Goldhedge
02-13-2006, 10:56 PM
This is from Jim Sinclair. He is saying that there is NO CONSPIRACY in the gold market. Rather, what is being done is perfectly legal and well thought out. So, much for conspiracy theories eh? Anyway, check out what is going on (he's an insider btw). We may be able to capitalize on the goings on during the rise. [note: I punctuated in places where run-on sentences were a little confusing to me - I don't think I altered the intent though - link provided for purists.]
Monday, February 13, 2006, 8:42:00 PM EST
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The Backwards Conspiracy
http://www.jsmineset.com/spacer.gif
Author: Jim Sinclair
http://www.jsmineset.com/spacer.gif
This is to me is NOT conjecture. It is one of the reasons I had the courage to say what was published in my career review in Forbes of December 2001. Every fundamental supports a much higher price for gold, yet there has never been a market that was not made to do what it does. The only manipulation that has ever worked is manipulation that is parallel to the direction that a market wants to go anyway. This is called sponsorship and is required in every situation. What we will discuss here is the sponsorship for gold to $1650 or higher. The direction gold wants to go is up, and that up is going to be taken full advantage of in amounts that are in the trillions.
Those of you that see the easy answer to gold’s problems in the word “conspiracy” have it backwards. You see the intent as anti-gold. I have received copious numbers of faxes and emails chewing me out for what is interpreted as not seeing the evil intent in gold ETFs, pointing to the custodians as proof of the dirty deed.
Lets work through this together using logic and fact:
Almost all major gold producers are using over the counter derivatives of one variety or another. They inform you they do not have margin calls and can roll their deliveries forward with the buyer.
We have analyzed the margin call characteristics of over the counter short of gold derivatives almost to death. There is a tie between the gold derivative, the condition of the balance sheet, and the bond ratings of the producer which could trigger an event that mirrors a margin call. That may not be named as a call based on a margin, but in practice that is exactly what it is. This factor does not fit into the scenario until well down the road to $1,650 - if at that point at all.
Looking at the form of over-the-counter short of gold derivatives, you have to come to the conclusion that the producers have found a trillionaire that is both clinically insane and actually has the money to make these contracts as the buyer in the short of gold derivatives. In any contract there is a buyer and a seller. The non-recourse loan requires the short of gold over-the-counter derivatives. It is the buyer in this situation we need to examine in order to know what is really happening. This is something no one has done. The buyer is not a certifiable nut who is a trillionaire. He is a singular, cunning, smart international group. His nickname is Daddy Warbucks, followed by Daddy Warbucks’ gang. The assumption that the buyer in the transaction is in a nut house is illogical.
The conclusion that efforts like today to pound the rear end off gold at any opportunity are to cover short positions profitably. There is some of that out there, but the short continues all the way from $248 to the present level. You can conclude the best traders in the world are numskulls of world class character. What is happening is called “shaking the tree so the apples will fall.”
With the dangers now well known in the non-recourse borrowing for production loans, every new project is financed this way. You say that the oxymoron in the gold mining industry is the word “management.” Today the largest companies are run by modern Authoritarian Free Enterprise which are generally financial and accounting people. If not run by them, they are the back up teams to CEOs and Chairmen. Companies with a billion dollars in the treasury and those that made two billion short gold in the bear market are not neophytes even if we disagree with them.
We assume that companies that scored big time in the gold bear market are a pack of idiots that have not perceived the gold bull market as clearly as they perceived the bear market.
The fact is we have out there a perfect classical case study of derivative failure right in front of your eyes screaming for your review. But how many of you have used the amazing tools of the Internet to review all articles and announcements on the Ashanti Derivative problem. My guess is no more than one in a thousand readers has taken the time to make this review.
