Author: Jim Sinclair

Dear CIGAs,

Nothing happens by chance! Please consider the following excerpt from the Reuters article below:

"Small and medium-sized miners and juniors who are still in the exploration stage, are the easiest targets for bigger companies, but the acquisitions wave won't likely stop there."

Why is it that amongst companies active in the minerals sector, it is primarily and almost only precious metals shares that are under severe selling pressure?

Why is it that companies active in other mined products or co-products as below have their shares in major demand?

Did gold not rise from $248 to a recent high of $1033 even while the hammer was being applied to gold shares - especially those that hold the potential and promise of new production in a period of declining gold output?

Is there not a glaring example of a mined product in the form of potash this week? Did not an IPO in a potash mining company (Intrepid Potash), which is used as a fertilizer, open up above its issue price by 58%?

Chemically, potash consists of potassium carbonate but it also might contain potassium oxide or potassium chloride depending on the feed source. Usually, potash takes the form of powdery salts. Modern methods of extraction generally rely upon deposits mined from ores, like sylvanite. Nowadays our potash comes from mining and goes toward inorganic fertilizer rich in potassium.

Why are other mining entities acting so well, especially those with the following significant products?:

• Antimony
• Beryllium
• Cadmium
• Chromium
• Cobalt
• Manganese
• PGMs
• Rhodium
• Tungsten
• Vanadium

How about simple iron ore and all those involved in all the criteria of exploration and development of crude oil? That is also an extractive industry like precious metals mining.

Your answer may be that gold is different but it is not. You might say others think that gold has topped but has it?

The stimulants economically are the same for potash, iron ore and the other items listed above as it is for gold. It is the growth in Asia, the consequences of the effort to maintain the social order as the financial order implodes, and the condition of the US dollar.

Nothing happens by chance but for argument's sake let's call it an opportunity to be seized. Many junior gold companies are so depressed that they are worth more dead than alive. Gold and other metals shares are depressed so that they are selling well below their asset value

Asset Value is something that 3.7 generations have not taken into consideration where price is concerned. You may recall that I suggested to you that one major company would consolidate the industry. Keep that concept in mind. Major gold producers are in need of new production. This is FACT.

South African companies are in need of major projects OUTSIDE of the RSA. For the RSA gold producer there is no expansion of reserves in RSA because even if they have the reserves they cannot raise production levels as the energy situation is already stressed beyond demand. This is a long-term problem unfortunately.

The major consolidator of the gold mining industry may have gotten too greedy in waiting for future reserve properties to become ever cheaper for acquisition or joint venture.

The game being played by design or serendipity is to depress the juniors or to take advantage of the decline in the juniors as a result of the poor share price action by starving the junior or explorer of financing.

Depressing the price of the shares of most junior situations results in starving precious metal juniors of financing and their shareholders would be ripe for a bid for the company at a price much lower then their highs when gold was at $600. It may also make the smaller company eager to make deals at less than advantageous conditions for their investors.

The key here is that the gold producing industry is in need of new resources as present resources are depleting. That is fact.

It is much cheaper to pick up a property or entire company in a financially stressed condition because it cannot publicly finance for continued operation.

Let's call the situation the taking advantage of a serendipitous development. To others it looks like the consolidators are holding a smoking gun. The weakness in this strategy is the advent of new competition for minerals internationally - primarily from Asia and the Middle East.

The Saudis and the Chinese are actively looking for mineral prospects that are prospective for precious metals, strategic metals, industrial minerals including rare earths and beach sands to name a few. They have said so publicly at top executive levels.

The major industry consolidators now have competition from companies with more liquidity and NO need for debt to take any property to production.

The advent of this new competition may well trump the Western companies some feel are holding the smoking guns.

This competition from Asia and the Middle East may accelerate the consolidator - whose timing is a greed-driven desire to get properties so cheap they might be considered free - to move sooner than later.

To call attention to the factual nature of this analysis please read the following article regarding the stated interest of a major Chinese company given publicly at a recent professional mining conference.

Again, please note the all-important statement given by a top executive of the Chinese company:

"Small and medium-sized miners and juniors who are still in the exploration stage, are the easiest targets for bigger companies, but the acquisitions wave won't likely stop there."

Mega mergers ahead for mining industry
Fri Apr 11, 2008 6:13pm BST
By Ignacio Badal - Analysis

SANTIAGO (Reuters) - With metal prices holding in what many call a super cycle, the global trend toward mergers and acquisitions will continue among miners, according to analysts and executives who attended the CRU/Cesco copper week in Santiago this week.

Small and medium-sized miners, and juniors who are still in the exploration stage, are the easiest targets for bigger companies, but the acquisition wave won't likely stop there, they said.

Mining analysts agree the market will soon see more huge takeover bids announced, like the failed attempt by Brazilian mining giant Vale (VALE5.SA) (RIO.N) to buy Xstrata (XTA.L) for more than $90 billion.

Executives say acquisitions will continue because global copper demand is growing and supplies are tight, so new supply has to be brought on line. The easiest way to do that is to buy existing producers.

Companies will be on the lookout for producing assets and smaller players won't have the same access to financing to bring new output on line.

"(Mining) costs have skyrocketed in recent years, with the subprime crisis and the disappearance of securitized debt markets ... it is increasingly difficult to finance, meaning only the best capitalized players can afford to invest," said Bart Melek, a Toronto-based analyst with BMO Capital Markets.

"We may well be entering an era of super-consolidation. We'll see what pans out during the course of the next two years," Charlie Sartain, the chief executive of Xstrata Copper, told the CRU conference on Thursday.

Words like mergers, acquisitions and takeovers were among the most heard at the CRU and Cesco copper week, where potential buyers and sellers huddled in hallways and hotel lobbies.

more...

Now think about this as you take actions based on emotions based on the late afternoon manipulations of price, not on hard cold reasoning.


( Click on the link below to visit our website. )

http://www.jsmineset.com

By Jim Sinclair

Dear Friends,

The Bear case for gold is made up of the following points:

1. The Federal Reserve slows down on rate cutting.
2. The Euro Central Bank raises rates modestly.
3. The US dollar then rallies.
4. Commodities fall, especially crude and edibles, because the dollar rises.
5. Shortages in foodstuffs cease globally.
6. The US Equity Markets rise.
7. Gold falls.
8. All problems solved.

These points make up the flavor of this week.

All short-term market movements in anything produce the assumed reasons for the movement after the fact.

The reasons at that moment (see above) seem acceptable because the market that produced them is moving in their direction, as was the case today.

The primary reason why this scenario is weak is due to the "CONSEQUENCES" of the actions taken to produce the appearance of normalcy.

Monetary inflation ALWAYS produces price inflation regardless of the level of business activity.

There is no question that international liquidity is growing at such a rate that it will double by 2012. Those who deny that international liquidity is moving higher at this rate have actually accepted the announcement of the Treasury Auction that put cash into the banking system, investment banking and other fanatical entities at or near bankruptcy. They then write tomes saying the Fed actions are monetarily neutral, exposing themselves as damn fools dressed in academic clothing.

Regardless of how normal the perspective is spun, the cellar is full of unprecedented financial rot. The need to keep that rot from starting a domino effect requires that any and all funds required will be produced to prevent any primary US Treasury dealer or significant OTC derivative grantor from going broke.

The reason to keep primary treasury dealers alive is self-evident.

The reason that Bear Stearns could not go broke is that it would have caused their more than 20,000 OTC derivative counter-party financial entities to fess up to the fact that the specific performance contract with Bear Stearns cannot function and is therefore valueless.

The only time nominal value becomes real value with an OTC derivative is when the specific performance contract goes bankrupt and one side, the losing side, cannot perform. This is FACT.

The upcoming plague of hyperinflation is raising its ugly head due to a combination of the hot-dry long weather cycle and global demand for crude products, but more so from the unprecedented amount of international liquidity created in order to offset true valuation of the OTC derivatives.

The CONSEQUENCES of the expansion of monetary liquidity will NOT be vacated. It cannot be by any measure, action or spin.

