Dear CIGAs,
Here comes another $50 billion dollar for the US Treasury Primary dealers. This flow of funds into the markets comes from what the Fed calls an auction, although that name only emanates from what interest rate is paid. They are auctioning nothing other than LOANS.
- The primary dealers are not seeking the funds because they don't really need them, but rather to demonstrate there is no stigma.
- The system is still in deep trouble.
- The spin you need to know is 'Category 3 Assets" are worthless OTC derivatives still valued by mark to model, which is a financial CARTOON.
- The Fed and the Exchange Stabilization fund can and will invest in any US equity or debt they wish. Now ask yourself how much they will participate in the Lehman offering of debt.
Conclusion: Nothing is solved and little is contained. All will break down with the test of credit default derivatives when the issues all have their debt downgraded
The price objective on Crude is $125 to $128 per barrel and that is only for now.
Gold will trade again between $1024 and $1030.
Gold is headed to $1650 and that is conservative.
It would be fortunate if the dollar actually stops its decline at .5200, a price objective given to you when the dollar was trading above one hundred on the USDX.
As Monty has said, gold shares will participate and in time outperform gold.
If you have questions PLEASE call me at 1-860-364-1830 Monday through Friday, Business hours EST.
Your call will be returned that day if I am busy. Do not worry where you are calling from.
Respectfully,
Jim
