Posted at 4:10 PM (CST) by & filed under General Editorial.

Dear CIGAs,

This is money without liability attached to it.

As paper money continues to degrade worldwide, real money will experience geometrically increasing demand.

Stay the course.
Ignore the noise.
Turn off financial TV.

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Posted at 4:05 PM (CST) by & filed under Jim's Mailbox.

Dear Jim,

Every month its considered a "surprise." How long does it take for a recurrent surprise to be considered the norm? At least a decade it would seem.
CIGA Pedro

US jobless claims make surprise rise
By Alan Rappeport in New York
Published: April 15 2010 14:04 | Last updated: April 15 2010 15:23

The number of Americans claiming unemployment benefits recorded a surprise rise last week, as the labour market continues to lag behind other improving areas of the economy.

Separately, Federal Reserve figures showed that US factories boosted their production for the ninth month running in March, as businesses have begun rebuilding their stocks.

Initial jobless claims rose by 24,000 to 484,000 last week, labour department figures showed on Thursday. That clashed with economists’ predictions that new claims would decline and brought the less volatile four-week average up to 457,750.

The data were a disappointment to economists, who argue that claims need to fall to the low 400,000 level before the economy can begin consistently creating jobs. The labour department noted, however, that there was increased volatility during holidays and that Easter could have caused the surge in claims.

Continuing claims, which measure the total number of people receiving benefits, also rose, climbing by 73,000 to 4.64m.



Dear Jim,

The proponents of Management of Perspective Economics (“MOPE”) believe that if you play a happy enough tune, the public will behave optimistically and generate economic growth. Government sources widely proclaim the banking sector has recovered and the economy is turning around, with no challenge from a complacent press.

Then, once in a while harsh facts come to light to a very few that are paying attention that reveal the happy talk has no basis.

There is no recovery in the banking sector when the collateral underlying loans keeps declining in value.  People are not faring better economically when 35% more lost their homes than a year before.

Even here in classic MOPE form the terrible news is cast in a favorable light. The author states the stunning increase in foreclosures is a positive sign that “banks are starting to wade through the backlog of troubled home loans at a faster pace…” God bless him for trying; at least he doesn’t have to worry about this premise being challenged by any other mainstream source.

Respectfully yours,
CIGA Richard B.

Foreclosure rates surge, biggest jump in 5 years
US homes facing foreclosure jumped 16 percent in 1st-quarter as banks take back more homes
Alex Veiga, AP Real Estate Writer, On Thursday, April 15, 2010, 12:34 am

LOS ANGELES (AP) — A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report.

RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.

More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said.

"We’re right now on pace to see more than 1 million bank repossessions this year," said Rick Sharga, a RealtyTrac senior vice president.

Foreclosures began to ease last year as banks came under pressure from the Obama administration to modify home loans for troubled borrowers. In addition, some states enacted foreclosure moratoriums in hopes of giving homeowners behind in payments time to catch up. And in many cases, banks have had trouble coping with how to handle the glut of problem loans.


US Long Bonds

The test trading swing high came on light volume. I described it as a bond rally with a limp. As a result, the bonds have faded off the resistance and trend line.

Still, those expecting that the neckline will be broken without a fight, might as well pick up their marbles and go home right now. Unless, the last week’s heavy inflows have reversed into the small up tick (doubtful), it is likely that the bulls will reorganize into this dip. A light volume dip into the lower gap will create another bullish setup. What cannot break resistance with force, will reverse and attempt to break resistance with force.

The overhead gap is the critical line in the sand. It was formed on heavy volume and will not be easy to overcome.

US Long Bonds ETF (TLT)


Posted at 1:15 PM (CST) by & filed under Trader Dan Norcini.

Trader Dan’s Commentary

Here is another straw to pile up on the back of the struggling Euro. As mentioned yesterday, the Dollar and the Euro are vying for the “Least Despised Currency” award.

This is currently what we are seeing sorted out in the Forex markets. Dollar strength is not because traders are enamored with the greenback’s prospects but rather are less enamored with those of the Euro. Depending on how this psychology shifts from day to day, we will see strength in the one or the other.

Gold is responding to all of this currency world turmoil by displaying strength and upside resilience as it returns to its age old role as the ultimate in currencies, without any obligations attached to it whatsoever.

