Dear Friends,

Today is made up of lawyer talk from Russia’s Finance Minister Kudin. He is calling the dollar "irreplaceable" as a reserve currency at a time when China, India and Russia have all simultaneously reported significantly REDUCING their purchases of US dollar instruments. I am sure he is talking his position while today further reducing any new purchases.

Of course there is no way to substitute the US dollar in the reserves of all world central banks as they are simply stuck with too many.

There are too few SDRs at the present time.

There are no SDR bonds yet that are to issued so the IMF can join in Quantitative Easing in a more enthusiastic way. Governments would prefer a basket of depreciating paper rather than one single currency, even the euro, to diversify their reserves, risk, and to slow down their losses.

Today the IMF complimented the Federal Reserve for its enthusiastic monetary actions. That means applause for printing money with a confidence that if required the US Federal Reserve would continue along that path.

There is even some who are declaring Chairman Bernanke the greatest Fed Chairman anywhere.

The market hears what it wants to hear but does not take into consideration the further deterioration of fundamentals, now in the Treasury International Capital Flows (TIC).

When technical analysis first came on the scene it was a method of knowing fundamentals that were not evident in the marketplace. Then along came the millions who adopted TA as a religion. This religion further appointed high priests who became the Holy Seers of algorithms which were further financed by titanic amounts of money.

Now you need to know the fundamentals perfectly because TA is a Siren song attracting you by emotional pressure up on the rocks of a dollar that will not survive the fall and winter of 2009.

TA now makes the short term explosions up and down, but take a step back and look at the big picture. TA does not make the long term trends of all these practitioners or failed to own gold at $300.

Today is comical based on the senseless movement of algorithms and the now pushing of a non-concept that the US dollar is somehow going into a bull market and gold has had it.

The US dollar is going to .7200, .6200, and .5200. Gold is going to $1224 then to $1650 and onto Alf’s numbers.

This is a perfect setup for a June low in this reaction. Armstrong feels if this happens $5000 is set in cement.

Ignore the top callers. Understand trading these markets is reserved for the professional only. The pubic cannot trade for insurance. Understand the pull inside you to trade is that of the gambleholic’s emotional parade to destruction. Listen to Kenny Rogers "The Gambler."

Stay the course.