The Resourceful Bear Blog

We are witnessing the end of human prosperity
The Yahoo Finance chart of EFA, VTI, TLT, GLD, XOM and IYF shows the rise and fall of debt facilitated growth that came under the laissez faire, neoliberal, Milton Friedman, capitalism which was based on a floating rate currency exchange, interest rate differential investing, and free trade system.

Stephen Lendman in Global Research article The End Of Prosperity relates that Morgan Stanley's economist and chairman of the company's Asia operations Stephen Roach was extremely critical of Fed policy in an October 27 Financial Times article where he called "the era of excess as much about policy blunders and regulatory negligence as about mistakes by financial institutions." We need a new system and new role for the Fed in his judgment. Explicitly to reference "financial stability", he said.

Britain's Charles Goodhart, a founding member of the Bank of England's Monetary Policy Committee, MPC, and now a professor emeritus of banking and finance at the London School of Economics, says the country "may need 0% interest rate to avoid a depressionist warns."

Some in Tokyo believe the country can do little to reverse the downward trend. According to Credit Suisse's Toyko-based chief equity strategist, Shinichi Ichikawa, "The Japanese government alone can't fix" the nation's export woes or the deepening global crisis. "The factors hurting the market are beyond Japan's control." Japan is heavily export dependent. For most of its economic growth and health. It's hurt by a surging Yen. At a 13 year high against the dollar. In addition, hedge funds and foreign investors are bailing out. The way they're doing everywhere, but it's hurting Japan more than most because it relies so heavily on outside capital.

Mr. Lendman concludes by asking: "Will world leaders seize the challenge and act?"

I can assure you that indeed the world's leaders will seize the moment and establish a new global monetary authority only to see it result in total failure and a worldwide currency system being installed.

True prosperity will come when Jesus Christ returns to govern for a 1,000 years
As the elect of God, I will be governing with the Lord for a thousand years, Revealation 20:4, as there will be at least 2 Billion left over after the Battle of Armageddon, that is the final conflagration on the plain of Megiddo, Revelation 16:16, where the EU US western world Sovereign, Revelation 13:5-10, goes out to battle the tide of 200 million from the East, Revelation 16:12-16, as well as the Bear of the North, Daniel 11:40-44.

Governace - it's only for a day; as a 1,000 years are as a day, 2 Peter 3:8.

The Lord will be governing in Jerusalem from his Temple, Ezekiel 47-48. Ezekiel is emphatic on the orientation of the temple: it faces east Ezekiel 47:1.

The prophet mentions the direction east in other places in his writing as well: Ezekiel 43:1-5 and Exekiel 10:18-19 and Ezekiel 11:22-23 and Ezekiel 8:16.

The Temple will be oriented eastward, that is, in the direction that all sun god worshipers, throught history, have faced.

Cludia Thompson relates: "Because the God of the Freemasons is the Sun God all devotions in their Lodges are made facing East! The Masonic ritual proclaims that: "as the sun rises in the east, to open and govern the day, so rises the Worshipful Master in the east, to open and govern his Lodge, set the craft to work and give them proper instruction." Malcolm Duncan, Duncan's Masonic Ritual Monitor, pg.15 In Ezekiel 8:16, Ezekiel tells us about God showing him what was really going on, in the temple at Jerusalem: "And he brought me into the inner court of the Lord's house, and, behold, at the door of the temple of the Lord, between the porch and the altar, were about five and twenty men, with their backs toward the temple of the Lord, and their faces toward the east; and they worshipped the sun toward the east."

