6 votes

Jim Sinclair has something to say, (and I personally disagree)

FM: What if political pressure on Bernanke prevents him from continuing QE?

JS: That is why Ron Paul can’t win. The desire to do the right thing would be absolutely the wrong thing. The explosion you would hear economically, you would hear on Mars. The right things only can be done in conditions of economic ease. You can’t have a gold convertible currency. You can’t at this point in time violently drain the system. That whole mountain of notional value will descend on us all. The idea that we are going to have a change in administration, in an extreme sense, isn’t going to happen. The other candidates that have any possibility of being able to [beat] President Obama wouldn’t make much change. The only one in there who would make great change — and it would be wonderful intellectually and horrible practically — [is Ron Paul]. We are in a box, there is one way out, there is only one tool available, quantitative easing.

FM: What about silver?

JS: Silver is not money for one practical reason: It is too heavy. Gold is extremely portable. If you wanted to buy a pick-up truck you could put the money in your lefty pocket in gold but if you wanted to buy it with silver even at today’s prices you would need a pick-up truck full of silver. Silver is not as monetary as gold

More:
http://www.futuresmag.com/2012/05/01/jim-sinclair-has-someth...

Sinclair is a legendary Gold trader, but politically the system has to change to make it fair. Ron Paul's competing currencies and balancing the budget plan would even out the playing field for the the people who can't get .25% loans and have to pay 20%. If the general population could get the same loans the insiders get with no collateral and no personal guarantee and .25% interest, then nobody would be defaulting and everyone would be borrowing and house prices would be way up. How would the the insiders like it if the the shoe was on the other foot. They would be crying like babies. ($250,000 @ .25% interest is $102 a month)

Most importantly, Ron Paul represents personal freedom and free markets. If the insiders can't compete on a level playing field then they shouldn't be in charge. It's called capitalism. The insiders should try it some time, and join the rest of us.

BTW, when halve of Bain Capital's leverage buyouts went bankrupt was Mitt and his buddies on the hook personally like the rest of us would be? I suspect the answer is no, and that's not capitalism.




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Competing currencies

Others have noted the distinction between tying the dollar to gold, which RP does NOT advocate, and competing currencies such as gold, which he DOES advocate. He is merely saying the government should not be able to tax you on the appreciation in your gold, and then people can choose to use gold or dollars until a market price is determined. Sinclair and others miss this crucial point and then denigrate RP for their own misunderstanding of his policy proposal. I know people don't have all day to follow RP, but we owe it to correct the record when someone like Sinclair, who I admire very much, doesn't understand RP's position.

That said, Sinclair is right - QE is what they WILL do, and make no mistake about that. The value of the pound has been obliterated over the centuries, and so will the dollar. The system will function, but old people who do not switch to gold will be robbed of their net worth.

This is not accurate - "If

This is not accurate - "If you wanted to buy a pick-up truck you could put the money in your lefty pocket in gold but if you wanted to buy it with silver even at today’s prices you would need a pick-up truck full of silver". Very few bags would do it. Probably only 3 or 4.

Ron Paul does not call for a

Ron Paul does not call for a gold standard, he simply wants to legalize free market competition in currency, he would be OK with whatever the market choose to use for money. If you want Paul to gain mainstream acceptance, lessen the talk of a gold standard (because it is difficult to understand), and promote the idea of auditing the Fed! Auditing the Fed is something that anyone can support (as a matter of fact, one looks deranged if they are against it!) and a simple but complete audit would force a complete reassessment of our monetary system, which would naturally end with free market currency!

Rock meet Hard Place

Jim Sinclair wants to save the System. Ron Paul wants to save America. That is the face-off.

Sinclair admits that Bernanke is a One Trick Pony. Quantitative Easing is his trick, that's it, monetizing everyone's debt. The goal is to keep the banks on life support and inflation ongoing but under control until the economy recovers and debts can be liquidated in an orderly fashion more cheaply. Japan has been in this purgatory for 22 years. Now it is a global problem.

Ron Paul has another solution for America that is disconnected from this old paradigm. He is the present day Alexander with the Sword of Liberty confronting the Gordian Knot. He can achieve the same objective in a more forthright and effective manner with a greater chance of success.

As soon as Ron Paul takes office he will immediately rescind every non-Constitutional executive order and stop enforcing all non-Constitutional laws and regulations. He will immediately move to make it possible for corporations to repatriate $1 trillion of offshore profits tax free and eliminate taxes on capital gains and all savings. Interest rates will rise to market levels rewarding savers. The economic impact of these actions will be very positive and very quick acting.

He will pay for most of the deficit reductions by cutting to the bone all foreign expenditures. These include all war spending, paying for military bases in foreign lands and all foreign aid. He will introduce competing currencies and there are already gold, silver, bitcoin and local currencies in place to take advantage of this. FRNs will eventually lose their legal tender status, probably after the audit of the Fed is concluded. At that point they will become rapidly worthless.

I believe this means that anyone OWING debt in FRNs, including the Treasury, will be able to pay off their debts quickly as the prices of debt notes fall precipitously. This is Jim Sinclair's objective but he wants to preserve the System while gaining this objective. This is not possible and this is why he cannot see the way out. His thinking, like that of all Keynesian economists, is stuck between a Rock and a Hard Place.

Those who OWN Treasury debt in FRNs would be well advised to dispose of it all by then in the open market. This will assist in causing the necessary collapse in that market enabling the Treasury, now under new management, to purchase the notes at knock down prices. The entire house of cards will collapse and all the big banks, and the corporations depending on them, will be broken up and disposed of in an orderly fashion.

