No matter how the Fed tries to manipulate the markets through its orchestrated communiques, more ‘quantitative easing’ is coming, says ‘Mr. Gold‘ Jim Sinclair. And this time, $17 trillion more of Sinclair’s mantra “QE to infinity” is a done deal, according to him.
How does he know?
“How does anyone know an answer to a question? By being told. By having sources,” Sinclair revealed to King World News, Friday. “I’m half a century in the business. I’ve constantly kept up my contacts in a very unique and focused way. Quantitative easing was made clear to me, prior to Bernanke’s speech to the Washington group, prior to quantitative easing.”
The 50-year-plus veteran of the gold market first came to use the term “QE to infinity” back as early as the summer of 2009, suggesting he knew all along that the Fed had finally reach a liquidity trap and that it was inflate or die from then on.
Nearly three years later, there’s been no chink in that assessment, as evidenced by the Fed’s subsequent QE2 program, bogus currency swaps schemes as well as the most recent backdoor bailout of Europe through the Troika earlier this year.
“The next step in the formula is the fatigue of Asia in supporting bad Western monetary habits and QE to infinity to protect the long term 28 year up-trend line in the 30 year U.S. Treasury bond market,” he said in a Jul. 2, 2009 post.
A look at a 20-year chart of the 30-year Treasury reveals the trend line Sinclair had spoken of. Investors seeking clues to the dollars next major move could find in the chart of the 30-year bond.
Both the MACD and Slow STO indicate intermediate-term technical topping in the 30-year bond, and the trend line has held ever since the Jul. 2009 post.
As far as the outlook for the gold market, Sinclair is as bullish on gold as he’s as sure of more QE from the Fed.
The battle, he said, for the Fed is to fight the rise in the gold price for as long as possible prior to the next formal announcement of further Fed expansion of its balance sheet. A move through “$1,764 and they [Fed] lose control. That begins the move which is exponential.
“It’s a formidable challenge (keeping gold below $1,800). The true range of gold is $1,700 to $2,111, but these guys are going to try to fight it like nobody’s business.”
However, the fight will be lost and the breakout above the $1,700 to $2,111 range is inevitable following the next QE announcement by the Fed on the way to trillions more. That, Mr. gold has no doubt.
He concluded, “If we’ve done over $17 trillion already, do you think we won’t do another $17 trillion? Of course we will.”