The Robert Jamieson Bible Commentary relates Manessah's reign was wicked and characterised by great idolotry who oriented worship towards the sunrise: "Manasseh was twelve years old when he began to reign. He must have been born three years after his father's recovery; and his minority, spent under the influence of guardians who were hostile to the religious principles and reforming policy of his father, may account in part for the anti-theocratic principles of his reign. The work of religious reformation which Hezekiah had zealously carried on was but partially accomplished. There was little appearance of its influence on the heart and manners of the people at large. On the contrary, the true fear of God had vanished from the mass of the people; corruption and vice increased, and were openly practised (Isa 28:7, &c.) by the degenerate leaders, who, having got the young prince Manasseh into their power, directed his education, trained him up in their views, and seduced him into the open patronage of idolatry. Hence, when he became sovereign, he introduced the worship of idols, the restoration of high places, and the erection of altars or pillars to Baal, and the placing, in the temple of God itself, a graven image of Asherah, the sacred or symbolic tree, which represented "all the host of heaven." This was not idolatry, but pure star-worship, of Chaldaic and Assyrian origin [KEIL]. The sun, as among the Persians, had chariots and horses consecrated to it (2Ki 23:11); and incense was offered to the stars on the housetops (2Ki 23:12; 2Ch 33:5; Jer 19:13; Zep 1:5), and in the temple area with the face turned toward the sunrise (Eze 8:16)".

Egyptians were involved in sun worship and faced east in their worship activities; Wikipedia relates: "The Egyptian God Ra (pronounced Rah) and sometimes as, Rê, is an ancient Egyptian sun god. By the fifth dynasty he became a major deity in ancient Egyptian religion, identified primarily with the mid-day sun, with other deities representing other positions of the sun. Ra changed greatly over time and in one form or another, much later he was said to represent the sun at all times of the day. Obelisk represents the rays of the sun and was worshiped as a home of a solar god. Pyramids, aligned east to west, Falcon; Bull; a cobra commonly seen wrapped around the sun disk, the form of the goddess Wadjet, who often was depicted as an Egyptian cobra, an animal thought only to be female and reproducing through parthenogenesis. Some traditions relate that the first wadjet was created by the goddess Isis who formed it from the dust of the earth and the spittle of Atum. The uraeus was the instrument with which Isis gained the throne of Egypt for her husband Osiris. As the sun, Ra was thought to see everything. Together with Atum, Ra was believed to have fathered Shu and Tefnut who in turn bore Geb and Nut. These in turn were the parents of Osiris, Isis, Set (also known as Seth), and Nephthys. All nine made up the Heliopolitan Ennead".

The Lord will be in his Temple, it will be facing east, and he will be transmitting peace, and the result will be joy and prosperity as Allen Ross reveals.

Related
Ezekiel is what bible historians refer to as a "major prophet", that is one of God's heavyweights. In article Video Documents Orbs At The 08-80-08 Wiltshire Crop Circle Site, I relate the wheels he reported seeing in Ezekiel 10:18-19.

Katherine Griffiths, in Telegraph.co.uk article Financial Crisis Is Shifting Power To Asia, Says HSBC Boss Stephen Green suggests that power is shifting to Asia.

A multipolar balance of world power now exists between North, South, East, and West.

Article Update
In retrospect it was awareness of the impact of FASB 141, and awareness of AIG's difficulties, as well as those at Washington Mutual, that turned the market in favor of gold.

The US Dollar Turned Down Today, Friday September 12, 2008 To Close At 79
Stockcharts.com reports that the US Dollar, $USD, closed yesterday at 80.22; today it closed at 78.98 ... $USD

Gold Turned Up To Close At 766 Today, Friday September 12, 2008
Gold, $GOLD, it closed at $766. Chart is courtesy of Ted Burge ... $GOLD

The gold ETF, GLD, closed at 75.55; chart is courtesy of Ted Burge ... GLD

The Privateer provides the 2x3 chart for gold showing support at $750.

The ongoing Yahoo Finance chart of the 200% inverse of the emerging markets, EEV, compared to DRR, FXP, DEE, GLD and EFA reflects that the Euro, FXE, has temporarily found support; gold and the world markets rose ... GLD and EFA are up while FXP, DEE, DRR, and EEV, are down ... FXE has found support ... DRR shows a parabolic turn lower

The Yahoo Finance five day ongoing chart of of UUP and DRR compared to GLD shows that GLD rose and DRR and UUP fell ... GLD is up and DRR and UUP are down

The Yahoo Finance five day ongoing chart of USD/EUR relative to GLD reflects that the US Dollar fell and gold rose.

The Yahoo Finance five day ongoing chart of EUR/USD relative to GLD, XME and EFA reflects that the Euro, FXE, rose taking gold, the metal manufacturing shares and world stocks higher,

The Yahoo Finance five day ongoing chart of the USD/JPY relative to the EUR/JPY reflects that the rise in the EUR/JPY pulled gold higher and the US Dollar lower.

