Jim Sinclair: A new Sodom and Gomorrah run by the money changers


By Jim Sinclair
Friday, August 17, 2007

Today takes the cake in geek speak. The talking heads discussed the following:

-- The Fed's moral hazard (as if they care).

-- The Bernanke put. (Why not? Greenspan did it.)

-- The Fed's problems with inter-temporal considerations. (Huh?)

But the best of all was a dumbbell who actually got on TV to make the proud pronouncement he thought was a compliment to the United States and a slur on China: "China manufactures goods, but the U.S. makes money!"

He is totally right. The top business in the United States is money changing in what was once the temple of freedom. The money changers are the derivative traders, those young hundred-plus millionaires who name their 110-foot boat "Positive Carry."

This is the worldwide financial equivalent of Sodom and Gomorrah. It has broken down. It is systemic. All the money you can pump will not reverse the housing market and general business situation.

Tax revenue is going into the pits and the dollar will follow. Gold is going to and through all the angels with the blessing of the Federal Reserve, as deflation is now what they most do not want to hear about regardless of what nonsense pours out.

St. Louis Federal Reserve Bank President William Poole looked like a fool, having made statements yesterday that got squashed all to hell by the Fed this morning. Poole might consider either keeping his mouth shut for a while or wearing a clown suit when he makes public pronouncements for the next few years.

Today was proof that as the dominos fall, the dollar will be burnt to a crisp before the big boys roll over. Gold will go up and all gold and precious metals shares with no derivative risk will fly.


Jim Sinclair is a veteran precious metals specialist and chairman of Tanzanian Royalty Exploration Corp.

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