Gold is a Unique Currency and a Barometer of Fear

By Jim Sinclair

- Gold is a unique currency.

- Gold becomes money when money fails.

- Gold is competition with fiat currency.

- Gold is not a commodity

- Gold is a barometer of fear.

- Attempts to break the barometer in order to avoid fear are futile both in trying to hold the value of gold down as well as preventing fear.

- Gold is a barometer of confidence in government’s functionality

- Gold is insurance. Trading your insurance is dangerous because when you need your insurance it will out-price itself immediately by hundreds or thousands of other currency units.

- Inflation equals money squared. Hyperinflation is a currency event, not an economic event.

- Gold is the financial high-ground when a Global Tsunami hits, such as sovereign default or the real threat thereof.

- Gold in your hand eliminates counter-party risks.

- Gold in hand removes financial agents between you and your assets.

- Gold ETFs defeat the definition and purpose of gold and are therefore poor choices for the gold investor.

- Claims on paper gold by ETFs far exceed anything that the true cash physical spot market could EVER provide.

- Velocity of money represents attitude of all consumer types from business to household.

- Velocity of money would spike when confidence in a currency is lost in terms of that currency.

- There is no practical way to drain debt from the fragile economic recovery therefore QE must go to infinity.

- Margin in gold is a financial death wish.

- A weak currency is a symptom of Inflation in Monetary Aggregates.

- The price of gold has many enemies, but the most seditionist are those who claim to be friends of gold – the majority of those authorities that write on gold.

- Hold your gold and get out of the system.