It's The Inflation, Stupid!

"You know the U.S. dollar has problems when comedians start working it into their acts. 'Interesting fact came out today on the new $5 bill,' Jay Leno says. 'It turns out it used to be the old $10 bill.'"

S Korea pension fund shuns US debt

The world’s fifth-largest pension fund will no longer buy US Treasuries because yields are too low. The move signals what could be a big shift by financial institutions away from US government debt into higher-yielding assets.

Central banks from 16 Asian countries said last weekend at a meeting in Jakarta that they might invest more of their $1,000bn of official reserves in one another’s sovereign bonds instead of US Treasuries, given the dollar’s volatility.

http://www.ft.com/cms/s/0/6dcf5f86-fb67-11dc-8c3e-000077b07658.html

Is it over?

Personally, I think the crisis is much deeper than most are willing to admit at this time ..

Otherwise, the Fed would not have opened its lending to investment bankers, effectively throwing out the rule book on central banking and becoming the true lender of last resort for virtually all financial institutions, not just commercial banks!

http://www.moneyandmarkets.com/Issues.aspx?Subprime-Crisis-and-Commodity-Boom-Will-Continue-1595

Forgotten Anniversary Haunts the Nation

Seventy-five years ago this month Franklin Delano Roosevelt was inaugurated as the 32nd President of the United States. Within days after swearing to uphold the U.S. Constitution, through a Presidential Proclamation he closed the U.S. Mint to gold. Recall that the Mint had been established by the Constitution to protect the people’s right to sound money.

Roosevelt had been elected on a platform of sound money. Barely in office, he reversed himself. He grabbed the gold of the people, marked up its value, leaving Federal Reserve notes in the hands of the people that were to lose 95 percent of their value during subsequent years. They stand poised to lose their remaining value before long.

http://www.kitco.com/ind/fekete/mar282008.html

Keeping U.S. Financial Markets Competitve

The plan to overhaul the regulation of U.S. financial markets that Treasury Secretary Henry Paulson will announce on Monday morning is as broad and sweeping as it is overdue.

It has been in the works for a year, and predates the present crisis in credit and mortgage markets that started last August. That, though, has given urgency and focus to the work as well as providing an unwanted dress rehearsal for the envisioned expanded role of the Federal Reserve as the primary regulator of market stability.

http://www.forbes.com/2008/03/29/financial-markets-regulation-oped-cx_pm_0329notes.html

Why the Paulson Plan is DOA

Let’s see. In the middle of perhaps the greatest financial upheaval since the Great Depression, Treasury Secretary Hank Paulson is proposing a change in financial regulations which basically amounts to a big wink to Wall Street. His plan will go nowhere, both for political and practical reasons. In fact, it does not even meet the minimum standard of improving transparency, which would reduce the possibility of a similar crisis in the future.

...the Paulson plan belongs in a fictional world where financial institutions do a good job in regulating and monitoring themselves. Unfortunately, that’s not the world we live in.

The most striking thing about the current problems is just how much money the banks and the investment banks have lost. They apparently had no idea of how risky their own exposure was. The supposedly smart guys were simply stupid.

http://www.businessweek.com/the_thread/economicsunbound/archives/2008/03/why_the_paulson.html

INFLATION. All roads point to it. There are no bypasses or shortcuts around it. Expect it and respect it. Buy Gold. Buy Silver. Be right, and sit tight.

Always Late To The Party

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, (i.e., the "business cycle") the banks and corporations that will grow up around them will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered."
-Thomas Jefferson, President of the United States 1801-1809

All the Feds jokers, and all the Treasury's con men, can't put the US Financial System back together again. Try as they might, failure is inevitable.

The Die Is Cast The Cast Will Die

Today, Americans are looking to the Fed to protect them against the financial chaos threatening our economy. This is tantamount to the Jews in 1930s Germany looking to the Nazis to stave off a possible holocaust. The Fed cannot help America with its economic problems because the Fed is itself the cause of those problems.
http://news.goldseek.com/GoldSeek/1206339300.php

Problem Solved?

Now, you will excuse me if I seem a touch skeptical, but I can’t help but notice that short of climbing aboard helicopters rigged to carry pallets of dollars, the Fed is now doing exactly what we have been expecting it to: provide all the liquidity it can muster using its near mystical powers of money creation. In addition to yet another deep cut in the Fed Funds rate, they are now making the almost unprecedented move (at least since the Great Depression) of lending money to non-commercial banks, in the process effectively putting taxpayers on the hook for $30 billion in suspect collateral from Bear Stearns.

Given the estimates that the assets being carried as capital on the books of Bear Stearns were worth only 10% of what was being posted, and the herd-like business practices of the big investment houses, the odds are fairly high that Bear Stearns is not the only institution teetering on the brink.

Yet this week investors seemed to actually buy the idea that the worst is now over, and that the all-clear signal will soon be sounded.

http://news.goldseek.com/DougCasey/1206364980.php

Investors usually show up late to the party, but tend to stay the longest. Bull Markets are usually launched by the contrarians. Never shy, they show up at the party and wonder where everybody is. The speculators show up not long after the contrarians. They party hard and leave quickly...their stamina for parties limited by their excesses. The investors usually stroll into the party just as things are getting out of control, attracted by all the excitement the speculators have created. They know a good party when they find one, and do everything they can to keep the party going. Nobody notices the contrarians slipping out the back door loaded, content with themselves and their effort to get the party started. And then the dumb money shows up, and the party is over.

The Precious Metals Party has had few investors show up yet, but word is they are on their way by the bus load. Word is the speculators are making a spectacle of themselves, and few want to miss this party now.

Next Stop: $2,000 Gold
During the first half of 2007, overall investment in gold was relatively weak; identifiable investment was 22% lower than one year earlier while statistically residual "inferred investment" was substantially negative. In Q3, while inferred investment was close to zero, identifiable investment soared as a result of record quarterly inflows into gold Exchange Traded Funds (ETF). In Q4 identifiable investment was more subdued, as retail investors took profits and ETF inflows steadied, but inferred investment became strongly positive. In dollar terms total net gold investment in Q4 reached just over $8bn – a quarterly record.

The $95 price drop in gold this past week is therefore nothing short of a gift. An unparalleled buying opportunity that will quickly be acted on, and one of a likely good number, as the volatility in the commodities, debt, and equities markets is going to stay high for the foreseeable future.
http://seekingalpha.com/article/69710-next-stop-2-000-gold?source=d_email

Up In Smoke

"Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety." -Benjamin Franklin

Last week. It's over. It's "last week". But the questions linger... How can the FIFTH LARGEST investment bank in the country go belly up, and Gold tank? How can the Fed cut 75 basis points from the Fed Funds rate, and Gold tank? How can retail sales drop, producer prices rise, jobless claims increase, and new home starts fall, and Gold tank?

Damn good questions, eh? We've not heard many answers as to why Gold tanked, but plenty of excuses. Excuse #1, the Fed ONLY cut 3/4 instead of one point. LOL, poorest excuse of them all. They cut AGAIN, damn it! Excuse #2, the Fed saved the financial system by financing the assimilation of Bear Stearns by JP Morgan/Chase. LOOOOOOOOOOL, who's next? Excuse #3, quarter end profit taking in the commodities sector. Um, this was more than "profit taking". And for the last time please, Gold is NOT a commodity. Gold is MONEY! Excuse #4, the Dollar rallied because the Fed ONLY cut 3/4 of a point and not ONE FULL POINT. LOOOOOOOOOL, the second poorest excuse. The only currency with lower interest rates in the ENTIRE world now is Japan. Excuse #5, margin calls forced selling. Hmm, we may have something here.

