Jim Sinclair, the man who predicted the current bull market in gold over a decade an a half ago has sent an email alert to subscribers this afternoon regarding the economic circumstances that will propel gold to and through $3,500/oz over the next 4 years.
Sinclair states that the Fed can and will provide 100% of whatever is required in every circumstance via QE, and that the result of the Fed’s non-economic buying of US Treasuries will be an ever lower dollar and escalating gold prices.
Sinclair’s full alert below:
From Jim Sinclair:
I have been under the weather with the flu for over a week. That actually gave me more time to work on various matters. One is my consideration of whether I should outline the potentials for 2013 in one essay or give you the various specific circumstances/alternatives/
decisions that will be the foundation of the market from 2013 to 2017.
I have decided one great tome is a waste of your time because the various concepts given all at once might lead to confusion rather than a clear conclusion. Therefore today I will present to you the fulcrum concept that everything balances on for the economy of 2013 to 2017.
In a technical sense, the Fed can finance 100% of whatever is required via QE under every possible circumstance. The result of meeting every seller of US treasuries with non-economic buying (QE) on a continuous basis would be an ever lower dollar. Any opinion that the Fed cannot do QE to infinity if they determine the need to maintain modest interest rates is simply and utterly wrong.
So what this entire equation for 2013 to 2017 stands on is a simple decision by the Fed: Will they? It is a political question, not an economic question. If it was a purely an economic decision QE would never have been utilized in 2008.