Zeev's Turnips Patch-No Politics (ZEEV)

[basserdan]

*** Jim Sinclair on gold ***


Jim’s Mail Box

Author: Jim Sinclair
Wednesday, April 28, 2004, 2:29:00 PM EST

DearJim,

Others have concern for you as much as I do. The following was posted on Gold Warriors and indicates others see your stress as well. Be like a doctor, have patience. You have seen the future, allow it to appear at its own speed. Having something brilliant to say ... everyday ... is very hard to do.

Best wishes,
BT

Dear BT:

I am a person of honor and deep concern. If I did not believe my market observations were correct, why in the world would I wish to write as a community service doing harm to just those I wish to serve.

This is not a business for me. Gold trades at $480 by August 15, 2004 or I should not be doing this. I simply care too much to injure the good folk!

By the way, I feel certain that gold will - at a minimum - make a high above $430.30 by then although $480 plus is what I am personally looking for.

Today in gold is simple nonsense that the market for the US dollar will cure soon. It is still all in the US dollar and so far all the dollar has done is a classic pull back to the underside of the Up Trend line between 91 and 92.

It is a total absurdity to consider that curtailing Chinese banks from meeting higher demand for money inside China will hurt gold or the demand for commodities. That action will not fundamentally injure either demand for commodities or the demand for manufacturing capacity in China which is really the product of external demand for China's manufactured goods.

My job here is to counter the firestorm of misinformation coming from COT who want to break your will so they can cover their short positions, shift to the long side and manage news in order to jam gold to $529 in your face.

I will admit that I suffer badly when I receive so much communication from terrified Community members that buy all the bull that is shoveled at them.

If the Community would simply stop trading on margin and ignore all this nonsense, gold would do a lot better. The pros like myself simply cannot be run out of the market and we continue to load up in controlled manner rather than taking open risk like margin. Mark my words. The raid on gold is based on a totally WRONG premise that cannot survive cold hard reasoning. Will cold hard reasoning come back into the gold picture? That is up to you out there.

Your caring well wisher,
Jim
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Market Commentary

Author: Jim Sinclair
Wednesday, April 28, 2004, 12:44:00 PM EST


Chinese Interest Rate Increase Triggers COT Fund Client Raid on Gold. The Fund Buggers Have Their Economics Backwards!

You write’em! I buy’em! Now the August $410 Call becomes real interesting around $5.50. Why not - a lower price and a longer time can’t hurt.

The reason the short raid was initiated is the belief that higher rates in China will kill its economic boom and, as a result, commodity demand.

Hey dummies, that boom is externally generated. What fools these big shots are! The time I spent at Wharton School wasn’t wasted even though I considered college itself a waste as I was making more money at the time than a degree would get me in the marketplace by orders of magnitude.

Those foolish fund managers don't even understand the concept of an externally driven boom causing internal inflation. The external demand driven Chinese boom can only be shut off if you can stop the Wal-Mart's of the world from importing Chinese goods. It is this demand that is consuming and will continue to consume the world's commodities.

The internal Chinese banks are weak and increasing rates is a product of their policy to cut out of control Chinese bank lending which has nothing at all to do with an external demand driven manufacturing boom.

These guys are fund managers? They don't seem economically smart enough to sell newspapers on a street corner.

Of course rates rise as the Chinese face their own internal INFLATION. The fund managers have it totally backwards. These same fund guys got creamed by gunning gold to $433 a few weeks ago and selling out under $390 not long after.

There is no one as bearish as a sold out bull. All that selling this morning was initiated by a bunch of sold out bulls and represented pure short selling by many of the exact same jerks that just got killed on the long side.

The premise that motivated this selling is totally wrong! Soon these idiots will realize that whoever gave them the conclusion that increased internal Chinese interest rates can kill off an externally driven manufacturing demand boom is dead wrong.

They will try and sneak out of their short positions, hoping they have damaged gold significantly enough to be able to exit. As soon a Dr. No and Chung Fat get a scent of that, watch the game shift back to our side.

So the economic reasons for these gold raiders attaching themselves to their new large short positions is totally wrong and will explode in their faces one more time.

You write’em and I buy’em is the catchphrase again today. This morning’s score certainly favors COT and Jim’s score at the moment is ZIP. But the day and the game is not over.

Oh yes, since I upped the ante today in the COMEX August Gold Calls strike $410, let’s up the wager in another fashion. I am adding a date now to my gold price of $480 or the web site is closed and I do not publish to the general public after that.