This is just one scenario and I do not believe it is at all frightening. Sinclair himself owns gold mines so he should be sitting pretty in Africa or India IF they allow him to remain there. It may however become dangerous for Americans in Africa when the System falls. His gold mines could well be repossessed by the indigenous people. This may be another reason for him to protect the System which presently protects his interests with the American military. This is a rational decision on his part but not in the best interests of the American people.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

QE for 22 years avoids a crash at a very high price

The price is time. If the crash and correction took place tomorrow, I would have the opportunity to pick up the pieces of my life and start fresh. I could work and be be productive and make back everything I had lost in the crash over the next 22 years.

But if Bernanke thinks he can painlessly correct the malinvestment by slowly depreciating the debt through inflation, I will see my life's work dwindle day by day, week by week, and in 22 years I will have little to show for my life.

22 years is a working lifetime for many people. Bernanke is condemning the current working generations to slowly declining standards of living...wasted opportunities.

QE comes with very high opportunity costs.

right now to buy my 2011 3500

right now to buy my 2011 3500 dodge cummins turbo diesel truck with every option, it would cost 1500 ounces of silver. that is approx. 120 lbs of silver. you don't need a truck to carry that.

besides, gold and silver are both money.

maybe i would buy the truck in gold do to portability and buy the tank of gas for it with silver.

Agreed..They Certainly Did NOT ..

..Explore that option did they?
Then again, Sinclair is in the business of selling gold.
Lemme see now....... 1+1= ?

And which country has the largest in-ground mineral deposits of silver?
Give me some feedback on that please.

(I think it's America..correct me if I'm wrong)

"Beyond the blackened skyline, beyond the smoky rain, dreams never turned to ashes up until.........
...Everything CHANGED !!

It is a matter of degrees. On

It is a matter of degrees. On the one hand you have to cut drastically and that in itself is going to be painful, but the alternative is a sudden and complete collapse somewhere in the very near future.
I think it is very important to point out that almost all of the debt is pure bunk. This is a manufactured crisis - a design by the criminal class to subjugate us.

"The United States can pay any debt it has because we can always print money to do that." — Alan Greenspan

Presidents that mess with the international banking system

are usually SHOT.

SequoiaTrees4RonPaul

Sinclair is vested in the status quo system.

He thinks of gold and silver in terms of its value in FRNs.
As if the FRN is somehow the standard that will always be there, which it clearly will not be.

This is common, even with some people here on DP. Mostly those who are traders in the market. They really don't believe that soon there will be no Wall St, no stock market, no dollar, and all their paper will be completely valueless overnight.
I can't help their delusional state of mind.

The fact is that the "whole mountain of nominal value descending on us all" is EXACTLY what needs to happen. This is what is required to destroy the PTB.
The rest of us will have our debt wiped out and start over.
We have to kill the beast, and Sinclair seems to want to protect it.
The entire world banking and monetary system needs to be wiped out.

$250,000 @ .25% interest is $102 a month?

$250,000 @ .25% interest (on a 30 year fixed) is $721 a month.

I'm not understanding your number...

Banks pay interest only and constantly roll it over.

And most importantly they aren't on the hook personally.

Silver is portable enough to be used as a currency...

You wouldn't want to pay for a pick-up truck in pennies would you...

If the were a silver coin currency in circulation there would be no need carry it with you at all times you could pay electronically via card. You could potentially even withdraw another currency at an atm using your "sliver account" to pay for such goods.

He's right

It's not that you can't have the change - its that the time for change when it could have occurred without violent disruption has gone.

And it's not something Ron Paul really disagrees with. He knows that the first year of change, there is absolutely going to be chaos.

You don't strip 7% of an economy - which is what the additional federal debt each year buys you - out, without serious repercussions.

All the ameliorating circumstances like the military coming home are small in comparison. They'll help, but it will still take time.

Ron Paul is not easy medicine. Its just that the other alternative, is, in the medium term, far, far worse.

He's wrong

Before the Federal Reserve Bank was established, banks issued their own paper money that was tied to silver and gold. So people didn't run around with gold and silver in their pockets unless they just came from a mine. Other than that, they had notes issued from the bank that held their gold or silver.

The economy is collapsing.

I'm taking a free class, we get pizza and soda and candy, and the books, pens, everything is free, and when we finish, we either $100 deposit in a credit union, or a $500 loan from a credit union.

The crdit unions partivipating in this educational course received a $250K grant from the federal government.

They are not fans of Ron Paul. My bet is, the feds are preparing to collapse the credit unions the Occupiers ran to as the protested the big banks. Most folks will not be able to repay their loans, or they will just take the $100.. and th credit union will be looking for a way to recoupe what they lost (probably wish they didn't spen so much on pizza and soda and candy?)

How do you figure?

What is Ron Paul going to do that is so disruptive? I think small businesses would thrive. 2% deflation a year would be greatly welcomed by the small businessperson. Profits would grow and hiring would begin.

if you go into a true

if you go into a true deflationary collapse, it would be a 1 to 2 year ordeal of terrible times. I am for that because then after we start over it would be great times. You will not be able to control deflationary spiral by 2% per year. This is what Sinclair is saying. You pull the QE out of the market you will see a swift deflationary depression. For that year to 2 years there will be no jobs or economic activity while all the malinvestment is purged. Next the American people would wake up and vote every single politician out of office. Those in charge can not have that. People who do not prepare for this kind of economic event are, in my opinion, dumb.
Now the next ordeal we are entering into is a inflationary depression. less jobs and economic activitiy yet the prices of everything go up. This is where we stand right now. By inflating the powers that be kick the can down the road and delay the day of reckoning. BUT doing it this way drains people of their savings. This is exactly what the want.