Gold On A Tear!

By David Vaughn November 1, 2006 www.goldletterdv.com

Gold is holding above 600 an ounce and doing well. And we even had Alan Greenspan scrumptiously (mouth wateringly) endorsing gold this past week in a speech at a conference. What did Mr. Greenspan say? “Former Federal Reserve Chairman Alan Greenspan said on Thursday that both private investors and central banks were shifting away from the US dollar and toward the euro.” click Below are Alan Greenspan’s direct words quoted from last week. Alan Greenspan, 10-27-2006 - "We're beginning to see some move from the dollar to the euro, both from the private sector ... but also from monetary authorities and central banks…" “His comments pushed the dollar down…” click Wow! I’ll bet my buns his comments drove ole’ glory down! You are still confused? How does this correlate with the dollar and gold? Read on bad boys and girls. Alan Greenspan, 10-27-2006 - "We'll get to the point at some point that willingness to finance it (U.S. Dollar) will slow, and if you can't finance it, it won't happen…" click I am sorry Alan. You said, “… it won't happen…” What won’t happen? He is saying there is a time coming when the US dollar is going to essentially cease because our good ole' neighbors decide to stop financing our debt. Do you comprehendo? Now, how is all this an endorsement of gold? Remember that the only thing really sustaining our economy, our debt, our standard of living, etc. is the fact that foreigners are pumping big bucks into our economy every day. And when this stops so long girls and boys. The dollar is toast along with that brand new boat you just bought on credit. Wow! I love this next comment from Darrill as he hits it very well on the head with a hammer what I have been trying to get across over and over. Read on below.

