JIM SINCLAIR'S COMMENTS JULY 31, 2008

URL: JSMINESET.COM

Posted On: Thursday, July 31, 2008, 10:58:00 PM ESTBack To The Gold Investment Basics Author: Jim Sinclair Dear CIGAs, Here is a proposal:

I am getting emails with files on every bearish gold article from every corner of the cyberspace world. You know that I do not wish to read other’s ideas, bullish or bearish. Answers come to me through silent contemplation of a question, not in the hopeless din of a multitude of so-called gold experts who in reality are unqualified loud dullards. If you insist on sending me every negative posting you can find on the internet you must send me the credentials you have reviewed that qualifies the writer to opine. Assuming the list of credentials is noteworthy; I will review it and comment either here on JSMineset or directly via email. Now that we have that out of the way, let’s get down to the basics: Protection of your hard earned assets is the first and foremost needful exercise. Investment of those assets is the secondary consideration. What good is an investment if it is unprotected from financial agents. Gold must not be approached as a speculative vehicle in which you want to make a killing. If you approach gold in that fashion it will be you who will be killed because of its volatility. Gold is a currency. All the analysis, questions you ask me and handholding I willingly do sit directly on that correct definition. This understanding is the route to answering your entire question and almost every foolish article you inundate me with that fails to see that. To protect your retirement accounts you have two avenues of approach. a. You request direct registration as a book entry at the transfer agent, naming your trust entity and your retirement account name. This creates what equates to a check requiring two signatures and thereby assures a fast settlement and payout by a bankruptcy judge.b. You require your trust agent to assure you that your IRA is held in a true custodial form. That means the assets of the retirement account are segregated to your IRA account name and is not part of the balance sheet of the financial agent. If those assets are in the nominee name of the Trust agent your assets are on their balance sheet. Physical gold is insurance. If some financial agent is holding physical gold for you in any form you have violated the insurance characteristic. What you do not have in your hand or safety deposit box is not insurance. Do not send money to or deal with anyone you cannot find. The scams in gold are prolific and transparent to a professional like me. Any entity that offers to help you violate the law will certainly violate you before you get a chance to break the law. Any entity that, as a main attraction, offers you gold somewhere outside of your domicile that is difficult to see and touch probably has taken your money and you have nothing to worry about. The reason you have nothing to worry about is you have nothing. Share investments in precious metals entities can be protected three ways. The first is to take paper delivery of your shares where available. The second is by you ordering direct registration as a book entry at the transfer agent. Third is that you keep your shares at a financial agent that offers true custodial accounts. **Note - Canadians cannot get direct registration at the transfer agent for Canadian entities. We are working on that. All those holding Swiss, Euro and Cando short-term treasuries in their accounts as true custodial form need to take one more step. That is to firmly ask if the broker holding these assets are certain that the depositories for the broker have provided your broker themselves with true custodial form. This is a systemic problem where we may need to build new forms of protection to rest comfortably. We must be sure that our broker has protected itself (the brokerage house or bank) in order to protect you when offering true custodial accounts. Each link in the chain of ownership must be firmly segregated, not held in nominee form. Settle for nothing less.