The following is reprinted from Jim Sinclair's jsmineset.com website:

Posted Friday, February 01, 2008

Author: Jim Sinclair

THE SEAT OF REAL POWER

There is an axiomatic truth defining society, "The Structure of Power is Pyramidal." What that means is that as your position of power rises in human society there are less people with more power above you until you reach the top where there is but one person in control of all below.

That person and the first two levels below are unknown. Conspiracy theory comes from a less than perfect observation of what is simply natural. All food chains have a top dog, not top dogs.

Many inquired why I said 30 dollars lower that ABX would consolidate the gold field and not suffer from its short of gold position until much later on. The reason is simple. The highest level of the "Pyramid of Power" is the long side of those short sales which are extremely close via agents to ABX.

In the final analysis ABX will have obtained all the production that can be achieved then it will be watered down as per the Ashanti case. I doubt present stockholders will care because with gold trading at or above $1650 the price of ABX will be in the stratosphere. The then stockholders of ABX's hit will be light compared to Ashanti.

The point I am trying to bring home to you clearly, directly and not in between the lines is that those you blame for today's most uncomfortable Western world economic conditions and the derivative disaster that is starting are those that run these people and have long positions in most gold hedges. As unnamed international stockholders owning the majority of ABX shares, they will control ABX who in turn will control all the available gold production by acquisition.

The fact is by itself all you need to know in order to have the courage to step up to bat in every decline in the gold price is scale buying after having sold some on every Rhino horn. That is all you need to know in order to sit tight with your gold and gold share investments, knowing that just those in the highest position in the pyramid of power are those who have the largest position in physical gold and have a strategy in place and operations to control gold production going forward from 2011.

This is all you need to know in order to understand that gold will not collapse as was evident from 1980 to 2001.

I will review well ahead of time the mechanism that will assure gold remains trading in price around its final high, not significantly lower. It is not convertibility, nor the gold cover clause as previously structured. It is this that makes the business of precious metals and the companies therein excellent investments, even though today you are screaming bloody murder.

Remember when gold was just going through $300 and $400, you heard from me about Chung Phat and Dr. No? Well they are real people.

Check the honorary directorship of ABX then hunt all the boards they are presently serving on after which you will need oxygen.

This is just one of the many reasons that the present action of gold, today off $30 from the top, is nothing but noise on the way to $1650 and probably above.

Of course those that believe TA is the sole determinant of the direction of anything will be screaming against gold this weekend. They forget that (a) major interest can paint the charts of a market as tiny as gold with the greatest of ease.