Dear Jim,

Today’s New York Times spells out in stark black and white the government plan.

IN OUR OPINON THIS PLAN IS A VERY POSITIVE CATALYST FOR GOLD AND FOREIGN CURENCIES TO CONTINUE TO RISE FOR A PROLONGED PERIOD.

May I quote From a front page NYT article entitled “In A Bold Action, Fed Cuts A Key Rate To Virtually Zero”

“…Of much greater practical importance, the Fed bluntly announced that it would print a much money as necessary to revive the frozen credit markets and fight what is shaping up as the nation’s worst economic downturn since World War 2.”

THAT SAYS SOMETHING LOUD AND CLEAR

May I translate: In my opinion, they are saying we want to liquidify the banking system, and we want to do it now. We know that there will be consequences such as a lower US dollar and more inflation. We are just as happy that the dollar is falling - this will help with exports. We are not happy that inflation will rise, but that is a necessary side effect of bringing liquidity back to the banking system so be it. We will deal with the inflation problem later.

Of course dealing with inflation after it becomes imbedded may be another equally intransigent problem.

Your pal,
Monty Guild
www.GuildInvestment.com