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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Teresa Lo who wrote (51971)	5/23/2002 2:31:29 PM
From: Jim Willie CB	Respond to of 65232

thanks, Teresa... will review... couple thoughts quickly your 322 target is higher than I would put it at I think the real target was 308-312 which was wrestled with in typical battle fashion, then broken you should not put a top to Cup & Handle at the extreme level of the impulse in my opinion even if earlier in the chart we saw some reversal support your 322 seems a stretch I think it was a lower barrier which means to me that a runup is due toward 330-335 (loosely cited) also the upchannel on XAU has been broken on the UPSIDE you should revise the analysis to use a superior HUI index XAU is 35% loaded with pieceofshit Barrick, hedged 4.5 yrs a very similar story though with Goldbug Index HUI which confirms my stated 310 mark both the C&H resist level and uptrend barrier have been broken upside they confirm each other thanks again, and I will take a look tonight / jim

To: Teresa Lo who wrote (51971)	5/23/2002 3:03:21 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 65232

fundamentals of GOLD are sketchy to you maybe, not to others certainly not to monetary analysts who foresaw Naz bust here are my 20 reasons reprinted from last week some are bonafide fundy reasons, others are tangential many solid reasons to trade more than on timing & psychology in fact, I dont find much psychology brewing out there yet THE SHAKEN MONEY SYSTEM AND ITS CRISIS HAS YET TO BEGIN fundamentals are overwhelming powerful, compelling, convincing, irrefutable, monstrous, and foretell of extremely painful and deep worldwide recession ahead I expect a currency crisis and a banking crisis before 2006 / jim 20 REASONS WHY GOLD WILL RISE Jim Willie CB -- May 14, 2002 1. real rate of interest has been near zero since Oct 2001 - bond disincentive, no real return on investment - credit market is 5x larger than stock market - strong historical precedent for rise in gold 2. trade debt is approaching 5% of US GDP - symptom of overvalued dollar, lost export competition - strong historical precedent for decline in US dollar - extremely strong inverse correlation between gold and US$ 3. money supply increased 30% since Jan 2001, 85% rise since 1991 - monetary inflation plants seeds of eventual price inflation - printing of "blank check" dollars has met every world economic accident since before the Asian Meltdown 4. rising world tension, desire for safer safe haven - threats of terrorism (conventional, biological, chemical, nuclear) - Middle East escalation, probably retaliation to US attacks on Al Qaeda 5. unwinding miner hedges, end of gold leasing, reducing supply - 1000 ton annual supply/demand shortfall - eventual central bank discontinued selling - lost control by Gold Cartel (central banks, bullion banks, hedged miners) - unwinding of largest naked short position in history (3 years supply) - end of trashing of South African Rand (world’s leading gold supplier) 6. dismantled mining supply apparatus, from systemic price below production - two years lag to bring new supply to market with higher prices - decade of neglect, lowest prices generally for commodities since 1929 7. no more Japanese savings guarantees - private citizen savings total $12 trillion - reports pose that Japanese could eventually own 70% of world gold 8. new federal deficits from inefficient wartime and security spending - increased supply of bonds leads to reluctance to maintain additional holdings - corporate debt collapse leads to pressure on federal and household debts 9. trade tariff resumption discourages global trading village concept - tension leads to reduced trade, cutbacks in dollar exchange, boycotts 10. accelerating worldwide currency turbulence - Japan, South Africa, Argentina, Brazil, Mexico, Taiwan, PacRim, Turkey 11. world perception of American institutionalized dishonesty - scandals, accounting fraud, broker conflict of interest, exaggerated earnings - consequent resentment of American hegemony, lost trust 12. Arab & Islamic financial warfare countermeasures - reflow of significant petrodollars to Europe - potential for Arab minting of new Islamic inscripted coins 13. end old economic cycle of prosperity, begin new cycle to correct excess - Kondratieff summer in 1999, followed by Kondratieff winter in early 2000’s - Kondratieff identified the 60-70 yr cycle boom/bust (>4 cycles) - new down trend began with the US dollar in January 2002 14. extreme rise in foreign holdings of US assets - lost control of our own economy (interest rate, value of dollar) - diversification away from American financial instruments - flawed USTBond deposit base supporting entire foreign economies 15. correction of US dollar usage as store of value - really a debt instrument in acute oversupply - entire fractional banking system to be called into question - its gold collateral is in process of depletion, perhaps 50% depleted - full circle coming toward currency backed by hard asset 16. rising costs from entire energy complex - political, legal, environmental obstacles to increased supply - obsolete natural gas infrastructure inhibits new supply - both gold and natural gas highly correlated with crude oil 17. USTBond yield must rise to meet other world treasury competition - other major currencies offer higher interest rates (dividend yield) - poor competitive position versus Euro (trade surplus, 15x gold backing) 18. steep yield curve forecasts price inflation within 3-5 years - refusal of long bond yield to come down in response to Fed rates cuts 19. Bank for International Settlements has targeted the US dollar - BIS sees extreme valuation as unbalanced, and lack of collateralization as unstable - Swiss desire to install Euro as new gold-backed currency - reversal of yen carry trade, reversal of gold carry trade - 10 years of carry trade have provided foreigners with necessary dollars - previous BIS target was the Soviet Union 20. Sept 11th marks the turning point for US dollar - 9/11/1989 presaged a rise in the dollar to stretched highs with fall of Berlin Wall - 9/11/2001 presaged a correction after blowoff top following World Trade Center attack