Jim Sinclair is a gold trader I follow. You can always expect the price of precious metal to go up in time of uncertainty. It appears now that the price of gold is out of control. Look what he says about where gold will go next.
Consider for a moment what things would have looked like if QE did not exist in the US as well as other major Western financial systems. What would this so called recovery look like? Now think how things will look if the Fed, pressured politically, ceases QE. Then think how fast and big the next program (with a new name for QE) will be to manufacture money before all legislators, Democrats and Republicans, get sent home along with the Administration in 2012. Be realistic. Before our beloved politicians give up their power forever the master of the financial universe will burn down the dollar barn. Gold is locked and loaded for $1650 andWe don’t have to look far to see where a lot of this uncertainty is coming from. You probably saw how China put a scare in the markets not long ago. I found this story on the Zero Hedge blog.
China has decided to serve the world another surprise. Following last week's announcement by PBoC Governor Zhou (Where's Waldo) Xiaochuan that the country's excessive stockpile of USD reserves has to be urgently diversified, today we get a sense of just how big the upcoming Chinese defection from the "buy US debt" Nash equilibrium will be. Not surprisingly, China appears to be getting ready to cut its USD reserves by roughly the amount of dollars that was recently printed by the Fed, or $2 trilion or so. And to think that this comes just as news that the Japanese pension fund will soon be dumping who knows what. So, once again, how about that "end of QE"?Can we really expect our government to be capable of controlling the markets? I’ll give you my thoughts in a podcast shortly, but please leave your comments here.
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