Jim Sinclair: "Putin can completely destroy the US economy»
American leadership can not even imagine what kind of blow force can cause Russian dollar
The well-known trader Jim Sinclair believes that the US government, by imposing sanctions against Russia, do not miscalculate what response they can cause. From the point of view of Sinclair, petrodollar now there is only one real value in the world, and Russia may unleash it just demanded for their oil is not dollars and euros or yuan. In this case, the US economy would collapse, while Europe, by contrast, will rise sharply. And if Ukraine will go on loan from the IMF, the crisis there will be such that in six months she will fall into the hands of Putin.
25.03.2014 - 22:35
"Sanctions against RUSSIA tantamount shot itself in the foot»
- Most likely, we will face economic sanctions, the economic war that is already going. And one of the things they say - is the exclusion of Russia from the Swiss system [the system of international payments], the prohibition of its use. In turn, Russia can claim that he wants to get paid for gas in gold and silver. And they do it selectively: for Europe and the Western allies - gold for the Chinese yuan fine. What do you think about this?
- You raise several issues. Firstly, using the Swiss system to create huge difficulties to transfer bank payments. This is one of the possibilities. But the BRIC countries are already developing their own payment system. So use it as a lever to pressure - this is an erroneous measure in any situation short of war. They [the West] just created a competitor. Use it to put pressure on Iran, albeit selectively, in my opinion, was a mistake - a premature use of powerful weapons. If there is a hot war, so you can strike at the enemy's economy. Using this in the situation of the Cold War, you just create a competitive mechanism for the Swiss system. Swiss system - it is a western communications system. It's just a platform. Such platforms can easily be repeated ...
To impose sanctions against Russia, you forget that it is a source of Europe's gas. To impose sanctions against Russia, you forget that at this point in its territory are numerous European and American companies. I firmly believe that the sanctions against the Russian equivalent to the shot itself in the foot. You are asking for a new system of international payments and the introduction of retaliatory sanctions against foreign companies, which are also heavy for the Western powers, as well as any of their actions against Russia. This cold war that could turn into a second hot.
- There are rumors that the Russian just come into the European and American business and say it's all ours, we all nationalized. You have imposed sanctions against us, and now we introduce sanctions against you, get out.
- If you think you can shove away with the former KGB colonel, your analysis of his personality is fundamentally not true. Until now, all public statements by Putin were very soft, he did not mention any hard measures and behaved like a gentleman in international relations. We constantly threatens draconian measures against Russia, I would say that he would keep a low profile and start an escalation of the situation in accordance with the requirements of the moment.
- Last week, I read that one Russian official said that their approval would be symmetrical.
- Yes, symmetric actions of opponents, that is a limited response. Nevertheless, it is so dangerous. The idea that Russia - a regional power ... Where did they get that idea? Any country that has nuclear weapons and their means of delivery as much as Russia is a world power. We hear all the time that it is a regional power. We hear a lie. We hear the truth. We do not have a clear picture of what is happening. Large corporate media called Russia an aggressor, when in fact there was a coup, during which came to power a new government, which is no more or less legitimate than the Russian presence in Crimea.
"RUSSIA CAN retaliate dollar»
- Let's go back to the financial side of the issue. Can these sanctions to blow up the world economy? It is beginning of the end?
- When Nixon abolished the gold backing of the dollar, he transferred it to oil security. He signed an agreement with Saudi Arabia that all energy contracts are denominated in dollars. Therefore petrodollar - a sphere of demand to settle the contracts necessary to buy dollars, petrodollar - a standard which is based on the strength of the US dollar. More recently, when the US dollar index [USDX, an index showing the ratio of the US dollar against a basket of six major currencies: the euro, yen, pound sterling, Canadian dollar, Swedish krona and Swiss franc], fell below 80, it might seem that the dollar has lost vitality, but for a long time below this mark, he does not hold in this market all the time there is stabilization fund exchange (Exchange stabilization fund), and when the dollar falls below 80, it is constantly trying to get it back to 80.50 or 81.20, to create the impression of strength. But the greenback fights at this level, and it happens because he feels his teeth retaliation, lies in the simple decision to make payments to Europe any other currencies. And believe me, they will be calculated in other currencies. Payments in euros - a very simple matter for the energy dealers.
The strength of the dollar is that you need to go to the dollar market and buy dollars for settlement of energy contracts. We went to war for the sake of the petrodollar. Greg, if the petrodollar is at least a little bit loose, it will mean a shift all power, a shift pulse. Petrodollars - is the impulse of the US dollar. And if Russia will challenge the petrodollar, starting calculations for energy in a currency will change the momentum, and the dollar index may fall to 76.
- That is, Russia can easily say, you know what, we want to pay in gold, they can also say - we pay in rubles ...
