Gold is officially replacing the US dollar on June 28th 2012

Jim Sinclair’s Mineset

Dear CIGAs,

Gold is officially replacing the US dollar June 28th. The cat is out of the bag.

Phil, you are booting any nation that dares to refuse to be legislated by any other body than themselves out of the SWIFT system.

You have officially made gold money. Now what are you going to do, declare economic war on China? They will fire dollars back at you.

You just might end the economic world as you knew it.

The Best Reason in the World to Buy Gold

Have no doubt, emotions generated by short-term price action will be influencing investor decision-making a hundred years from now. We may have substituted iPad for the telegraph over the past hundred years, but we’re still fairly lousy traders as a species. The real world makes decision based on reality rather than perceptions generated by emotions. Well, at least the real world that stays in business. The Chinese are buying gold while the public panics and sells. Nuf said.

Headline: The Best Reason in the World to Buy Gold

“Beijing is planning to avoid U.S. financial sanctions on Iran by paying for oil with gold. China’s imports of the metal are already large, and you can guess what additional purchases are going to do to prices. On the last day of 2011, President Obama signed the National Defense Authorization Act for Fiscal Year 2012. The NDAA, as it is called, attempts to reduce Iran’s revenue from the sale of petroleum by imposing sanctions on foreign financial institutions conducting transactions with Iranian financial institutions in connection with those sales. This provision, which essentially cuts off sanctioned institutions from the U.S. financial system, takes effect on June 28.”



It Feels Like Not Even Lipstick Will Work Now

The following is automatically syndicated from Grandich’s blog. You can view the original post here. Stay up to date on his model portfolio!
April 17, 2012 03:33 AM

To say the junior resource market has been “acting like a pig” is an understatement. To say simply I’ve been wrong about them being undervalued only irritates those already wishing they hadn’t purchased… (just ask my wife—I would, but she stopped speaking to me after looking at our last brokerage statement).

It’s about 25 years since I first started speculating (gambling) in the junior resource market, and I can’t recall a stronger sense of dislike, disgust and hopelessness (maybe some Canucks fans feel close to this) in this sector than I am seeing and feeling now.

While I didn’t need a metal detector at the door, I just had many readers at a local seminar and from them sensed a high level of frustration and a wanting to throw in the towel. (It was my wife who was giving me the really dirty looks). The common theme among their questions and comments was, “Why are the mining and exploration stocks doing so poorly despite metal prices still much closer to their decade highs versus lows?:

Because I never felt they could be selling where they are at today (my own personal portfolio of juniors is down seven figures in the last couple of months), I no longer deserve to be the one to answer their questions. However, I will tell you what I told my wife and hope you hold off seeking a divorce attorney as she has (at least, I hope she has).

Despite metals prices up anywhere from 100% to 500% or more from where they were a decade ago, the vast majority of producers and exploration stocks have not remotely come close to reflecting those appreciations in their share prices. The thought used to be that mining shares were actually better to own than the physical metal as they were to offer better leverage to metal prices going up. Nothing has seemingly been further from the truth.