All your answers are staring you in the face as a matter of history which went into a cement foundation due to the miracle of the Internet. It is there for those that know how to browse thoroughly. Yet there remains a pertinent fact yet to be defined. The important yet unanswered fact is this question: When Ashanti was diluted in the process of paying out shares of stock - for the purpose of meeting the exotic over the counter derivatives that went totally bad - were contracts closed or are they still on? Mark my words carefully. We are about to find out soon.
If we find out that the answer to the question concerning whether or not those deadly contracts were closed by the payment of shares of Ashanti, which went down the line to the buyers of the gold on the OTC derivatives, we will have in the hand the fact most important to this line of reasoning some call a CONSPIRACY, but which I believe you have defined totally backwards. You call this CONSPIRACY with the interpretation of illegality which it is NOT under present law.
You also really believe that there are many entities making these short of gold derivative contracts as the buyers of the contract on the long side. The tenets of the specific performance contract known as OTC short of gold derivatives would indicate the buyer never wants the gold and is willing to take infinite risk. This is going back to the point that the long side or the short of gold derivative must be a certified mad person presently in a mental ward without a conservator.
Now let’s look at all this from a different angle. What if the long side of all these short of gold derivative that allows the non recourse loan was a singular entity, in fact Daddy Warbucks and his Warbucks' friends? Let’s say that all these loans from the international corporation are controlled by Daddy Warbucks and Daddy Warbucks’ buddies. These loans are made via Grand Cayman corporations to major producers who also have corporate subsidiaries in tax sheltered domiciles. There is no crime here, just a layer of privacy.
Let us take this story a little further and assume that one or two major gold producers were going to consolidate the entire gold production industry by buying all the 'for sale' major producers and/or the subsidiary corporations of holding companies that are gold producers.
Now assume, that between 2008 and 2010, these final consolidators of the many bags of derivative ruined gold producers was to experience the same situation as Ashanti did. The outcome is clear. As the shares are issued to meet the debits, the final entity to receive these shares would be the long side of the short of gold derivatives that have allowed the huge expansion of non economic new production in the 1990s as well as production from 2000 to present.
The plan is so perfect that the shareholders of the acquired companies are quite happy with the price received. Gold will be so high by that time and the final public gold producing consolidators of the gold industry will be so watered down, that the shareholder of this company, or companies, will have profits regardless of the water-down that will keep them happy as clams in mud.
Now assume for a moment that the majority of ETFs with their extreme expansion to come are, in the main (of course not all), the tool of Daddy Warbucks and the Warbucks’ gang to take up excess supply of gold before the gold fever really takes over all the black boxes so perfectly explained by Dan last evening.
The ETFs or a fund of gold is so enticing I am presently speaking to Monty Guild and our inside gold associates about establishing a gold community fund because we are the top guns of this business with real experience, not Parker Pen experience.
Not to be concerned, my public company is number one in the line of my focus and responsibilities and that will NOT change under any circumstances.
So here is the bottom line. The agreement amongst major investors, a legal conspiracy if you will, is NOT to depress the price of gold but to own it ALL. I mean all! Thanks to the black boxes, watered down major producers and ETFs the price of gold will go to unimaginable levels by 2012.
This is why no reaction should concern you. This is why the top callers are witting or unwitting allies of Daddy Warbucks. This is why I buy all reactions selling 1/3 into all periods of strength. This is why worry is not part of my gold vocabulary. This is why I have quoted you the words of the old New Orleans spiritual, “I will NOT be Moved.”
You should not be moved by this week’s action in gold. It is all part of what a move to major prices is made of. I expect tons of email attacking this viewpoint, but I am totally CORRECT. You will see all I have just told you unfold in front of your eyes and over this generational bull market in gold.