The Yen Fell Lower Today
CMS Forex in ActionForex article Yen Gives Up Yesterday's Gains as New Deal for Lehman Boosts Risk Appetite reports that the Yen, FXY, fell.

Forex Analysts Report An Uptick In The US Dollar ... And Some Give Bearish Prospects The US Dollar
ActionForex in article Is Market Turning Around? shows the EUR/USD ticked up to trade at 1.4093.

ActionForex in article Dollar Retreats Further on Poor Retail Sales reports that the GBP/USD rose to trade at 1.7768.

Candice Zachariahs of Bloomberg in aticle Australian, N.Z. Dollars Gain as Investors Boost Carry Trades provides a bullish report: "The Australian and New Zealand dollars rose as Asian equities rallied, increasing investors' appetite for higher-yielding assets ... "We've got quite a strong rebound under way", said Tony Morriss, a currency strategist at Australia & New Zealand Banking Group Ltd. in Sydney. Australian government bonds fell. The yield on the 10-year note rose 2 basis points, or 0.02 percentage point, to 5.68 percent".

ActionForex in article USD/JPY Mid-Day Outlook shows the USD/JPY trading at a level of support at 107.06.

Crown Forex in ActionForex article Majors Extend Gains against Greenback reports in bearish tone that "the worst than expected retail sales didn't do the U.S. dollar any good".

Global Forex Trading in ActionForex article Dollar Rally Done For Now? reports that the Chinese may diversify away from dollar assets according to China Daily; and that strong Strong AUD employment data may keep RBA stationary in October; and that Fed's Kohn sees no housing bottom yet; and that CB Trichet is unabashedly hawkish stating that inflationary pressures remain enormous and that the ECB will need to guarantee price stability.

TheLFB-Forex in ActionForex bearish toned article Midnight For The US Dollar reports that the dollar fell on increased speculation of a Fed rate cut by December. And that The Pound, FXB, made its biggest one day gain since September 2005. The Aussie, FXA, made its biggest one day advance since May 16, 2008, as gold futures advanced nearly $15. The Canadian Dollar, FXC, fell for the fist time this week as prices for gold, oil and other commodities rose. The Swiss Krona, FXS, rose.

AC Markets in ActionForex article US Trade Deficit And Weaker Stocks Weighed On Dollar reports that late on Thursday, the Dollar dropped against majors, weighed down by a combination of weaker global stocks and data showing the US trade gap expanded to $62.2b, it's widest since March 2007.

TheLFB-Forex in AtionForex article Dollar Index And The Financial Sector provides a bearish slant that Washington Mutual, WM, the nation's largest savings and loan, had its debt ratings cut on Thursday. The bank is heading to its fourth straight quarterly loss and is facing as much as $19 billion in loses tied to residential mortgages. The drop on its credit ratings could force WaMu to sell part of its $143 billion deposit base, which would mean selling branches. "Toxic" might be the best descriptor for the Financial Sector. It would seem there just is no reason to invest while so much uncertainty exists. AIG (-27%), FRE (-23%), LEH (-15%), FNM (-9.6%) and MER (-9.2%) were the biggest percentage losers on Friday. WM (+4.24%) was an unlikely bright spot after the company issued statements saying its capital position was adequate, allaying market fears that it might be the next big bank to go down. On the day, the XLF fell 0.30 points (-1.40%) to close on 21.15, Chart of XLF is courtesy of Ted Burge ... XLF

Trader Tim Knight Is Terrifically Bearishg Gold
Tim Knight in article Getting Ready for the Gold/Energy Short relates: I wonder what cuteness the Feds are going to pull this weekend? Use taxpayer dollars to bail out Lehman? Send everyone a $2,000 check they can spend at WalMart? Cut interest rates to 0%? Make short-selling illegal? You just never know. verything is waiting to see what happens to LEH, of course. With only 365 cents left to its share price, there's not much left to fall. This last posting of the week is going to be somewhat different - - I'm not going to provide any opinion on the broad market. Instead, I'm going to offer a "theme" to invest. Specifically - - re-entering short positions on the energy/gold sector (I think of them as one sector these days, strange as that may sound). My narrative is pretty simple. I think the EUR/USD, which has been firming up, won't get much past the ~1.43 level, tinted below.

