From today's Gartman Letter...... (1-22)

"THE US$ HAS TURNED RATHER SHARPLY FOR THE WORSE, and we shall mince no words here this morning for few words were minced yesterday by our young, and we fear misguided, President when he stood before the cameras of the world and threw down the gauntlet to the banking system, challenging it directly. In a show of anti-capitalist audacity we cannot recall having heard from an American president in our lifetime, and which we hope never to hear from an American President ever again, President Obama said that it was his intent to reform the nation’s banks, to outlaw the notion of proprietary trading within any of the nation’s banks, to fundamentally shift the notion of what a bank is and what it can do… and he finished by say that if the banks wished to “fight him on this, [he] will fight.”

Upon listening to his comments we were completely taken aback. We were stunned by the vehemence of the comments he made. We were astonished at the virulence of the anti-capitalist “line” he was taking. We were shocked by the vitriol. We were amazed at the fact that he seemed not only not to have been chastised by the election loss suffered by the Democrats in Massachusetts earlier this week, but he instead seems to have chosen an aggressive counterattack. To say we were shocked is an understatement of the first order, but shocked we were and dismayed the market shall be.

COMMODITY PRICES SEEM EVERYWHERE TO BE CONFUSED by what is going on in Washington as this battle between the President and the Banks takes shape. All things being equal, with capital leaving the US and looking for a home elsewhere, we can imagine that frightened capital will find its way into gold, for that has always been, at the margin, the first repository of flight capital. We see no reason to believe that that shall change now. We, however, are making a material shift in our sentiment toward gold this morning and we shall again mince no words as we make that shift: rather than owning gold in foreign currency terms, we wish to own it in US dollar terms, for we now fear for the dollar rather than cheer for it in the light of this battle between the President and the Banks. Where we once wished to avoid the bearish dollar bet that one is making when one owns gold in US dollar terms, in light of the battle that is shaping up between the President and the capital markets, we shall instead embrace that dollar risk."

Dan