Sinclair:
“The concept that our financial leaders are in some sense geniuses that
foresee the future and calculate every move based on their ability to
divine what will be the result of their actions, is absolutely false.
The IMF made a massive mistake here.
The IMF has now put itself
into a very difficult position. The IMF must now support Cyprus, even
in the face of the rejection of the attempted confiscation of partial
bank deposits, or let the Cyprus banking system seek its own solutions
to its banking problems, which would be Russian Corporations, or Russia
itself.
“I believe this is unacceptable to the IMF
because it would mean that the IMF would not carry the clout which it
has carried over the years as a group of many nations. If one nation
can turn the switch ‘off’ against the IMF, it’s going to be very hard to
turn that switch back ‘on’ at the IMF.
This now rejected proposal
of a tax on depositors was a total shift in strategy that had existed so
far in the rescue operations of banks. If you change your strategy,
you break a promise because you have acted in a certain way where all
other major nations are concerned.
If continually over years
you have a strategy, and then all of the sudden decide that, well,
Cyprus is too small or that the Russians are not in your league
socially, and you let Cyprus go on its own and Russia makes the repair,
the IMF loses by having broken a promise.
You create promises with
nations not necessarily by your word, but most certainly by your
actions. The actions up to now have been consistent in that no
depositors would be injured. The central banks have worked together,
either through swaps or through direct actions in order to meet any and
all contingencies. That simply cannot stop now, especially in light of
what’s just happened in Cyprus.
If there is a spread to
other smaller countries of the fear of confiscation from the depositors
in order to meet the obligations of their errant banks, you will begin
bank runs everywhere.”
Eric King: “Can the IMF recover from this?”
Sinclair:
“Yes, but it will be very difficult. The IMF only has one choice if it
wishes to remain the spokesperson monetarily for the world, and that
choice is to rescue the Cyprus banking system, exactly the same way they
treated Spain, Portugal, Italy, etc.”
Eric King: “How much of a victory is this for Putin and Russia?”
Sinclair:
“It’s a huge victory. Even though most people won’t understand it,
those people who make decisions will, and do very well understand it.
Putin has faced down the International Monetary Fund, which by the way
is located in Washington, DC, and is in fact Washington itself. So in
the sense of a Cold War, you have Washington vs Moscow, and Moscow won
this round.”
Sinclair also added:
“There is no question now that there is a paradigm shift in gold toward
the physical market. A paradigm shift in the longevity of the paper
futures markets, which as I said before will now move towards a physical
market. The West will end up losing control of the ability to
manipulate the gold market much sooner as a result of this debacle in
Cyprus.
I remember back in the
1970s there was the assumption that the bullion banks were geniuses, and
that under no circumstances did they ever make a mistake in anything
they participated in. That was absolutely false then as much as it is
now.
Back in 1979 when the gold
price broke over $400 for the second time, I had been under pressure
because I was the buyer the first time gold broke over $400, and
subsequently down gold went. Well, in came the Middle-East to the gold
market.
The minute I saw the
Middle-East come in to the gold market I bought back every gold contract
I had sold to protect myself and then doubled my position which
literally sent the gold banks into total and absolute retreat. They had
been overrun. Gold then moved from that roughly $400 area in late 1979
to $887.50 at the beginning of 1980, gaining the most over the shortest
period of time in the entire 1970s bull market.
Right now we have had a
significant change in the world financial landscape and paradigm. The
fact that Russia has faced down the IMF is not any different from the
day I faced down the gold banks in late 1979. What I believe this means
for gold is that its slavery to the Fed is over and it’s on its way to
freedom from US manipulation.
The important point here,
besides the fact that what we have just witnessed is a clear and
decisive Russian victory and an IMF defeat, what is absolutely crucial
is for investors to understand that a wrong decision by the IMF here
could create runs on banks throughout the entire Western world that make
the likes of what we have seen previously in Greece and Spain look
likes child’s play.
What I am saying is that
another major mistake here by the IMF could destabilize the entire
Western financial world in such a way that it simply could not recover
without unprecedented turmoil and destruction. The bottom line here is
Lagarde took on Putin, but Putin has checkmated both her and the IMF the
same way a Russian grandmaster chess player would destroy his
opponent.”
Sinclair also predicted:
“Cyprus cannot, will not, absolutely must not leave the euro. They
know that quite well. So the break of the euro market down into the
1.28 area must have sent shock waves through decision-makers in euro
land. Cyprus must be rescued because they cannot be allowed to leave
the euro. In the end, however, all of this will create a demand for
other alternative ways of being able to support the value of money, and
gold will benefit enormously from it.”
IMPORTANT - Jim Sinclair is holding a meeting in New York today, March 20th at 2 PM EST, but it is entirely sold out at this point.
UPDATE - The
incredible KWN audio interviews with MEP Nigel Farage, billionaire Eric
Sprott and the former US Treasury official Dr. Paul Craig Roberts are available now and you can listen to them by CLICKING HERE.
© 2013 by King World News®.
All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page
is permitted and encouraged.
The
interviews with Michael Pento, Nigel Farage, Eric Sprott, Dr. Paul
Craig Roberts, Egon von Greyerz, Rob Arnott, James Turk, Jim Sinclair,
John Embry and Andrew Maguire are available now. Also, be sure to listen to the other recent KWN interviews which included Marc Faber, Felix Zulauf and Art Cashin by CLICKING HERE.
Eric King
No comments:
Post a Comment