Peak US Treasuries Has Been Observed
The Resourceful Bear News Service is reporting that the interest rate on the 10 Year Note, $TNX, is going up from 3.6% ... $TNX

The bailout of the debt toxic and debt overwhelmed mortgage guarantors was "the mother of all credit writedowns" making for "Peak Treasuries On September 9, 2008".

The chart of the Treasuries ETF, TLT, shows the fall of the US Government bonds ... TLT

And the gravestone doji in BTTRX relates that the zero coupon bonds have peaked out ... BTTRX

All debt got a write-down this week because of the bailout, as is seen in LQD and AGG falling lower ... LQD

The Direxion mutual fund, DXKSX, which is 200% inverse of the rate on the 10 Year note, as seen in The Street ongoing monthly chart of DXKSX will provide low risk and good growth of investment for corporations seeking to preseve corporate wealth ... Chart of DXKSX

For historical note, the spike down bottom low of 13.25 in DXKSX was established September 9, 2008.

Recent Peak Stock Wealth Occurred August 11, 2008
In as much the dollar rally in stocks ended August 11, 1008, recent "Peak Stock Wealth" has occurred.

The stock market is in bearish mode, primarily over concerns of growth, as is seen by the Proshares bear market ETFs QID rising. It's recent bearish engulfing candlestick, followed by today's small gain provides a safe entry point for going short the Nasdaq, 100, QTEC. Chart of QID is courtesy of Ted Burge ... QID

Hurricane Ike Is Reported Bearing Down On Houston
Mary Foster of the Associated Press relates that a Hurricane Hunter monitoring Ike, says: "it's a big one, and it's going to get bigger".

Kondratieff Winter Settles In As Conflict, Bank Insolvency, Stagflation And The Mortgage Crisis Intensifies

Conflict
Mike Mish Sheldon in article Test Of Wills At Boeing relates "Time will tell who, if anyone, wins the battle. Most often both sides proclaim victory even though no one does".

Peter Symonds in GlobalResearch.ca article President Bush Authorises US Ground Operations Inside Pakistan reports that the US carried out a military strike to crack down on militant groups in its Federally Administered Tribal Areas, FATA.

Kaveh L Afrasiabi in GlobalResearch.ca article US a Step Closer to Iran Blockade reports that the EU US Western World Government has imposed new sanctions on Iran, this time targeting its shipping industry, by blacklisting the main shipping line and 18 subsidiaries, accusing the maritime carrier of being engaged in contraband nuclear material, a charge vehemently denied by Iran.

While the economic impact of the measures against Islamic Republic of Iran Shipping Lines, IRISL, will be minimal in light of the near absence of any connection between the shipping company and US businesses, this latest US initiative against Iran sends a strong signal about the US's intention to escalate pressure on Iran, even unilaterally if need be. And, perhaps, it is a prelude for more serious and dangerous actions in the near future, above all a naval blockade of Iran to choke off its access to, among other things, imported fuel.

Bank Insolvency
Scott Lanman of Bloomberg reports in article Fed Direct Loans Lose Stigma as Banks Push Borrowing to Record relates that the use of Federal Reserve Facilities has gone balistic as banks desperately seek liquidity and capital.

The article reports: "The low cost may 'delay necessary adjustments': at banks, said Vincent Reinhart, a resident scholar at the American Enterprise Institute in Washington who was director of the Fed's monetary affairs division from 2001 to 2007. Lenders may 'have a hard time if the Federal Reserve tries to take it away,' he said.

Geithner, along with Fed Vice Chairman Donald Kohn, told a group of banks including Citigroup Inc., JPMorgan Chase & Co. and Bank of America Corp. on an Aug. 17 conference call that tapping the so-called discount window was a 'sign of strength' ".

Yes, a sign of strenght indeed -- not of the banks who avail themsleves of the liquidity, but rather of growing state corporatism, that is state corporate rule in a desperate move to achieve financial stability.

