US Dollar Weakness Trumps Market Manipulation

Posted On: Friday, June 29, 2007, 5:30:00 PM EST
Author: Jim Sinclair

Dear Friends,

They can manipulate as much as they want but it is all in the US dollar!

It is my opinion that those powerful short interests — both legal and illegal -are frantic to cover and are therefore pulling out all the stops.

Dirty tricks, use of media pals, and all the usual underhanded methods seem to populate everything these days from gold to gold shares of good value.

Using the baseball analogy, “Three strikes and you’re out,” I rate today as strike number two at the .8050 to .8150 range on the USDX. The interesting part of this is that commentators are looking at the differential rate between the US Fed and other Central Banks. My comment is, “Like hell that is the reason.”

The real reason is a meltdown of sub prime mortgages that appears to have caused Bear Stearns more of a problem than was first thought. When you see a new man come on board at Bear Stearns who specialized in asset maximization of corporations you know the horse dung has hit the proverbial fan.

I believe that Over the Counter Derivatives are now melting down, threatening many other well known international investment firms. And that is why the dollar looks like death warmed over. In addition, that is why the price of gold is under the great power of manipulation to hold it down so as not to reveal the degree of the problem.

Remember this about Over the Counter Derivatives:

1/ They have no regulation.
2/ They have no standards.
3/ Without standards there can be no viable market.
4/ They are unlisted
5/ They are traded by private treaty negotiation
6/ They are valued by “Mark to Model” which is a total cartoon.
7/ They have no financial guarantee such as a clearing house.
8/ They are unfunded special performance contracts floating in cyberspace. All funds in the OTC Derivatives are taken out as spreads and commissions.
9/ More than 50% of the earnings of major international investment banks come from granting in private treaty negotiations these instruments of mass financial destruction.
10/ The financial performance of the specific performance contract called OTC Derivatives depends on the financial capacity of the loser in the transaction.
11/ Control has been loose in the interest sensitive OTC Derivatives because of multiple dealings outside of the initiating two until no one knows who has what.
12/ The replacement value of these instruments is in the multi trillions of dollars.

Interest rate differential would not hammer the dollar as we are seeing today. Remember that three strikes and the US dollar is out. Expect every dirty trick and media negativity towards everything gold as quiet but frantic insiders attempt to offset a panic by subverting early warning systems.

Those in the know are frantic to cover their short positions which can only be accomplished if they stampede you by every means possible. They are going to fail. You are not. If you wish to screw the shorts royally – simply do nothing. They can make price but they cannot make cover as long as you are not spooked into selling everything gold. The gloves are off and the major battle between longs and shorts in gold is here!

Gold is going to $682 – $761 and then to $887.50 – $1000 plus

The bear market in gold shares is a total construction of bear raiding hedge funds that is doomed to failureJ. Sinclair's Mineset

Their really bad day is close at hand!