Turning to the gold market, we remain, as we have

been for many months overtly bullish of gold, although

we shall have to admit that heretofore we’ve not been

bullish of gold in US dollar terms, but have instead

been bullish of it in foreign currency terms and

primarily in EUR terms. The problems attendant to the

European Union have weighed heavily upon the EUR,

and have helped our investment position accordingly.

Gold has risen from approximately €650 mid-summer

last year to €1015 this morning. That is an increase of

just a bit more than 55%. At the same time, gold has

risen from US$910 in June of last year to $1255 as we

write… a solid bull run of course, but at 38% far behind

that of gold in EUR terms. Gold in British Pound

Sterling terms has risen from £555 a year ago to £835

this morning; an increase of 50%, and again far

stronger than gold in US dollar terms.

However, after the “G-meetings” this weekend and

following the quiet, but rather obvious,

disdain/disrespect/dismay that the world shows for the

US government we can imagine… or fear… that gold

shall begin to strengthen more in US dollar terms than

it has in foreign currency terms. We can imagine in the

not too distant future either adding to our long positions

in gold in US dollar terms, holding that which we

already own in EURs and Yen et al.

Finally, we draw everyone’s attention to the chart at the

upper left of p.1 this morning by our friends, Pam and

Mary Ann Aden. We have argued in the past that many

markets, and especially the commodity markets, move

along rather common paths. Bull markets almost

always begin quietly and end in parabolic ascents. As

we’ve said many times in years past, over 50% or

more of a bull run comes in the last 10% of the time

frame of that market, and one gets the sense that that

shall happen in the gold market… again… at some

point in the future. It may be worth keeping this chart in

mind in the coming weeks and months.