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QE3 explained by gold expert Jim Sinclair

Economic Effects Of QE3 Will Soon Enter The Markets

Posted By Jim Sinclair On September 20, 2012 (6:24 pm) In General Editorial

My Dear Extended Family,

Everyone has an opinion of QE3. Almost all are wrong.

What has taken place here in its size, and in an almost simultaneous international unified approach has no precedent in economic history.

QE1 and QE2 were not failures. Do you have any idea what the world would have looked like if every major bank in the Western financial world broke?

It is easy to be a naysayer and say let the banks go broke, but you have no idea how hard it would have hit you and yours and maybe gold and silver. This is not to say that Debt Monetization, which QE represents, is correct, but it was the only tool available to central banks that would create infinite cash for the Fed and Treasury to use in a totally discretionary manner. Governments, because of the size of their debt, were incapable of applying the better tool for reviving economic activity, which is fiscal stimulation. One thing for certain is the infrastructure of the USA is collapsing in front of your eyes. Dar es Salaam airport looks better on approach than JFK. Dubai is beyond description. Roads from the Beijing airport are brand new. The USA infrastructure is disgraceful for a major power. New York City roads look like “Mad Max and the Day After.” However when you are the major debtor nation fiscal stimulation is simply not possible. It will not happen because it cannot happen.

Please stop listening to those that tell you QE will have no effect. They are “Ignorant to Infinity.” QE3 is going to have an unprecedented effect, as it is now simultaneous and global in scope.

Please make note of all the governments that screamed at the Fed for the use of QE1 and QE2 that are now applying QE to infinity.

There will be no QE4 because QE3 is going to go on continually with a month or two off now and then. Please recognize that it is hard for markets to discount what they do not believe in and therefore by definition do not anticipate.

Know within 90 days the economic effects of QE3 will be entering markets for money and therefore the markets for gold, silver, and most certainly the dollar.

Gold is going to at least $3500. Silver will certainly perform well also. The real support for the US dollar is .7200 on the USDX and it will trade there. The euro will trade at $1.35 and $1.40.

Ron McEwen of MUX fame said it correctly: “Patience is bitter; but the fruit is sweet!”

Respectfully,
Jim

Article taken from Jim Sinclair's Mineset - http://www.jsmineset.com
URL to article: http://www.jsmineset.com/2012/09/20/economic-effects-of-qe3-will-soon-enter-the-markets/

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Why Buy Gold and Silver? [by Deviant Investor on September 5th, 2012]

Why Buy Gold and Silver?

The simple answer is: Preserve Your Purchasing Power! Gold and silver are great investments in the current monetary environment, lovely to hold in your hand, historically interesting, and they provide financial and emotional security.

Consider these ten questions

• If you were putting something into a “time capsule” for your grandchildren to open in 40 years, would it be gold coins or $100 bills?
• Gold was under $300 per ounce in 2001. As of today, it is nearly $1,700 per ounce. How has the purchasing power of a $100 bill held up since 2001 compared to gold?
• Would you trust the veracity of a gold coin more than that of a politician?
• Central bankers can and do create trillions of Dollars, Euros, Yen, and Yuan. How many ounces of gold can central bankers create?
• How many hundreds of paper currencies throughout history have been inflated into worthlessness? Has a gold coin ever become worthless because of inflation?
• Have you ever held a gold coin in your hand? Would you like to?
• Gold was valuable 5,000 years before the “Dollar” was invented. Will it still be valuable 5,000 years from now?
• Gold pays no interest, so should I invest my savings in it? How much is your money market paying you these days? Less than 1%? Gold has averaged over 15% increase in price per year for the last decade. Which sounds better?
• Do you remember $.15 per gallon gasoline? Gold was worth about $40 per ounce at that time. Our economic system depends on a rapidly expanding money supply, which guarantees inflation over time. In simple terms, as prices increase, so will the price of gold. During some decades, the price of gold can increase very rapidly. I suspect 2010 – 2020 will be one of those decades.
• If I substitute silver for gold, are all of the above still true?

Think about the above questions and then think about your retirement, your savings, and your ability to preserve your purchasing power with gold and silver, in comparison to most other investments. I think an objective analysis will point toward gold and silver over most other investments.

from deviantinvestor.com