Re:        Chairman's Corner - Friday, January 04, 2008
Title:     Jobs Number Spells Trouble Ahead
Author:    Jim Sinclair

Dear Friends,

The jobs number that was released today was pitiful. Now the talking head pundits that had the US flying high last Friday are yelling "recession." Some feel that the recessionary news is negative to gold but in fact it is wildly BULLISH as the dollar sinks. I heard all this "slow business" talk as being negative to gold in the 70s. It was garbage then and is garbage now.

With this historical perspective as a backdrop, I would like to introduce you to the following formula which will provide you with some insight into how I see the economy unfolding in the coming months:

1. First interest rates rise, affecting the driver of the US economy, housing, but before that auto production goes from bull to a bear markets.
2. This impacts many other industries and the jobs report. An economy is either rising at a rising rate or business activity is falling at an increasing rate. That is economic law 101. There is no such thing in any market as a Plateau of Prosperity or Cinderella-Goldilocks situation.
3. We have witnessed the Dow rise on economic news, indicating deceleration of activity. This continues until major corporations announce poor earnings, making the Dow fall faster than it rose, moving it deeply into the red.
4. The formula economically is inherent in #2 which is that lower economic activity equals lower profits.
5. Lower profits leads to lower Federal Tax revenues.
6. Lower Federal tax revenues in the face of increased Federal spending causes geometric, not arithmetic rises in the US Federal Budget deficit. This is also true for cities and States as it is for the Federal government.
7. The increased US Federal Budget deficit in the face of a US Trade Deficit increases the US Current Account Deficit.
8. The US Current Account Balance is the speedometer of the money exiting the US into world markets (deficit).
9. It is this deficit that must be met by incoming investment in the US in any form. It could be anything from businesses, equities to Treasury instruments. We are already seeing a fall-off in the situation of developing nations carrying the spending habits of industrial nations - a contradiction in terms.
10. If the investment by non-US entities fails to meet the exiting dollars by all means, then the US must turn within to finance the shortfall.
11. Assuming the US turns inside to finance all maturities, interest rates will rise, with the long term rates moving fastest regardless of prevailing business conditions.
12. This will further contract business activity and start a downward spiral of unparalleled dimension because the size of US debt already issued is of unparalleled dimension.

Therefore as you get to #12 you are automatically right back at #1. This is an economic downward spiral.

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Message sent on Fri Jan 4, 2008 at 10:53:57 AM Pacific Time

Tanzanian Royalty Exploration


	CODE : TRE
	ISIN : CA87600U1049

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Tanzanian Royalty Expl. is based in Canada.

Tanzanian Royalty Expl. holds various exploration projects in Tanzania.

Its main exploration properties are BIHARAMULO, SHINYANGA and KABANGA JV in Tanzania.

Tanzanian Royalty Expl. is listed in Germany and in United States of America. Its market capitalisation is US$ 49.0 millions as of today (€ 42.9 millions).

Its stock quote reached its highest recent level on August 13, 2010 at US$ 9.94, and its lowest recent point on December 15, 2017 at US$ 0.24.

Tanzanian Royalty Expl. has 122 437 228 shares outstanding.

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