Here are my “crying towel” reasons for why I think we are where we are:
The audience for mining and especially exploration shares has shrunk despite the dramatic increases in metals prices themselves. A clear example of that is the dramatic drop in the primary “end users” that used to be a key part of the demand side – brokers.
Years back, hundreds if not thousands of brokers built part or much of their book of business around the buying and selling of mining and exploration stocks. They each had 100 or even 500 clients and many of them ended up buyers of these shares. Unfortunately, these folks are now asset gathers and commission-driven buying and selling is ancient history. They no longer are active in the mining and exploration sector. This is also unfolding in the Canadian financial industry.
While the 43-101 rule truly reformed what used to be like the wild, wild west in the junior sector, it also removed any sizzle from the promotional side of things. While not a bad thing when one recalls what used to go on in this area, the downside to it is companies who are mostly sizzle and not yet steak can’t even light a match when speaking of their potential, let alone stroke the fire. That may be a good thing, too, but it wasn’t the case when these shares did much better as a group a decade or more ago (and a reason one must consider now whether they like it or not).
Regulatory and/or compliance factors have made it much tougher for juniors to attract attention. Again, this may or may not be a good thing, but it’s a fact of life as far as I’m concerned. In the States, most brokerage firms no longer allow solicitation of companies not trading on the NYSE or major NASDAQ markets. Some even don’t allow unsolicited orders anymore. Many compliance departments have made it difficult or impossible for their advisers to buy juniors-period.
Canadian investors may be surprised to find most Americans don’t find natural resources as “second nature” to them. Americans’ biggest concerns about natural resources are availability of gas to drive their cars and oil to heat their homes. They’re not keen on natural resource stocks and still think for the most part a gold mine is a hole in the ground with a liar standing next to it.
The junior sector is a “pimple” of an industry, yet 1,000 to 1,500 juniors are trying to find a few dozen so-called experts who can appreciate and talk about them in a mostly what’s-in-it-for-me mindset. The ability to get their story known is perhaps the biggest challenge and drag for a junior these days.
Reducing the hold period on private placements to just four months has hampered the juniors. Companies just can’t advance themselves up the corporate ladder in such short periods to warrant enough new interest to gobble up all these new free trading shares that come to market.
Investment bankers now play the “warrant” game in order to keep deal flow going. They turn to their institutional buyer and suggest selling the shares that are coming free trading for either side of breakeven and hold the warrant as their leverage. Meanwhile, they take the freed up capital and buy their next deal.
Discount brokerage has also greatly added to what seems like an endless supply of shares. Years back, one held juniors at times simply because they couldn’t profit from selling them after just a few cents rise. Now, thanks to deep discount commissions, one can profit from the sale even if the share price is barely up.
I’m certain there are other reasons, but I believe the above is a good part of why we’re where we are today. The question now is does this mean the mining and exploration stocks are no longer worthy?

I’ve had discussions with many different players in the junior sector of late and they’re all either sitting on their hands, in a state of disbelief, and/or feeling life as they knew it has ended. Like I said at the beginning, in 25 years I have not seen such a dire state relative to when gold was well below $300 and it seemed like “last one out of juniors turn out the lights.”

So, the end result of all this appears to be only three possibilities:
It is indeed the end of juniors as we know it and we die off as former buggy whip players did at the turn of last century;
Like it did a decade ago, the juniors become mostly non-existent price-wise and they rally simply because they really can’t go any lower;
Something not imaginable (good or bad) occurs and we go from there.
On the basis it’s like a decade ago and we’re at or close to a major bottom, there are a host of juniors at which one could almost toss a dart at this juncture. Whether it’s those with a pile of cash, a sector like uranium that fundamentals seemingly demand attention to (my Tracking List has several juniors in that sector), or special situations that appear to be crying out for attention ASAP.

Here are my six largest personal holdings dollar-wise as of today. It would come as no surprise to me that any and all of these might either merge, get taken over and/or get strategic partners before the year is out:

Cap-Ex Explorations (CEV-TSX-V $.74 )– Forbes and Manhattan have shown themselves to be on the forefront of the iron-ore plays in Canada by being key players in Consolidated Thompson and Alderon Iron Ore (a client of mine and a company I still own a substantial amount of shares in). They’re now leading CEV, which should be considered special when compared to its peers. A major drill program begins soon and the shares seem to be on fire sale at the moment.

Excelsior Mining (MIN-TSX-V $.48 ) is led by Mark Morabito, who took Alderon Iron Ore from birth to doing what should end up to be a billion-plus deal when all is said and done. I think we shall see a good part of his focus now on MIN and a major strategic partner like ADV received is not a pie in the sky possibility.

Geologix Explorations (GIX-TSX $.26 )only problem in my biased opinion outside of a collapse of metal prices or something unforeseen, is going to be being bought out for maybe just a dollar or so versus the potential for at least twice that if the junior market doesn’t get better. I will just have to learn to accept that and suffer on the way to the bank if and when that happens.

Oromin Explorations (OLE-TSX $.78 ) of all my companies and personal holdings, this is the no-brainer in terms of takeover/merger. The company has already told us they continue to have discussions and I suspect if not for some recent political factors in the country where OLE does business, such actions may have already occurred. The fact that the company is expected to update its resources and feasibility is only a plus in my prejudiced mind and like this report seems to suggest, risk appears to be pennies to the downside while upside potential is many times more than that.