Morgan Stanley: A Eurozone Collapse Is Now Far More Likely, Here Are The Canaries To Watch Out For
Vincent Fernando, CFA | Apr. 15, 2010, 5:42 AM

The latest Global Monetary Analyst raises the notion of stronger Eurozone nations ditching the euro in order to form a stronger, smaller currency union.

Morgan Stanley’s Joachim Fels believes that the eurozone/IMF financial backstop for Greece, plus the European Central Bank’s recent backing-down on collateral rules for Greece have substantially, and ironically, increased the long-term risk of a eurozone break-up.

Joachim Fels at Morgan Stanley:

… which gives rise to moral hazard: The bail-out and the ECB’s softer collateral stance set a bad precedent for other euro area member states and make it more likely that the euro area degenerates into a zone of fiscal profligacy, currency weakness and higher inflationary pressures over time. If so, countries with a high preference for price stability, such as Germany, might conclude that they would be better off with a harder but smaller currency union. And because the Maastricht Treaty does not provide for the possibility of expelling euro area members, the only way how Germany could achieve this would be by leaving the euro to introduce a stronger currency.

Obviously, we have not reached the end-game yet. However, with the recent developments, such a break-up scenario has clearly become more likely, for two reasons. First, the lesson for other euro area members from the Greek bail-out package that no matter how badly you violate the SGP guidelines, financial help will be forthcoming, if push comes to shove. This introduces a serious moral hazard problem into the European equation. Fiscal slippage in other countries has now become more rather than less likely.



Trader Dan’s Commentary

In a further sign of the madness that seems to have gripped our society, here comes the ability to gamble on movie flicks. One can already bet on snowstorms, hurricanes, granny’s death, and with this proposal, whether or not Robert Downey Jr. can wow them enough to rake in a box office take of $150 million.

I am waiting for the derivatives contracts on both horse racing and cockroach racing. Now those would be useful. You could bet it all on “Runs with a Limp” and at the same time short the hell out of the horse futures.

‘Iron Man’ Bets Loom as CFTC Staff Backs Film Futures (Update1)
April 14, 2010, 4:30 PM EDT
By Todd Shields and Michael White

April 14 (Bloomberg) — The Commodity Futures Trading Commission staff, bucking Hollywood opposition, is recommending approval of a market for box-office contracts on films such as “Iron Man 2,” two people with knowledge of the situation said.

The staff recommends the CFTC on April 16 approve Media Derivatives Inc.’s request to create a market for professional traders, the first of two applications, said the people, who asked not to be identified because the information isn’t public.

The Motion Picture Association of America, representing the studios, says plans by Media Derivatives and Cantor Fitzgerald LP to open markets based on movie-ticket forecasts will lead to manipulation and hurt the industry. At least one commissioner, Democrat Bart Chilton, is “leery” of the idea. Democrats hold three of the five seats.

“There would be conflicts of interest,” Chilton said in an interview. “It wouldn’t serve as a legitimate hedging vehicle.”

After putting off a decision last week, the panel is scheduled to vote on the initial request by Media Derivatives, a Scottsdale, Arizona-based unit of Veriana Networks Inc. A specific contract requires a second vote.


Posted at 2:39 PM (CST) by & filed under In The News.

Where has Jim gone?


Jim Sinclair’s Commentary

What is said here is a requiem for the dollar!

Bernanke Warns: U.S. Debt Could Balloon to More Than 100% of GDP

Jim Sinclair’s Commentary

At the time of the Lehman crisis, bailout money from the Fed could have been legally lent to banks, financial institutions, partnerships, individuals and hedge funds. This is why the facts cannot come out.

This is fact, not conjecture.

Fed Shouldn’t Reveal Crisis Loans, Banks Vow to Tell High Court
By Bob Ivry

April 14 (Bloomberg) — The biggest U.S. commercial banks will take their fight against disclosure of Federal Reservelending in 2008 to the Supreme Court if necessary, the top lawyer for an industry-owned group said.

Continued legal appeals will delay or block the first public look at details of the central bank’s $2 trillion in emergency lending during the 2008 financial crisis. The Clearing House Association LLC, a group that includes Bank of America Corp. and JPMorgan Chase & Co., joined the Fed in defense of a lawsuit brought by Bloomberg LP, the parent company of Bloomberg News, seeking release of records related to four Fed lending programs.

The U.S. Court of Appeals in Manhattan ruled March 19 that the central bank must release the documents. A three-judge panel of the appellate court rejected the Fed’s argument that disclosure would stigmatize borrowers and discourage banks from seeking emergency help.