MF Global cash call to cover CFDs sparks fear
Stock markets faced new selling pressure today as leading broker MF Global demanded more cash from clients to cover derivative positions.

In some cases the margins will rise from 25% to 90%, requiring a big injection of funds that could lead to a massive sell-off of shares as investors scramble to raise the money to cover their positions.

MF Global has given customers until this morning to find the cash or close their positions. That has led to fears there will be forced selling, with millions of shares being dumped on a volatile market.

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=433697&in_page_id=3

Hedge funds ... may be cutting leverage

"Leverage is being closely watched," said Josh Galper, managing principal of Vodia Group, which advises hedge funds on borrowing strategies.

Leveraged is important for some hedge funds. Using borrowed money can increase potential profits from trades, but it can also lead to bigger losses if those positions don't work out.

A hedge fund investor said one of the managers they invest with recently moved from Bear and had to adjust because the new prime broker had a more conservative lending policy.

Indeed, the investor, speaking on condition of anonymity, said all prime brokers have been re-assessing their relationships with hedge funds as the credit crunch deepens.

This process has already roiled credit markets as some hedge funds have had to sell assets to meet margin calls, or demands for more cash or collateral to support leveraged positions.

Hedge fund de-leveraging may now be affecting commodities markets too.

The price of commodities including energy, metals and grains slumped for a second day on Thursday amid speculation that some hedge funds are selling leveraged positions to either meet margin calls or lock in profits and shift to other assets.

http://www.marketwatch.com/news/story/hedge-funds-leaving-bear-may/story.aspx?guid=%7B16A32981-E9D4-4FC3-A7C5-6B6134B5A110%7D

The Great Unwind has begun, Citigroup warns

"We are now confronted by a broad bloodbath in the credit markets," Citigroup said. " The most leveraged paper is falling in value because it is leveraged, and now the least leveraged paper is also falling in value because it is owned by leveraged investors."

http://www.marketwatch.com/News/Story/great-unwind-has-started-avoid/story.aspx?guid=%7B1DC25DFD%2D3543%2D4CF4%2DBE26%2D74EA4B9C9330%7D

So, taking into consideration the technicals of most commodities, and the Precious Metals, were coincidentally at or near all-time highs as we entered last week...perhaps we could surmise that the blowup of Bear Stearns has sparked a Global Cash Call that has forced leveraged speculators across the globe to reluctantly dump their ONLY profitable positions because they couldn't find more cash to maintain them. And strangely, it is then the very reason that so many have bought commodities, that they are now forced to sell them...the Credit Crunch, falling interest rates, and rising inflation. How perverse is that?

And the beneficiary of this "dumping" of speculative commodity and Precious Metals positions...cash. The Dollar catches a "temporary" bid as speculators are forced into cash and short term treasuries. On Thursday, investors bid up prices on the one-month Treasury bill, sending its yield, which moves inversely to price, down 85 basis points, to 0.2%. LOL, nice return on your money.

Let's face it...commodities and precious Metals should be soaring after everything we witnessed last week in support of the fundamentals that have been driving them higher. This "fire sale" of everything tangible last week has created a much sought after "buying opportunity" for "global" investors to take advantage of the "speculators" demise. Remember, it is investors that will drive the precious metals higher in this leg of the Bull Market.

Asia jewellers on buying spree as price sinks

Singapore, March 20: Jewellers across Asia rushed to buy gold on Thursday after prices tumbled more than $100 an ounce since spiking to a record above $1,000 an ounce this week, pushing up premiums in key bullion trading centres.

http://www.financialexpress.com/news/Asia-jewellers-on-buying-spree-as-price-sinks/286761/

Rush back to gold by Eastern jewellery markets...

Reports from Asia in particular suggest that jewellery sector buyers and investors have been climbing back into the market for the yellow metal in a big way in the past few days after virtually boycotting it in the run up to the recent higher price levels. The jewellery market tends to be pretty shrewd in its assessment of price levels, and this activity suggests an underpinning of the gold price at or around current levels and further suggests, perhaps, that the upward momentum will come back into effect before too long.

http://www.mineweb.net/mineweb/view/mineweb/en/page33?oid=49719&sn=Detail

Investors across the globe see the writing on the wall. And the Precious metals are on sale. The Asians are all about value, and they love Gold. Their "savings accounts" are their Gold "investments". Think of this weeks plunge in Gold and Commodity prices as the catalyst behind the coming tsunami of investment into this sector globally. The speculators have done their job by making investors around the world aware of the virtues of owning these tangible assets. They will now be pushed aside as investors trade in their fiat currencies for REAL money, and REAL assets. The age of "paper assets" is going up in smoke.

The weak hands club

ANNANDALE, Va. (MarketWatch) -- If gold bullion's plunge over the last couple of days is enough to scare you into selling, then join the club.
The club of weak hands, that is.

The very purpose of sharp corrections during major bull markets is to transfer ownership from weak to strong hands, thereby preparing for the next leg up.

http://www.marketwatch.com/news/story/story.aspx?guid=%7B2BAB38A3%2DCCE6%2D4908%2D954C%2DF54F10B17FA6%7D&siteid=rss

Despite the mildly tough language in its statement, it should be clear to all that the Fed sees inflation as the only politically acceptable “solution” to the problems it created. The conclusion that a 75 point cut shows concern about inflation is half right. The Fed is concerned, but only to the extent that the markets stay focused on bogus CPI numbers and fail to notice severe price increases throughout the economy. The fact is that inflation will be with us for some time, and the knee jerk drop in gold is yet another excellent buying opportunity.
-Peter Schiff, Euro Pacific Capital, Inc.

http://news.goldseek.com/EuroCapital/1206038716.php

The gold price will not stop at the $1000 milestone. The silver price will not stop at the $20 milestone, and will vastly outperform gold. The crude oil price might go below the $100 milestone briefly, but will return and shoot past the century mark. No no no!!! All are heading much higher, because the banking problem is not to be soon fixed, the bond problem is not to be soon fixed, the economy is not to be soon fixed, household distress is not to be soon fixed. Maybe none can be fixed, even as money thrown at the problem accelerates parabolically. The limited power of USFed solutions, and limited arsenal of devices to treat the problem, will ensure that monetary inflation will be the main tool. Still, adding liquidity in rescues, repairs, and bailouts is not seen as the cause of the problem. It still is seen as the immediate solution. SUCH IS THE HERESY THAT HAS DESTROYED THE US BANKING SYSTEM.

-Jim Willie CB, GoldenJackass.com

http://news.goldseek.com/GoldenJackass/1206025200.php

Back again to my February 25, 2008 post, Looking Past The Moon , and we can see that last weeks Gold dump, though shocking in magnitude, should not have been completely unexpected.

It would not be unreasonable to expect Gold to perform in March much the same as it did in January. If this scenario were to come to pass, we would expect Gold to soon break above 950 and move swiftly towards the BIG $1000 station. Gold bugs could be celebrating St Patrick's day wearing Gold instead of Green. With Gold +/- 15 of 1000 by mid March we could expect a reaction back towards the breakout at 936. This reaction would be swift and likely last less than 10 trading days.

