Jim Sinclair’s Commentary

How can OPEC influence prices created by Currency Induced Cost Push Inflation? They simply cannot.

OPEC says can do no more to control $120 oil
By Muriel Boselli and Barbara Lewis
PARIS | Wed Apr 6, 2011 8:44am EDT

PARIS (Reuters) – OPEC can do little to control prices driven by speculators betting on "worst case scenarios" and has already supplied the market with the oil it needs, members of the producer group said on Wednesday.

Oil on Wednesday traded above $122 a barrel for Brent crude, near two half-and-a-half year highs set this week.

"There is little we can do in terms of price control," UAE Oil Minister Mohammed bin Dhaen al-Hamli told an oil conference in Paris.

Already, he said, the Organization of the Petroleum Exporting Countries had increased output in response to the disruption of supply from OPEC member Libya.

The group, which pumps around a third of the world’s oil, has resisted calls for an emergency meeting before its next scheduled conference in June in Vienna.

"International markets are choosing to ignore market fundamentals and bet on the worse case scenarios," Hamli said, adding the market was well-supplied.

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Jim Sinclair’s Commentary

For those who joined me on our safari in Africa you might recall the key point in our discussions on markets.

To quote, "There is an opportunity for all of us. It is going into a different business. You are going to become Long Bond Bear Inc.

As long as QE is there you can expect rallies from support but do not fear putting out a short line into near resistance. You will meet all your cash needs for a generation."

GEAB N°53 is available! Global systemic crisis: Second half of 2011 – Get ready for the meltdown of the US Treasury Bond market
53 (March 17, 2011) -

Beyond its tragic human consequences (1), the terrible disaster that has just hit Japan weakens the shaky US Treasury Bond market a little more. In the GEAB No. 52, our team had already explained how the sequence of Arab revolutions, this fall of the “petro-dollar” wall (2), would translate during 2011 into the cessation of the massive purchases of US Treasury Bonds by the Gulf States. In this issue, we anticipate that the sudden shock experienced by the Japanese economy will lead not only to the halt in US T-Bond purchases by Japan, but it will force the authorities in Tokyo to make substantial sales of a significant portion of their US Treasury Bond reserves to finance the enormous cost of stabilization, reconstruction and revival of the Japanese economy (3).

With Japan and the Gulf States alone accounting for 25% of the total 4.4 trillion USD of US federal debt (December 2010), LEAP/E2020 believes that this new situation which is asserting itself during the first quarter of 2011, against a background of China’s increasing reluctance (holding 20% of US Treasury Bonds) to continue to invest in US government debt (4), carries the seeds for the collapse of the US Treasury Bond market in the second half of 2011, a market that now has only a single buyer: the US Federal Reserve (5).

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