Yesterday, I wrote about Trader David R’s comments on manipulation. After giving some thought to what he wrote, I asked myself the following question – if, as David R says, “There is much bigger money at play now and it’s HOT money that comes in and out; and they try to make money pushing all markets around,” then what will happen if this outside-the-system Wall of Hot Money decides to zero in on the dollar?
Not so many years ago, George Soros nearly brought down the British Pound. Can these guys bring down the dollar? I can hear some of you saying, “No way – the Chinese would never let that happen because they have around $2 Trillion of their reserves in dollars.” Do you think that will be sufficient motivation to support the dollar? If they “allow” the dollar to lose half its value, then they lose $1 Trillion. That would be a small sacrifice if it moved their yuan into prominence as the replacement “Reserve Currency” role. A very small sacrifice.
In fact, a lot of this “wall of hot money” may be coming via the Sovereign Investment Fund in China, or from out of sight wealthy Chinese investors. It doesn’t matter who is behind this Wall of Hot Money – it only matters what they do with it. I say, it is only a matter of time before this “Wall of Money” goes after the dollar and at the same time, corners the gold and silver market.
I want to be heavily invested in gold and silver and out of the dollar before that happens. Sinclair knows it will happen. That’s why he says the dollar will fall into the 60s (now just below 79) in the USDX. He doesn’t discuss who will be doing the selling, but it must be either central banks or a pool of money of the nature of what David R is talking about.
In today’s daily, Mark Faber also warns that even the rich will lose up to half of their wealth. That can only happen if the dollar crashes. In my mind, the only question is whether the crash will be sudden or a slow-moving train wreck!
One of our readers emailed me and was surprised that I question the conspiratorial view and “icons” like Ted Butler. I never said I don’t believe in what they say; I simply presented a rational and credible alternative and suggested that YOU make up YOUR own mind. I try and offer you a “balanced” report. Two of the most successful and bright people I know, in this industry are Trader David R and Bill Fleckenstein, who is NOT a part of Wall Street and is NOT a part of the precious metals industry. Neither of them have an axe to grind. Both have told me that they absolutely disagree with Butler’s analysis. Both of them are on a first name basis with the traders at JPMorgan. They both say there is no manipulation, at least not by the banks. That does not mean that Ted is wrong, but there are many credible folks out there who take a different view.
This much I do know – Ted is absolutely correct in his position that JPMorgan is bullying the silver market with a huge (25%) short position on the COMEX and that this type of “concentration” is not allowed in the Commodity Exchange rules. And yet, the CFTC sits idly by, for the last few years, and does nothing. This is flat out wrong! He has been a pioneer, trying to get this fixed, and for that, all of us owe him our gratitude.
There is no doubt in my mind that the markets are manipulated! The way they behave, falling almost every day at exactly the same time, is beyond coincidence. It is manipulation. By who, and for what purpose is another matter. You may have noticed that icons like Richard Russell and Jim Sinclair never refer to manipulation. Sinclair talks about “increased volatility.” This whole conspiratorial issue brings out the emotions in many of you and it shouldn’t. It should be enough to know that you are in the midst of the greatest bull market of your lifetime. Gold and silver are the place to be. All you have to do is load up and wait for two or three years. Please take Richard Russell’s quote, “I think in the next two or three years it will be impossible to buy gold except at black market prices.” Being in the industry, I could not agree more!!!