Eric King:  “Jim, there are a great many pieces discussing the COT report, can you talk about that?”

Sinclair:  “I’m just going to ask you a question and give you a definitive answer:  The question is, do you really believe the people (banks) who manipulated LIBOR are absolutely, totally, and completely honest on the figures that they render to the CFTC on the position of traders (COT)?  The answer is, of course not....

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“Everybody in the trading industry, even those who should know otherwise, puts so much faith in looking at what they think is the commercials’ confessional.  They believe they can read, through the COT, the commercials’ intentions.  That’s just total nonsense.  We’re living in a new normal, and one part of the new normal is that fabrication is a virtue.”

Eric King:  “With regards to Stephen Leeb’s comments yesterday on KWN where he was predicting that before this is over, gold will be a larger percentage of total reserves then it was in the 1970s, your thoughts on that?  Is Leeb correct in that prediction?”

Sinclair:  “He’s absolutely right in what he said because there is a very quiet trend taking place where you see the reserves of gold rising, looking towards a 15% level.  If you were to take a globe and get yourself a colored pencil and color in each country that has marked their gold to the market, you will understand why, eventually, even those that have manipulated us on the downside will be part and parcel with us on the upside.

Gold is the only tool that is able to balance the balance sheets of the offending deficit spending central banks.  There is no other tool.  Therefore, the tool (gold) will be used.  Just as QE was the only tool to feign sovereigns as financially sound, gold is the only tool to bail them (central banks) out in the end.  It’s simply a fact, a reality, and it cannot be denied.”

Eric King:  “Jim, at some point they are going to be releasing gold higher.  Will that be a time where they stop the anti-gold propaganda as they begin the big push higher in gold?”

Sinclair:  “In 1979 the gold banks shifted to the long side, and it’s my opinion that they made the greatest profit in the shortest period of time.  I can’t see any reason why they would not do the same thing now.  So, yes, they will be very much on the long side, and whether the COT figures will reveal that or not is up to the fibbers.”

Eric King:  “This smash that we’ve seen in gold, is it over?”

Sinclair:  “On or before the 28th of February is the date that I’ve been living with, and it looks like it’s right.  The mining shares, those with the most liquid positions are the shorts.  So basically the mining shares today were in shock at the price of gold and didn’t believe it.

What is the best sign here for us is that we didn’t get a Monday smash.  Also, the morning takedowns have been less enthusiastic.  So you would have to conclude that the morning takedowns are not being done by the major manipulators now.  That’s a reversal of a pattern and a reversal of a pattern means a reversal of the (gold) market.

I think any time you’ve taken a hit like this you are going to have to chop your way out and that’s exactly what I think we’ve been doing so far this week.  But if the pattern now is reversed, and that will be very obvious next Monday morning, I think gold could shoot right back out of this hole and aggressively to the upside.”

Eric King:  “Would that be a V-bottom Jim?”

Sinclair:  “This time, yes.  With the amount of pressure recently on the downside, and with the reversal of the pattern of what was the hallmark of the interest that created the downside, the answer is yes, a V-bottom is what you would expect.”

© 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.

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