Elaine Meinel Supkis in article US Struggles As Ports Are Hammered By Mother Nature writes: "Note how the bankrupt Citigroup head as well as Geithner are calling this obvious raid on the Cave, a sign of strength! HAHAHA. Up is down, in is out and negative is positive. This is pure Outer Darkness Lightning territory. Whenever we see people stand reality on its head, we are looking at magic. Magicians believe that if you lie about the true condition of things, reality changes. This belief is stupid, of course. The gods control reality and the gods are really all goddesses: Mother Nature and the three evil sisters, History, Inflation and Depression. They love to use numbers and charts and unlike the liars who try to fool us, they keep very accurate accounts. Everything is carefully tracked and when the graphs show the 'hockey stick' sudden rise upwards, these demonic forces sharpen their fangs and claws and tear into whatever has dared to go off the charts. They hate things going off the charts. Balance is everything with them! They love to make everything equal zero."

Stagflation
Kevin Franco of CEP News in ActionForex article BOE's Tucker Says Slow Growth, Higher Inflation Likely reports that Bank of England Monetary Policy Committee Member Paul Tucker said: "If in the interests of sustaining growth in the short run, we were to let inflation become established at higher levels, things could easily get out of control as higher medium-term inflation expectations would become embedded," Tucker said. "We would then find it much harder to bring inflation back to target, and could well end up having to generate a serious recession to put the genie back in the bottle."

Mortgage Crisis
Dan Levy of Bloomberg in article U.S. Foreclosures Hit Record in August as Housing Prices Fell reports that U.S. foreclosure filings rose to a record in August as falling home prices made it harder to sell or refinance homes to pay off the mortgage, RealtyTrac Inc. said. California had eight of the 10 metropolitan areas with the highest foreclosure rates, led by Stockton at one in 50 households. Merced, Modesto, Vallejo-Fairfield and Riverside-San Bernardino ranked second through fifth. Bakersfield, Salinas- Monterey and Sacramento, the state capital, ranked eighth through 10th.

Presidential Candidate Obama Appeals To The Idealism Of Youth And Students For National Service
Patrick Martin in WSWS.org article Obama Calls For US Military Mobilization reports that the Democratic candidate said at the Forum on National Service, Thursday September 11, 2008, sponsored by Time at Columbia University in New York.
As president he would stand behind a National Service Initiative: "There was that sense of sacred obligation that, frankly, we have lost during these last two wars," Obama said. "I want to restore that." The candidate continued: "And I think it’s important for the president to say, this is an important obligation. If we are going into war, then all of us go, not just some."

The Zoo provides Key Quotes in Video Format.

Douglas Hester in article Hitler Obama Youth recalls that another country went down this road 60 years or so ago, and it didn't work out so well.

Obama said: "'We cannot continue to rely only on our military in order to achieve the national security objectives that we've set,' ... 'We've got to have a civilian national security force that's just as powerful, just as strong, just as well funded.'"

He said he would make federal assistance conditional on school districts establishing service programs and set the goal of 50 hours of service a year for middle and high school students.

The night's forum seems to just be a continuation of Obama's speech in Colorado Springs where he is quoted by Reuters saying: " Loving your country must mean accepting your responsibility to do your part to change it." Colorado Springs is in a conservative region of the state that is home to a military base, the U.S. Air Force Academy, and is the hub of many christian religious non-profit organizations, as well as to a host of Evangelical Christian megachurches.

Yes, the Hitler Youth will be returning, so get your brown shirts and jack boots ready if Obama is elected.

Hitler Youth recruitment poster. The wording translates to: “Youth serves the leader. All ten year-olds into the Hitler Youth.“

To some degree I find it strange that black man would endorse slavery. But then again, his words, prove that even he is a neocon. Yes there are neocons on the left and on the right. And they take morality, taxation and investment every which way but right.

The Question Is: Will Gold Rise Or Fall?
The Euro moved above a support line first at 141.140 and then at 142 to close at 142.38; and the Yen fell to close at 92.43 ... FXE and FXY

The Stockcharts.com chart of the EUR/JPY, that is, FXE:FXY, shows the EUR/JPY at support. This abeyance, but not abatement, to the unwinding of the yen carry trade, enabled gold to rise today ... FXE:FXY

Greg Michalowsk in article EURUSD approaches resistance at 1.4225. Expect Resistance writes: "The 1.4225 level is approaching. The price corresponds to the high from September 9th and the 200 hour moving average (at 1.4227). I would expect sellers at the level".

