The Future Of Quantitative Easing (Jim Sinclair)

10/31/10
My Dear Friends,

Tomes have been written this week about quantitative easing, many written by those who didn’t know what QE meant twelve months ago. Tomes are silly as very few actually read them. Those that do read are comatose by the end. We do not do tomes here. We present conclusions.

QE to infinity means the economic can gets kicked down the road again at the cost of the dollar’s value and therefore sparks the event of accelerated currency induced cost push inflation.

No QE means a violent collapse of general business within 90 days. That takes the camouflage off of the following:

• False balance sheets of financial entities, thanks to the sale of the FASB’s soul to political pressure, are exposed.
• Further collapse of tax revenue to states brings about a financial crisis much larger than anyone presently anticipates.
• The malaise in the US destroys what little is left of general confidence in the austere Euro region.
• The rape of pension funds is exposed.

Gold will go to a figure equal to all foreign debt of the USA divided by the number of ounces that the US is assumed to have. This is how you can calculate the potential price.

If moderate levels of QE are utilized, that means the can gets kicked down the road once again at the cost of the dollar and therefore the event of accelerated currency induced cost push inflation. It might in this case take a few days before the markets figure it out. If moderate QE is announced that means QE to infinity but only revealed a little at a time or not revealed at all. To do QE to infinity without revealing it violates the tool of communication recently discuss by the Fed which means MOPE. It will be revealed.

By Jim Sinclair
 Jim Sinclair's Site