“Our member banks are very concerned about real-time disclosure of information that could cause a run on the banks,” said Paul Saltzman, the group’s general counsel, in an interview yesterday. “We’re not going to let the Second Circuit opinion stand without seeking a review.”

Regardless of whether the Fed appeals, the Clearing House will take the next legal step by asking for a review by the full appellate court, Saltzman, 49, said at his office in New York. If the ruling is unfavorable, the bank group will petition the Supreme Court, he said.


Jim Sinclair’s Commentary

Everybody cheats to disguise their balance sheet and hide losses and that makes it ok.

Where does such reasoning come from?

Lehman Perfidy: Everybody Does It
April 13, 2010
John Lounsbury

I have reported previously about the accounting shenanigans at Lehman Brothers (LEHMQ.PK) prior to their collapse in September, 2008. The earlier reports discussed the official report of the court examiner, Anton Valukas. Mr. Valukas’ official report revealed that Lehman’s executives were involved in a scheme to hold assets off the balance sheet, at key accounting times, in order to conceal the firm’s extreme use of leverage. The Valukas report also faulted the bank’s accountant, Ernst & Young, for defective audit processes.

Repo 105

One of the accounting procedures that has received a great deal of publicity is known as Repo 105. Repos are shorthand for repurchase agreements, whereby one party makes a sale of a security or asset for a specified time to a second party with a specified higher repurchase price. The end effect is the same as would be achieved through a secured loan, with the lender holding the security. The higher repurchase price covers the "interest" costs for the "secured loan."

The Repo 105 process is an arcane maneuver where the sale of the asset is at a higher value than it actually has. In the case of 105, the value is 105% of its actual value. The effect is that the bank removes an amount, say $100 billion from its invested assets and shows $105 billion in cash on its books.



Jim Sinclair’s Commentary

Do you want the truth? Then subscribe to this.

- Annual Inflation: 2.3% (CPI-U), 9.5% (SGS) 
- "Strong" Retail Sales Should Prove Fleeting 
- Trade Deficit Widened / Recession Is Not Over

Jim Sinclair’s Commentary

When the big fall they do not bounce.

FASB has allowed a financial cartoon to be drawn a year ago to formulate a plausible denial to base an equity rally.

We are not headed for a double dip, but rather a second flop.

Morgan Stanley Property Fund Faces $5.4 Billion Loss
APRIL 14, 2010

Morgan Stanley has told investors in its $8.8 billion real-estate fund that it may lose nearly two-thirds of its money from bum property investments, according to fund documents reviewed by The Wall Street Journal.

That would likely make it the biggest dollar loss—$5.4 billion—in the history of private-equity real-estate investing. Over the past 20 years, Morgan Stanley’s real-estate unit was one of the biggest buyers of property around the world, doing some $174 billion in deals since 1991, mostly with money raised from pension funds, college endowments and foreign investors. The losses come from investments in properties such as the European Central Bank’s Frankfurt headquarters, a big development project in Tokyo and InterContinental hotels across Europe, among others.

The loss also represents a huge challenge for the firm as it tries to resuscitate its Morgan Stanley Real Estate Funds business, known as Msref.

The firm has reinstated Owen Thomas, the executive who helped create Msref, as head of the real-estate business and brought in an outsider, real-estate-debt veteran John Klopp, to lead its property business in the Americas.

The soured investments made by the $8.8 billion fund, Msref VI International, continue to be a distraction for Morgan Stanley as it tries to extricate the fund from complex deals around the world. In many cases, the company can’t walk away from foundering investments because the fund made billions of dollars in guarantees.


Jim Sinclair’s Commentary

So far, with the exception of few for show perp walks, no one has been called to the dock for their crimes. When the Devil is in charge in Wall Street those that sin prosper.

Lehman Channeled Risks Through ‘Alter Ego’ Firm
On Tuesday April 13, 2010, 2:46 am EDT

It was like a hidden passage on Wall Street, a secret channel that enabled billions of dollars to flow through Lehman Brothers.

In the years before its collapse, Lehman used a small company — its “alter ego,” in the words of a former Lehman trader — to shift investments off its books.

The firm, called Hudson Castle, played a crucial, behind-the-scenes role at Lehman, according to an internal Lehman document and interviews with former employees. The relationship raises new questions about the extent to which Lehman obscured its financial condition before it plunged into bankruptcy.

