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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Gary H who wrote (17635)	3/24/2003 10:18:32 PM
From: Gary H	Read Replies (1) \| Respond to of 81101

More from Jim Sinclair New York Times article worthy of reflection Dear Friends: The New York Times on Sunday had a telling comment which I ask you to consider. This comment was contained in an article on page A-24 headlined: "Delaying Talk About the Cost of War." The article discussed the certainty of the Bush Tax Reduction Package while the Administration has not yet quantified the potential cost of the war effort. Please keep in mind that estimates for the full cost of this action, plus rebuilding, plus macro-economic costs, were estimated in the "Economist" months ago at from USD$100 Billion to USD$1.2 Trillion. The telling comment in the Times was: "The administration has stiff-armed, as far as I am concerned, the congress, those that wanted to know something about what are the costs of the war." White House reticence about war costs has crystallized opinion among its political opponents, some independent observers, and even some Republicans, that Mr. Bush is willing to suppress information that threatens his agenda. For this reason, and because the huge run up in the equity market and drop in gold has come as a result of government released information concerning the success of the US strategy in Iraq, you have an absolute need to obtain unbiased professional intelligence on what in fact is happening in Iraq. If the war has not been won by Wednesday of this week, I strongly recommend that you purchase the entry level intelligence report issued by Strategic Forecasting LLC which you can reach at www.stratfor.com. If the war extends through this coming week, then there is a strong probability that the huge Dow rally and gold sell-off is based on public acceptance of a war time propaganda program and possibly not on hard facts. The press, who believe they have full access to this conflict by being directly immersed in coalition fighting units, seem to have overlooked that the government chose those units in which they are placed. I am also sending you this powerful article on gold by Richard Russell, Editor in Chief of Dow Theory Letters. The inimitable and venerable Mr. Russell gained wide recognition via a series of over 30 Dow Theory and technical articles that he wrote for Barron's during the late-'50s through the '90s. Through Barron's and via word of mouth, he gained a wide following. Russell was the first (in 1960) to recommend gold stocks. He called the top of the 1949-'66 bull market. And almost to the day he called the bottom of the great 1972-'74 bear market, and the beginning of the great bull market which started in December 1974. Russell's article points to a real disconnect between recent market action and its underlying fundamentals. Here's the article: "The markets are operating on two separate levels. The level it's operating on now is what I would term the "surface" level, the war, the current economic statistics, the current psychology. But under the surface level, we have what Bill Gross is referring to, and that is the massive debts and deficits that could ultimately sink the dollar and topple the US as a super-power. Perhaps ironically, the path that Bush is putting this nation on will simply accelerate this process of debt and deficit building. There are two main scenarios regarding the future of the US, at least two which I take seriously. The first is held by a number of highly intelligent people such as Bill Gross above. This scenario holds that the US is headed for increasing inflation as the Fed is forced to print new oceans of money to cover our continuing deficits and debts. The other scenario held by such analysts as Bob Prechter and James Dines is that we face a deflationary depression, as the bear market bears down relentlessly on the mountains of debt that is built into the US economy at every level. Assuming that one of these scenarios is correct, what is our salvation as investors? In both cases, I believe the salvation of investors is real money, better known as gold. In a major inflation, the purchasing power of the dollar is sure to decline. If that happens, the case for gold is obvious enough. As the value of paper money declines, the value of real money (gold) will become clear, even to the most stubborn anti-gold element. In a major deflation, the pressure on business would be relentless. In this case, the Fed would go all out to fight the forces of deflation. Fed Governor has already announced that the Fed would not hesitate to use its chief weapon, its "printing press" to fight deflation. The Fed would also bring interest down to zero or even to a negative level, and it might even turn to buying stocks if necessary.<html> So in the case of a deflationary depression, the Fed would flood the world in liquidity, putting massive pressure on the dollar - and here again investors would turn to the safety of gold. " Jim's Sinclair's Comment: Reviewing the true history of gold you will find that the 1930s was a positive gold period as gold was utilized by the US and the open market as a means of fighting deflation. I have already told you why, IMO, that the 85-year Prechter study condemning gold shares in a bear market is flawed. =========================================================================== Copyright (c) 2003 JIM SINCLAIR'S MINESET () All rights reserved. For more information visit our website at jsmineset.com or send mailto:tnxinvestor@tanrange.com Message sent on Mon Mar 24, 2003 at 1:01:53 PM Pacific Time