As an effect of the about-to-balloon Federal budget deficit and the CONSEQUENCES of not letting major financial institutions collapse, the euro will reach $2USD and the US dollar will hit .5200 USDX.

What the Bears fail to realize is this:

Of course the Fed has to slow down rate cuts as they are closing in on zero quite quickly. Dropping the rate significantly now would empty the ammunition locker for spin if an emergency reduction becomes required.

The Central Bank of Euroland may increase rates, but common to those who have seen their currency dissolve due to inflation, the decrease would be quite gradual.

Comparative US/euro interest rates price themselves into an equation of the dollar/euro rate, finding an equilibrium point. That point is equally impacted by what the Fed is doing in all areas.

As the Fed (at what they call Treasury Auctions) buys OTC derivative paper in exchange for cash or treasuries, their balance sheet weakens and that factors into the dollar/euro relationship.

As Federal spending stays even or increases in the face of decreasing Federal tax revenues, the growing Federal Budget Deficit is factored into the dollar/euro relationship.

As a change of guard closes in on the US Administration, the economic policies of the candidates factor into the dollar/euro relationship. There are only 270 days, 8 hours, 13 minutes and 38 seconds at this writing until a new guard arrives, more than likely a clone of the present.

The shortage of food cannot be solved by closing US markets - no matter how Mr. Gartman feels - as food trades everywhere and traders that matter trade everywhere. That will be factored into the dollar/euro relationship. In Asia, a shift has been made from eating a purely carbohydrate diet to eating a protein diet and that WILL NOT reverse, no matter how much Mr. Gartman feels the impact of stopping US futures trading on foods would be.

Hyperinflation is unavoidable as a product of the expansion of international liquidity that persists, regardless of Western business conditions that would be an on balance factor for the dollar/euro relationship.

A dollar rally from a change in the US momentum of lowering interest rates would be a modest affair as world central banks awash in dollars that have declined drastically are eager to offload. Sovereign Funds, investments via loans to private companies and other methods of getting out of US dollar would accelerate. This is certainly true in precious, base and strategic metals, as well as food production. Most of this will take place in the financial acquisition of Africa.

Should a dollar rally occur from these levels it wouldn't have legs because of the financial rot in the US economic system and the deterioration of the Federal Reserve balance sheet that occurs as junk is bought for cash and treasuries with no equal or even near equal value.

Closing of markets, as Mr. Gartman proposes, will not happen, as it is the same as saying currency controls can act to correct the value of currencies when the underlying fundamentals are violently contrary to that assumption. His proposal is akin to price controls of foodstuffs resulting in more food to feed the many. That is simply wrong.

I have given warning that shorting equities has to be for a fast cover because liquidity greases the wheels of equity value, not business activity.
In the Weimar experience the stock market went up violently before it all exploded during a period when business activity was awful.

Gold can have significant reactions at any time yet whatever gold is to do on the downside should complete by the first week of May. As far as gold shares are concerned they should reverse by May 8th at the latest even if gold is still chopping for a bottom.

This reinforces my plea to the average person not to use margin in anything gold as you lose your freedom of action, you are not disciplined enough and you have a financial death wish.

For the gold investor in anything gold without margin, the reaction from the first penetration of $1000 is meaningless. The market has NOT topped. What differentiates today from the early 1980s is the mountain of garbage paper called OTC derivatives and the growing demand for proper valuation, much of which is zero. There is no Paul Volcker at the controls.

You are all welcome to call me if you need me. I can be reached at 860-364-1830. If I am on the phone leave a message and I will return your call.

Your friend,

Jim

Dear Friends,

I have known Monty Guild of Guild Investment Management for 38 years. He has distinguished himself as multi-dimensional global thinker not prone to attachment in any particular investment vehicle. His track record over the past 20 years is intact with consistent profits. He is the only man who has ever made money for me and is the executor of my will. Need I say more? Today is the perfect day for a review of his thinking.

Sincerely,

Jim Sinclair

Market Commentary From Monty Guild
Author: Monty Guild and Tony Danaher

Dear Friends,

Hello and warm wishes to you this April 22, 2008.

ARE YOU KIDDING US JOHN?

In the three way battle for worst economic policies, Obama has a narrow lead but both Clinton and McCain are close behind.

In our opinion, there is a simple and accurate one word description of John McCain's proposed economic policies...terrible. Is he really a Republican? I doubt it after seeing his proposals.

One thing is sure, if any of the three were to implement the economic policies that they have so far proposed, inflation would take off like a rocket in the U.S. I know it is early, and they all are pandering to the mass of uninformed and economically strapped voters. I also know that their wild ideas will probably not be implemented in full, but come on folks...your economic ideas are inflationary, with a capital "I".

THERE IS A BIG TREND WHICH WE SHOULD ALL BE AWARE OF...AND INVESTMENTS SHOULD BE POSITIONED TO TAKE ADVANTAGE. THAT TREND IS: INFLATION IS HIGH AND RISING IN EVERY GEOGRAPHIC REGION OF THE GLOBE

We research about 20 countries carefully. We research about 30 industries and about 400 companies worldwide.

We have been talking about the coming inflation for two years now. Individual countries started to notice it about eighteen months ago, and a few months ago inflation finally came to the public's notice on a worldwide scale. However, the seeds of the current price increases were sown at least two or three years ago. What is more important is that the growing season for prices is nowhere near complete.

A few salient points for those who want to protect themselves from the current and oncoming inflation.

1. Inflation takes a long time to incubate. Its soil is the fertile ground of irresponsible monetary policies that take the form of governmental money creation.

2. Countries then institute price controls and government imposed export curbs.

3. Shortages develop in world markets for commodities.

4. Inflationary psychology lags inflation by a long time, but once inflationary psychology begins to grip the populace there is a scramble to acquire and hoard goods instead of money, bonds or bank accounts.

5. Citizens of inflation ridden-countries wish to hold something other than cash, bonds, bank accounts and income producing stocks. The psychology begins to be, "Every day that I hold cash it is losing value to the inflation rate." So countries and investors take the following actions: People buy stocks, hoard food, gold, oil, commodities and other resources and in normal times. If credit is available, they hoard real estate. Currently, real estate can be hoarded in the developing world but in the developed world there is a credit liquidation going on due to an increasing illiquidity in the credit markets...simply put, real estate cannot be easily financed so hoarders go to other assets.

6. Countries begin to raise taxes on extractive industries or even force them to sell their companies to the government at low prices. Then the government operates them inefficiently with political goals in mind. A politically operated company is usually grossly inefficient, production falls and prices rise even faster.

7. Investors begin to call their money managers, stock brokers [financial consultants] mutual funds managers and ask "how can I stay ahead of inflation?"

8. Before this stage hits (it is about 6 months away in our view), you are wise to be invested in the industries and companies which benefit from inflation.

WHO BENEFITS FROM INFLATION? ENERGY, GOLD, FOOD, BASE METALS AND THE FAST GROWING COUNTRIES, SUCH AS CHINA ALL BENEFIT.

LET US TAKE THESE AREAS ONE A TIME AND BRIEFLY DISCUSS OUR INVESTMENT STRATEGY FOR EACH ENERGY

In the past six years (having owned a lot of energy investments while oil has gone from $30 to $116 per barrel) we have invested in several sectors. Currently, we are focusing on those companies which find energy or provide services in finding energy in harsh environments, in unpopular countries, and in offshore deep water environments where most all of the big new discoveries are taking place. We focus on the foreign and harsh environment companies because of the expertise that they possess, in the form of country contacts, and/or technical expertise that will be very valuable in finding energy located off the beaten path. The reason for this is that the energy investments on the beaten path are more highly priced. In our opinion, bigger profits can be found off the beaten path.

GOLD AND SILVER

For the past six years we have focused on precious metals of the following type. When owning mining companies, we favor companies with a royalty model or with a model that uses equity financing and no debt with derivatives attached. Companies who do not sell forward future production as collateral to pay off their loans, and whose growth model does not use derivatives (selling forward future production to get the mine started) are preferred. Such companies are few.

