Jim Sinclair expects a dollar crisis which will end in hyperinflation, because the confidence in the currency will ultimately disappear. Nobody knows when it will happen, but Sinclair is convinced it will be a sudden event. In a long interview with Greg Hunter from USAWatchdog Sinclair tells the audience that hyperinflation in the USA could start any day from now. The economic recovery in the US is weak at best, at the expense of unprecedented fiscal and monetary stimulus. If the recovery doesn’t gain momentum, the people will loose confidence in the dollar.
According to Sinclair, gold is an excellent hedge against a currency crisis. He expects the downward trend in the price of gold to end, because the people who own the physical gold will be hesitant to sell at the low price. While investors and savers get out of paper gold schemes such as ETF’s, they will find out that the supply of physical gold has dried up! This will ignite a supply-driven revaluation of gold. Freed gold (freed from the numerous paper derivatives) will be priced at about $50.000 per troy ounce, according to Jim Sinclair.
Jim Sinclair: “No confiscation, but a windfall tax on gold”
Despite the extreme revaluation of gold in the scenario mentioned above, gold will not be confiscated. Sinclair believes there will be a taxation on the windfall profits instead. How this will play out remains to be seen. The world monetary system has no direct link between gold and money, which was the case in both 1944 and 1971. Watch the whole Jim Sinclair video below.