We're five days into this correction. We should know who the fools are by April 1. There is nothing pretty about this. As a matter of fact it sucks, but it comes with the territory. Fundamentally, the reasons for owning Gold and Silver are probably sounder today than they were one week ago. Corrections in a Bull Market are are to be expected, and this one, like those in the past, should prove to be constructive as Gold sets its sights on Infinity.

Seasonality. For the past six years Gold has bottomed in mid-march and rallied into May. For more on this phenomenon please take the time to read HUI Bull Seasonals 2 by Adam Hamilton, Zeal Intelligence LLC. You will be glad you did. IMO, the man's work is brilliant. You will find this excellent essay on the seasonality of Gold here: http://news.goldseek.com/Zealllc/1206256080.php

Don't Be A Fool

The Working Group on Financial Markets (also, President's Working Group on Financial Markets or the Working Group) was created by Executive Order 12631,[1] signed on March 18, 1988 by United States President Ronald Reagan.

The Group was established explicitly in response to events in the financial markets surrounding October 19, 1987 ("Black Monday") to give recommendations for legislative and private sector solutions for "enhancing the integrity, efficiency, orderliness, and competitiveness of [United States] financial markets and maintaining investor confidence".[1]

As established by Executive Order 12631, the Working Group consists of:
The Secretary of the Treasury, or his designee (as Chairman of the Working Group);
The Chairman of the Board of Governors of the Federal Reserve System, or his designee;
The Chairman of the Securities and Exchange Commission, or his designee; and
The Chairman of the Commodity Futures Trading Commission, or her designee.

http://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets


The Chairman of the Commodity Futures Trading Commission is a seated member of the Plunge Protection Team. Did not know that...do now. At 2PM est on Monday, March 17, 2008 President Bush met with the group above at the White House. Together they put together a plan that was hoped to baffle the investing public with their BULLSHIT! It worked for a day. Today the Dow gave back 2/3 of yesterday's 420 point gain. There are no more Aces up their sleeves.

Obviously with the Chairman of the CFTC present, a plan was hatched to use some of the counterfeit money the Treasury and Fed are printing, and handing out like candy on Halloween to the investment banks, to terrorize the Precious Metals Markets. Giving new meaning to "A Fool And His Money Are Soon Parted", fool after fool headed for the exits at the same time. Interestingly, none of the fools live on the other side of the planet. The Asians, Indians, Russians, and Europeans all awoke to a sale on Gold...and they were buying. They bought through the evening, thru the night, and into the morning. That is until, while the Chairman of the CFTC looked the other way, The NY COMEX opend at 8:20 and once again with brazen criminal intent, flaunted the "free market" system in the face of Precious Metals Bulls. More fools soon parted with their money and headed for the exits as the Fed sponsored investment banks used freshly printed US Dollars to sell "paper contracts" into the Precious Metals markets and force prices lower. I wish I could buy Precious Metals with money I printed at home, but that's illegal. Of course so is what the investment banks are doing. But when their actions are condoned by the individual who's responsibility it is to maintain the legitimacy of these markets is encouraging the crime, it's no wonder our financial system is on life support.

The rest of the planet must be giddy with anticipation. "These Americans must be some of the dumbest SOBs on God's Earth. Selling their Gold as their financial system implodes? Thank you very much for the Silver and Gold. You won't be getting an opportunity to buy it back anytime soon."

Do any of these Fools have any idea how small the Precious Metals markets really are? There are approximately [supposedly] 135 million ounces of Silver in the NY COMEX warehouses. Do any of these fools realize that for the "chump change" sum of just $2.5 Billion [at today's prices], all of that Silver could be bought? $7.05 Billion would by all the Gold at the NY COMEX. For less than $10 Billion you could wipe out the NY COMEX. $10 Billion is camel piss. The Fed just handed JP Morgan $30 Billion to buy up Bear Stearns. Why do you think they are called Precious Metals fools. Because there ain't much of them around. And the rest of the world knows it, and the rest of the world is standing in line to buy them on sale.

LOL, is it any wonder these Fed sponsored "investment" banks are ALL on the brink of bankruptcy? Is it any wonder the United States of America is already bankrupt? These criminals have been trying to keep Gold down for the past seven years. Gold has quadrupled in price instead. The more they work to suppress it, the higher it will go.

Pissed off? Yeah I'm pissed of, tired of the BULLSHIT. As I said yesterday, Gold is up 39% since the Fed began cutting interest rates back in August 2007. The Fed has now cut interest rates by 71% since August. 1/4 of that total 3.00 cut came just yesterday. You're telling me that Gold is NOT going higher from here? Your telling me that I should sell my Gold because the Fed just did the right thing and saved the world financial system? BULLSHIT! The ONLY hope for the world financial system is Gold. Buy, Buy, Buy!

I will not even attempt to dissect this move in the Precious Metals here. Technical analysis is useless in an environment such as this. Focus on the Metals 50 day moving averages. ALL fundamentals suggest Gold should be screaming towards infinity [it was Sunday evening] yet it is not. It is not because it does not trade in a "free market". Gold is going higher though. A lot higher. If you maintain that conviction, be a SHITKICKER. Refuse to sell your Gold. Refuse to sell your Silver. Don't be a FOOL.


Paulson Is 'F**king Incompetent'

Within the space of a week, the Federal Reserve announced the emission of $400 billion in cash to bail out the bankrupt U.S. banking system,...

The soaring price of oil, and the consequent price of gasoline, are effects of this bailout operation. The price of oil is set, not by OPEC, but by the financial markets, and so every time you fill up your car with $3-plus/gallon gasoline, you are paying a hidden tax to bail out the banking system. The same thing happens when you buy a loaf of bread, because of the speculation on wheat which has sent prices soaring. The hyperventilating you do when you fill up your car or buy groceries, is actually caused by the hyperinflationary collapse of the financial system, and these foolish attempts to save it. http://www.larouchepub.com/other/2008/3512paulson_incomptnt.html

BULLSHIT!

Bush Seeks to Give Assurances On Stability of Capital Markets

WASHINGTON -- Amid heightened concerns over the state of the world financial system, U.S. President George W. Bush gave assurances Monday that capital markets are working smoothly, adding that the U.S. is "on top of the situation."

"One thing is for certain, we're in challenging times," Mr. Bush told reporters after meeting with his top economic aides. "But another thing is for certain -- that we've taken strong and decisive action.

"The United States is on top of the situation," Mr. Bush said.
http://online.wsj.com/article/SB120578005997442619.html?mod=googlenews_wsj

Dollar rebounds after Fed rate cut

NEW YORK (CNNMoney.com) -- The U.S. dollar moved higher against several major currencies Tuesday after the Federal Reserve cut interest rates by three quarters of a percentage point - a less aggressive move than some investors were hoping for.

http://money.cnn.com/2008/03/18/markets/dollar_fed/?postversion=2008031815

Gold Tumbles as Fed Cuts U.S. Interest Rate Less Than Expected

March 18 (Bloomberg) -- Gold futures tumbled as much as 2.7 percent after the Federal Reserve lowered U.S. interest rates less than some investors anticipated, bolstering the dollar and reducing the appeal of the precious metal.

http://www.bloomberg.com/apps/news?pid=20601081&sid=ax.4ImvyA8xM&refer=australia

BULLSHIT! Mr. President, the United States is FAR from being on top of the situation, but they're definitely the ones behind it...