While Hudson Castle appeared to be an independent business, it was deeply entwined with Lehman. For years, its board was controlled by Lehman, which owned a quarter of the firm. It was also stocked with former Lehman employees.

None of this was disclosed by Lehman, however.

Entities like Hudson Castle are part of a vast financial system that operates in the shadows of Wall Street, largely beyond the reach of banking regulators. These entities enable banks to exchange investments for cash to finance their operations and, at times, make their finances look stronger than they are.


Jim Sinclair’s Commentary

This is the true condition of one more of the hidden disasters in finance.

Morgan Stanley Property Fund Faces $5.4 Billion Loss

Morgan Stanley has told investors in its $8.8 billion real-estate fund that it may lose nearly two-thirds of its money from bum property investments, according to fund documents reviewed by The Wall Street Journal.

That would likely make it the biggest dollar loss—$5.4 billion—in the history of private-equity real-estate investing. Over the past 20 years, Morgan Stanley’s real-estate unit was one of the biggest buyers of property around the world, doing some $174 billion in deals since 1991, mostly with money raised from pension funds, college endowments and foreign investors. The losses come from investments in properties such as the European Central Bank’s Frankfurt headquarters, a big development project in Tokyo and InterContinental hotels across Europe, among others.

FRANKFURT EUROTOWER: Morgan Stanley projects losses of 90% on the fund’s $77 million investment in the Eurotower, which is the headquarters of the European Central Bank

The loss also represents a huge challenge for the firm as it tries to resuscitate its Morgan Stanley Real Estate Funds business, known as Msref.

The firm has reinstated Owen Thomas, the executive who helped create Msref, as head of the real-estate business and brought in an outsider, real-estate-debt veteran John Klopp, to lead its property business in the Americas.


Posted at 1:51 PM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

Comments out of Fed Chairman Bernanke regarding the state of the economy and the consequent need for maintaining a low interest rate environment were enough to give the Dollar the kiss of death today. It fell through its recent floor of support near 80.20 on the USDX and is very close to confirming a topping formation. A pair of closes below 79.75 would get the attention of the hedge funds. Keep in mind that the last Commitment of Traders report shows a fairly large speculative long position in this market. If that key technical level gets taken out, an avalanche of sell orders are going to be activated.

The greenback is trying to claw its way higher as I put this commentary together but the bulls have some serious work to do if they are to avoid getting hammered. Perhaps the only thing keeping them from being swamped for now is lingering fears over the overall health of several nations in the Euro Zone. In other words, it is the same “The Dollar may be a piece of junk, but the Euro is hardly any better” thing that has been occurring in the Forex markets for some time now. The question is which one is least hated and despised.

None of the drama surrounding the Dollar was missed by gold which fought off bullion bank selling as the Dollar began falling upon Bernanke’s remarks. Overnight it pushed into that lap region I noted yesterday but was unable to push on through there and trigger enough buy stops to affect price in a consequent manner. If you note on the chart, the selling is appearing at the former resistance level which was taken out Friday and Monday of this week and is once again serving to cap the upside progress in the metal. The battle lines are clearly drawn therefore with bulls needing a strong push through that level again to take command of the market while bears are hoping that bullion bank price capping can hold down the charge of the bull brigade.

Strength in the mining shares as evidenced by the HUI is helping the cause of the gold bulls at the Comex. It took out yesterday’s high but thus far has not been able to garner any additional upside momentum. The bounce off the uptrending 10 day moving average is healthy.

Crude oil looks like it is getting ready to take a run back to $87 again. It is a bit tricky trying to read whether it is responding to the weakness in the Dollar or the seasonal tendency for stronger demand as we enter the warmer months. Either way, it looks as if the cheap gasoline prices we had been enjoying the last year are now an ancient relic of the past. I want to reiterate, rising energy prices as evidenced by crude oil are helpful to the cause of gold. Energy costs affect just about every sector of the economy that one can bring to mind whether it is food production (agriculture), manufacturing, transportation (shipping, airlines, etc) or even the costs incurred by the local contractor who has to drive from locale to locale. If crude oil pushes past $100 again, watch for more calls to have the “evil, vile speculators” curbed although those same “evil, vile speculators” are hypocritically adored by the feds when they turn their guns on the equity markets and goose them ever higher.

Speaking of being goosed ever higher, the S&P just made yet another new yearly high this time propelled by the earnings report of JP Morgan. It’s nice to know that 74% of their income came from trading revenue.

