20080111PM Jim Sinclair, Inflation

DOW 12,606.30 -246.79 (-1.92%)
NASDAQ 2,439.94 -48.58 (-1.95%)
S&P 500 1,401.02 -19.31 (-1.36%)
Gold and platinum hit all time highs. Silver hit highest price since 1980.
It is tough to be short, as folks are expecting a giant Fed-induced rally any day now.

BRK-A 132,100 -2100. Lots of time was spent at 110,000 up until the credit problems last summer.
FRPT 4.02 -.26.



Jim Sinclair runs TRE.
Posted On: Friday, January 11, 2008, 3:03:00 PM EST
Author: Jim Sinclair
My Dear Extended Family,

Please, for me and for you, protect yourselves. I did not spend all this time with you to ensure you made money in gold for no reason. I wish accomplish two goals here:

1. Pass on my knowledge to you as a gift.
2. Protect you and therefore your family and their futures in the totally unavoidable dislocation of all you hold dear in the next three years.

It is not only the US financial system, it is the world financial system that has sprung terminal and unstoppable leaks. What is coming is a combination of unparalleled geopolitical events and the downside of unbridled greed; one unprecedented in world history that will literally kill people.

* Have you acted to protect yourself?
* Do you have debt?
* Have you equaled your debt with 100% fully paid gold?
* Have you eliminated any margin on investments?
* Have you done everything possible to eliminate agents between yourself and your assets?
* Have you taken delivery of your coins from your coin dealer?
* Are you doing business in any SUBSTANTIAL way with any internet financial entity, even those that have the word gold in their title?
* Have you taken delivery of paper certificates for those items you have deemed investments?

Your opportunity for taking physical delivery of paper shares of ANY company is coming to an end.
Major brokerage houses have indicated and some have already put in place a policy of electronic shares only. What that means is that they simply refuse by operating practice to forward your request for paper certificates.

Since the transfer agent requires a signature guarantee and your shares are now at the refusing broker you cannot get the proper request and documents to the transfer agent.

This means you take delivery now or forever have an agent between what you own and yourself. Now means today, not tomorrow.



St. Louis Federal Reserve Bank says government if primary beneficiary of inflation. Inflation crushes the middle class and those on a fixed income. I would add that the Federal Reserve banks also benefit from inflation, as they are the first to touch the newly created money.
FEDERAL RESERVE BANK OF ST. LOUIS, NOVEMBER 1976

CONCLUSION
...
In recent years, some economists have argued that
there are benefits to inflation and, if the rate is stable
and can be fully anticipated, there is little or no cost
to society. The cost of perfectly anticipated inflation
is its wellare cost. It results from the loss in welfare
due to the substitution away from real money balances.
While this cost may be small in relation to the
costs of redistributions of income and wealth when
inflation is unanticipated, it is comparable to the welfare
costs of other major components of the U. S. tax
system at levels of inflation as low as 5 percent.
Moreover, the size of the welfare cost of inflation
increases rapidly with the size of the rate of inflation
itself. The welfare cost of inflation is independent of
resource costs incurred to economize on cash balances;
indeed, the analysis assumes these costs to be
zero. To the extent that valuable resources are used
to economize on cash holdings, the cost of perfectly
anticipated inflation is even greater.
One of the primary benefits of inflation is the
revenue it produces for the government.