The latest date for gold to trade at $480 is August 15th, 2004 or COT wins. (dan's bolding)
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Tuesday, April 27, 2004, 7:51:00 PM EST

Gold Market Summary: Jim Two- COT Zero

Author: Jim Sinclair

Somehow I really feel that www.jsmineset.com will be around for a long time. You know and I know that gold is going through 419.70 and 430.30 real soon. Maybe even in the lifetime of the June gold call strike $430.

You know nothing on earth would make me happier than seeing those COMEX nerds buried. The Delta Factor in options, such as the June $430 calls, is a nerd-based concept whereby they simply spread out the bid and offer and pray that the strength in gold isn't real so they can take you out at zero cents on the dollar. The option guys’ greed has no equal. If you yelled "give us Barabbas" all the COMEX option nerds would rush out. Well, dear nerds, it is all supply and demand so you know what you can do with your Delta Factor.

Here are a couple of reasons why the Comex naked gold option selling nerds are going to have a spiritual experience (good grief, what an awful visual - a naked Comex nerd).

1. We have a price-based energy crisis right now. However, given the fact that al Qaeda has delivered its message of "play politics with oil or die" to the pampered and cowardly Saudi Royal family, you can forget the pre-US election decline in the oil price. Quite the contrary! So get ready for a gallon of 87 octane at $3 and a line a few miles long to get it.

2. The price of milk just went up 50 cents a gallon. A lot of mothers are quite unhappy with any idea that there is no inflation. The real inflation message is reaching the masses.

3. The US dollar rally is kaput. It never had legs or arms to begin with. The dollar got to its 91-92 level and then the Fat Lady sang.

4. You think terrorism is over? How about a planned but intercepted chemical attack in Jordan designed to kill 80,000?

5. There is no way to drain the liquidity from the world economy that the US Fed and the Japanese cooked up. The use of the "Bernanke Electric Mayhem Money Printing Machine" will result in three things: Greenspan will retire early as Chairman of the Fed. Ben Bernanke will not be the next Fed Chairman and the degree of inflation coming down the pike is going to curl your hair if you have any to curl. All this is going to happen because unlike the use of monetary aggregates wherein liquidity can be drained by simply reversing the transaction, the liquidity injected by the Japanese into the world bond markets across all maturities cannot be reversed without totally breaking both the dollar and the US bond market. This damn foolish non-traditional use of the Bank of Japan has created the "Liquidity BLOB" that will eat the planet. (This is a Japanese-produced movie that you won't like to see). It seems appropriate that the Japanese committed this world class economic blunder on behalf of the US Fed because it is exactly like a 1950s Japanese Sci-Fi movie wherein the BLOB does eat the earth.

6. The US is being snookered into attacking and flattening the Shiite Vatican. The wanted "Dead or Alive" cleric knows he is past tense. But remember one man's delusion is another man's faith. Do you really believe that 3,000 focused and fierce marines backed by Specter gunships and high altitude bombers with smart bombs are going to lose? Now what happens after we flatten the Shiite Vatican and present another martial cleric with 70 virgins (if indeed there are any left given the attrition rate within his peer group)? Jihad in Europe. Yup, that is the game.

7. You all know that interest rates will probably rise one half percentage point by year-end. You also know that is the best news the price of gold could have. If you don't, then simply go to my "Gold Market Sanity Check" article posted Friday April 23 to see what interest rates stood at from 1970 through 1980 in the big gold market. The Fed will be pulled reluctantly by the bond market where interest rates are always made. Motivated by inflation, the Fed will have to raise interest rates, creating the biggest possible bull element for the price of gold.

8. I saved the best for last because it receives the "Fickle Finger of Fate Award" for this generation. Yesterday, a judge of the Supreme Court of the US was criticized for accepting an invitation to go on a duck hunting trip from the Vice President. You know the Supreme Court is presently reviewing complaints concerning the Presidential right to hold prisoners forever in the legally unique Gitmo chicken coupes in Cuba

The judge answered by saying: "If a Supreme Court Judge of the US can be bought that cheaply, then the country really is in trouble." Now what exactly does that mean? If you want a Supreme Court Judge you better be ready to pay BIG? I thought these people selected for the Supreme Court - even if political in nature - were supposed to be smart. That answer is the dumbest thing I have heard since I watched Financial TV a few minutes ago.

There are many more reasons for gold to reach $480 and FAST. But I think that is enough to give the COMEX nerd-naked gold call writer lower back problems.

http://www.jsmineset.com/home.asp