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Dollar will doom, Gold will boom: Jim Sinclair

Published on February 06, 2010 at 23:45

By Jim Sinclair
The Euro is down again today on the sovereign debt concerns focusing on a debt to GDP percentage. The nations presently in focus of this have been quite impolitely nicknamed PIIGS. The PIIGS are Portugal, Italy, Ireland, Greece and Spain.

Although this means little to floor traders, Forex speculators of F-TV guess what nation stands directly in the middle of the PIGS on the debt to GDP percentage?

Yes, you are right, the USA.

So much for logic.

Algorithms will yank markets into the stratosphere and down again.

Fundamentals make the trend and algorithms make the noise. Fundamentals will pay off on insurance policies.

The argument against the PIGS is the debt to GDP percentage. The exact same argument would place the US dollar in a crisis position.

So what does this mean for the future? Gold will be elected the currency of choice.

The race to the bottom is what makes currency values. While size is being used today for dollar strength versus the Euro, in time the argument of size in terms of a currency whose debt to GDP ratio is equally bothersome as the PIGS, the US dollar, will accelerate in the race to the bottom.

The US dollar is no safe haven. Stay the course.

Even to today I get emails asking me to explain the why of gold in what the writer assumes is coming deflation. Well deflation is debt failure and inflation is monetary expansion.

Deflation took place in the OTC derivative meltdowns that still have not been attended to outside of making the winners whole.

As a result the dollar will experience hyperinflation that few, certainly the Keysians, have no understanding of.

Courtesy: www.jsmineset.com

Source: http://www.commodityonline.com/news/Dollar-will-doom-Gold-will-boom-Jim-Sinclair-25461-3-1.html