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Politics : Gold and Silver Stocks and Related Commentary

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From: loantech	1/7/2005 8:44:15 PM
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I like this guy and his politics and the fact he made millions. Regardless if a claim is made that his prognostications may be off. I think his record is good myself. <<General Editorial Friday, January 07, 2005, 7:32:00 PM EST Gold and Dollar Market Summary Author: Jim Sinclair The payroll number, which was expected to be +175,000 jobs, came in at 157,000 jobs which proved to be a disappointment despite the positive spin put on it by the media. Then a little help came from a friend in the Euro as it moved up smartly against the USD as a product of the disappointing payroll number. It wasn’t much intervention but with the Treasury Secretary about to speak, a roaring euro certainly would not have been the proper setting. Now keep in mind that the US Treasury Secretary controls the actions of the Exchange Stabilization Fund so a quick foray into the USD/Euro was only logical if you were him. Then came the main event: US Treasury Secretary Snow speaking publicly and making the following points: 1. The US Treasury supports a strong dollar policy. 2. The present administration wants to see the dollar strengthened, without of course divulging what specifically that means in terms of policies. 3. A strong dollar is in the national interest, suggesting that a larger US Trade Deficit is in the national interest as well. 4. The administration wants Congress to work on something to bring down the US Federal Deficit. Keep in mind that the legislature is made up of primarily the same people that just before Thanksgiving added 11,500 special interest projects costing many billions to an appropriations bill. These are deficit zebras that will never change their strips. The US dollar and euro were under the influence of some intervention when the forceful statements of the US Treasury Secretary came into play when the numbers on the December Deficit began to influence the market. December is corporate tax payment month and due to higher corporate income, the number for that month was a plus $2 billion against last December’s minus 18 billion. Anyone that really believes that this is a harbinger of a significantly lower US Federal Budget Deficit also believes in the Tooth Fairy. The reason I say this is simple: Nature will simply not cure the systemic problems of the US dollar. We are not moving into a boom economy but at best are going sideways at a high level of activity due to two wars. Congress is going to do nothing meaningful to reduce the Federal Budget Deficit as they just demonstrated their total lack of real concern. Interest rates are at best tracking competitive international rates. Therefore, with no policies in place that can reverse deficits into surpluses, the US dollar will continue to decline. So far this rally is a counter trend short squeeze that reflects a large short position in the dollar. Added to this mix is the new popularity of online currency trading which allows weak hands to have 200 to 1 leverage in the currency market. The long side on the Comex at 20 to 1 leverage suffers from all the items I have already outlined to you thereby exaggerating the downside move in the US dollar on the upside. This too will pass as have all the other so called tops in gold. Gold has gone to $440 and will go to $480 plus. Click here for today’s charts. jsmineset.com

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