Dear Friends,

Welcome to the make believe world of what is left of the young lions. These people are clearly the top of the mega-speculative feeding chain and are now trying to eat each other.

Gold is the inverse of the dollar. Dollar strength is a product of short-term demand and short covering. This short covering emanates from enormous unstable risk carry trades and OTC derivatives written thereupon being buffeted by changing interest and cross rates, even if the changes are only window dressing.

What that means is large supply and demand emanating from our dear friends who are the same people who have basically killed the international financial systems. They are back again causing the US dollar to run contrary to the interests of fighting deflation as you will read below.

This dollar strength is not fundamental nor will it last one day longer than it takes the young lions to close or square their positions.

Welcome to the make believe world of what is left of the young lions. They are now trying to eat each other.

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Points to ponder:

1.) Although the timing is suspect for the PP, could this be the last chance to cash up before the poo hits the propeller in the U.S.? I had heard there was another wave of credit swaps due to hit us in December. Looking at the monthly chart for oil, it looks like we might see a bounce off of long-term support at $50, and then see it move sharply up from there. Could be we at or near the end of the deflationary phase and gearing up for the inflationary one?

Canada, although not a gold-backed currency, has still been recommended as a good alternative to the greenback BECAUSE we are resource based and our economy is in pretty good shape. Is this PP a shoving match to get to the top of the food chain before the U.S. flight to safety begins in earnest?

More extreme views expressed out there, aimed at the U.S. audience, seem to think cash spent now, on things with real value, is better than delaying to purchase it later with dollars that will be devalued by inflation. And we know the stuff in the ground at the RoF has real, lasting value.

Could it be, since we have a direct link to the world of hedge funds sitting on our BOD, the one thing they are know how to do is position themselves for success, and they probably have a better idea than anyone what is headed our way. If, and this is a big IF, the inflationary cycle the U.S. is about to enter into is even a glimmer of what is being predicted, then our BOD might really need to get set up for the long haul to preserve their wealth.

Anyways, I'm not discounting the probability that they might be in it for the quick flip and off to pillage something else, but to be fair, we must realize there don't seem to be any geological finds of this magnitude anywhere else that even compare, and given the economic forecasts, where else could they safely grow their money?

I have more PP related questions to follow later.....

JMO