For those who do not want to own stocks, buy precious metals ETF's assuming they are solidly and fairly constructed.

FOOD

Food prices have only been rising for a couple of years, and for that long we have been focusing on it. Food prices will rise much more because politicians are starting to manipulate food prices for their political gain. They are installing price controls, export controls, tariffs and other artificial boundaries which have always led to long-term inefficiencies and problems. These actions tend to cause long-term price increases as they spread incoherence in the farming, distribution and consumption process.

Investing in food is easier now due to the proliferation of ETF's, especially grains. Many ETF's exist to buy grains in several countries. Meats are harder to buy because meat producers consume a lot of grain and grains will rise a lot more in price longer term. In addition to grain ETF's we like to buy fertilizers. We have analysts focused purely on fertilizers, which has been a very successful investment area for us.

BASE METALS

Base metals are in huge demand to build the infrastructure of China and other fast growing countries like Russia. The world's biggest sellers of base metals are Brazil, Canada, Russia, Australia, U.S., and Africa. To a lesser degree other Latin American and Asian countries also sell base metals.

FAST GROWING COUNTRIES

Most economists agree that it looks like the growing countries, especially China, India and Brazil have decoupled from the U.S. and Europe. They are growing, and growing fast. While Brazil is still growing much slower than the other two, its income distribution plan has worked only because the commodities that it sells are rising rapidly in price. Brazil and India must develop more manufacturing and services to supplement farming and commodity sales.

China is a phenomenon, and thus far a very successful one. China is a commodities importer. China has a much more developed manufacturing sector, and now its growing consumer sector is developing.

Even though there were huge snow storms in the first calendar quarter throughout southern China, the GDP growth was stunningly good. The government is trying to slow inflation and is raising interest rates. Thus far, there has been little effect on Chinese economic growth.

To us, Brazil and India are OK if you focus on special companies, but both markets are more vulnerable than China. China's stock market has fallen 50% from the highs while corporate profits grew about 25% in the last year. In our opinion, some Chinese stocks are getting quite cheap and amount to a good long term play.

more...

Author: Jim Sinclair

*Dear CIGAs,*

Gold is going to at least $1650 so investors take heart.

Citicorp only loses 5.1 billion in the last quarter.

Talking heads cheer Citicorp's earnings because Citicorp lost less than predicted by the Street, declaring now that the OTC derivative problem is over. Talk about world class BS!

Euroland big wigs jawbone the US dollar saying, "Hey, we are jawboning so listen to us!"

A little help from its friends and the dollar rises against the euro.

The Gold Cherubs get the top.

The up trend line breaks down as the electronic market takes over and voila, gold is off $30. This is not brain surgery.

Gold is a trend line situation, simple and straight forward. It will only experience greater and greater volatility.

The Angels and Cherubs will give you the price if you understand how to play them.

Speculators in gold who did not get stopped out last US night would be best advised to find a less expensive hobby.

The dollar cannot be manipulated against fundamental reality for long. Currency intervention will be small and on Fridays.

Gold is going to at least $1650 so investors take heart.

( Click on the link below to visit our website. )

http://www.jsmineset.com/

Dear Friends,

I take great pride in the fact that one of our directors, Mr. Joseph Kahama, travelled with Tanzanian President Kikwete on his goodwill visit to China. Next on President Kikwete's schedule is New York City.

Sincerely,

Jim Sinclair

Home News
JK, China premier stress expanded ties
DAILY NEWS Reporter and Agencies
Daily News; Monday,April 14, 2008 @18:01

CHINESE Premier Wen Jiabao and Tanzanian President Jakaya Kikwete have pledged to promote traditional friendship and practical co-operation between the two countries. China and Tanzania respected and supported each other since establishment of diplomatic ties. China treats Tanzania as its all-weather cooperative partner, said Wen.

He said China will continue to provide economic aid and broaden pragmatic co-operation. The Chinese government will continue to provide aid for Tanzania's economic development within its capacity, and hopes to co-operate with Tanzania and enhance friendly partnership, added the Chinese Premier.

Noting China's precious support and assistance for Tanzania over the past years, Kikwete said the Tanzanian people value the friendship with the Chinese people, adding that Tanzanians were glad to hold the Olympic Torch relay in Dar es Salaam on Sunday.

Kikwete kicked off his visit to China on April 11 in Sanya, where he met with Chinese President Hu Jintao and exchanged views on bilateral relations and international and regional issues of common concern. According to official statistics, the trade volume between the two countries in 2007 reached 794 million US dollars, up 48.2 per cent compared to the preceding year.

Mr Kikwete, who was elected rotating Chairman of the African Union in January, visited China in 2006 to attend the Beijing Summit of the China-Africa Co-operation Forum. Meanwhile, the government of China has praised the government of Tanzania and its people for their co-operation during Olympic Torch relay in Dar es Salaam.

The praise was made today by China Ambassador to Tanzania Mr Liu Xinsheng when he was handing over office equipment worth 3,200 US dollars to the Minister for Information, Culture and Sports, Mr George Mkuchika, for his ministry's use.

The equipment include computer, printer, air-conditioner and photocopier. Ambassador Liu commended the stable relations between the two countries in various fields of development. On his part, Minister Mkuchika thanked the government of China for its support to Tanzania. He stressed that the relationship between the two countries should be cemented for mutual benefits of the peoples.

more...

 

Dear Friends,

I respectfully request that you take a moment to review the Confidentiality Agreements (CAs) that your Company has in place with respect to its land holdings in the Lake Victoria Greenstone Belt of Tanzania.

Please click here to view a map showing the CAs we currently have in place. The information on this map will be updated weekly given the growing interest we have been receiving in our extensive property portfolio.

Sincerely,

James Sinclair

By Jim Sinclair

Hedge funds shorting juniors with good property assets would be wise to cover Monday.

Mega mergers ahead for mining industry
Fri Apr 11, 2008 6:13pm BST
By Ignacio Badal - Analysis

SANTIAGO (Reuters) - With metal prices holding in what many call a super cycle, the global trend toward mergers and acquisitions will continue among miners, according to analysts and executives who attended the CRU/Cesco copper week in Santiago this week.

Small and medium-sized miners, and juniors who are still in the exploration stage, are the easiest targets for bigger companies, but the acquisition wave won't likely stop there, they said.

Mining analysts agree the market will soon see more huge takeover bids announced, like the failed attempt by Brazilian mining giant Vale (VALE5.SA) (RIO.N) to buy Xstrata (XTA.L) for more than $90 billion.

Executives say acquisitions will continue because global copper demand is growing and supplies are tight, so new supply has to be brought on line. The easiest way to do that is to buy existing producers.

Companies will be on the lookout for producing assets and smaller players won't have the same access to financing to bring new output on line.

"(Mining) costs have skyrocketed in recent years, with the subprime crisis and the disappearance of securitized debt markets ... it is increasingly difficult to finance, meaning only the best capitalized players can afford to invest," said Bart Melek, a Toronto-based analyst with BMO Capital Markets.

"We may well be entering an era of super-consolidation. We'll see what pans out during the course of the next two years," Charlie Sartain, the chief executive of Xstrata Copper, told the CRU conference on Thursday.

Words like mergers, acquisitions and takeovers were among the most heard at the CRU and Cesco copper week, where potential buyers and sellers huddled in hallways and hotel lobbies.

[more]

 

By Jim Sinclair

Dear Friends,

With the world's mineral resources being depleted by unprecedented demand from developing nations, mining companies and end users are desperately looking for new sources of supply.

Is it any wonder that some of the most pre-eminent names on the global mining scene (Homestake, Placer Dome, Inco, Falconbridge) have simply disappeared - gobbled up by competitors who realize that buying mineral resources on the open market is a lot easier than discovering the resources themselves?

Given the high capital risk associated with exploration in virgin territory, most of these predatory companies are looking closely at established mineral belts where mines have been found and are still being discovered. It's not rocket science but just common sense.

