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More Dollars than Sense



Gold $407 Silver $6.25 Wednesday 15 Sept , 3.30am Sydney

"The first panacea of a mismanaged nation is inflation. The second is war." - Ernest Hemingway.

G'day. Another day, another massive U.S. deficit. How many more of these 'till someone spits the dummy and trashes the dollar and bonds? Typically, a sharp spike in the currencies was met head-on by sellers happy to disregard the awful economic realities that we are faced with. They must have more dollars than sense, I reckon.

Gold wobbled around $404 all day in Asia which didn't surprise and I think the continual Central Bank "will they-won't they" crapola about gold sales may have had some effect and held us back a little, especially in NY. No real news in gold, India still buying and happy about it judging by the premiums in Mumbai. I note that the gold buying "season" is fast approaching. The dollar was most of the story today although I get a feel that gold is doing more what it wants to rather than being driven by the dollar. There were a few instances where they moved quite noticeably in opposite directions, and I think this is just the first whiff of the stench that is Fiat currency on its death bed. It won't happen overnight and maybe not even in the next 12 months, my best guess is before the 2008 President gets voted in. The late selloff in gold back to $405 was just some locals squaring up and think Asia will see $407 print again in a few hours. Opinion only and I hope I'm punching out some killer ZZZZ's when it happens!

Silver has dragged the chain in my opinion. I would have expected seeing closer to $6.40 than $6.20 today. Someone is selling a lot of silver and from where I sit they aren't maximizing their return, rather they are making sure they get crap prices by driving silver lower at any opportunity. I wouldn't like to be an investor with those sorts of executions. Maybe we will see a few more cents taken off today but am keen to grab some physical on dips to $6.10.

Equity volumes are pretty anemic at best. The Amex Gold Bugs Index (HUI) is bumping its noggin on the 210 level again and maybe we will have another little breather here although CPI data could change everything in a blink. Coeur D'Alene Mines (CDE:NYSE) leads the silvers and the South Africans are pacing the golds, even with a stronger rand. Hmmmm.

Heading home a little early today as my 5 year old daughter has her first "Big School sports carnival" and Daddy's promised he's gonna be there. AWAKE. (Maybe a medicinal 6 pack of coldies might make it into the picnic basket!)

CPI tomorrow..... sigh.

Enjoy the rest of the day ......


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position in gold & silver

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