0 votes

The Catalyst for Financial Disaster....

Posted On: Friday, July 25, 2008, 9:56:00 PM EST

The Catalyst For Financial Disaster

Author: Jim Sinclair

Dear Friends,

A serious event occurred today. This event was the very public international recognition of more off balance sheet so called “assets” revealed as having little, if any, value.

This event is arguably the most serious financial upset ever. If you have not protected yourself, it is getting very late - maybe too late.

Your best hope is that this event is so complex that the herd of self anointed experts has no clue what that vehicle is, how large it is and therefore the profound meaning it has.

Gold, serious junior gold shares (the only seriously underpriced and therefore real value in equities) and non-dollar short term federal currency instruments are your sanctuary. You better get there, and get there FAST!

Click here for the criteria you should consider when selecting junior gold share situations.

The meaning of this is not only are Freddie and Fannie’s troubles much costlier than realized, but now there is an entirely new definition of market-less financial entities with off balance sheet assets that undermine primarily the US and now international banking systems. Conduit mortgage OTC derivatives will have to be marked down now that the sun is shining on them.

The U.S. mortgage industry transformed itself in a way that has opened dangerous SIV sub prime real estate conduits to global capital markets.

A conduit loan is priced by swaps and swap spreads, thereby becoming a package of various OTC derivatives generally derived from a formula that would make Einstein look like a kindergarten mathematician.

By turning mortgages into securities, lenders created vast distances between homeowners and their mortgage holders, who can be anywhere in the world such as Australia.

US banks have written down $450 billion in bad housing loans. The revelation from NAB means that they will now certainly need to take provisions to $1,000 billion. Write-downs of $1,300 billion and perhaps even more are in the cards.

That guarantees the USDX at .6200 and more likely at .5200.

That guarantees gold to reach at least $1650 much sooner than I anticipated.

This strongly suggests that my estimate of $1650 is significantly below the price of gold coming soon.

This opens the probability that a modernized and revitalized Federal Reserve Gold certificate ratio tied to the M3 will evolve into the monetary system.

The greatest economic crime ever committed is OTC derivatives. Those that proffered these will have killed more people than most wars.

This is it and it is NOW!

Respectfully yours,
Jim Sinclair

Posted On: Friday, July 25, 2008, 2:44:00 PM EST

Jim's Mailbox

Author: Jim Sinclair


Trending on the Web

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

I don't understand

Can you explain exactly what he is recommending? I don't know what those are. We are trying to get our money out of the U.S. but we thought putting it in an international bank would be safe. This doesn't look so safe.


"Trust in the Lord with all thine heart; and lean not unto thine own understanding. In all thy ways acknowledge Him, and He shall direct thy paths." Proverbs 3:5,6


The lip of truth shall be established forever: but a lying tongue is but for a moment...Lying lips are abomination to the LORD: but they that deal truly are His delight. Prov 12:19,22

health! I would email Jim

I would email Jim Sinclair... he will answer your email he is the expert not me!

I have become my own bank.. I have put the money into well you know!
gaurded by me!

as for me and my home, we shall worship the LORD