What we've seen so far on the merger front is only the tip of the proverbial iceberg. In the coming years, companies with good land positions in the world's most prolific mineral belts will reap the rewards of their efforts at premiums that will shock you by today's standards. In fact, the targeting process is happening as I speak.

Mega mergers ahead for mining industry
Fri Apr 11, 2008 6:13pm BST
By Ignacio Badal - Analysis

SANTIAGO (Reuters) - With metal prices holding in what many call a super cycle, the global trend toward mergers and acquisitions will continue among miners, according to analysts and executives who attended the CRU/Cesco copper week in Santiago this week.

Small and medium-sized miners, and juniors who are still in the exploration stage, are the easiest targets for bigger companies, but the acquisition wave won't likely stop there, they said.

Mining analysts agree the market will soon see more huge takeover bids announced, like the failed attempt by Brazilian mining giant Vale for more than $90 billion.

Executives say acquisitions will continue because global copper demand is growing and supplies are tight, so new supply has to be brought on line. The easiest way to do that is to buy existing producers.

Companies will be on the lookout for producing assets and smaller players won't have the same access to financing to bring new output on line.

"(Mining) costs have skyrocketed in recent years, with the subprime crisis and the disappearance of securitized debt markets ... it is increasingly difficult to finance, meaning only the best capitalized players can afford to invest," said Bart Melek, a Toronto-based analyst with BMO Capital Markets.

more...

From Jim Sinclair:

Dear Friends,

For those interested, I will be interviewed on CNN this weekend.

Anyone wishing to view the program can see it at the following times:

Saturday at 1PM on "Your Money"
Sunday at 3PM: a repeat

I anticipate the timing being somewhere around the middle of the show.

There is a possibility next week that I will be on CNN Money as well. Check back here for updates.

Regards,

Jim

Tanzanian Royalty would like to clarify some erroneous information that
appeared in an article carried by Bloomberg news service on April 4,
2008 pertaining to its exploration activities in Tanzania.

Tanzanian Royalty has no intention whatsoever of raising capital
through a public share offering. In fact, the Company's Chairman and
CEO, James E. Sinclair, has stated publicly his intention to finance
the Company through ongoing private placements for as long as required.

The Company is continuing to discuss business opportunities with
potential royalty partners for its strategically located land portfolio
in the Lake Victoria Greenstone Belt of Tanzania.

"At the present time, four entities have concluded Confidentiality
Agreements (CA's) with the Company that will allow them to review
technical data on our entire land portfolio in Tanzania," Sinclair
noted.

In addition, five other entities have signed CA's for specific
projects, with many of the confidentiality agreements covering the same
projects. (For a map showing specific projects that are subject to CA's
please visit the Projects Section of the Company's website at:
www.tanzanianroyalty.com).

"Although we are working hard to develop the mineral potential on our
entire portfolio of properties in Tanzania, we are focusing most of our
fiscal resources on our core project, Kigosi, which we consider to be
the most attractive gold exploration project in Tanzania at the present
time," Sinclair said.

Sinclair also confirmed that Tanzanian Royalty is being "courted by
some well-heeled mining entities" which in large part is due to its
long and successful track record in Tanzania which includes a
sensitivity to the needs of indigenous Tanzanians and the environment
in which they work and live.

Author: Jim  Sinclair

Dear Friends,

The spin about the proper valuation of credit derivatives, which is the meltdown process now called the sub-prime mortgage problem, is that all is well and the problems ended with the Bear Stearns rescue.

The equity participants have signed on to this bogus line as demonstrated by the demand for financial shares in the marketplace. The risk in this overconfident spin of course is that it is blatantly wrong and exposes investors to even higher risks. That risk exposure lies in the almost unreported and not discussed Fitch downgrade of a significant issuer of credit default derivatives involving municipal bonds.

It does not take a brain surgeon to understand that the participants in the credit default derivatives crisis cannot in any manner meet their responsibilities should more than one significant failure take place.

Now that Fitch has made a major two-step downgrade, it puts tremendous pressure on the other rating agencies as they maintain double and triple AAA ratings for the debt of the remaining issuers of default swap derivatives.

Yesterday the shares of Washington Mutual rallied following an injection of $5 billion that was intended to dig them out of their financial sinkhole. Today they needed $7 billion. The truth is that no one really knows what anyone needed as the offending financial vehicle has no market in real terms. Of course the silly stock buyers turned around and became sellers.

The huge risk is in declaring the problem SOLVED while sitting atop a keg of black powder while smoking a very large messy cigar. The potential is that the SOLVED situation goes up in smoke.

Risks like this are not new. Last week, Iraqi cleric Muqtada al-Sadr beat the pants off Iraq's military even when air strikes were called in. That was not supposed to happen. The US was sure it would not happen - but it happened. You can bury this super embarrassment but not the $45 trillion in default derivative swaps that are looking like an accident waiting to happen.

The better spin would have been telling the truth. Saying the problem still exists but is being controlled for the present time raises false hopes.

Tight rope walking might pass in a combat situation but is ill considered when used in the financial world where there is no Patriot Missile to save day. I see the danger has been heightened by the extreme use of spin that we are seeing in the media. This time I feel they are pushing a strategy that has reached its functional limit. That may be the first major mistake in "Operation White Noise."

The system is in total disrepair and to spin it any differently creates more danger. That does not protect investors but rather puts them is harm's way.

This is a grandstand spin play that is creating over confidence and is probably the most risky move yet by those involved.

We wish the Fed well. However CONSEQENCES are not being considered which is extremely dangerous. Consequences cannot be avoided but they can be accelerated.

Problems in the credit default derivative arena will occur. Then what?

This is it! Are you prepared?

By James E. Sinclair,

Chairman & CEO,
Tanzanian Royalty Exploration Corporation

MBIA, the issuer of massive amounts of credit default derivatives, has had their bonds downgraded two notches by Fitch.

This is the most significant event to occur since this entire mess started.

It is reasonable now to assume that all the bond issues guaranteed by MBIA will feel the impact of that downgrade.

I was certain the civil liability the rating companies would face by keeping the credit default derivatives at an AAA rating was high enough to break them.

This is a very significant development that opens the door to a new $45 trillion dollar derivative problem.

MBIA Loses AAA Insurer Rating From Fitch Over Capital (Update1)
By Emma Moody

April 4 (Bloomberg) -- Fitch Ratings cut MBIA Inc.'s insurance rating to AA from AAA, saying the bond insurer no longer has enough capital to warrant the top ranking.

MBIA, the world's largest bond insurer, would need as much as $3.8 billion more in capital to deserve an AAA, New York- based Fitch said today in a report. The outlook is negative, Fitch said.

Fitch issued the new, lower rating even though Armonk, New York-based MBIA asked the ratings company last month to stop assessing its credit worthiness. The two companies disagree over how much capital MBIA needs to absorb losses on the bonds it insures.

''It will be difficult for MBIA to stabilize its credit trend until the company can more effectively limit the downside risk'' from collateralized debt obligations, Fitch said in the report.

more... 

Gold's weakness today is predicated by the short covering strength in the US dollar.

Short covering in the US dollar is predicated by the Paulson program, the $4 billion raised by Lehman Brothers and the conclusion that the credit problems are now behind us.

The problems in credit are NOT behind us. The US dollar problems are far from over.

There are consequences to the increase in liquidity created to craft the appearance that no further major international investment and banking companies will need rescuing.

Tanzanian Royalty is pleased to announce that all assay results have
been received from the Phase 5 drilling program on its Kigosi Gold
Project. 

The Reverse Circulation (RC) drill program was completed in December
2007 and consisted of 64 holes aggregating 3,659 metres, bringing the
total drilled at Kigosi to 16,958 metres in 378 holes. 

According to Tanzanian Royalty President, John Deane, "The objective of
this fifth phase of drilling was to test the strike continuity of the
Luhwaika reef system to the southeast on two 200 metres-spaced lines,
and to drill infill holes down-dip and along strike of mineralization
identified in previous drilling in the northwest area."   

