Tanzanian Royalty Exploration Catalyst For Financial Disaster Looming by 24hgold

Re:        Chairman's Corner - Friday, July 25, 2008
Title:     Catalyst For Financial Disaster Looming
Author:    Jim Sinclair

Dear Friends,

A serious event occurred today by way of a very public recognition of more off balance sheet so-called "assets" that have little if any value. This event is possibly the most serious financial upset ever.

If you have not protected yourself, it is getting very late - maybe too late.

Your best hope is that this event is so complex that the herd of self-anointed experts haven't a clue what the vehicle is, how large it is, and therefore the profound meaning it has to the global economy

Gold, serious junior gold shares (the only seriously under-priced real value in equities) and non-dollar currency short term federal instruments is your sanctuary. You better get there and get there FAST!

The meaning of this is simple. Not only are Freddie's and Fanny's troubles much costlier than previously realized,they are now an entire new category of off balance sheet assets with no market. Even worse, they are undermining not only the U.S. banking system but the entire world's. Conduit mortgage OTC derivatives will have to be marked down now that the sun is shining on them

The U.S. mortgage industry has transformed itself in a way that has opened dangerous SIV sub prime real estate conduits to global capital markets. A conduit loan is priced by swaps and swap spreads thereby becoming a package of OTC derivatives generally derived from formulas that would make Einstein look like a kindergarten mathematician. By turning mortgages into securities, lenders created vast distances between homeowners and their mortgage holders who can be anywhere in the world including Australia.

U.S. banks have written down $450 billion in bad housing loans. They will now certainly need to take provisions for at least $1,000 billion. But write-downs of $1,300 billion and perhaps even more are in the cards.

That guarantees .6200 USDX and more likely .5200 USDX.

That guarantees gold will reach at least $1,650 much sooner than I anticipated.

This strongly suggests that my estimate of $1,650 is significantly below the price that gold will see soon.

This opens the probability that a modernized and revitalized Federal Reserve Gold certificate ratio tied to M3 will evolve in the monetary system.

The greatest economic crime ever committed is OTC derivatives. Those that proffered these will have killed more people than most wars.

This is it and it is NOW!

Respectfully,

Jim Sinclair

PS - The criteria for the selection of precious metals juniors are as follows:

1. Ethical Management by checking litigation, criminal and credit records. All this information is now easily attainable.

2. A property or properties with outstanding upside promise sustained by data.

3. History of success both on the ground (properties to mines) and in the financial markets (stock performances of at least 10 value to 1 value).

4. Strong hands on board

5. Key man insurance

6. Order of succession in place.

7. No anti-takeover devices written into the indenture of your certificate.

8. Availability of knowledgeable person in the company to speak with.

9. You retain a property-qualified geologist to perform a desk review of all exploration, development and production information at company headquarters.

10. A property visit by this consultant if the position is to be of significance.

11. The company has access to financing.

12. The company has used restraint with respect to having control over insider options, preferably none.

13. The company has no warrants outstanding.

14. A significant short position at this time is highly desirable.

15. The market must be liquid therefore some respectable listing is preferable.

16. Preferably not listed on the Frankfurt Bremen Exchange.

17. Key executive and Board members hold a reasonable amount of shares.

18. Goodly number of stockholders.

19. Owned by (but not primarily) by some respected fund interest.

20. Preferably not in any index.

21. The company has a good Sarbanes Oxley program with financial checks and balances.

22. Audited by respectable firm with special attention to who does the subsidiary audits if offshore to the venue of incorporation and trading.

Copyright � 2008 TANZANIAN ROYALTY EXPLORATION CORPORATION (TNX) All rights reserved. For more information visit our website at http://www.tanzanianroyaltyexploration.com/ or send email to info@tanzanianroyaltyexploration.com ..
Message sent on Fri Jul 25, 2008 at 9:59:48 PM Pacific Time

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