James Chen in ActionForex FXSolutions article Chart Of The Day shows the strong downdraft of the EURUSD.

And Catalin in Euro Daily Update provides an Andrews Pitchfork view of the EUR/USD which to me suggests further down.

And Greg Michalowski in article USDJPY Is Testing Key Technical Resistance Aat 107.70 relates "The USDJPY is testing the 200 hour moving average resistance at the 107.70 level." It appears that the USD/JPY is bouncing around the top of an Ellott Wave 2 up and sometime will go down into an Elliott Wave 3 Down.

The real mover has been the EUR/JPY; it is forcefully down, as it is in an Elliott Wave 3 Down.

Unlike Elliot Wave 3 Ups which are powerfully sweeping up, Elliott Wave 3 Downs are aggressive and very severely down as we see in the fall of the Euro, FXE, taking down the world stocks, EFA, the emerging market stocks, EEM, and the natural resource stocks, such as metal manufacturing, XME, the HUI indexed precious metal mining shares, GDX, steel producres, SLX, coal producers, KOL, energy producers, XME, and energy service, OIH as well as the whole commodity complex, RJI, oil, USO, and even gold, GLD.

The chart of UUP weekly shows a massive gravestone doji. The gravestone doji would suggest an end to the dollar rally and a rise in gold, yet all this is is just an ETF, it is the outcome of greater currency trading ... UUP Weekly

If Holistic Forex comments, I will post its comments here.

Here is the comment of Jesse, in article US Dollar Weekly Chart with Commitments of Traders which says: "The explosion in the open interest, which is unprecidented in our memory, and the record level of funds long positions suggests a blow off top driven by forced panic buying probably in some short of squeeze or unwind."

Jesse is a Dollar Bear and a Gold Bull.

I have to ask how did the explosion get there? Did the plunge protection team produce the explosion by using US Federal Reserve dollars to go long the futures market? Did yen carry traders use loans from the bank of Japan to long the futures as well? Did the Federal Reserve twist the primary dealers to create it by going long? Or did the Saudis or the Bank of Japan use their massive reserves to drive the US Dollar up?

What if the explosion is not a blow off top but rather a blow down top -- a top to blow down of oil and gold. In other words, Jesse sees the committment of traders report as bearish, while the fact is it could be bullish, if the longs keep committed to the US Dollar.

The deflationry presssure in EUR/JPY is terrific, and I really do not see any particular reason for it to let up.

Although I am bearish the US Treasuries, and have documented that a top is in for them, I do not see a run on them, so therefore, I do not see any particular flight from the dollar yet.

Could it be that "they", the currency traders, will continue to drive gold down by shorting the EUR/JPY? I rather think so, simply because they are in control, and probably don't feel any need to take profits and go long?

Yes, the effect of shorting EUR/JPY will be more down for the Euro, FXE, Gold, GLD, the world stocks, EFA, the emerging market stocks, EEM, and its leaders Russia, RSX, and Brizil, EWZ, and the natural resource stocks, such as metal manufacturing, XME, the HUI indexed precious metal mining shares, GDX, steel producres, SLX, coal producers, KOL, energy producers, XME, and energy service, OIH.

Here is the big "but": there is a systeic risk event coming, the banks are really insolvent, that is in desperate need of obtaining capital. And because of the impact of FASB 141, unable to get capital to stay liquid, so they have to rely on the lending window at the Federal Reserve to stay operational.

AIG insurane had a capital loss event today. Greg Farrell and Nicole Bullock in FinancialTimes article
AIG Falls On Fears Over CDS Exposure report that "Investor panic over the state of the US financials spread to AIG on Friday, as the stock dropped 31 per cent during active trading. The shares fell 2 per cent further in extended trading after Standard & Poor's, the credit rating agency, said it may cut the insurance company's credit rating. More than other insurance companies, AIG has significant exposure in real estate and the credit default swap market, two segments that have been crushed in the past year by the decline in asset prices. Although it boasted revenues of $110bn in 2007, AIG has taken $18.5bn in losses over the past three quarters".