Drilling was conducted along nine control lines with a central baseline
having a strike length of 2.8 kilometres.  Hole spacing was 30 metres,
he noted. 

The two shear zones hosting the high grade shoots have now been traced
along a strike length of 2.2 kilometres. Both structures are still open
towards the northwest and southeast.  The gold bearing shoots within
these shear zones have strike lengths ranging from 100 to 1,300 metres
and most of them appear to be closing off to the northwest.  

 Below is a summary of the shoot statistics:

    -------------------------------------------------------------------------
                         No of                   Thick-
    Shear         Shoot     RC   Length   Width   ness        Grade
    System         Name  holes      (m)     (m)    (m)        (g/t)  Comments
    -------------------------------------------------------------------------
    Luhwaika
     Main        Falcon      8   ±850   10-20    1-2    2.59-8.83   Closed
    -------------------------------------------------------------------------
    Luhwaika
     Main      Bateleur     17  ±1300   10-20    1-3  1.99-101.25   Closed
    -------------------------------------------------------------------------
    Luhwaika
     Main         Eagle      7      450   10-20    1-2    2.10-6.65   Closed
    -------------------------------------------------------------------------
    Luhwaika                                                         Open to
     Main       Goshawk      4      650      10    1-2   7.14-35.70     west
    -------------------------------------------------------------------------
    Luhwaika
     West      Flamingo      3      300      10      1    3.96-4.46   Closed?
    -------------------------------------------------------------------------
    Luhwaika                                                         Open to
     West       Pelican      7     1000?  10-30    1-2    2.77-16.46    west
    -------------------------------------------------------------------------
    Luhwaika                                                         Open to
     West     Albatross      3   ±250      10      1    4.63-20.30    west
    -------------------------------------------------------------------------

The shoots are separated by lower grade (<2g/t) envelopes that are
between 10 and 30 metres wide along the plane of the shear zones. 

A summary of the Phase 5 drill highlights is presented below: 

-------------------------------------------------------------------------
    Hole         From    To    Intercept   Gold
    No            (m)    (m)         (m)    g/t       Including     Comments
    -------------------------------------------------------------------------
    Line 1510N
    -------------------------------------------------------------------------
    KG20RC-378    75     78           3    1.25   *1m@9.07    West Zone
                                                                    in shoot
    -------------------------------------------------------------------------
    Line 1750N
    -------------------------------------------------------------------------
    KG20RC-370    41     42           1    1.83                    West Zone
    -------------------------------------------------------------------------
    KG20RC-370    74     75           1    1.04                    West Zone
    -------------------------------------------------------------------------
    KG20RC-371    60     61           1    2.29                    New Zone?
    -------------------------------------------------------------------------
    KG20RC-371    80     81           1    2.21                    New Zone?
    -------------------------------------------------------------------------
    KG20RC-371    88     93           5    .053                    West Zone
    -------------------------------------------------------------------------
    KG20RC-372   101    104           3    1.82      1m@4.63    West Zone
                                                                    in shoot
    -------------------------------------------------------------------------
    KG20RC-373   118    119           1     1.0                    West Zone
    -------------------------------------------------------------------------
    Line 2550N
    -------------------------------------------------------------------------
    KG20RC-360     4      5           1    3.16                    gravel
    -------------------------------------------------------------------------
    KG20RC-360     8      9           1    4.85                    Main zone
                                                                    in shoot
    -------------------------------------------------------------------------
    KG20RC-361    17     19           2    1.29                    Main zone
    -------------------------------------------------------------------------
    KG20RC-363    39     41           2    0.89                    Main Zone
    -------------------------------------------------------------------------
    KG20RC-364    47     50           3    1.13       1m@2.11   Main zone
                                                                    in shoot
    -------------------------------------------------------------------------
    KG20RC-366    64     66           2    3.93       1m@7.24   Main zone
                                                                    in shoot
    -------------------------------------------------------------------------
    KG20RC-367    76     77           1    0.99                    Main Zone
    -------------------------------------------------------------------------
    Line 2650N
    -------------------------------------------------------------------------
    KG20RC-314    39     40           1    1.39                    West Zone
    -------------------------------------------------------------------------
    Line 2750N
    -------------------------------------------------------------------------
    KG20RC-341    15     17           2    1.13                    West Zone
    -------------------------------------------------------------------------
    Line 2850N
    -------------------------------------------------------------------------
    KG20RC-319    21     23           2    2.60                    West Zone
                                                                    in shoot
    -------------------------------------------------------------------------
               * Screen Fire Assay result on duplicate run.
    -------------------------------------------------------------------------

The above intersections are estimated to be very close to true
thicknesses with all the drill inclinations being -60 degrees and the
dip of the reef being -22 degrees. All holes are drilled perpendicular
to the assumed strike of the reef(s). 

The sixth phase of drilling will commence shortly once maintenance on
the Company's in-house rig has been completed. This phase will evaluate
untested artisanal mine workings some 150 metres to the north of the
Luhwaika Main Zone.  

These workings are sub-parallel to the Luhwaika Main Zone and have a
known strike length of 350 metres. Artisans have been mining a gravel
zone in this area that is hosted within laterite material, a
heavily-weathered subsoil. "This may well be the surface expression of
a third shear structure," Deane suggested. 

The drilling will also target the down-dip and northwest extensions to
the Albatross Shoot. In addition, some in-fill drilling will also be
undertaken on the Main Zone.    

Analysis 

Fire assay with flame AAS finish was conducted by SGS Laboratories in
Mwanza. Duplicates and Standards were inserted in the sample stream
approximately every 20 samples. The duplicates have a correlation
coefficient of 84.6%, which is accounted for by the large nugget effect
within the sampling. 18% of the standards from SGS fall outside the
acceptable 3rd standard deviation. Due to this, to validate the assay
results 95% of the high gold samples were sent to Humac lab as a check.
The Humac fire assay results gave a 71% correlation with the SGS
results. The figures used in this press release are the average grades
taken for between one and three duplicates run by the labs on each
analysis.  

Qualified Person 

The technical information contained in this document has been reviewed
and approved by John Deane, President, Tanzanian Royalty Exploration
Corporation Limited, a qualified person as defined by NI 43-101. He has
an M.Sc. from the University of Cape Town (1993) and is a registered
scientist with SACNASP (Reg. No.400005/05).

Respectfully Submitted, 

"James Sinclair" 
James E. Sinclair Chairman and Chief Executive Officer 

For further information, please contact Investor Relations at
1-800-811-3855 
Visit our website: www.TanzanianRoyaltyExploration.com
The Toronto Stock Exchange and American Stock Exchange have not
reviewed and do not accept responsibility for the adequacy or accuracy
of this release

Dear CIGAs,

I have warned you in these most unusual times to be vigilant and cautious with all financial agents, especially new internet entities with the name "Gold" in it, no matter who recommends it.

Please review Trader Dan Norcini's wise comments on ETFs.

Buying public gold baskets managed by COT related parties is the ultimate contradiction.

Regards, Jim

Just a reminder to anyone wanting to listen to the webcast of the Company's Annual General Meeting on February 29th at 10:00 am Eastern Standard Time.

You can register for the webcast via the following link...

Tanzanian Royalty Exploration Corporation advises that, including this
$1 million private placement and interest free advances to the Company
to be applied towards the aggregate $3 million private placement (the
"Placements"), the Company's Chairman and CEO, Mr. James E. Sinclair's
total share placements to date aggregate in excess of $17 million.

Mr. Sinclair completed the $1 million private placement announced
February 5, 2008 and the $375,000 fourth tranche of the aggregate $3
million private placement first announced on August 10, 2006.

The Placements closed on February 19, 2008 and consisted of 167,196
common shares of the Corporation having a purchase price of $5.981 for
proceeds totaling $1,000,000 and 61,871 common shares of the
Corporation having a purchase price of $6.061 per share for proceeds
totaling $375,000.