Sunridge Gold (SGC-TSX-V $.39) and another company in Eritrea,Nevsun Resources, are prime targets of the Chinese in my biased view. I suspect when SGC feasibility comes out soon, we shall find the company’s Net Asset Value (NAV) more than its entire market cap. Like GIX, I think the worst case barring metals collapse or something unforeseen is I eventually sell my shares for $.90 or a buck versus $1.90 or two bucks. Here, too, I expect to adjust.

Spanish Mountain Gold (SPA-TSX-V $.45) after announcing it was skipping pre-feasibility and going straight to bankable status, the share price lost about half of its value. Go-figure. Fifty-cents or below feels like fishing in a fish farm.

I like to suggest given where shares stand today versus the actual metals, the time has come to add to my Tracking List. The fact that one of the handful of experts I take the time to listen to, Mr. Frank Holmes seems to agree, encourages me to add to my Tracking List today the following companies:
Agnico Eagle Mines AEM-NYSE $32.57
Hecla Mining HL-NYSE $4.16
Keegan Resources KGN-NYSE $3.16
McEwen Mining MUX-NYSE $3.82
“Often the difference between a successful person and a failure is not one has better abilities or ideas, but the courage that one has to bet on one’s ideas, to take a calculated risk and to act.” * *Andre Malraux

Shift From U.S. Dollar As World Reserve Currency Underway ? What Will This Mean for America?

Today, more than 60% of all foreign currency reserves in the world are in U.S. dollars but there are big changes on the horizon…Some of the biggest economies on earth have been making agreements with each other to move away from using the U.S. dollar in international trade…[and this shift]*is going to have massive implications for the U.S. economy. [Let me explain what is underway.] Words: 1583

So says Michael T. Snyder (**in edited excerpts from his original article* (which Lorimer Wilson, editor of (Your Key to Making Money!), has further edited below for length and clarity � see Editor�s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.)

Snyder*goes on to say, in part:

China has the second largest economy on the face of the earth, and the size of the Chinese economy is projected to pass the size of the U.S. economy by 2016 [and projected to become three times larger than the U.S. economy by the year 2040 by at least one economist. [As such,]*China is sitting there and wondering why the U.S. dollar should continue to be so preeminent if the Chinese economy is about to become the number one economy on the planet. [Read: Why America Should Relinquish Reserve Status for its Dollar]

China, and other emerging powers such as Russia, have been quietly making agreements to move away from the U.S. dollar in international trade over the past few years [and, as such,]*the supremacy of the U.S. dollar is not nearly as solid as most Americans believe it to be.**[Read: The U.S. Dollar: Too Big to Fail?]
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As the U.S. economy continues to fade, it is going to be really hard to argue that the U.S. dollar should continue to function as the primary reserve currency of the world. Things are rapidly changing, and most Americans have no idea where these trends are taking us. [Read: Is There a Viable Alternative to the Dollar as the Reserve Currency?]

The following are 10 reasons why the reign of the dollar as the world reserve currency is about to come to an end:

#1: China And Japan To Use Own Currencies In Bilateral Trade

A few months ago, the second largest economy on earth (China) and the third largest economy on earth (Japan) struck a deal which will promote the use of their own currencies (rather than the U.S. dollar) when trading with each other. This was an incredibly important agreement that was virtually totally ignored by the U.S. media. The following is from a BBC report about that agreement:
China and Japan have unveiled plans to promote direct exchange of their currencies in a bid to cut costs for companies and boost bilateral trade. The deal will allow firms to convert the Chinese and Japanese currencies directly into each other. Currently businesses in both countries need to buy US dollars before converting them into the desired currency, adding extra costs.

*#2: The BRICS Plan To Use Own Currencies When Trading With Each Other

The BRICS continue to flex their muscles. A new agreement will promote the use of their own national currencies when trading with each other rather than the U.S. dollar. The following is from a news source in India:
The five major emerging economies of BRICS — Brazil, Russia, India, China and South Africa — are set to inject greater economic momentum into their grouping by signing two pacts for promoting intra-BRICS trade…The two agreements will enable credit facility in local currency for businesses of BRICS countries…[which is] expected to scale up intra-BRICS trade*that has been growing at the rate of 28% over the last few years but, at $230 billion, remains much below the potential of the five economic powerhouses.