Bonds are lower today (making sense for the first time) with the potential for a double top forming near 116^ 22. With the yield on the Ten year back below 4.00%, near 3.83, the feds must be breathing a sigh of relief. We’ll have to watch the technical action in the long bond tomorrow to see if we get a clue to the next move.

A rather quiet move by the CCI (Continuous Commodity Index) seems to be going unnoticed by many but it did manage to thus far make a 3 month high in today’s session. Palladium has made a move of $150 in two months time and is trading at an astonishing $548/ounce price. Platinum, not to be outdone, has added $180 over the same time frame and is pushing up against $1,750. That may be partly responsible for the strong buying that we have also been seeing in silver which is acting like it wants to push up to $19. It certainly seems as if these metals are the recipients of substantial investment flows. Gold is not going to be left out of the party.

Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini


Posted at 1:04 PM (CST) by & filed under Jim's Mailbox.

Dear Eric,

As a precautionary note, the mark up of OTC derivatives held in inventory, compliments of the capitulation by the FASB, would appear if they occurred in trading profits.


JPMorgan Chase earns $3.3B in Q1 on strong trading

JPMorgan’s results encapsulates the 2009 economic recovery.

Weak lending, decline in many of the loan series and indicative of the real economy was off set by strong trading, liquidity driven economic illusion, results.

JPMorgan Chase, the first of the big banks to report earnings for the January-March period, said it earned $3.3 billion, up from $2.1 billion a year earlier. The company again added to its reserves for failed loans during the quarter, but its investment banking division and other businesses enabled it to more than overcome the ongoing weakness in lending.




Some may think who cares about Argentina?

What does that have to do with our future retirement plans?

Compare the writing on the wall.

CIGA "The Gordon"

Argentina seizes pension funds to pay debts. Who’s next?
By Ambrose Evans-Pritchard
Last updated: October 21st, 2008

Here is a warning to us all. The Argentine state is taking control of the country’s privately-managed pension funds in a drastic move to raise cash.

Should we worry about our pensions?

It is a foretaste of what may happen across the world as governments discover that tax revenue, and discover that the bond markets are unwilling to plug the gap. The G7 states are already acquiring an unhealthy taste for the arbitrary seizure of private property, I notice.

Here is a link from La Nacion and another from El Pais for Spanish speakers:

So, over $29bn of Argentine civic savings are to be used as a funding kitty for the populist antics of President Cristina Kirchner. This has been dressed up as an anti-corruption and efficiency move. Aren’t they always?


Failed Banks May Get Pension-Fund Backing as FDIC Seeks Cash
By Dakin Campbell

March 8 (Bloomberg) — The Federal Deposit Insurance Corp. is trying to encourage public retirement funds that control more than $2 trillion to buy all or part of failed lenders, taking a more direct role in propping up the banking system, said people briefed on the matter.

Direct investments may allow funds such as those in Oregon, New Jersey and California to cut fees for private-equity managers, and the agency to get better prices for distressed assets, the people said. They declined to be identified because talks with regulators are confidential.

Oregon’s retirement fund may contribute $100 million as regulators seek “the support of state pension funds to solve the crisis surrounding ongoing bank failures,” Jay Fewel, a senior investment officer at the Oregon State Treasury, said in a presentation at the fund’s Feb. 24 meeting. New Jersey’s fund may also participate, said Orin Kramer, chairman of New Jersey’s State Investment Council.


US Long Bonds are rallying, but it has a limp

Leveraged flows have pushed bonds higher from critical support, but the rally has limp. The trading swing high was cleared on shrinking volume. This indicates declining force. The overhead gap magnet is pulling hard now. If this zone is to be cleared, volume needs to pick up and the rally needs to lose its limp.

US Long Bonds ETF (TLT):



Gold to Silver Ratio: Hemorrhage or Injection Phase within the Depressionary Box

Silver investors are often pessimistic and optimistic at the wrong times. Pessimism reigns in the late stages of the hemorrhage phase. Nobody wants to buy silver after a beating. Conversely, optimism reigns in the late stages of the liquidity injection phase. After a big run, investors come to believe that trees grow to the sky.

The liquidity injection phase started in 2009. The relative out performance of silver over gold since then is clearly indicated in the gold to silver ratio (GSR) chart below. What it closely, as not only will the gsr help you reallocate between gold and silver but also distinguish between liquidity and hemorrhage phases within the depressionary box.

