Jim Sinclair's website is the first place to look for prophetic gold analysis, I thought this evening's post was worth repeating:
Things are out of control.
The draconian action taken by the Federal Reserve today was their entry into locked credit markets that are defined by the Libor Rate and Rate on Commercial Paper. This action prevented the triggering of a total implosion of all markets, with the exception of gold, the currency of ultimate final refuge.
"Out of Control" can be defined as a day the Dow crashes 500 points when the Chairman of the Federal Reserve and the President of the United States spoke on national TV, right on the heels of the much touted Bailout Bill, combined with the entrance of the Fed into the OTC derivative business with no binding limits set on the high side of this initiative.
This is a downward spiral in which now four major interventions have failed.
The only case study in History is the Weimar experience. You cannot compare this to the credit lockup of Livermore and JP Morgan times. Arguments against that point are hollow.
What I find inexplicable is that the "Uptick Rule for Short Selling" has not been reinstated. That rule is more powerful than even banning short selling. These people are not STUPID so one can only assume this "Out of Control" situation is not a surprise.
Do not be surprised by additional intervention failures, gold taking out $1000 on the 3rd try, three consecutive TIC reports failing to support the Trade Deficit, a Federal budget deficit of unprecedented proportions, a dollar trading at .72, .62 and .52 and gold trading at and above $1650.
I told you in the middle of the recent dismal state of mind many gold investors were in that I never felt better about gold. That may have sounded nuts to some of you.
I now say that I have never felt more confident about gold and silver juniors with good property, good management and money in the bank.