Hi David,

“I used to be a stockbroker for Paine Webber and I cannot remember a time where every piece of news whether it is the economy, industry, or a company's earnings report has been interpreted as good news.” “Foreign governments are not going to continue to buy dollars and dollar invest-ments forever. When their economies are strong enough (i.e. China, India, and Russia) they are going to focus on their internal growth. Right now it is in their best interest to export. Some day they are going to want to spend more money helping their citizens become consumers and that day is coming sooner than people think.” Take care. Darrill B. OK. Did you catch that? “When their economies are strong enough (i.e. China, India, and Russia) they are going to focus on their internal growth.” This is what I am trying to get across. When the U.S. tanks economically these Asian countries have the money and the resources to put their focus back into their own people and this will generate a great deal of economic clout that will surpass that of the U.S. “There seems an unwillingness for the price to break out either upwards or downwards from its recent pattern of ranging between $590 and $600, but my view is that an upside breakout is more likely than a downside one…” “…I (Charles Carlisle/mineweb.com) continue to think positively in this respect with gold perhaps breaking out into the low to mid $600s by the year-end or shortly after…” click And you ain't bought gold equities yet? You watin’ for the Titanic to sink buddy? What are you going to tell your family a few years from now when you’re flat broke and your wife and kids ask you why you sat on your butt and did nothing to preserve your family’s wealth and property when you still had the time? Better start now looking for a new wife and kids because they are going to dump you because of your ignorance and stupidity. I said gold is strong and so confirms the press release below. “Gold in New York rose, heading for the third straight weekly gain…” click Now, read below as you will read gold is coming back very quickly into everyone’s sites. “There's a big focus on what could happen to the dollar,'' said Carlos Perez-Santalla, a gold trader and president of Hudson River Futures in New York. ``I'm liking gold again.'' click Now, let’s shift our gears and go back 5 years to something Greenspan said that will scare the pants off you. Alan Greenspan, November 30, 2001 - “An international currency emerges because it is a solution to an economic problem.” Click What you just read should scare you and make you pee in your pants because those of us in the “know” see the developing economic problems growing and even escalating with rapidity never before matched today. And more? Alan Greenspan, November 30, 2001 - “…the attractiveness of any vehicle currency grows as its liquidity increases…” Click Yes, and pertaining to the above quote we are witnessing the ‘attractiveness’ of the US dollar gradually wane as the Euro is presently more valuable by as much as a third. And remember that all of this occurring portends extremely well for the long term attractiveness of gold. Read the below text and you will observe that the material below is already happening and picking up pace. Alan Greenspan, November 30, 2001 – “If the underlying demand for one of two competing vehicle currencies falters for a reason not clearly perceived to be transitory, and its bid-ask spreads, accordingly, increase relative to its competition, demand will shift to that competitor.” Click And who is the ultimate competitor? Gold. Now read on below Captain Underpants. Alan Greenspan, November 30, 2001 – “But that shift, in turn, will widen the bid-ask spread of the faltering competitor still more, inducing a further shift of transactions to the alternative currency. This process ends with the demise of the weaker currency as a competing vehicle and the stronger of the two becoming the sole surviving vehicle.” Click Greenspan appears to be speaking of 2 surviving and competing currencies and I believe he may be referring to both the Euro and our friend and buddy, gold. And because of this very testimony by Alan Greenspan is why so many analysts see gold eventually climbing beyond 3,000 per ounce. Good comment below on the reality of this present commodities bull market. Michael K. Dawson - “It was just a few short months ago many were saying the bubble had burst in commodities. First of all, I never bought into the bubble talk. How can there be a bubble in commodities - when not one of your friends can name 5 gold stocks? Back in the internet bubble days, taxi cab drivers could rattle off the names internet companies without skipping a beat. Before there can be a bubble the masses must participate. The commodity bull market is being driven by simple supply and demand dynamics. Just think about the amount of copper that will be consumed as China industrializes. Mass industrialization takes many years. Everyone knows that Rome wasn’t built in a day and China will be no different. What the bubble promoters forget is that no bull market goes straight up.” “Commodity stocks are simply too volatile to simply buy and forget. There will be many more drubbing such as the past 5 months before this bull market is over. An effective strategy is needed to navigate through these rough waters.” click Now keep in mind that as the U.S. dollar dies it matters not who becomes the reigning new strong currency. In matters not whether it is the Yuan, the Euro, or the pea knuckle, because gold’s stature throughout this entire process will rise dramatically. Think of a scale with gold on one side and the new fiat currency on the other. Gold cannot lose as this process unwraps and unfolds. Does gold qualify as an “International Currency?” Read on below for your answer. Alan Greenspan, November 30, 2001 –“How does a currency become an international currency?” “First and foremost, an international currency must be perceived as sound. To be acceptable, market participants must be willing to hold it as a store of value.” “In addition, if a currency is seen as a viable store of value in times of general uncertainty…” Click The below text is interesting as Greenspan rebukes his own Federal Reserve Board that he was President over at the time. Incredible! Alan Greenspan, November 30, 2001 –“The mandate of the European Central Bank to maintain a stable purchasing power of the currency is doubtless firmer than that of the Federal Reserve or any other major central bank.” Click Read below to understand how both gold and the Euro are gaining favor and strength and will continue to do so. Alan Greenspan, November 30, 2001 – “History has shown us that once currencies achieve the status of an international vehicle currency, as the guilder and the pound did in previous centuries, the established infrastructure of deep and liquid markets favors their continuing to be so used.” Click I like this last quote below from Greenspan as it is a beauty. Alan Greenspan, November 30, 2001 – “The world can only benefit from the competition.” Click Principally, we are already seeing a benefit from the competition a strong gold price is creating. And make no mistake Captain when you ask yourself if the gold price is strong now. Any price above 400 per IS formidable. And what tremendous strength we continue to see in the gold price! That golden bull is roaring at the gate and is just waiting to bust out and soar higher. Those elections are almost behind us. Are you ready? No? You are taking a nap? I know you want to argue that gold is still under 600 per. I say to that, “So what?” Gold is clearly showing strength and strength in my book is a very strong catalyst and driver for higher prices yet.

Countdown to elections!

Actually, who cares except for the fact that the markets will return “closer” to their normal manipulated status. Right now we are witnessing severe manipulation in over drive where in a few weeks we will see manipulation return to a more subtle pace. The following article below is a good article dated just 10-27-6 for those wondering whether the bull is still with us. Bruce Tinney – “The commodity bull run is still in its early stages.” “WE ARE IN THE EARLY STAGES OF A LONG-TERM BULL MARKET FOR COMMODITIES, WHICH SHOULD PROGRESS AS ASIA MOVES UP THE DEVELOPMENT CURVE.” What is that ole’ saying? If it walks like a duck? If it talks like a duck? If it acts like a duck? Well, then, it must be a duck. From what I am reading that ole’ duck must still be in a commodities bull market. I know I see a duck. And a golden duck! Subscribe to Gold Letter to receive emailed reviews of gold and silver mining companies poised to increase in value in a rising gold price environment. Find out what makes Gold Letter different.

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Email me people! It gets cold and lonely out on this distant island all by myself! David Vaughn
Gold Letter, Inc.
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