#3: China and Russia*Use Own Currencies In Bilateral Trade

Leaders from both Russia and China have been strongly advocating for a new global reserve currency for several years, and both nations seem determined to break the power that the U.S. dollar has over international trade. [In fact,] Russia and China have been using their own national currencies when trading with each other for more than a year now. [Read: Will the Trickle Out of the U.S. Dollar Now Become a Torrent?]

#4: Use Of Chinese Currency Growing*In Africa

Who do you think is Africa’s biggest trading partner? It isn’t the United States. In 2009, China became Africa’s biggest trading partner, and China is now aggressively seeking to expand the use of Chinese currency on that continent.

A report from Africa�s largest bank, Standard Bank, recently stated the following:
We expect at least $100 billion (about R768 billion) in Sino-African trade � more than the total bilateral trade between China and Africa in 2010 � to be settled in the renminbi by 2015.

China seems absolutely determined to change the way that international trade is done. At this point, approximately 70,000 Chinese companies are using Chinese currency in cross-border transactions.

#5: China and United Arab Emirates To Use Own Currencies In Bilateral Trade

China and the United Arab Emirates have agreed to ditch the U.S. dollar and use their own currencies in oil transactions with each other.

The UAE is a fairly small player, but this is definitely a threat to the petrodollar system. What will happen to the petrodollar if other oil producing countries in the Middle East follow suit?

#6: India To Use Gold To Buy Oil From Iran

Iran has been one of the most aggressive nations when it comes to moving away from the U.S. dollar in international trade. For example, it has been reported that India will begin to use gold to buy oil from Iran. [See: Video: India to Pay for Iranian Crude Oil in Gold Instead of Dollars]

#7: Saudi Arabia Likely to Abandon*Use of*Petrodollar in Dealings With China

Who imports the most oil from Saudi Arabia? It is not the United States, it is China…Saudi Arabia and China have teamed up to construct a massive new oil refinery in Saudi Arabia…so how long is Saudi Arabia going to stick with the petrodollar if China is their most important customer? [Read:**2012: The Beginning of the END for the U.S. �Petrodollar�!]

#8: The United Nations*Continues to*Push For A New World Reserve Currency

The United Nations has been issuing reports that openly call for an alternative to the U.S. dollar as the reserve currency of the world. In particular, one UN report envisions “a new global reserve system…that no longer relies on the United States dollar as the single major reserve currency.”

#9: The IMF Has Been Pushing For A New World Reserve Currency

The International Monetary Fund has also published a series of reports calling for the U.S. dollar to be replaced as the reserve currency of the world. In particular, one IMF paper entitled “Reserve Accumulation and International Monetary Stability” actually proposed that a future global currency be named the “Bancor” and that a future global central bank could be put in charge of issuing it…. [Read: IMF Proposing New World Currency to Replace U.S. Dollar and Other National Currencies!]
A global currency, bancor, issued by a global central bank (see Supplement 1, section V) would be designed as a stable store of value that is not tied exclusively to the conditions of any particular economy. As trade and finance continue to grow rapidly and global integration increases, the importance of this broader perspective is expected to continue growing.

*#10: Most Of The Rest Of The World Hates The United States

Global sentiment toward the United States has dramatically shifted, and this should not be underestimated. Decades ago, we were one of the most loved nations on earth [but] bow we are one of the most hated. If you doubt this, just do some international traveling. Even in Europe (where we are supposed to have friends), Americans are treated like dirt. Many American travelers have resorted to wearing Canadian pins so that they will not be treated like garbage while traveling over there.

If the rest of the world still loved us, they would probably be glad to continue using the U.S. dollar but because we are now so unpopular, that gives other nations even more incentive to dump the dollar in international trade.

What will happen if the U.S. dollar’s reign*as the world reserve currency comes to an end?