Respectfully Submitted,

"James Sinclair"
James E. Sinclair
Chairman and Chief Executive Officer

For further information, please contact Investor Relations at
1-800-811-3855
Visit our website: www.TanzanianRoyaltyExploration.com

The Toronto Stock Exchange and American Stock Exchange have not
reviewed and do not accept responsibility for the adequacy or accuracy
of this release

Dear CIGAs,

China has a trillion dollars in foreign exchange reserves, wishes to offload dollars, and this is a perfect fit. The year of the Rat is a year of opportunity for some, especially the Chinese. Any sales of gold have nothing to do with the market for gold as not one ounce will ever see the free market. The buyers will be gold-poor central banks.

All the IMF sales did in the 70s was allow huge buyers to enter the market at one price. That attracts the major buyers.

The OTC derivative market is $516 trillion, dwarfing the $92 billion worth that the IMF holds. In today's financial world the $92 billion is chump change.
One large banking entity could easily lose $92 billion on failed derivatives in the final analysis.

The article below is designed to make a mountain out of a mole hill. I do not think it means a damn thing to the gold price trend. The only important fact is that the IMF just demonstrated its total lack of financial sense as it might only hold depreciating paper promises to pay nothing at all backed by nothing whatsoever.

Selling gold like this only occurs in bull markets and has historically been useless in stopping the price from increasing. In fact, these sales helped the price of gold move higher by facilitating demand from huge interests in the 70s and it will even more so now.

There are those who would try to make this look serious but it is not. This indicates the price of gold is not even half way to its upside resting point. This was true in the 70s and is today as well.

Finally, those that control black gold also control real gold. Those that you feel have caused the problem and are anti-gold are really NOT. To know this, you need only the eyes to see and the ability to connect the dots.

This will be looked on as something great for the price of gold as was the case in the 70s when the same entity, the IMF, proposed and did the same thing, only to stop before the buyers took all their gold. The same will happen if they even start. Note that the proposed sales come when the US Economic rescue plan is about to occur. The reason is clear.

G7 approves IMF gold sales - Italy econ minister
By Gavin Jones

TOKYO (Reuters) - The Group of Seven rich nations on Saturday approved the sale of gold by the International Monetary Fund from April as part of a broad reform of its budget, Italian Economy Minister Tommaso Padoa-Schioppa said.

"There was an acceptance among the G7 that resources should be raised by selling gold," Padoa-Schioppa, who is also the head of the IMF's steering committee (IMFC), told reporters after a meeting of G7 finance ministers in Tokyo.

He said the agreement would be finalised in April and would complement spending cuts being drawn up by the IMF under its new managing director, Dominique Strauss-Kahn.

"The current gold price means a flow of income can be ensured," Padoa-Schioppa said.

Morgan Stanley analyst Stephen Jen said the Fund held 103.4 million ounces of gold worth some $92 billion at current market prices. That was up from $23 billion just five years ago.

more...

Tanzanian Royalty Exploration Corporation announces that Mr. James E. Sinclair has agreed to provide C$1 million by way of a private placement with the proceeds being applied to general working capital.

Mr. Sinclair has agreed to purchase 167,196 common shares at a purchase price of $5.981 per share for proceeds totaling $1,000,000. The price reflects the greater of the weighted average trading price of the Company's shares for the five consecutive trading days ended February 4, 2008 of $5.981 and the closing price on February 4, 2008 of $5.80.

In addition, Tanzanian Royalty advises that Mr. James E. Sinclair is proceeding with the fourth tranche of the private placement announced on August 10, 2006 whereby Mr. Sinclair agreed to purchase common shares of the Corporation representing an aggregate value of $3,000,000. Such shares are to be purchased in 8 quarterly tranches of $375,000 each, commencing February 1, 2007. The fourth tranche of the Placement will consist of 61,871 common shares of the Corporation having a purchase price of $6.061 per share for proceeds totaling $375,000. The purchase price reflects the greater of the 5-day weighted average trading price of the Company's shares for the quarterly period ended January 31, 2008 of $6.061 and the closing price on January 31, 2008 of $5.93.

The placement common shares are subject to certain mandated hold periods and the certificates representing such shares are legended accordingly. No warrants, options or other rights have been issued or granted in connection with these placements.

The private placements are subject to Regulatory approval.

Respectfully Submitted,
"James E. Sinclair"
James E. Sinclair
Chairman and Chief Executive Officer

For further information, please contact Investor Relations at 1-800-811-3855 Visit our website: www.TanzanianRoyaltyExploration.com

The Toronto Stock Exchange and American Stock Exchange have not reviewed and do not accept responsibility for the adequacy or accuracy of this release

Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on this news release, such as "measured", "indicated", and "inferred" "resources" that the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No. 0-50634, which may be secured from us, or from the SEC's website at http://www.sec.gov/edgar.shtml.

Certain information presented in this release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on numerous assumptions, and involve known and unknown risks, uncertainties and other factors, including risks inherent in mineral exploration and development, which may cause the actual results, performance, or achievements of the Company to be materially different from any projected future results, performance, or achievements expressed or implied by such forward-looking statements. Investors are referred to our description of the risk factors affecting the Company, as contained in our Form 20-F, File No. 0-50634, for a more information concerning these risks, uncertainties, and other factors.

Author:    Jim Sinclair

Author: Jim Sinclair

Dear Friends:

In my recent email to you early on in the shutdown of major mines in the Republic of South Africa, the cause was unclear. I apologize for that yet my conclusions remain the same.

The impact of any shutdown of gold production in the RSA depends upon the duration of the situation. More importantly, the shutdown of major gold mines there focuses attention on the well-established trend of declining gold production, coupled with the lack of significant new gold projects coming on stream.

Gold is being influenced now by the magnet at $1,050 pulling from the front. Sellers exist at $950 to $960. The breaching of the $887.50 level multiple times as the gold price gyrated back and forth before reaching its present historic high is quite important.

Dear Friends,

The report this AM that is quite bullish for gold and platinum was that a shutdown had taken place in the Republic of South Africa due to drought and water problems.

This has nothing to do with Tanzania. As an example, the Bulyanhulu Mine obtains its water directly from Lake Victoria. Significant projects in the Tanzanian Greenstone Belt could do similar projects. The factor that causes some drilling to cease for a period yearly in Tanzania is the big and little rainy season. At our project, we anticipate that building all weather roads - as at Kigosi - will guarantee access for our large equipment along with fuel, spares and other required gear.

Regards,

Jim Sinclair

Dear Friends,

First the Fed makes a big slash then the President's Working Committee on Markets - otherwise known as the Price Protection Team or PPT - sits back to see how the market takes it.

The Fed and the PPT are totally focused on the equity markets and this morning's activity must be terribly disappointing to both. Anticipate more significant rate reductions with the Bush New Deal on the scheduled meeting day.

The Fed will increase liquidity exponentially, taxes will be slashed, and wars will stimulate fiscal spending. The US legislature will create spending on a bi-partisan basis and the President will not veto it. This is all very bullish for gold.

I believe all of the above will occur. Such actions simply strengthen the foundations of this generational bull market in gold heading into 2011.

Maybe you should breathe deeply, drink some cold water and take a walk next time you want to panic. If you insist on being a client of a major internet broker it will be good as you will not be able to panic and throw away your shares because orders will not be executed. That is good news for gold and gold shares, a sector that has the highest number of weenies professing to be members.

Everything discussed amongst us has happened. Now the consortium of US and European central banks will have to blast untold amounts of liquidity into the world market or witness a financial meltdown of hundreds of trillions of dollars worth of derelict OTC derivatives.

I do not believe that this is the proper action but it is the only action that politicians and their Central Bank political flunkies can do. Expect a new deal "a la Roosevelt" to go along with it. It worked for the present Administration in 2002 so to expect the same thing along with other dramatic action is reasonable. This is what I anticipate.

Sincerely,

Jim Sinclair

Dear Extended Family,

As far as I can recall, today is the first day that a headline appeared on Financial TV saying that the "US budget deficit is about to BALLOON."

This is a Key driver that will push gold higher than most people will ever believe.

