Today legendary trader Jim Sinclair told King World News that Lagarde’s IMF Cyprus disaster, in stunning fashion, has now forced Chairman Ben Bernanke out of the Fed. Sinclair, who was once called on by former Fed Chairman Paul Volcker to assist during a Wall Street crisis, takes readers on a trip down the rabbit hole that has become know as “The Cyprus Catastrophe” in this extraordinary and exclusive interview:


Sinclair: “The gamble was they were going to shift the onus of the funds required from the busted banks to the depositors and away from central banks. That would have been to the depositors, and away from QE. This is also being proposed in New Zealand and in Spain, but in tiny, negligible amounts. Obviously no amount of theft is acceptable, but the theory coming out of Cyprus was a 10% theory, and that is enormous money.


It was a historic mistake because what Mrs. Legarde and the IMF have done is potentially ruined all of Bernanke’s work. It has also potentially ruined all of the work of the central banks which have been doing QE in order to maintain sovereign solvency.


If she (Lagarde) had succeeded, the ease would have been to the governments, and the pressure would have been to the depositors. Up to now what has been done is to insure the bank depositors without them having to lose. This was the ‘Super Glue’ to hold together the possibility of an economic recovery. That’s what has been put into risk because of this debacle by Mrs. Legarde and the IMF in Cyprus.


This police raid and the 20-year old case is tied directly to her colossal failure in Cyprus. It is also directly tied to Bernanke’s indication that he wouldn’t seek to be Chairman of the Federal Reserve after his term is up.


Again, what the IMF’s catastrophe in Cyprus has done is put into jeopardy every single dollar that any central bank has put in to maintain sovereign solvency. This is enormous. The IMF originally telling Cyprus to ‘Go to hell,’ has in fact said to the world, ‘Go to hell.’ The Western financial world may now indeed go to hell, and Fed Chairman Bernanke knows it.”


[link to kingworldnews.com]