Anyone who has followed the issues that we do here on this blog for a long time knows the name Jim Sinclair. Jim is well known for his ability to do amazingly accurate long term price forecasting in the gold market. He famously called the top of the first huge bull market in gold back in the early 1980's. More recently (in this century) he incredibly made a long term gold price forecast of $1,650/oz way back when the price of gold was trading well below $500/oz. in the early 2000's. Gold hit that and more within his time frame.
In collaboration with Bill Holter (also hailing from Texas), they have been very consistent in the view that the present monetary system is unsustainable long term due to the combination of too much overall debt along side too many high risk derivatives that interconnect all through the banking and financial system
In this very recent interview with Greg Hunter, they repeat the warning they have been issuing now for many years and are going on the record to say they believe that this recent sharp move up in the price of gold is a signal that the first "reset" of the present system they have long predicted is now starting up. Jim Sinclair says the events that he and Bill expect to unfold during this reset process will be completed by 2025.
Below I have pasted in the video of the interview.
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Bullet points from the interview:
- the present system is unsustainable due to too much debt and risky derivatives
- Democratic candidates for President are basically calling for a debt "jubilee" reset
- central banks are cornered and running out of ammunition to stave off a reset
- the recent sharp move up in gold is an early warning signal
- there will be two resets higher in the price of gold over the next few years
- the events that are part of the reset process will unfold by 2025
Added note 7-17-2019: Ray Dalio describes his own version of a coming reset which he labels a "paradigm shift"
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My added comments: The conditions we all live in these days are not easy to get a handle on. Trying to make a prediction about anything happening within a certain time frame is extremely difficult to do. I will say that having followed Jim Sinclair for a long time that he has done a pretty good job of long term forecasting, especially in terms of predicting price levels for gold many years in advance.
Some people who were alert and alarmed when the 2008 financial crisis arose have since gone off alert because the enormous coordinated effort by central banks around the world to stave off a failure of the present system seems to have accomplished at least that much up to now and the system seems stable to them now. A decade has passed since that last major crisis.
In this new interview, Bill and Jim offer a reminder that by no means have the problems and issues that triggered the big 2008 crisis been permanently solved. Instead, they feel that the unusual and unprecedented monetary stimulus actions that were taken have at best simply managed to push a day of reckoning off into some unknown future date. Jim Sinclair thinks that date will come before the year 2025. Readers should watch the video to see why he believes this.
If you want more evidence that even those who were directly in the heat of battle in the 2008 crisis don't feel like all the problems are solved and have some similar concerns, please go back and read our articles (first one here, followup here) from earlier this year that feature Mike Silva. Mr. Silva was the Chief of Staff to Tim Geithner at the NY Fed. Near the end of his article describing how it was to deal directly with the 2008 crisis, Mr. Silva offered this comment:
"Once a financial mob panics, the only thing that will end that panic is for a central bank with a large billy club to show up and announce: "Break it up everyone. Go home. This crisis is over." Unfortunately, the Dodd Frank Act (DFA) has crippled the Fed's ability to play this role. I guarantee that curbing the Fed's emergency authority will come back to haunt us."
Mr. Silva offered this answer to his own question about whether we will see another major financial crisis:
"Absolutely. As long as we have a financial system, we will have financial crises. The only question is how often and how severe. Personally, I think a crisis is likely to happen sooner rather than later because of the large number of possible crisis triggers that are currently being squeezed." (see page 15)
Mr. Silva also stated in his article (see page 14) that the system did come very close to failure during that 2008 crisis and he was right in the middle of it at the NY Fed at that time:
"This was a terrifying moment. Central banks know how to support individual institutions, but no central bank had ever tried to support entire markets. And that was what we had to find a way to do."
My point here is, that while none of us can know if or when the next big crisis may strike, it is beyond foolish to assume it can never happen. It is also foolish to make no effort of any kind to understand these important issues and try to make some basic simple preparations in case another huge crisis does one day emerge. That's just common sense like buying auto insurance. You hope you never need it, but you would not think of not having it. In fact, it is deemed by society as so important for people to have it that it is illegal to drive without having it. Surely, the same prudence should be used in relation to the issues we cover here that might some day actually lead to some kind of major "reset" to a new financial and/or monetary system.
If a major "reset" to the present system does come, we would hope for a gradual change under controlled conditions. But we can not rule out a disorderly reset resulting from a sudden, unexpected failure of the present system. We have documented numerous system risk warnings from officials at the BIS, IMF, and central banks here over many years. Over time some risks decrease, others increase. But risks never completely go away. The goal here is to monitor events, report what actually happens over time, and document various ideas on how to "reset" the system should that be necessary at some point in the future.
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