BULLSHIT! The US Dollar moved higher in a short squeeze of the Dollar Bears lined up for a one point cut. End of story, and end of the Dollar.

BULLSHIT! Gold is up 39% since the Fed began cutting interest rates last Fall. Do you really believe Gold is going to go down after the Fed just cut interest rates ANOTHER 75 points? Do you really believe that people would suddenly dump their gold to buy stocks? Do you really believe that the Fed has fixed anything?

Damn it people. Gold and Silver are on sale this afternoon. Go buy some more. NOW!

U.S. net capital flows slump to $37.4 bln in Jan

NEW YORK, March 17 (Reuters) - Net overall capital flows into the United States in January fell to its lowest in four months, as private investors shunned U.S. assets, data from the U.S. Treasury Department showed on Monday. January's inflows slid to $37.4 billion in January from $72.7 billion in December. The inflows were not sufficient to cover the month's U.S. trade deficit of $58.20 billion, which economists say in the long-term would put downward pressure on the dollar.

http://www.guardian.co.uk/feedarticle?id=7391231

Foreign Bond Holders Vote No Confidence

Asian, Mid East and European investors stood aside at last week's auction of 10-year US Treasury notes. "It was a disaster," said Ray Attrill from 4castweb. "We may be close to the point where the uglier consequences of benign neglect towards the currency are revealed."

The share of foreign buyers ("indirect bidders") plummeted to 5.8pc, from an average 25pc over the last eight weeks. On the Richter Scale of unfolding dramas, this matches the death of Bear Stearns.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/17/ccview117.xml

Bernanke Driving Nails in Coffin?

Against this backdrop, the Bernanke Fed continues to make history before our very eyes. Day after day, move after move they place another nail in the coffin and further cement their role as the facilitator of the next US Depression. So perfectly wrong has Fed policy been over the past 18 months that it will likely become the test case for what not to do in the future. This should not be a surprise to anyone. This is all they know how to do. The irony here is that Ben Bernanke has always thought that the reason we had the Great Depression was because the Fed didn’t print enough money. So now he will take us back there again, this time by printing too much. The Planners are limited by their understanding of economics, and more importantly, their lack of desire to do anything politically unpopular. The fact that we are in an election year will only exacerbate the situation. There has been much talk, but precious little meaningful action and even that has been dead wrong.

http://www.nationalexpositor.com/News/1096.html

US Feb PPI up 0.3 pct; core PPI up 0.5 pct, largest gain since Nov 2006

WASHINGTON (Thomson Financial) - US inflation at the wholesale level rose modestly in February, though core inflation, which strips out volatile food and energy prices, rose at the fastest pace in more than a year, the Labor Department said today.
The department's Producer Price Index, which measures inflation pressures before they reach the consumer, rose 0.3 pct in February following a 1.0 increase in January. Core inflation rose 0.5 pct for the month, the largest gain since November 2006. In January, core prices rose 0.4 pct.

http://www.forbes.com/markets/feeds/afx/2008/03/18/afx4787690.html

US February housing starts down 0.6 pct to 1.065 mln unit annual rate

WASHINGTON (Thomson Financial) - US builders started work on slightly fewer new homes last month, but cut back severely on starts of single-family houses and in acquiring permits for future construction.

The Commerce Department said US February housing starts fell 0.6 pct to a 1.065 mln unit annual rate, down from 1.071 mln units in January. This was a decline, however, only because January starts were revised up from the 1.012 mln units first reported.

http://www.forbes.com/markets/feeds/afx/2008/03/18/afx4787320.html

The BULLSHIT Detector makes it clear then that what we witnessed today in the stock markets, in Gold , and in the Dollar was PURE BULLSHIT. The truth laid out for you, hidden behind the the BULLSHIT headlines of the day. The TRUTH is out there if you're willing to look for it. NOTHING! I repeat, NOTHING, has changed today for the better for the Dollar, for stocks, for housing, for credit availability, for jobs, or for the economy. NOTHING! NOTHING! NOTHING!!!

I am seething at this afternoons criminal activity at the NY COMEX regarding Gold and Silver. I have no further comment at this time accept to say once again, BULLSHIT!

MOONGLOW

At 10:00 AM est., Friday, March 14, 2008, spot Gold surpassed $1000 an ounce for the first time. As I type this at 9:25 est, March 16, 2008 Gold is rising, and is at this moment in time 1024.35 an ounce. Silver, content for the moment to stand in Gold's shadow at this milestone, is meandering along at 21.12 per ounce.

To all the naysayers, the Gold Cartel, dem Rat Bastids on the NY COMEX, Larry Kudlow, and the foolish Central Bankers of the Western World I think I speak for all of us, "Kiss my ass!" 1027.85...

1030.65... In my post on February 25, 2008 Looking Past The Moon I suggested the following: It would not be unreasonable to expect Gold to perform in March much the same as it did in January. If this scenario were to come to pass, we would expect Gold to soon break above 950 and move swiftly towards the BIG $1000 station. Gold bugs could be celebrating St Patrick's day wearing Gold instead of Green. And so it has come to pass, $1000 Gold. 1032.05... It would appear that the shorts in Gold have their hands full... lol, their pants may be full as well.

Gold may be looking past the station on the Moon. I hope you all took advantage of the Fed's Folly last week and purchased your boarding passes. This could be a long ride. Even at 1032, adjusted for inflation Gold is LESS than one half of it's true value. And infinity is far beyond that and here.

Bob Chapman, The International Forecaster

The market action we have been witnessing over the past several weeks where gold sets an all-time high and then pulls back for a short time, consolidates, and then repeats this action, which is characteristic of its most powerful rallies, has been occurring like clockwork. There is not a single negative fundamental for the precious metals, and the bad news emanating now on a daily basis is simply horrendous. It does not get any worse than what you are witnessing right now. Our economy now resembles the aftermath of a thermonuclear explosion. We are just waiting for the dust from the mushroom cloud to dissipate. And when the dust clears and the reality hits home, look out below! Precious metals and commodities are now the only place to be and all the pros know this.

Gold and silver are headed for a wormhole that leads into inter-dimensional space!

http://news.goldseek.com/InternationalForecaster/1205689845.php

THIS JUST IN!

AP

Fed Takes Steps to Ease Crisis, Cuts Lending Rate to Financial Institutions to 3.25 Percent

Sunday March 16, 9:54 pm ET By Jeannine Aversa, AP Economics Writer

WASHINGTON (AP) -- The Federal Reserve, in an extraordinarily rare weekend move, took bold action Sunday evening to provide cash to financially squeezed Wall Street investment houses, a fresh effort to prevent a spreading credit crisis from sinking the U.S. economy.

The central bank approved a cut in its lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created another lending facility for big investment banks to secure short-term loans. The new lending facility will be available to big Wall Street firms on Monday.

The Fed has completely lost control. LOL, like this is going to help a damn thing. The truly scary thing to me me as events unfold at an ever increasing pace, ...they believe what they're doing will not only help, but make this all go away. Shock and Awe... America may wake up tomorrow to the beginning of the end of life as they know it.