My opinion is based on almost 50 years of experience and upon which I place my reputation. A confluence of events will lead gold to over $1000 and potentially to and through $1650.

The derivative meltdown problem is the greatest risk any economy has faced since written history started in the Indus Valley prior to the arrival of Alexander the Great.

Please protect yourself by the simple act of, as far as possible, reducing financial agents between you and your assets.

Respectfully,

Your Watchman,

Jim

Dear Friends,

This is it. The DJII futures are down over 500 points. If the Federal Reserve fails to take emergency action before the US opening tomorrow, you will see the DJII open down 1000 points as the public joins this professional panic.

Everything you see happening will be the catalyst that takes gold again above $887.50 and to $1,650.

As long as you have followed my plea to have NO MARGIN on anything gold I see no problems for any of you. If you have margin, the rule is never meet a margin call, but sell whatever is needed to meet the call or more - never less.

It is a better wager that the Fed will immediately drop rates by 1 full percentage point.

It is a slam dunk that all Western Central Banks will cut loose and flood the world with more liquidity than we've ever seen before.

If Central Banks fail to cause a torrent of liquidity from their unending check books then $450 trillion of derivatives will take us to the world of Mad Max.

Monetary inflation ALWAYS causes PRICE inflation even without strong business conditions. Prices of hard and transportable assets rise regardless of business conditions.

All currencies fall and the stronger currency is the laggard in the race to the bottom of the tank.

Stocks Plummet in Germany, Hong Kong, India, Brazil in Rout
By Sarah Thompson

Jan. 21 (Bloomberg) -- Stocks plunged in Germany, Hong Kong, India and Brazil, and U.S. index futures dropped on mounting speculation that the global economy is slowing and company defaults will rise.

Europe's Dow Jones Stoxx 600 Index fell the most since the Sept. 11 terrorist attacks and sank into a bear market, as Allianz SE and BNP Paribas SA slid. Hong Kong's Hang Seng Index had its biggest drop in six years after BNP Paribas said Bank of China Ltd. may write down overseas securities by $4.8 billion because of losses from U.S. subprime mortgages. Citigroup Inc. retreated in Frankfurt.

The MSCI World Index slipped 2.4 percent to 1,402.75 at 2:44 p.m. in London, extending its decline from an Oct. 31 record to 17 percent. India's Sensitive Index lost the most since 2004, while Germany's DAX slid the most since March 2003. Futures on the Standard & Poor's 500 Index sank 3.4 percent. Trading in the U.S. is closed today for Martin Luther King Day.

''It's the worst I've ever seen,'' said Johan Stein, who helps manage the equivalent of about $14 billion at Nordea Asset Management in Stockholm. ''The financial system is in terrible shape, and no one knows where this will end.''

more...

Please take heart. If you have faith in me you can stop worrying. We have traveled a great distance together and the journey is still in its early stages.

The coming meltdown is not in the billions, it is in the trillions. Central Banks will seek to hold off the deluge by standard operating means that will only feed the INFLATION side of the STAGFLATION equation. Be assured it is happening as we speak, right here and right now today.

The recent drop in equities markets has the Bush administration extremely worried. At present, the White House holds Bernanke's strings. And Bernanke will not fail to serve his masters and in fact will exceed any such effort in the past.

The disinformation that a major slowdown in business is negative to gold is totally incorrect. It is the foundation of the next major move to the upside.

Those of you overcome by fear are operating on your emotions. Sometimes I have to ask why I try so hard to help those that don't listen.Some people have said my mission is impossible because only a few will listen and less will learn. But I keep going nonetheless.

Because of today's market action overseas, the Price Protection Team (PPT) will demand that the Federal Reserve take EMERGENCY ACTION prior to its scheduled next meeting.

Today European investors were throwing gold bullion and gold shares into the trash can and they were running like scared cats motivated by JUST WHAT WILL CAUSE GOLD to go through $1650.

Take heart and put your hand in mine - as long as you have not used margin. Also, take time to familiarize yourself with the following forumula which will help you understand why gold is heading much higher:

1. First interest rates rise affecting the drivers of the US economy,especially housing, but before that auto production goes from bull to a bear market.

2. This impacts many other industries and the jobs report. An economy is either rising at a rising rate or business activity is falling at an increasing rate. That is economic law 101. There is no such thing in any market as a Plateau of Prosperity or Cinderella-Goldilocks type situations.

3. We have witnessed the Dow rise on economic news indicating deceleration of activity. This continues until major corporations announce poor earnings, making the Dow fall faster than it rose, moving it deeply into the red.

4. The formula economically is inherent in #2 which is lower economic activity equals lower profits.

5. Lower profits leads to lower Federal Tax revenues.

6. Lower Federal tax revenues in the face of increased Federal spending causes geometric, not arithmetic, rises in the US Federal Budget deficit. This is also true for cities & States as it is for the Federal government.

7. The increased US Federal Budget deficit in the face of a US Trade Deficit increases the US Current Account Deficit.

8. The US Current Account Balance is the speedometer of the money exiting the US into world markets (deficit).

9. It is this deficit that must be met by incoming investment in the US in any form. It could be anything from businesses, equities to Treasury instruments. We are already seeing a fall-off in the situation of developing nations carrying the spending habits of industrial nations - a contradiction in terms.

10. If the investment by non-US entities fails to meet the exiting dollars by all means, then the US must turn within to finance the shortfall.

11. Assuming the US turns inside to finance all maturities, interest rates will rise, with the long term rates moving fastest regardless of prevailing business conditions.

12. This will further contract business activity and start a downward spiral of unparalleled dimension because the size of US debt already issued is of unparalleled dimension.

Therefore as you get to #12 you are automatically right back at #1. This is an economic downward spiral.

I heard all this "slow business" talk as being negative to gold in the 70s. It was totally wrong then. It will be exactly the same now.

Regards,

Jim

Author:    Jim Sinclair

2. The funds and hotshot short term traders in gold shares will be killed by the upward explosion of the gold price that is about to occur.

3. The PPT and the Fed will step out of gold's way because gold is one of the tools used in 1930 by Roosevelt and in 2000 by Bush. It will be used again but now on the upside.

4. Gold is the only insurance there is against all of this mess because a panic in equities will blow the financial system that is already coming apart to smithereens.

5. All country funds would decline any further investments in U.S financial institutions that now have their backs to the wall.

6. The rollover in credit and default derivatives would exceed the entire foreign debt of the USA.

7. The rest of the $450 trillion dollar mountain of derivatives would start to disintegrate like nothing you have every seen in your lifetime.

8. Consumer demand would slam shut.

9. The auto industry might as well go into liquidation this coming Monday, avoiding the June 2008 rush.

10. The US dollar would burn a hole in the floor going directly to .5200 or lower.

11. As the dollar disintegrates, gold would rocket to and through $1650 in a matter of days.

12. The markets for general equities would all have to institute total trading halts every 100 points on the downside for 30 minutes each.

13. All commercial call loans would be called.

14. All debtors one day late on any payment - lacking any grace period - would be liquidated. All debtors over one day of the grace period would be liquidated.

15. It is clearly visible to anyone with eyes or a mind to think that the PPT has lost all semblance of control in the equity markets. This will soon happen in all remaining markets.

16. The commercial paper credit market which is almost dead will die totally.

17. Should no emergency action take place soon, you will see an old fashioned panic of the 1929 variety.

18. Just as emotional fools sell gold and gold shares, be assured that more emotional general equity fools will unload and bring the averages down more than ever in history in one day.

19. Recognize that all this will happen much sooner and in a much bigger fashion than previously anticipated.

20. Emergency action will be all splash and theatrics but, truthfully, the cat is out of the bag. It buys some time but corrects nothing.

There now must be EMERGENCY ACTION because the Chairman of the Fed has BOMBED OUT PUBLICLY and a PANIC is about to occur. Expect EMERGECNY ACTION in days, not weeks.

If you have not protected yourself you may only have days to do so.

Author: Jim Sinclair

Dear Extended Family:

Please take heart. The Formula is unfolding. If you have faith in me you can stop worrying. So far we have traveled a great distance together. So far, so good.

