Today legendary trader Jim Sinclair told King World News that the Cyprus disaster is much bigger than what is being reported and the implications are stunning. Sinclair, who was once called on by former Fed Chairman Paul Volcker to assist during a Wall Street crisis, had this to say in this extraordinary and exclusive KWN interview:
Sinclair: “If people believe that $13 billion is the total of this bailout, they are out of their minds. $130 billion is not the true total of even the Russian deposits in Cyprus banks. One important Russian businessman, in his various business enterprises, would have $100 billion on deposit himself. 10% of all deposits in Cypress could be $500 billion or more because Cyprus is the banking entity for Russia, not Switzerland or Grand Cayman.
The Central Bank of Cyprus doesn’t even know how big the Russian deposits are because it is held as secret at the behest of the Russians. It is a secret banking system set up for the Russians, by the Russians, and the IMF has just taken a large bite out of that elephant.
Because of that, any attempt to shift the weight of bank solvency to depositors has failed. This was the grand experiment which was the defining event where the financial shift from the onus of insolvency was to be placed on the shoulders of depositors rather than on quantitative easing….
Before Sinclair continues with this interview, people around the world should understand the significance in history of this legendary trader and his family. Sinclair’s father (Bert Seligman), his firm used to control a staggering 10% of the daily New York Stock Exchange trading volume throughout the 1950s.
Sinclair was always around his father’s firm as a kid and even as a young man, but he started full-time in 1958. For people in the know, Bert Seligman and Jesse Livermore were business partners, and the Seligman name is truly legendary. But his father wasn’t just business partners with Jesse Livermore, Sinclair also remembers his father telling him stories about operations that he and Joe Kennedy (who later headed the SEC) conducted together in the stock market as well as the commodity markets in the 1920s and 1930s.
Being around and later working in his father’s firm shaped his entire career and molded him into the legendary trader he ultimately became. Sinclair later earned the nickname “Mr. Gold” because he was considered to be the largest trader in the 1970s bull market in gold, later calling the top of that market to the day.
But later in his life and when Wall Street found itself in jeopardy because of the significant break in the price of gold and silver in 1980, it (Wall Street) petitioned the Fed for a $1 billion bailout. People don’t know this, but Bache was broke and so was Merrill Lynch. At that time a bailout of that size was almost unthinkable, but something had to be done.
Well, the $1 billion was granted on one condition by Paul Volcker, who headed the Fed at that time, and that condition was that Jim Sinclair was to be retained by the Hunt’s to effect the liquidation of their monstrous positions in silver, copper, zinc, and gold. Volcker literally made it a criteria of granting the one billion dollars in loans that Jim Sinclair would guide the Hunt liquidation.
With KWN readers having a better understanding of his background, Sinclair continues: “People need to grasp that this is not about $130 billion. The real dollar figure is orders of magnitudes larger than that number. How much higher we’ll never know, but it is massive. This is the Bank of Russia we are talking about here. The Central Bank of Russia is for the people in Russia. What the IMF went after here is the central bank of the Russian elite and former KGB, and the Russians simply will not stand still for that.”