Posted On: Wednesday, May 21, 2008, 9:31:00 PM EST Gold and Dollar Market Summary Author: Jim Sinclair

**Last updated at 9:38pm EST - Charts from Trader Dan Norcini added**

Dear Comrades in Golden Arms,

Gold:

1. This move in gold is real.
2. The volatility of the gold price up and down is going to be wild. Buckle your seatbelt and put on your helmet.
3. Gold is headed to $1200 here and now.
4. The drought of interest in juniors is behind us, having ended on May 8th 2008.
5. The positivity of the gold price has legs both in time and price. I see months, not weeks in this phase.
6. "Sell in May and go away" will be proven completely WRONG this time around.

The Federal Reserve:

1. The equity market spoke to the Fed today.
2. There isn't a snowball�s chance in hell that the Fed can go hawk, even one bit.
3. The key to keeping the financial system afloat is that business does not go into a total tailspin with housing bottoming out reasonably soon.
4. If the Fed even talks tough to try and prove they have everything under control, everything will get out of control in a very destructive way.
5. Federal and State tax revenues are contracting and if the Fed plays the tough guy the deficits will be unprecedented.
6. If the Fed plays the �we have it all under control, business is sure to recover and therefore we are hawk� card, Bernanke�s boss will go down in history next to Hoover. The Democratic Party could run Mickey Mouse for president and win in a landslide.
7. The last thing the financial system can stand now is an implosion of the equity market.
8. The Fed is between a rock and a hard place, playing terminal games with the financial system.
9. When the book is written Bernanke will get all the blame when in truth he is only the fall guy.