The final act in this story will be the reinstitution of a modernized Federal Reserve Gold Certificate Ratio tied to international liquidity and the price of gold. This is the vehicle by which gold will find its way back into the depressed but low dollar in order to guarantee Daddy Warbucks and its gang that that de facto ownership of the world’s supply and oncoming new world supply stays at the high price accomplished in this magnificent and legal plan.
http://www.jsmineset.com/ARhome.asp?VAfg=1&RQ=EDL,1&AR_T=1&GID=&linkid=3391&T_ARID=3460
Monday, February 13, 2006, 8:42:00 PM EST
http://www.jsmineset.com/spacer.gif
The Backwards Conspiracy
http://www.jsmineset.com/spacer.gif
Author: Jim Sinclair
http://www.jsmineset.com/spacer.gif
This is to me is NOT conjecture. It is one of the reasons I had the courage to say what was published in my career review in Forbes of December 2001. Every fundamental supports a much higher price for gold, yet there has never been a market that was not made to do what it does. The only manipulation that has ever worked is manipulation that is parallel to the direction that a market wants to go anyway. This is called sponsorship and is required in every situation. What we will discuss here is the sponsorship for gold to $1650 or higher. The direction gold wants to go is up, and that up is going to be taken full advantage of in amounts that are in the trillions.
Those of you that see the easy answer to gold’s problems in the word “conspiracy” have it backwards. You see the intent as anti-gold. I have received copious numbers of faxes and emails chewing me out for what is interpreted as not seeing the evil intent in gold ETFs, pointing to the custodians as proof of the dirty deed.
Lets work through this together using logic and fact:
Almost all major gold producers are using over the counter derivatives of one variety or another. They inform you they do not have margin calls and can roll their deliveries forward with the buyer.
We have analyzed the margin call characteristics of over the counter short of gold derivatives almost to death. There is a tie between the gold derivative, the condition of the balance sheet, and the bond ratings of the producer which could trigger an event that mirrors a margin call. That may not be named as a call based on a margin, but in practice that is exactly what it is. This factor does not fit into the scenario until well down the road to $1,650 - if at that point at all.
Looking at the form of over-the-counter short of gold derivatives, you have to come to the conclusion that the producers have found a trillionaire that is both clinically insane and actually has the money to make these contracts as the buyer in the short of gold derivatives. In any contract there is a buyer and a seller. The non-recourse loan requires the short of gold over-the-counter derivatives. It is the buyer in this situation we need to examine in order to know what is really happening. This is something no one has done. The buyer is not a certifiable nut who is a trillionaire. He is a singular, cunning, smart international group. His nickname is Daddy Warbucks, followed by Daddy Warbucks’ gang. The assumption that the buyer in the transaction is in a nut house is illogical.
The conclusion that efforts like today to pound the rear end off gold at any opportunity are to cover short positions profitably. There is some of that out there, but the short continues all the way from $248 to the present level. You can conclude the best traders in the world are numskulls of world class character. What is happening is called “shaking the tree so the apples will fall.”
With the dangers now well known in the non-recourse borrowing for production loans, every new project is financed this way. You say that the oxymoron in the gold mining industry is the word “management.” Today the largest companies are run by modern Authoritarian Free Enterprise which are generally financial and accounting people. If not run by them, they are the back up teams to CEOs and Chairmen. Companies with a billion dollars in the treasury and those that made two billion short gold in the bear market are not neophytes even if we disagree with them.
We assume that companies that scored big time in the gold bear market are a pack of idiots that have not perceived the gold bull market as clearly as they perceived the bear market.
The fact is we have out there a perfect classical case study of derivative failure right in front of your eyes screaming for your review. But how many of you have used the amazing tools of the Internet to review all articles and announcements on the Ashanti Derivative problem. My guess is no more than one in a thousand readers has taken the time to make this review.
All your answers are staring you in the face as a matter of history which went into a cement foundation due to the miracle of the Internet. It is there for those that know how to browse thoroughly. Yet there remains a pertinent fact yet to be defined. The important yet unanswered fact is this question: When Ashanti was diluted in the process of paying out shares of stock - for the purpose of meeting the exotic over the counter derivatives that went totally bad - were contracts closed or are they still on? Mark my words carefully. We are about to find out soon.
