I find it interesting to watch the relationship with the DOW and the dollar lately. One would think on the basis of pathetic economic indicators and the issuance of so much additional debt (Ibelieve the US is formally issuing up to $1 trillion in new debt this year alone) that the dollar would crash on this news, yet the dollar seems to gain a lift on each new horrible economic data release. Huh? Meanwhile the DOW is starting to buckle under the bad news and perhaps investors are starting to figure out they have been had (again). The market looks very weak right now, and we are heading into what has been the worst performing interval of the year statistically for the markets.

So the obvious answer is manipulation is at work yet again. The party line has been that selloffs in the market require hedges to be covered, which were put on in US dollars and therefore they create demand for dollars to cover, driving up the dollar in the process. Yeah, maybe on a macro level that has been a contributing factor. But the nearly perfect inverse relationship in defiance of intuitive market performance suggests to me that its another scam. Like why the hell is the dollar so closely tied to even minor intraday fluctuations? Tonight, I see DOW futures lower, and the dollar is magically getting a bounce, way ahead of any trading. This is just too close, too perfect a match to be anything but the product of manipulation. Its like they have a team of traders on standby, watching and reacting to any fluctuation and ready to offest that with the effective dollar response they have predetermined.

This sort of thing is also illegal of course, but that has never stopped the goddam government from doing whatever the hell it wants to. Like all such scams, even those enacted and backstopped by the almighty government, it is doomed to collapse eventually. Just the very act of printing the money necessary to underwrite all the futures trading will eventually undermine the dollar. The short term illusion is already wearing thin. The dollar will return to its behaviour of losing value as international investors smell out that the underlying fundamentals have gone to hell, just as the bond market has trended higher even as the US government has tried to defy gravity by buying bonds in the billions of dollars to artificially boost prices. You cannot fool mother nature.

Gold is a bit easier to cap since it is a much smaller market and many players trade on leverage, thus they are easier to stampede. So it should surprise no one that manipulated gold trading is not reacting to the piss poor economic fundamentals and rampant money printing. In time the gold capping scam will break down too, whenever interantional investors have had enough.

cheers!

mike