Friday, September 02, 2005

US Dollar

Yesterday, Thursday, September 1, the USD Index broke below a second lower neckline of the head and shoulder topping pattern of the US dollar rally. Another confirmation of the topping rally pattern of the US dollar.

Wednesday the Index went down about 1. Thursday the Index went down about 1.

This is awful dollar action.

The Index could produce a 3rd lower neckline down around 84 on the index. I can't see how this dollar rally is not over. Gold and silver move the opposite of the dollar.

What is striking about gold is that the last time it got knocked down, it took about a month to recover. This time gold took 2 days. Probably the first time this has happened in the history of the current gold bull market. A bull market that most Americans are completely unaware of because the US mass media and financial media will not talk about this bull market, on top of the distracting "bread and circuses" act going on in the US.

The government mostly controls the media in the US and does not want Americans to be aware of what gold (the canary in the coal mine, the inflation barometer) is saying about the US Treasury and Fed having created massive amounts of USD out of thin air in direct competition with counterfeiters. After all, doing what counterfeiters do is the whole point behind governments having central banks, why the Fed in the US is screamingly unconstitutional. Unfortunately, Americans could care less about their constitution or their freedom. And there is a huge price for them to pay because of that. At some point, real soon it looks like, gold will no longer be able to be ignored; and the piper will be there demanding payment from debtors, and if the debtor can not pay, then from the debtor's creditors. There is going to be a terrible downside in the US to much higher gold prices.

The oil/gold ratio:
Historically, in the long long run it has been about 15:1 (barrels of oil to buy an ounce of gold). Right now it is about 6:1. You can buy an ounce of gold for a lousy 6 barrels of crude. The ratio has been as high as 33:1. Looks like a lot of upside left to the price of gold and silver.

Right now the bulk of the growing demand for **physical** gold is from India, China, Middle East, Russia, Turkey, and Argentina.

"Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide." -- John Adams

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