There Will Be a Run on Gold Stored in the US

kingworldnews.com

With gold remaining firm above $1,650, today King World News interviewed legendary Jim Sinclair, to get his take on where things are headed. Sinclair surprised KWN by telling us there would be a run, by European countries, on the gold they have stored at the New York Fed. Here is what Sinclair had to say when we asked him if the IMF would be selling any gold: “No. The role of gold has changed and gold is moving more toward the central bank then away from it. On top of that you have seen a significant amount of media attention towards, ‘Where is our gold?’ This is taking place in the European press.”

Jim Sinclair continues:

“(There is) surprise when they find out it’s in a cellar of the New York Fed, in Manhattan Island. There’s a desire for gold to have more of a national scent to it as it becomes the only performing asset for the central banks. When asked about Europeans wanting their gold brought back to their respective countries, Sinclair responded, “You’re starting to see that, and you have also seen, from the figures, the central banks accumulating.

The Fed would have no legal basis, whatsoever, to refuse to deliver it (to Europe). Any refusal or even delay in delivering it would only cause requests for more. So I would say there would be a lot of back channel arm-twisting not to ask for it. A run begins slow and historically, if this is a trend, rather than decelerating it tends to accelerate.

I would say that when we go to QE3, in the US in 2012, that could accelerate the call for delivery on gold from the New York Fed. It’s exactly what will happen. You see it already in Euro press. Accepted media, which is main media over there (in Europe), is discussing it....

“That begins to show something that has a great deal more to it than the political motivation of Chavez, who knows very well leaving his gold with people he calls, ‘enemy,’ is not the brightest idea in the world. The New York Fed will give back the gold because of the ramifications of not doing it.”

When asked about the calls to provide liquidity to the financial system, Sinclair responded, “We live in a global world, transferred into a global economy, and the only central bank able to create that kind of volume of money, out of thin air, legally, is the New York Fed. QE3 will be global and the Fed is the lender of last resort, not only to its members and the national banking community, but to the entire Western world.

Gold’s bull market in 2012 is a guaranteed event as a product of the fact central banks have no tool in their tool box other than moving, now, from national to global QE. It’s a done deal.”

This was an important interview from Sinclair. It will be interesting to see how things unfold when European nations begin asking for their gold to be shipped back to them.