• Believe me please that the FORMULA is 100% correct. The FORMULA will support the rise in the price of gold from its recent high at $913 to $1050 and then to $1650. As I see it, there is NO question about it.
• This is it, Trust me.
• The melt-down is not billions - it is trillions. Central Banks will seek to hold off the deluge by standard operating means that will only feed the INFLATION side of the STAGFLATION equation. Be assured it is happening as we speak, right here and right now, today.
• The recent drop in equities markets has the Bush administration extremely worried. At present the White House holds Bernanke’s strings.

• The Bernanke Federal Reserve will not fail to serve its Masters and in fact will exceed any such effort in the past.
• The disinformation that a major slow down in business is negative to gold is totally incorrect. Rather it is the foundation of the next major move to the upside.
• Those of you overcome by fear are operating on your emotions.
• Sometimes I have to ask why I try so hard to help you.
• Some people have said my mission is impossible because only the few will listen and less will learn.
• Because of today the PPT will demand the Federal Reserve takes EMERGENCY ACTION and act prior to its scheduled next meeting.
• Today you are throwing gold bullion and gold shares into the trash can and running like scared cats motivated by JUST THAT WHICH WILL BE THE CAUSE OF GOLD going to and probably through $1650.

This fits perfectly with the formula that will be translated into the US dollar’s bottom dropping out. The dollar will fall from here like a person entering an elevator when there is no elevator car there.

Jan. 15 (Bloomberg) -- The U.S. stock market resumed its January tumble after Citigroup Inc. reported a record loss, retail sales unexpectedly dropped and falling oil prices dragged down energy shares.

Citigroup, the largest U.S. bank, declined to a five-year low in New York Stock Exchange trading after cutting its dividend by 41 percent and writing off $18 billion for mortgage defaults. Chevron Corp., the second-biggest U.S. oil company, dropped the most in seven weeks. Apple Inc. tumbled to the lowest in two months on the Nasdaq Stock Market after new products failed to impress investors.

Jim Sinclair's Commentary

Don’t buy the spin that going to sovereign funds is all about seeking financing from selected sources. These are the only sources that can meet monster demands to bail out bankrupt entities while allowing them to remain solvent - barely.

Don’t buy the spin that these funds are making investment decisions based on in-depth analysis that indicates the entity will enjoy a rosy future. They are just dumping dollars and hoping for the best.

Jan. 15 (Bloomberg) -- Citigroup Inc. posted the biggest loss in the bank's 196-year history as surging defaults on home loans forced it to write down the value of subprime-mortgage investments by $18 billion.

The fourth-quarter net loss of $9.83 billion, or $1.99 a share, compared with a profit of $5.1 billion, or $1.03, a year earlier, the New York-based bank said in statement. Citigroup reduced its dividend by 41 percent and is selling $14.5 billion of preferred stock to investors including the government of Singapore to shore up depleted capital. Chief Executive Officer Vikram Pandit eliminated 4,200 jobs and plans more cuts.

The results are ``unacceptable,'' Pandit said today on a conference call with analysts and investors. He was installed in December after Charles ``Chuck'' Prince stepped down amid mounting subprime losses. ``We need to do better, and we will.''

Jan. 15 (Bloomberg) -- Sales at U.S. retailers unexpectedly dropped in December, capping the weakest year since 2002 and pushing the economy closer to a recession.

Sales fell 0.4 percent, the first retreat since June, the Commerce Department said today in Washington. Separate figures from the Labor Department showed producer prices eased at the end of a year that saw the biggest annual jump in more than a quarter century.

The pullback among consumers, whose spending propped up the economy through the housing slump, is eroding profits at retailers from Sears Holdings Corp. to Williams-Sonoma Inc. Coupled with downward revisions to October and November, the decline in sales means economic growth in the fourth quarter was about 1 percent or less, some economists said.

Jan. 15 (Bloomberg) -- Citigroup Inc. and Merrill Lynch & Co., two of the largest financial institutions in the U.S., turned to outside investors for a second time in two months to replenish capital eroded by subprime-mortgage losses.

Citigroup, the biggest U.S. bank, is getting $14.5 billion from investors including the governments of Singapore and Kuwait, former Chairman Sanford Weill and Saudi Prince Alwaleed bin Talal, the New York-based company said today in a statement. Merrill, the largest brokerage, will receive $6.6 billion from a group led by Tokyo-based Mizuho Financial Group Inc., the Kuwait Investment Authority and the Korean Investment Corp.

Jan. 15 (Bloomberg) -- Bank of America Corp., the second- largest U.S. bank, plans to cut 650 jobs from its corporate and investment bank and sell the prime brokerage unit that caters to hedge funds.

The bank is slashing its so-called structured products business, which packaged and sold real estate loans to investors, and will reduce investment banking in Europe and the U.S., Chief Executive Officer Kenneth Lewis said in a meeting with reporters today in New York.

Lewis, who told investors in October he'd had ``all the fun I can stand in investment banking'' after about $2 billion of writedowns and trading losses, said today the bank is still committed to the unit. Bank of America remains a market leader in syndicated lending and leveraged finance, and the business is important to the company's success, he said.

Jan. 15 (Bloomberg) -- Hedge-fund inflows declined by 33 percent in the fourth quarter as subprime-mortgage losses caused some investors to delay new deposits, according to data compiled by Hedge Fund Research Inc.

Fund managers attracted $30.4 billion in the final three months of the year, compared with $45.2 billion in the third quarter, the Chicago-based research firm said today in an e- mailed statement. Investors put $15.8 billion of new cash into hedge funds in the year-earlier quarter.

The situation in Kenya has been making headlines lately, prompting questions from many of you regarding its potential impact on Tanzania. I want to state without reservation that the situation in nearby Kenya presents no problem whatsoever to the Republic of Tanzania which has a long history of stable, democratic government.

In my opinion, Tanzania remains the best place in Africa to conduct business and that's why we are there. My friend, Tanzanian President, Jakaya Kikwete, will not tolerate misconduct from inside or outside his country's borders - a policy that is enforced by the strongest military outside the Republic of South Africa.

At the request of the Kenyan people, President Kikwete is presently trying to negotiate a settlement of the issues that have caused the serious unrest in Kenya. Upon reflection, perhaps the U.S. could learn something from the Kenyans who refuse to have elections stolen from them without significant protest. I have promised my stockholders that no spin or lies will come out of this company under my watch and I assure you all the above is fact.

Respectfully,

Jim Sinclair

Dear Friends,

Pakistan is unravelling under a terrorist strategy to capture the means to produce and deliver weapons of mass destruction. This starts a process certain to come to a head in the first quarter of 2011.

As you have been informed in the past, this particular situation is the epicenter of the sum of all fears. It will NOT be contained as it is a process set to become an impossible problem. Immediately, gold is under the control of the magnet at $887.50 with resistance certain to show at $880.

I want to bring your attention to the following Reuters article. Not only will there be more markdowns by every entity involved in SIVs (which is almost every worldwide financial entity) but they will also suffer significantly as a result of defenseless litigation now being organized against them.

Citi, Merrill, JPMorgan face larger writeoffs: Goldman
Thu Dec 27, 2007 1:48pm EST
By Jonathan Stempel

NEW YORK (Reuters) - Citigroup Inc (C.N: Quote, Profile, Research) may need to slash its dividend 40 percent to preserve capital, and with Merrill Lynch & Co (MER.N: Quote, Profile, Research) and JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) may write off $33.6 billion of debt this quarter as the global credit crunch deepens, a Goldman Sachs & Co analyst said.

"It will be a couple of quarters before the current credit crisis is fully digested by the markets," the analyst, William Tanona, wrote in a report released on Thursday. "Fourth-quarter trading results are likely to be among the weakest we have seen in some time."

Tanona nearly doubled his forecast for write-downs after mortgage losses led investors to shun debt they once thought safe but now deem risky.

He now expects Citigroup, Merrill and JPMorgan to write off a respective $18