Eric King:  “Jim, we will get to gold in just a minute, but first, what are you focused on in the aftermath of this latest development in Cyprus?”

Sinclair:  “There has been a total blackout in the Western mainstream media regarding what just took place in Cyprus.  Even where there was even scant reporting about Cyprus, they only reported approximately 1/3 of the amount of the assets that have effectively been stolen.

The takeaway I have, and the shock I have, is that the news is now so selective in the so-called free Western hemisphere....

Continue reading the Jim Sinclair interview below...


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Eric King:  “Jim, what do you make of the fact that there was virtually no reporting outside of KWN on this situation?”

Sinclair:  “What that tells me is that ‘bail-in’ is now a go globally.  There is no question that if you were to analyze the various initiatives in New Zealand, Canada, the United States, Great Britain, etc, you would know that ‘bail-in’ is definitely being framed and will now be applied as a replacement for ‘bail out.’

So the fact that the news of the $4.2 billion which was just stolen from accounts in Cyprus didn’t make any mainstream US news, and wasn’t even mentioned on financial media during the day, tells me there is definitely a feeling that what has taken place, and what is still to take place, will disturb the ‘social order.’

Control of the news has always been predicated on what it is believed the public can take.  The fact that this was totally blacked out underscores without any doubt that ‘bail-in’ is the method which will be used in any future bankruptcies in the banking sector.

The move to steal money from bank accounts, especially as the economic indicators are now turning down off of what has only been a sideways recovery, indicates to me that as the economy continues to worsen, the real condition of the underlying balance sheets of financial institutions will be exposed.

At that point there will be significant needs for funds in order to maintain the integrity of the Western world’s financial institutions.  So once again, KWN readers around the world need to understand that ‘bail-in’ is definitely coming.”

Eric King:  “Jim, it seems that because of these recent events you are now predicting that gold will go to and through $3,500, and head much, much higher than that level during the coming financial chaos.”

Sinclair:  “Well, let’s step back for a moment and just remember when the Dutch Finance Minister said that ‘bail-in’ would be a future blueprint going forward.  You had a very significant drop in the general equity markets.  We then had a great deal of noise from Bernanke and Draghi.

At that point the Dutch Finance Minister had to come back and recant his statement, even though he was simply telling the truth, because of the ensuing panic that was taking place.

We have already seen that the physical gold market has had a white hot flame underneath it.  The paper market would still like to take gold lower, but in truth it doesn’t stand much of a chance.  The price of gold going into the spring and summer and all the way into 2014 is going to make new highs.  About that there is no question.  I would add that if an investor has any sense at all, gold is for savings, and currency is simply for transactions.”

Eric King:  “There was another interview yesterday on KWN with James Turk, and he was actually discussing the fact that a major mining company appears to have gotten itself into trouble with some hedging.  Turk was talking about 65 million ounces of silver that was hedged, and significant amounts of gold as well.  The project they were hedging this for has now been halted due to a government court order.  This mine was supposed to produce 800,000 ounces of gold and 35 million ounces of silver annually.  Turk suggests this situation is setting up to create a major short squeeze.”

Sinclair:  “The company that was foremost in the hedging of gold in the 1990s, and early 2000s, and whose Chairman preached the religion of selling over the counter derivatives forward on gold, is once again forward selling future gold production.

But it is very important to note the track record of this company and the fact that they have absolutely been dead wrong in hedging.  So I think this is another vote for a new high in gold.”

Eric King:  “Could that trigger a large short squeeze in the metals?”

Sinclair:  “The physical market is what is going to create the short squeeze.  Each time the paper market takes gold down, it runs straight into the teeth of a ferocious bull market for physical metal.

When you add to this the fact that you have now had significant hedging by a major gold producer, and the fact that historically this company has lost their shirt and almost gone broke engaging in hedging in the past, I would say you are going to see them close their hedges a lot faster as the market moves higher than they would have otherwise.  So that may very well be your short squeeze.”

***IMPORTANT - The first Jim Sinclair Q&A meeting is completely sold out, but a second meeting was added due to overwhelming demand in Los Angeles on Sunday, May 19th from 11 AM to 3 PM.  For details and to sign up to attend this event while seats are still available CLICK 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 audio interviews with Bill Fleckenstein, Eric Sprott, Egon von Greyerz, Gerald Celente, Andrew Maguire, William Kaye, Rick Rule, Nigel Farage, Dr. Paul Craig Roberts, John Embry and Art Cashin are available now.  Also, be sure to hear the other recent KWN interviews which include John Mauldin, Marc Faber and Felix Zulauf by CLICKING HERE.

Eric King

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