Assault on U.S. Dollar Continues Unabated

by Jack Crooks

There appears to be no end in sight for the sliding greenback. This dollar of ours is rapidly falling to depths where no dollar has gone before. In fact, to say that it's unclear when we can expect a recovery would be a gross understatement.
http://news.goldseek.com/GoldSeek/1205679600.php

The following essay by Congressman Ron Paul is an absolute MUST READ. Your national government has thrown the US Constitution and the Nation's future under the bus in their failed attempt to steal the Nation's wealth for their cronies that put them in office. Ron Paul is the lone voice of truth left in Washington. The media elite have labeled this man too honest to lead America. How unfortunate for all of us.

What the Price of Gold Is Telling Us

By: Dr. Ron Paul, U.S. Congressman

The incentive for central bankers to create new money out of thin air is twofold. One is to practice central economic planning through the manipulation of interest rates. The second is to monetize the escalating federal debt politicians create and thrive on.

Today no one in Washington believes for a minute that runaway deficits are going to be curtailed. In March alone, the federal government created an historic $85 billion deficit. The current supplemental bill going through Congress has grown from $92 billion to over $106 billion, and everyone knows it will not draw President Bush’s first veto. Most knowledgeable people therefore assume that inflation of the money supply is not only going to continue, but accelerate. This anticipation, plus the fact that many new dollars have been created over the past 15 years that have not yet been fully discounted, guarantees the further depreciation of the dollar in terms of gold.

Counterfeiting the nation’s money is a serious offense. The founders were especially adamant about avoiding the chaos, inflation, and destruction associated with the Continental dollar. That’s why the Constitution is clear that only gold and silver should be legal tender in the United States. In 1792 the Coinage Act authorized the death penalty for any private citizen who counterfeited the currency. Too bad they weren’t explicit that counterfeiting by government officials is just as detrimental to the economy and the value of the dollar.

http://news.goldseek.com/RonPaul/1205726520.php

Dereliction of Duty? Treason? Revolution? Things are going to get uglier than any one could conceive. We'll know the end is near when there's a hanging party on the Fed's front steps, and their palace is in flames. I'm not joking...

"The needs of the many outweigh the needs of the few and/or the one."

- Cmdr. Spock, USS Enterprise

History will show in time that it was greed that destroyed America. The Founding Fathers of our Nation are turning in their graves this evening.

1024.80... Well, nothing goes straight up. Even Gold has to pause and catch it's breath. The path of least resistance is clearly up. Enjoy the ride...

No Bang for $200Billion

The U.S. dollar index lost more than double yesterday’s gains, treasuries rose, and the Dow, Nasdaq, and S&P fell by the close as optimism faded over whether the fed’s plan announced yesterday will be able to effectively solve ongoing credit market problems. Hawkish European Central Bank comments also helped push the dollar to a new record low while oil topping $110 a barrel was certainly a contributing factor to the Dow turning an early nearly 150 point gain into an almost 50 point loss by the close. -Chris Mullen, Gold-Seeker.com

So, after being force "fed" a shit sandwich yesterday, the Dollar shorts have got to have a bit of indigestion today after getting squeezed out of their delicious short positions yesterday.

Smart Gold and Silver Bulls were snapping up bullion in the final days of the St Patrick's Day Sale Event as the Dollar bears choked on every bite of that sandwich too.

As pathetic as the Fed has been in their response to this "credit crisis", you have to thank them for all that they have done to keep a wind in Gold's sails.

The Fed's in a desperate race with spectre of collapse

The Fed, with its latest $200bn offer of cheap cash, has provided yet more state aid for errant hedge funds and another Washington-backed bail-out for Wall Street bankers. The Bank of England joined in again, further shedding any notion of being wary of moral hazard. But as the bail-outs are getting bigger, then clearly the problems causing them must be getting bigger.

The Fed has saved the day again, but it will only be for a day or so. It was Friday remember when it had to pump $200bn of cash into the system. Yesterday it was offering to lend a similar amount to try and soak up some of the toxic debt out there which has left the lending markets hamstrung. How much further can the central banks go to support a system that is so obviously broken?

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/12/ccom112.xml

The treacherous nature of bear market rallies

Dr. Marc Faber

However, I would be extremely careful in concluding that rising stock prices after a terrific decline, such as we had in the NASDAQ since March 2000, do signal improving business conditions. For a market, which has become very over-sold, it is only natural to rebound, but frequently these rebounds are merely bear market rallies, which are subsequently followed by vicious declines.

http://www.ameinfo.com/16529.html

Will Gold Catch-Up With Crude?

As you can see, the oil price is now approaching its all-time high adjusted for inflation at near $105. Simultaneously gold clearly remains at less than half its inflation-adjusted high of over $2300 per ounce. What's more, looking back to the stagflationary 1970s, an era many economists equate with our own, gold rose at roughly twice the rate of oil. Now gold is rising at roughly half the rate of oil. In other words, if historical balance is to be retrieved in the months and years ahead, gold will not only have to rise with oil, it will have to rise faster than oil.http://news.goldseek.com/GoldSeek/1205263969.php

Investors Plan to Buy More Commodities, Barclays Says

March 10 (Bloomberg) -- More pension funds and other money managers plan to have in excess of 10 percent of their portfolios in commodities in the next three years, Barclays Plc said.

Thirty-four percent of about 260 investors surveyed at a conference in Barcelona last week said that more than 10 percent of their portfolios would consist of commodities in the period, Kevin Norrish, director of commodity research, told reporters in London. That's up from 22 percent of those surveyed a year earlier and 19 percent in 2006, he said.

http://www.bloomberg.com/apps/news?pid=20601082&sid=aB_d6g4UnuGE&refer=canada

So let's see if we have this right. The Fed is desperate, bear market rallies are followed by vicious declines, Gold will soon rise faster than Oil, and Investors plan to pile into Commodities.

I guess buying stocks and covering our Dollar shorts was not a good idea yesterday. "Well duh, that's obvious." I know, but it's fun to make fun of the fools.

You Can't Polish A Turd...

...but with enough money you can rap it in a bow and pass it off as sweet chocolate. Where does one begin after a basket of PURE BULLSHIT has been dumped in your lap. No mule shit mind you, PURE BULLSHIT. The US Fed has now proven beyond a shadow of a doubt the financial chicanery they will stoop to in an effort to pull the wool over the widening eyes of the World Financial Collective...not to mention the American Public.

We begin the day at 5AM est with news out of London that Gold was edging higher.

Gold edges higher on continued dollar weakness
LONDON (Thomson Financial) - Gold was higher in early London trade as investors eyed continued weakness in the dollar, but gains have been capped by investors cashing in, with prices at elevated levels.

At 10.08 am, gold was trading at 977.60 usd an ounce against 970 usd in late New York trades yesterday. Last week, gold hit a record high of 992.90 usd before consolidating on profit-taking ahead of the much touted 1,000 usd mark.

"Gold has seen a steady start this morning and is likely to remain extremely volatile in the short-term as the metal is caught between further profit taking from investors and speculators forced to cover margin requirements, and ongoing investment demand given the bullish tone across the commodities spectrum," said TheBullionDesk.com analyst James Moore.

Funds have been pouring into commodities to hedge against dollar weakness and recessionary fears in the US. Gold has benefited from its traditional role as a safe haven asset during times of economic turmoil, as well as being boosted by inflation concerns and its use as an alternative holding to the US currency.

