iHub Mining Sector Entrance Lobby

[Frank Pembleton]

Requiem for the Ruthless
The Gold Cartel in Dying -- May They Rest in Pieces
by James Sinclair -- October 6, 2002

It is reasonable to assume that JPM is out of the gold controlling business.

It may well be that the firmness of gold is a result of JPM closing short positions via beards (agents on the Comex floor and in the world gold cash market to hide the identity of JPM) as money would be called in from all JPM trading operations. This is SOP crisis action. Clearly, JPM is in crisis mode as they cut their staff by 20%. JPM is not alone in a crushing economic squeeze.

Commerzbank in Germany, another commercial bank that is a derivative dealer in Germany, has lost a quarter of its value last week. All the derivative maniac commercial banks are bleeding badly.

It is also reasonable to assume that the entire gold cartel, all trading entities of commercial banks, may well be headed out of the business of controlling the gold price. Lately their efforts have appeared to me to be more bluff than reality. Sure they will try to bluff the moves, but without ample funds, their game is up. All the commercial banks have bigger fish to fry.

The bigger fish is the interest rate derivative market and massive mismatching.

I do not expect that market to implode, but it is going to skin many derivative positions alive. No one expects interest rates to tighten, so if I am right about the bond market top, the Grim Reaper is going to descend on whatever profits the commercial banks have left. are
http://www.financialsense.com/metals/sinclair/editorials/100602.htm