The demise of the dollar will also bring radical changes to the American lifestyle. When this economic tsunami hits America, it will make the 2008 recession and its aftermath look like no more than a slight bump in the road. It will bring very undesirable changes to the American lifestyle through:

1. massive inflation,

2. high interest rates on mortgages and cars,

3. substantial increases in the cost of food, clothing and gasoline and*

4. the U.S. government is going to have a much harder time financing its debt. Right now, there is a huge demand for U.S. dollars and for U.S. government debt since countries around the world have to keep huge reserves of U.S. currency lying around for the sake of international trade but what if… the appetite for U.S. dollars and U.S. debt dried up dramatically? That is something to think about.


At the moment, the global financial system is centered on the United States but that will not always be the case. The things talked about in this article will not happen overnight, but it is important to note that these changes are picking up steam. Under the right conditions, a shift in momentum can become a landslide or an avalanche. [Read: What Would USD Collapse Mean for the World?]

Clearly, the conditions are right for a significant move away from the U.S. dollar in international trade. When will this major shift occur? Only time will tell.

*…come-to-an-end *(To access the article please copy the URL and paste it into your browser.)
Editor�s Note: The above article has been has edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article�s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

Related Articles:

1. IMF Proposing New World Currency to Replace U.S. Dollar and Other National Currencies!

Over the past few years, there have been many rumors about a coming global currency, but at times it has been difficult to pin down evidence that plans for such a currency are actually in the works but not anymore. A shocking new report by the IMF is proposing just that � a global currency beyond national control! Words: 820

2. 2012: The Beginning of the END for the U.S. �Petrodollar�!

A major portion of the U.S. dollar�s valuation stems from its lock on the oil industry and if it loses its position as the global reserve currency the value of the dollar will decline and gold will rise. Iran�s migration to a non-dollar based international trade system is the testing of the waters of a non-USD regime�transition to a world in which the U.S. Dollar suddenly finds itself irrelvant. [Let me explain.] Words: 1200

3. Video: India to Pay for Iranian Crude Oil in Gold Instead of Dollars

The EU has delivered on its threat to ban the import of crude oil from Iran, in response to its nuclear programme. The latest round of sanctions prohibits any new oil contracts, while allowing for existing deals to run until July but Tehran is apparently finding ways to keep business pumping. Reports say Iran will keep supplying one of its biggest customers � India � but will get payment in gold instead of dollars. Video* length: 02:37 minutes.

4. Why America Should Relinquish Reserve Status for its Dollar

Conspiracy theory notwithstanding, claims that the reserve status of the U.S. dollar unfairly benefits the U.S. are no longer true. On the contrary, it has become a burden, both for America and the world. [Let me explain.] Words: 825

5. *Will the Trickle Out of the U.S. Dollar Now Become a Torrent?

Yesterday, another brick was taken out of America�s dollar fundamentals. China and Russia have announced that they intend to stop using the U.S. dollar and begin to pay for trade between their two countries in renminbi and rubles, respectively, from now on. It begs the following question: Will the OPEC countries of the Middle East follow suit in abandoning the U.S. dollar? Words: 614

6. The U.S. Dollar: Too Big to Fail?

Those in the U.S. power structure know what the plan is if the U.S. dollar should fail. They are not admitting publically that there is even the remotest chance that it could happen but, rest assured, there is a plan. There is always a plan. To paraphrase Franklin Roosevelt, nothing happens by chance in government, so don�t be caught up in such a �surprise� event � whatever it may be and whenever it occurs. Words: 1345

7. Is There a Viable Alternative to the Dollar as the Reserve Currency?

Within the recent retracement of the U.S. currency there has been endless speculation about the future role of the dollar as the world�s primary reserve currency. Moreover, there has even been conjecture that the dollar will no longer exist at some point in the near future but any case made for the vulnerability of the dollar falls short when it comes to naming alternatives. Words: 631

8. What Would USD Collapse Mean for the World?

I came to the conclusion several years ago that it was just a matter of time before the world realized that the relative functionality of the U.S. dollar was about to go belly up � to collapse � and that that time happened to coincide with that fateful date all the prophecies are going crazy about � 2012! Words: 881