Later today, investors will be watching the release of US balance of trade data for January at 12.30 pm GMT, which could weaken the dollar further, in turn boosting gold, analysts said.
http://www.fxstreet.com/futures/news/article.aspx?StoryId=5085d1be-231b-4754-81e4-649f245c0339

Gold has cleared 975 overnight and Silver has tagged along and risen into the 19.80s. At 5:30AM est the following headlines rolls across our screen, and Gold and Silver are exploding higher. With the US Trade Deficit numbers coming out later this morning, we anticipate a big reversal in the Precious Metals today.

European government bonds extend losses after above-forecast German ZEW
LONDON (Thomson Financial) - European government bonds extended losses after a better-than-expected German ZEW survey raised hopes that the downturn in Europe's largest economy may not be as severe as previously thought.

The ZEW economic expectations index rose to -32.0 points in March from -39.5 in February, well above forecasts for a deterioration to -40.0.

"March's surprise rise in the German ZEW index provides some encouragement that investors do not expect a deteriorating outlook for the US and problems in financial markets to spell disaster for the German economy," said Jennifer McKeown at Capital Economics.

Although the index remains at a very low level and most responses will have been taken before last week's dismal US payrolls data, today's ZEW survey "could clearly have been far worse".

"It seems that the recent run of broadly positive news on the Germany economy, including January's strong industrial production figures, has reduced investors' pessimism," she said.

Resilient data, official's remarks boost euro
Also contributing to the euro's gains were remarks by German Bundesbank President Axel Weber, who is also a member of the European Central Bank's rate-setting governing council. He said German economic growth for 2008 would likely come in near potential.

"Demand is broadly based and supported by increasing employment. Therefore we are sticking to our forecast that GDP growth should be around potential," Weber said, according to Dow Jones Newswires.

Weber said price pressures remain a worry, however, after German inflation hit 3% last autumn. "It is not at all sure that the average inflation rate will subside significantly," he said.
http://www.marketwatch.com/news/story/resilient-data-german-officials-remarks/story.aspx?guid=%7B8ECA13C8-4413-464E-A0B7-DA69BF54249E%7D


The Euro promptly knocked the US Dollar to the canvas and began dancing circles around it reaching 1.5494 over the next hour. Gold and silver vaulted higher as the Dollar re-entered its death spiral. Gold quickly reached 985.50 in London and Silver 20.28. The race to $1000 Gold looked like is was back on with a vengeance.

Coincidentally, perhaps, perhaps not, the Wall Street Journal published an article this morning suggesting that the Fed might have some new tricks to help ease the credit crisis up its sleeve.


Will Fed Try Something New to Aid Markets?
With worsening strains in credit markets threatening to deepen and prolong an incipient recession, analysts are speculating that the Federal Reserve may be forced to consider more innovative responses -- perhaps buying mortgage-backed securities directly.

"As credit stresses intensify, the possibility of unconventional policy options by the Fed has gained considerable interest, said Michael Feroli of J.P. Morgan Chase.

He said two options are garnering particular attention on Wall Street: direct Fed lending to financial institutions other than banks and direct Fed purchases of debt of Fannie Mae and Freddie Mac or mortgage-backed securities guaranteed by the two shareholder-owned, government-sponsored mortgage companies.

Fed officials have said that, at times like these, the prudent course is to evaluate all sorts of ideas, many of which may be rejected.

Since 1932, the Fed has had the authority to lend, against collateral, to individuals, partnerships or corporations other than banks in "unusual and exigent circumstances," subject to the vote of five members of the Board of Governors. (The board has seven seats, but two are currently vacant.) This power has never been used.

Mr. Feroli noted that Congress in 1966 gave the Fed temporary authority, made permanent in 1979, to purchase obligations of government-sponsored enterprises, such as Fannie Mae and Freddie Mac.


Since 1932, the Fed has had the authority to lend, against collateral, to individuals, partnerships or corporations other than banks in "unusual and exigent circumstances," subject to the vote of five members of the Board of Governors. One pauses to ponder just what that may entail. The lender of last resort, that's what it means. The Fed is desperate... And before I can brew my morning cup of coffee and almost at exactly the same moment the US Trade Deficit numbers are released along side a stunning news report from the Fed.


Trade gap widens to $58.2 billion in January
WASHINGTON (MarketWatch) -- The U.S. trade deficit widened slightly in January as strong exports were offset by higher oil prices, the government reported Tuesday.
The nation's trade gap widened by 0.6% in January to $58.2 billion, the Commerce Department reported.

The trade deficit for January was still below the consensus forecast of Wall Street economists, who were expecting a deficit of $59.5 billion in January.

U.S. stock futures jump on new Fed lending program
LONDON (MarketWatch) - U.S. stock futures on Tuesday surged after the Federal Reserve announced it's expanding a securities lending program, which helped to offset another record high for oil prices and downbeat outlooks from Texas Instruments and WellPoint.

To promote liquidity and "foster the functioning of financial markets more generally," the Federal Reserve said Tuesday it's expanding its securities lending program. The Fed will lend up to $200 billion of Treasury securities to primary dealers secured for a term of 28 days, rather than overnight, as in the existing program.
http://www.marketwatch.com/news/story/us-stock-futures-surge-new/story.aspx?guid=%7BAE4A4C52%2DCF58%2D454A%2DBDD4%2D0C809ECE61C4%7D&dist=TNMostRead

Fed turns on the spigot of money again
Mortgage-backed securities will be swapped for safer Treasurys
WASHINGTON (MarketWatch) -- The Federal Reserve and other leading central banks doubled to more than $400 billion the amount of money they're willing to lend to banks and bond dealers, hoping to flood dysfunctional credit markets with enough money to get them working again.The Fed announced a new temporary lending program on Tuesday that will allow participants in the bond markets to swap the mortgage-backed securities that they can't currently sell for highly liquid Treasurys that they can. The hope is that the extra money in the financial system will restore trust and keep prices of illiquid securities from plunging.
http://www.marketwatch.com/news/story/fed-extends-emergency-lending-program/story.aspx?guid=%7B9AF5E673-0BA7-40E6-9D35-8B639C7860E2%7D

Read Fed press release here:
http://www.federalreserve.gov/newsevents/press/monetary/20080311a.htm

If this doesn't smell like a BLATANT effort by the Fed to prop up the stock and bond markets, then the effort has never been made. Incredulous! The Fed is going to PRINT MORE MONEY and buy literally worthless securities from floundering banks? Yes they are! Gold and Silver promptly turn tail and plunge back towards Monday's lows. The Dollar miraculously gets up off the mat and scorches the Euro in it's rebound on this "news". I scratch my head and ask myself if this is Dollar positive. How can it be? The Fed has just devised a way to pump BILLIONS of Dollars into the financial system and avoid an inter-meeting Fed Funds rate cut. The shorts on Wall Street are caught completely off guard by this news, and the stock markets open up with jaw dropping gains. No matter how you slice it, this is NOT good news...it's very bad news. VERY VERY bad news...Things are WAY worse than even the most pessimistic prognosticators could even imagine.

The Fed is following up on their promise to do anything and everything to save the stock and bond markets...the financial system... And sadly, this "trick" will fail just as the countless other before it have. Wall Street is Euphoric today...a false sense of hope at the expense of those caught short when the Fed pulled a fast one on them. If this "move" isn't inflationary, then I don't know what inflation is. I just wish I could print money they way these criminals do.