Gold to Silver Ratio (GSR):


Retail sales up in March; consumer prices tame

Similar interpretations, such X (number) consecutive month of gains, unexpected strength in retail sales, and the consumer is driving the recovery, were used 2005, 2007, and 2008. Unexpected this or that has tendency to fade without notice. The constant currency (gold adjusted) retail sales trends, see chart below, are well defined since 2000. Historical high debt burden, low savings and devaluation are hallmarks of a cyclical (liquidity driven) rather than secular (fundamental or demand driven) economic recovery. When the free money wears off, the old problems of 2001 and 2007 will reemerge.

Retail sales rose for the third straight month in March as better weather and auto incentives brought out shoppers in force.

The rise was more than economists had expected. It’s the latest sign that consumer spending is rising fast enough to support a modest economic recovery.

Gold-Adjusted Retail Sales (RSGLDR) and YOY Change:



Dear Jim

"The NAB will be increased by SDR 333.5 billion (about US$500 billion) to SDR 367.5 billion (about US$550 billion), representing a major increase in the resources available for the Fund’s lending to its members. "

More rearrangement of the chairs on the Titanic?! Borrowing from members to lend to other members all backed by the same empty promises that the global financial system operates on now. It can’t last forever.

CIGA Keith


Royal Gold

The old brokerage rating change game. Ignore them. They often serve another purpose.

Money "sees" the tape energy expanding to new highs in 2009.

Royal Gold (RGLD)



FDIC proposes large banks pay for their risk

Classic locking the barn door after the horse has bolted. For starters, define risk. Risk, when hidden through OTC derivatives marked to model rather than market and/or off the balance transactions, cannot be defined. Also, paying for undefined or under defined risk in terms of fees will do little to curb risky activity if those fees do little to match the inherent risks. Furthermore, well defined risk in terms of full disclosure and fair market valuation would be discounted in share price. Share price and capital ratios will affect the ability of the entity to raise cash in the capital markets. Impede the ability to raise cash, and risky behavior will be squashed.

Maybe the FDIC needs cash. Risk fees will be passed on to their customers.

In creating the new scorecard for large bank fees, the FDIC said it used lessons from the recent crisis to determine which risk factors increase the chance an institution will fail.



Breakdown of total bank credit

All series continue to contract except for consumer loans and credit cards. This is a dangerous reversal for household consumers during a liquidity driven, jobless-less recovery. The market will show no mercy for those without understanding, or what could very well be choice (borrow to survive) this time around.

Breakdown of total bank credit:


Posted at 4:00 AM (CST) by & filed under General Editorial.

My Dear Friends,

It is 6am and I write to you while overlooking the Gulf. I am yet to see anyone in the sea even though the waters are clear and inviting. That to me is a good reason to take a swim only in the pool so handsomely presented for guests.

Only a stone’s throw from the sea there seems to be little humidity to deal with. The sun seems to give you penetrating warmth more so than an uncomfortable heat. The practicality of the local men’s wear cannot be argued with as it give comfort beyond all the zipping and buttoning we do daily.

Our meetings have been at the ministerial level courtesy of our hosts and the arrangements made by the General Secretary for Royal Court Affairs.

Our direct business is with our hosts yet this society has an integrated decision making process wherein acceptance at the ministerial level is vital to forming partnership relations.

A partnership between Africa and Oman would look both ways as far as asset building is concerned.

Oman looks poorly upon speculation, but rather applauds a focused execution of goals, objectives and plans. As this approach put Canada in the lead, it supports Oman, not having fallen victim to the Wall Street proliferation of destructive OTC derivatives. This is a period where not keeping up with the financial Jones has paid off handsomely.

It is my view that if you were able to form an active partnership with significant Oman interests it would be a key to the growth of any sincere enterprise.

To that end we meet today with the Minister of Minerals to better understand the reciprocal opportunities of an Oman/African relationship.

It needs to be understood that Oman and Tanzania have a long-standing relationship culturally and economically that reaches back as far as the 14th century.

Exchanging energy for paper has become exhausting in the talent required to consistently remain ahead of the violent changes in the fiat currency markets. Minerals as a storehouse of value have been recognized in this testing time as solid compared to paper frenzy taking place every day.

We are fortunate to be here, to be with our hosts and to be meeting those that run this country on behalf of and at the direct instructions of the Sultan.