Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: RealMuLan who wrote (64554)	3/15/2007 10:35:51 AM
From: mishedlo	Read Replies (2) of 116555

First Flame Of Financial Meltdown Nears The Short Fuse Author: Jim Sinclair jsmineset.com Dear CIGAs, This situation is serious as the first flame of a financial melt down is getting closer and closer to the short fuse of the interest sensitive over the counter derivatives. A flop in those OTC derivatives would be devastating to the international financial community so it is reasonable to assume it will not occur, at least here and now. In order to prevent such a situation that would act as a vacuum on liquidity, the Federal Reserve must act to add liquidity to an already brimming over the top world liquidity situation. Since this is super bearish for the US dollar, it is super bullish for gold. The courage of my youth has returned as I bid every $2 lower as the noobies pound away at gold. The dollar is heading for .8050 while the euro is only 4/100 below 1.33. Wish me luck. Respectfully yours, Jim ===============================================+ I disagree with his assessment that a flop in derivatives will be super bearish for the dollar nor do I think the Fed would be able to contain it once it starts. But I do agree they would try and contain it and that gold would likely be a beneficiary, assuming there is a beneficiary at all outside of treasuries. Mish

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