Needless to say the "weak hands" dumped Gold and Silver into the "smart hands" today to chase the latest pipe dream of the US Federal Reserve. The Dollar rally? Just another short squeeze in a market that is going so low it may never see the sun again. Nobody wanted the Dollar at 5AM est this morning, and the lines to buy Gold and Silver were growing in length. 8:30AM rolls around and the Fed unveils another in a long line of tricks to prop up the US financial markets, and it was lights out. And the cockroaches of Wall Street once again covered the floor. This "Dollar rally" will fool a few, but amuse many more as the opportunity to buy Gold and Silver on sale has been extended.


Dollar soars as Fed announces liquidity measures
"In a nutshell, this demonstrates the Fed will use every means at its disposal to get the economy going," said Jonathan Lewis, founder of Samson Capital Advisors in New York.

Some market participants, however, said the dollar's gains were probably not sustainable, especially as recent U.S. economic data has been almost universally gloomy. Some economists believe the economy is already in a recession.

"The economic rationale for buying the dollar is that this encourages confidence in the U.S. financial system, but, earlier this morning, the market was selling the dollar on exactly the same logic," said Alan Ruskin, chief international strategist at RBS Greenwich Capital, in a note to clients.

Ruskin said the dollar's rally probably has more to do with the market being caught off guard by the Fed's liquidity injection and being forced to cover short dollar positions.
http://biz.yahoo.com/rb/080311/markets_forex.html


But there's another story today, one from yesterday that is now forgotten, the story that most likely led to the Fed's call to the printing presses this morning:


Market panic after Bear Stearns reports
Panic swept the credit markets on reports of an insolvency crunch at both the US investment bank Bear Stearns and the mortgage giant Fannie Mae, triggering a dramatic surge in default insurance and rumours of yet another emergency rate cut by the US Federal Reserve.

Credit default swaps (CDS) measuring bankruptcy risk on Bear Stearns debt rocketed from 246 points to 792 on fears that it had been unable to raise capital to cover mortgage losses and was preparing to invoke Chapter 11 bankruptcy protection.

The company denied the reports, insisting that it had $8bn of ready credit lines and enough funds to meet its debt obligations for the next year without having to sell assets or take out fresh debt. "There is no truth to the liquidity rumours," said a spokesman.


The Fed has been "loaning" [giving money away] to floundering banks in exchange for "collateral" since the beginning of the year via their TAF bi-weekly auctions. They've given away BILLIONS already to date, and none of it has helped a damn thing. As a matter of fact, the credit markets are in worse shape going into today than they were when the Fed began handing out money in January. What makes anybody believe that this new "sleight of hand" is going to work any better than the last? Today's Fed response to the "credit crisis" is but another new drug for the zombies on Wall Street convinced that the floundering Fed can and will fix this whole mess. THEY CAN'T! The can try to, pretend to, but they never will. The problem can not be fixed. The Fed offers another bandage to a patient that desperately needs a tourniquet.

A week from now, probably less, the Dollar will once again be digging new lows, Gold and Silver vaulting to new highs. The US Dollar was raped today, soon to be left in a heap alongside the curb. Whose going to pay for this deceit, this deception, this CRIME? We all are... for years and years to come.

And in case you forgot to check the price of Oil and gasoline this morning:

Oil hits record above 109 usd/bbl as weak dollar triggers buying
http://www.fxstreet.com/futures/news/article.aspx?StoryId=99ef945d-d107-480c-af59-719cb37e2126

Gas Prices Rise to New National Record
http://biz.yahoo.com/ap/080311/oil_prices.html

Yep, good idea...sell your Gold and buy Dollars. LOOOOOOOOOOOOOOOOOOOOOOOL!

When The Levee Breaks, Then What?

Bush quick to react to jobs report

Employers across the United States slashed payrolls for the second straight month, according to a federal report that served as the latest sign of an economic slowdown so worrisome that President Bush called an impromptu news conference to comment on the news and calm the nation's fears.

"Losing a job is painful," Bush told the White House press corps Friday after the Labor Department reported the biggest payroll cuts in five years. "I know this is a difficult time for our economy.

"But we recognized the problem early and we provided the economy with a booster shot," said Bush, referring to the recent federal economic stimulus package.

Employers cut 63,000 nonfarm jobs in February, the department said. There was a loss of 22,000 jobs in January. February's loss was the steepest one-month decline since March 2003, when payrolls plunged by 108,000. The last time the job count fell two months in a row was May and June 2003.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/03/08/BUR4VG5ME.DTL

Damn, is that leadership or what? Booster shot my ass. Like that tiny handout is going to do ANYTHING for ANYBODY that has lost their job. It is painfully amusing how brainwashed Americans believe their government is going to "make everything all right" by throwing money at it, or coming up with some grandiose plan/program with a "vision of hope" attached to it's name. They believe everything that falls from their "leaders" mouths as if it were gospel. Six months from now Americans from coast to coast are going to to wake up, scratch their heads and groins and ask, "What the the hell, and how was this allowed to happen?" "Ignorance" will be the answer. You think things look bad today? Wait until this Fall.

What Will Take the Gold Price Higher?
Take a look at the fundamentals that have driven gold higher; have they changed? Have they been exhausted? Not at all! Has the $’s fall terminated? Has the oil price stopped rising? Has the credit crunch been resolved? Has the world’s money system been repaired and solidified? Has the wealth’s move from West to East stopped? Has confidence in the U.S. housing market and the global economy been restored? Can any of these matters worsen? Is the investment climate globally looking solid and worth more investment? Will the potential Tsunami of capital stay in one place only? If the answer to these questions remains negative gold has good reason to rise further.
http://news.goldseek.com/GoldForecaster/1204909200.php

Dollar-Gold: A Perfect Storm - by Jim Willie CB
When people ask whether the USDollar has hit bottom, a simple question goes out as my reply. HAS ANYTHING BEEN FIXED? HAVE ALL DESPERATE MEASURES BEEN INVOKED? The answer to the first question is NO WAY! and to the second question NOT EVEN CLOSE!
http://news.goldseek.com/GoldenJackass/1204905600.php

Real Rates and USDX

Since July 2001 our current dollar bear has bled 39.2%. This may seem extreme, but the USDX lost 52.4% in its last secular bear ending in September 1992. A similar loss in our current bear would yield a USDX level of 57.5! Ouch. This is another 22% lower from today’s all-time dollar lows! So in light of historical precedent, there is plenty of room for the USDX to continue falling even from here.
http://news.goldseek.com/Zealllc/1204907400.php

U.S. Consumer Borrowing Rose, Led by Credit Cards

Consumer credit increased by $6.9 billion to $2.52 trillion, the Fed said today in Washington. In December, credit gained $3.7 billion, less than a previously reported increase of $4.5 billion. The figures don't include borrowing secured by real estate, such as home-equity loans.

People once dependent on home-equity financing are turning to other forms of short-term financing after the collapse in subprime mortgages made it harder to qualify for loans. Personal income in January rose at a slower pace than inflation, and credit card usage in January rose for a second straight month.

``There's not much gas left in the tank,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``In the early stage of a recession, consumers tend to rely on credit cards to see them through the hard times.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJCsK7w8YlGk&refer=home

The biggest challenge for both the Fed and the economy
The weak jobs report was widely seen as indicating the Federal Reserve will have to continue cutting rates to stimulate the economy.

The central bank has cut the overnight fed funds rate to 3 percent. Before the credit crisis began last fall, it had remained at 5.25 percent for many months. The Fed will hold its next monetary policy meeting on March 18.

