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To: Secret_Agent_Man who wrote (250513)	7/16/2003 3:11:49 PM
From: Secret_Agent_Man	Respond to of 436258

Pox Hits Box as ESF Knocks (With Apologies to Dr. Seuss) The Exchange Stabilization Fund (ESF) made the Chairman look worse than he did himself which in retrospect is quite a feat. We are clearly using non-traditional means of fighting deflation by manipulating markets of all types. Currency and gold markets were being "stabilized" or "manipulated" depending on your perspective. The Fed gave no new news. It is still depending on a lower dollar, interest rate cuts and market manipulation to resuscitate the economy. The lower dollar is falling out of that equation quite quickly based on the "War of the Titans." Lower interest rates have done nothing, so manipulation is the only tool the Treasury and Federal Reserve have to resuscitate the global economy. What group of companies turned in big earnings gains this quarter? No, not the heartland industries of America but the "American Money Changers" that benefit directly by Fed actions, especially their bond trading departments. What a horrible signal that sends to the world about what we are as an economic entity. In GE's case, its earnings and quality of earnings went south. Northern bound earnings-wise were JPM, Citicorp, Goldman and the rest of the Cartel of Common Interest with many raising their dividends in an attempt to bull the market some more. Federal Reserve Chairman Greenspan says he's ready to do this and ready to do that but nothing new is really being done. The ESF did its usual thing to depress the price of gold not recognizing that an appreciating gold price would give Greenspan more credibility in his statements concerning the US economy. How could an arm of the US Treasury make such a dumb mistake? Believe me, it is easy if gold has been considered your enemy for so many years. I will go with Kenny Adam's analysis of the gold market and therefore am grateful to the market manipulators for providing one more opportunity close to the takeoff of the gold price. Yes, I did my thing and will redo it if the manipulators try for lower prices. I never reach up price-wise for anything gold but I do take my stand when I feel it's the right thing to do. Long Bonds What market is too large for even the Exchange Stabilization Fund to manipulate? You got it, the long bond market. Chairman Greenspan had a great effect there today. Walking the tightrope between the threshold of a great expansion in US economic activity and the threat of deflation, the Chairman only deflated the long bond big time. Long-term bonds deflate, then the housing market deflates. The last requirement for a long term bull market in gold is now in and that is a confirmed top on the long bond. The Euro We award round one of the Heavy Weight Title of the World Exchange rate fight, not to the US, but to the Euro area on the trade weighted USDX and on the Euro. Yes, the Euro looks bad and that is one for Germany. If you think the Fed wants to see the dollar rise you also believe in the Easter Bunny. A higher US dollar is quite negative for the US balance of trade and payments. Conclusion The Battle of the Titans has broken out in the marketplace. Manipulators are manipulating the manipulators and it's a virtual free-for-all. I told you to be prepared for fireworks but this is crazier pyrotechnics than the 4th of July in lower Manhattan or in Baghdad on just about any night these days. I must admit that the televised grilling that Chairman Greenspan got today is certainly different from our President's prepared news conferences. The peanut gallery was feisty today and made their points quite well. However, beating up the Chairman seems a little mean when you view his professorial demeanor behind those large glasses probably saying to himself, "Who needs this job." As a Chairman of sorts myself, please remember never be mean to the Chairman. They have feelings too. Be calm. Eliminate any reaction born of emotions. Stay disciplined and stay the course. Gold is going to and above $400. Now one of my buds finally agrees. Thanks Kenny, it was getting lonely. j sinclair