If we find out that the answer to the question concerning whether or not those deadly contracts were closed by the payment of shares of Ashanti, which went down the line to the buyers of the gold on the OTC derivatives, we will have in the hand the fact most important to this line of reasoning some call a CONSPIRACY, but which I believe you have defined totally backwards. You call this CONSPIRACY with the interpretation of illegality which it is NOT under present law.
You also really believe that there are many entities making these short of gold derivative contracts as the buyers of the contract on the long side. The tenets of the specific performance contract known as OTC short of gold derivatives would indicate the buyer never wants the gold and is willing to take infinite risk. This is going back to the point that the long side or the short of gold derivative must be a certified mad person presently in a mental ward without a conservator.
Now let’s look at all this from a different angle. What if the long side of all these short of gold derivative that allows the non recourse loan was a singular entity, in fact Daddy Warbucks and his Warbucks' friends? Let’s say that all these loans from the international corporation are controlled by Daddy Warbucks and Daddy Warbucks’ buddies. These loans are made via Grand Cayman corporations to major producers who also have corporate subsidiaries in tax sheltered domiciles. There is no crime here, just a layer of privacy.
Let us take this story a little further and assume that one or two major gold producers were going to consolidate the entire gold production industry by buying all the 'for sale' major producers and/or the subsidiary corporations of holding companies that are gold producers.
Now assume, that between 2008 and 2010, these final consolidators of the many bags of derivative ruined gold producers was to experience the same situation as Ashanti did. The outcome is clear. As the shares are issued to meet the debits, the final entity to receive these shares would be the long side of the short of gold derivatives that have allowed the huge expansion of non economic new production in the 1990s as well as production from 2000 to present.
The plan is so perfect that the shareholders of the acquired companies are quite happy with the price received. Gold will be so high by that time and the final public gold producing consolidators of the gold industry will be so watered down, that the shareholder of this company, or companies, will have profits regardless of the water-down that will keep them happy as clams in mud.
Now assume for a moment that the majority of ETFs with their extreme expansion to come are, in the main (of course not all), the tool of Daddy Warbucks and the Warbucks’ gang to take up excess supply of gold before the gold fever really takes over all the black boxes so perfectly explained by Dan last evening.
The ETFs or a fund of gold is so enticing I am presently speaking to Monty Guild and our inside gold associates about establishing a gold community fund because we are the top guns of this business with real experience, not Parker Pen experience.
Not to be concerned, my public company is number one in the line of my focus and responsibilities and that will NOT change under any circumstances.
So here is the bottom line. The agreement amongst major investors, a legal conspiracy if you will, is NOT to depress the price of gold but to own it ALL. I mean all! Thanks to the black boxes, watered down major producers and ETFs the price of gold will go to unimaginable levels by 2012.
This is why no reaction should concern you. This is why the top callers are witting or unwitting allies of Daddy Warbucks. This is why I buy all reactions selling 1/3 into all periods of strength. This is why worry is not part of my gold vocabulary. This is why I have quoted you the words of the old New Orleans spiritual, “I will NOT be Moved.”
You should not be moved by this week’s action in gold. It is all part of what a move to major prices is made of. I expect tons of email attacking this viewpoint, but I am totally CORRECT. You will see all I have just told you unfold in front of your eyes and over this generational bull market in gold.
The final act in this story will be the reinstitution of a modernized Federal Reserve Gold Certificate Ratio tied to international liquidity and the price of gold. This is the vehicle by which gold will find its way back into the depressed but low dollar in order to guarantee Daddy Warbucks and its gang that that de facto ownership of the world’s supply and oncoming new world supply stays at the high price accomplished in this magnificent and legal plan.
http://www.jsmineset.com/ARhome.asp?VAfg=1&RQ=EDL,1&AR_T=1&GID=&linkid=3391&T_ARID=3460