On Friday, Dallas Fed President Richard Fisher, who has voted against recent rate cuts, warned that the markets shouldn't expect more. Still, fed funds futures contracts on Friday showed investors are betting on a rate cut of up to 0.75 percentage point.

The biggest challenge for both the Fed and the economy is that inflation is rising although the economy is wobbly. Fed Vice Chairman Donald Kohn on Friday acknowledged that rising commodities prices have taken the Fed by surprise. If prices do not level out, as the central bank has projected, there will be "important implications" for monetary policy, he said.
http://www.fxstreet.com/futures/news/article.aspx?StoryId=c1b476e7-953b-4c1b-8ab4-91d8e95af998

Shockingly, following Friday's absolutely dismal jobs report, Gold and Silver failed to vault higher. Even more shocking, after plummeting to a new all-time low, the Dollar rebounded and actually closed higher on the day. Fundamentally, nothing has changed for the better for the US Dollar. Not one dollar of the BILLIONS the Fed has manufactured and thrown at the crumbling financial system has resolved a damn thing. What's another $100BILLION supposed to do? The Dollars "bounce" was most likely the result of investors rush to cash as paper assets got whacked, and will shortly be redeployed into commodities and the Precious Metals. A tsunami of increasingly worthless US Dollars is about to flood the Precious Metals and their mining stocks, and carry them to heights well beyond those forecast or imagined.

The inevitable "profit taking" as Gold nears the millennium mark, the margin calls on the permabulls in general equities as the markets plummet, and the endless efforts of the NY COMEX CROOKS to hold Gold down are but noise. "Investors" have barely made their presence felt in the Precious Metal markets. They'll be knocking on our door any day now.

To Infinity And Beyond

Silver's recent performance is proof positive that being out of Silver is much riskier than being in today. The path of least resistance is clearly up. Trading this Precious Metal is not for the feint of heart. If you do insist on trading, it is clear that you should always keep a core position in Silver to take advantage of it's power price appreciation potential. It could be summed up easily, trading Silver now could be very costly, profit wise, versus just sitting tight in your positions, and being right.

Volatility will now become the word of the day in the Precious Metals markets. The past 48 hours are just a small example. Look no further than Platinum to see the potential price swings Gold will experience as it moves to "Infinity And Beyond". Platinum was down almost $100 in this just passed commodities reaction. And then bounced hard and fast.

Oil. Oil obviously was the catalyst to yesterdays mega bounce that hammered the shorts further as they stuck their heads up for air. In Ted Butlers recent essay: http://news.silverseek.com/TedButler/1204651474.php he has surmised that NY COMEX shorts are short more than 395 million ounces, or more than 225 days equivalent production.

The shorts in silver and gold, as well as in many other commodities are in a very difficult position; they are, quite literally, up against the wall. Their collective open losses are of a magnitude many times greater than anything they have ever experienced in the past. In fact, it is my observation that these concentrated shorts have actually lost (on paper and in meeting resultant margin calls) more than they made in total over the past five or ten years. The shorts have gotten absolutely hammered.

Look no further than this fact to see why being LONG Silver is the ONLY smart play in this market. The COMEX warehouse stockpile is presently about 134 million ounces. Where are the shorts going to get the Silver to cover 395 million ounces? Silver is lagging the overall global rally in all commodities. Silver has yet to even reach one half of it's all time [nominal] high of $50. Gold has surpassed it's previous "all-time" high. Platinum has not only passed it's "all-time" high, but it's inflation adjusted high as well. The same for Oil. Wheat? Wheat is well on it's way to the "Beyond". Silver is, and remains, the best "value" in the commodities world. That alone makes Silver "the must own" commodity, as the US Dollar unravels. Silver will reward those with the conviction to hold it with huge profits.

Now, considering the volatility. Why all the fireworks? 395 million short ounces underwater versus investors seeking positions in Silver at a value [dip buyers]. The Silver shorts, particularly the weak ones, will be looking to cover their asses on any break in price. Combine the short covering with the dip buyers and you get powerful bounces off any breaks in the market. And these bounces can, and as we saw yesterday and last night, often go to new and higher highs. "Overbought" indicators can become very misleading in a market like this. Case in point, Platinum. This is why I use and post 4 hour charts of Gold and Silver.

Yesterday, as seen on the chart posted above, Silver offered significant value at it's overnight low of 19.37: Trendline support, 40 period moving average, and 38% Fibonacci. The vault in Oil following yesterdays inventories numbers may have been the catalyst to the commodities sector bounce yesterday, but for Silver, buyers were staring value in the face and were beginning to line up before the Oil numbers were made public. That is why it moved so quickly off it's lows yesterday...short covering and dip buying...a volatile stew if ever there was one.

As you can tell by the charts above, a lot occurred just in the time I have been writing this. As a matter of fact the volatility the past 2-3 days is the primary reason I have not been able to sit down and address my blog [which is one year old today, thanks for reading!] Geez, just in the last 15 minutes Silver broke lower to 20.19. Volatility baby! Value is what you seek. Buying "value" limits your downside risk, which should never be ignored even when the path of least resistance is up. At 20.19 Silver clearly shows great value on a one hour chart. On my four hour chart, 20.19 Silver shows good value, but value none the less.

Timid buyers should determine value and the use buy-stops ABOVE the market to catch the bounce higher. It's safer than trying to catch the proverbial "falling knife". Investors, if you think Silver is going to $30, $50, $150, what are you waiting for? ...you should be in Silver now, and not worrying one little bit about any of this volatility.

In Silver, near-term support has firmed around 19.30. Solid intermediate-term support rests near 18.15. Long term support in Silver now rides with it's 50 day moving average.

In Gold near-term support has firmed around 950. Solid intermediate-term support rests near 930. Long-term support in Gold rides with it's 50 day moving average.

Dollar Falls to Record Low Versus Euro as Fed Signals Rate Cuts
March 1 (Bloomberg) -- The dollar fell to the weakest ever against the euro and to a three-year low versus the yen after Federal Reserve officials signaled they will keep cutting interest rates to support the economy.

http://www.bloomberg.com/apps/news?pid=20601087&sid=af8Cqcf10WcY&refer=home

Dollar: It will only get worse

NEW YORK (CNNMoney.com) -- Despite all the pain the U.S. dollar has endured in recent days, the greenback may still have further to fall before seeing any sort of relief, according to currency experts.

Driving much of the dollar's decline this week were tepid remarks about the U.S. economy by Federal Reserve Chairman Ben Bernanke, who hinted that the central bank would cut interest rates once again at the Fed's March meeting.

http://money.cnn.com/2008/02/29/markets/dollar/?postversion=2008030123

No rescue expected for weak dollar

LONDON: Currencies will be in full focus on financial markets this week, following the dollar's drubbing of recent days, yet anyone hoping for help from policy makers to shore up the ailing

U.S. currency is likely to be disappointed.

Crucial meetings of European Union finance ministers and those who set interest rates for the European Central Bank are expected to do little to shift the status quo, while the U.S. Federal Reserve Board appears set on cutting rates again this month.

http://www.iht.com/articles/2008/03/02/business/rtrmarkets03.php

The "Dollar Is Doomed side of the boat is filling up fast. This is the first sign that the Dollar's cliff jump from 75 may soon find support. Though fleeting, this support could slow the Precious Metals trip to the Moon and Beyond...but only briefly.