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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: ggersh who wrote (1628)	10/18/2007 11:11:03 PM
From: Real Man	Read Replies (1) \| Respond to of 71456

Gold will tend to get volatile around futures rollover or options expiration. Large spec futures longs can be reduced in 2 alternative ways 1) Taking profits without rollover - bearish 2) Taking delivery, even on 10% of OI - extremely bullish GLD fund is a large spec in the futures market that is taking delivery. Its OI corresponds to investment demand for physical gold. I sold about 1/3 of the gold lately and rolled it into Yen. Also dollar bearish, but might be less risky. Very happy with the profits -g-

To: ggersh who wrote (1628)	10/19/2007 6:21:25 AM
From: Real Man	Read Replies (2) \| Respond to of 71456

The US reserves are gold, and are around 198 billion at current prices, if they have any of the gold left, that is (not lent out at ridiculously low lease rates). Thus, if US CB decides to do what other CBs do in currency crises, sell reserves, this would put enormous pressure on gold price, unless all that gold is readily bought by some CBs holding worthless dollars. There is always this unknown variable with gold, CB selling, which caps gold price. So far only European CBs sold their gold, with 500 tonnes a year cap. US does not have a cap, but it might not have any gold left, just the IOUs from the bullion banks in the vault. We never know. They can sell the IOUs to other CBs, but gold won't care. The problem I see with this is that US manages US dollar through interest rates, and given recent action, the plan now is to devalue the dollar to avoid recession and to cure trade deficit situation some, so it seems highly unlikely they will sell gold. CBs are known to emerge and cap the gold price with some selling (much less than 8000 tonnes) when it rallies too much, though. Dollar devaluation is a one-way street? That said, G7 is deemed to be very important for the direction of the currencies, and it is happening this weekend. Dollar dropped on increased chances of October cut only. If the Fed does not cut in October, dollar should rally some. Should is the word. -g-