- ... Pay us anything ...
- ... Or we pay in RMB, or in Euros, Rupees - anything. We no longer make payments only in dollars.
- It does not have to be Russian rubles, large consumers should not have foreign exchange transaction, the energy will become cheaper because of the simplification of foreign exchange volume. Why pay a dollar, if you can pay in their own currency. The dollar will be under that kind of pressure under which he had never been, and the dollar, and that is what shows that is not able to rise above the 80 Europeans who sell US stocks should go into the safe haven, to buy dollars and US government bonds, but why then the index can not rise above 80? Because the dollar looks up and says that Russia could retaliate, and it will have a huge impact on the dollar. And it's not about the sale of bonds - they say I'm no longer in the Swiss system, I pay in any currency other than the dollar.
- How will this affect the price of gold?
- I will say immediately that gold will rise to 1550 dollars, and the dollar index would be at around 76 on the way to 72.
- If they impose such measures, can I go back? This will be the beginning of the end of the petrodollar? Do not decide whether to go to Saudi Arabia for the Russian way and make the yuan, rupee, euro, whatever?
- Anything ... For comparison, let's say that the dollar - this is a common action of the United States who have lost a significant amount of demand that will break the momentum of his tendencies. You break the momentum of the trend, the end of the bull market and a bear starts. When does a bear market, such as gold, the bull market begins. When will the bull market of the dollar, the market will bear. Russia has the potential, and, of course, the desire to do the one and only: to start taking payments for energy in any currency. We'll get a couple of dollar / euro at 1.45 / 1.50 and the dollar index at around 72 - 76.
- Then they get a bonus in Europe, their currency will rise in price, energy prices will fall, and they will say that they like to pay for the natural gas and oil in euros.
- Merkel will shut up and smile. Is not it cheaper to do without the foreign exchange markets? For trade needs a cheap euro, and for the long term - expensive euro.
- But for American consumers this will be a disaster. Gasoline will rise from 3.50 - 4 to $ 4.50 - $ 5 per gallon (3.78 liters).
- I'm already 12 years talking about the cost of inflation caused by currency factors, which may cause hyperinflation in the worst business climate. If the value of your import goes into the ceiling, what will happen to the price of what you are selling in the local market? - She, too, will go into the ceiling.
"The IMF UKRAINE WILL GIVE PUTIN»
- Yeah, this is a very ominous technical look at what can happen. I think that it was all done very clumsily, they do not see beyond their own noses, do not believe all this is threatened. Another threat - the military scenario. And I'm on his website quoted people who say the division of Ukraine into two halves, but really? Russia will allow NATO to deploy missiles and troops in western Ukraine, defensive and offensive capabilities, to receive a NATO member country right at at the border? Do you think that will be the case?
- You did not think for a moment that the IMF was going to do - let's call it the Western Ukraine. They will lend the country and it needs $ 37 billion rather than $ 15 billion, because they have to remember about payments in 2015. The IMF will do the same thing in Greece. Six months later, people in Western Ukraine will scream and demand of joining Russia, because retirees who now receive $ 165 per month will receive $ 80 on the conditions of the IMF loan. Do you think they will be happy to stay in a free Western Ukraine? They want to become Russian. There is no doubt that the IMF will perform the task of transferring the Western Ukraine Putin using conditions set for granting loans.
- Putin has increased the number of troops at the Ukrainian border. Do you think he will wait and invade?
- Look, do you see a guy that rides a horse bare-chested, who examines the gun at arms exhibition, which weighs in hand a gold bar. Do not take a genius to realize that it is not necessary to push. He is a former KGB officer, you will push it too hard and the troops will cross the Belarusian border. Lord, forgive them, for they [Americans] do not know what they do. We pushed around by a group whose ideology demands of war. We do not have enough intelligence and capacity for leadership to recognize that Russia is holding all the cards. Petrodollars - this is the only and the most important factor that exists today in the world economy - without any exceptions. And Russia is holding his hand ... and in an instant, can respond in a way that would cause the collapse of the [stock index] Doe, never seen a story.
"RUSSIAN could put the US economy on its head»
- Brilliant Simplicity: we just accept payment in any currency, regardless of continued membership in the Swiss system. You say that it would break our economy will cause inflation and cause tooth gold bull market to continue.
- No other scenarios no, Russian have more powerful weapons than the Swiss system. Their expulsion from the Swiss system is equivalent to a shot at their own pace, they can destroy everything - especially because of the derivatives market, which is so tied to interest rates.
- You want to say that under the retaliation they can completely destroy the American economy?
- They can put the American economy on its head and completely destroy it. You can as much as necessary to wave the flag, but the fact remains - they have such an opportunity.
- It's a terrific forecast!
- This is the reality.
Questions - Greg Hunter