Jim Sinclair

"I sing because I own 75% Gold, 20% Swiss and 5% Cando." -Jim Sinclair

If you haven't figured it out by now, let me give you a clue - Jim Sinclair and Richard Russell are right at the top of the list of the people I most admire in the financial services industry. I read everything they have to say and never miss a word. I have followed Russell since 1984 and Sinclair since 2001.

Russell is the "Big Picture" guy. Sinclair is "Mr. Gold." The quote, above, is typical Sinclair. For reason's he doesn't go into, he is not big on silver, although he certainly expects gold to pull it along on its coat tails.

Russell is also a gold bug, not a silver bug and he likes silver - sometimes even more than gold as an "investment," but not as his "core" holding. Gold, he insists, is money. Silver, somewhat less so.

Both Sinclair and Russell are teachers. Both have wisdom that only comes with decades of hands-on experience. If you had followed either, or both for the last 11 years, you would have made a LOT of money.

Both men recognized the onset of the current bull market in precious metals and endorsed it and have not wavered for a moment ever since. Neither have I!

Sinclair does not believe in holding dollars - in fact he suggests the Swiss franc and Canadian Dollar (above) along with gold. Russell says gold and dollars. Personally, I believe Sinclair's position is more correct on this issue.

If you pick your "experts" carefully, and correctly, you will do well. But more than being able to reap financial success, by following their sage advice, you will avoid losing a great deal of your wealth by being invested in the WRONG areas and that means you will not be caught with your wealth in dollar denominated assets. You will not own bonds. You will understand that gold is your life raft.

What about stocks, you ask? - and many of you do - well, you can make money in the stock market if you time it right, but what will you do with your profit, your dollar profit? You see, you can make money in dollars but you really cannot save in dollars. Not with inflation running at "an honest" 10% and rising. Saving in dollars guarantees that you will lose significant buying power over time. It really is harder for most people to know what to do with their money than it is to earn it!

Don't get me wrong, there are many other brilliant and insightful writers out there and I try and present many of the best to you on a daily basis, but if it came down to a case where there were only TWO who you should follow, I have just given you the short list.

"What is their prediction for the price of gold," you ask? Russell does not give a hard number, but he does say that gold and the Dow will sell at one-to-one or two-to one with each other. That means that gold and the Dow could both be 2,000 or 10,000, or gold could be 3,000 and the Dow 6,000. He is giving you a ratio and the ratio clearly shows that you will be much better off in gold than in the Dow (and dollars). The Gold-to-Dow ratio has favored gold in the last 11 years. The ratio has fallen from approximately 40 to 1 to the current level of around 8 to 1. Gold has OUTPERFORMNED the Dow by 8 to 1 in the past decade! The trend continues.

Jim Sinclair promised his readers that gold would hit $1,650 minimum! He made the prediction in 2002 when gold was $300 and most people either thought he was crazy or they were very skeptical. Better yet, he said it would happen in February 2011. He missed his target by some $100, or around 5% but it was still one of the great calls of all-time in our industry. He will get his $1,650 this year, so he did pick the number and the year some 10 years in advance! That, my friends, is a WOW! By the way, he predicted the exact high of $850 in the last bull market and got out at the exact top! His latest thoughts on the subject, which are highly influenced by the Fed's Quantitative Easing, are for a much higher gold price. His new numbers fall in the $3,000 to $5,000 range, minimum. He even suggests that his friend Martin Armstrong could be right and gold could hit $12,500. For those of you who laugh at such a number, you should remember that he was on the money with his original prediction of $1,650.

More importantly, he believes that there is no possible way out of our financial minefield. He says we are stuck with QE-to-forever. He laid it all out several years ago when he wrote, "the Geeks have killed us all," referring to the 1000 trillion dollar derivative monster created by the greedy Wall Street bankers. Russell says the Fed must "Inflate or die." They both agree, inflation is baked in the cake, and I mean serious inflation.

That is all you need to know. The dollar will continue to lose value until it exists no more and gold will be your island of safety. Buy stocks if you wish. Buy silver if you wish - and I certainly do. I have more silver than gold for reasons that I discuss often in these pages. A mix of the two metals is prudent and you will have to be the judge of how to ratio them to each other. Silver is more volatile but it seems to offer the potential for a higher return. It's your call.