Felix Salmon in SeekingAlpha article AIG The Mark-to-Lehman Market relates that "Ooh now this is ugly. AIG's shares are down 26% today to their lowest level in over 15 years; the firm's credit default swaps, CDS, are wider than Lehman's. Note that AIG is not trading at zero, in the way that Lehman (LEH) and WaMu (WM) are: its market capitalization is still a substantial $35 billion or so. But the credit markets are certainly far from reassured that there's any value in the equity. Your shares can -- and quite possibly will -- go all the way to zero".

Doug Noland writing in Safehaven.com article, Too Big To Fail, writes that "while the media directed its attention to Lehman, the pricing of AIG Credit Default Swaps, DCDS, exploded this week. This is a company with a Trillion dollar balance sheet and enormous exposure to the CDS market and other derivatives. And although its balance sheet is only about a third the size of AIG's, Washington Mutual also saw its CDS blow out. And while most holders of Fannie and Freddie obligations have come out of the GSE fiasco unscathed (or better), one can see how this crisis going forward will see more pain meted out to the corporate bondholder - not just the poor lowly equity owner. Perhaps the prospect of Lehman debt holders suffering losses has pushed the acutely vulnerable CDS market to the edge."

I want to go back to concept mentioned above of bank insolvency. The banks are on life support, they use to get a little triage, then they got a transfusion, but now they are on total life support, sustained only by TAF, TSLF and PDCF as related by Adrian Ash of BullionVault in Safehaven.com article Safehaven.com article PLIF!! Just an Everyday Emergency

The banks and investment bankers, will one day have an "AIG Insurance like event", where they will get further capitally depleted, and then kaboom, the stock market fall, and the whole world wide financial system freeze up, and the US Dollar go into a nosedive.

At that time those owning gold will survive; and those who do not own gold will not. Peter Schiff Last in Safehaven.com article Last Gasp of a Doomed Currency writes: When the dust settles, the Federal government will be left with staggering liabilities that will be impossible to repay with legitimate means (taxation or borrowing). To make good, they must rely on the printing press to create money out of thin air. The rapid expansion in money supply will push the dollar down mercilessly. Right now every asset on the planet is being sold except the U.S. dollar. To me this rally looks like the last gasp of a dying currency. Just like a toy rocket ship, once the dollar runs out of fuel it will crash back down to Earth.

So what is one to do?

Does one invest in gold now, only to suffer loss at a falling EUR/JPY?

Does one go short gold, GLD, now? or short with DRR, DEE or DZZ now, as the the EUR/JPY is likely to continue to fall sharply lower?

I Encourage That Pay For Investment Insight From Two Sources
1) Ted Burge TedLines
2) Gary Dorsch's Global Money Trends newsletter or call toll free to order, Sunday thru Thursday, 8 am to 9 pm EST, and on Friday 8 am to 5 pm, at 866-553-1007. Outside the US call 561-367-1007.

Mr. Dorsch wrote in Safehaven.com artcle Safehaven.com Is The Super Commodity Cycle Dead Or Alive that the direction of gold prices and inflation expectations also hinge on the direction of world oil prices. It's doubtful that the ECB hawks and the Group-of-Six central banks would have been so successful in knocking gold and oil prices lower without the help of Saudi king Abdullah, the central banker of oil. Iran and Venezuela would like to see the Saudis cut their oil output at the upcoming OPEC meeting on Sept 9th to stabilize the oil market, and prevent prices from moving lower.

However, the Saudi kingdom might be looking at the US political calendar, and would feel more comfortable with a John McCain presidency, thus Riyadh might be inclined to leave its oil output unchanged awhile longer. Already, the 25% drop in crude oil prices from five-weeks ago is paying dividends for Riyadh. In a sharp turnaround, Republican John McCain has opened a 5-point lead on Democrat Barack Obama in the US presidential race, wiping out Obama's solid 7-point advantage in July, and taking his first lead in the monthly Reuters/Zogby poll.

So is the "Commodity Super Cycle" dead or alive? Is now the time to buy badly battered commodities? The answers to these tough questions will be published in the August 23rd edition of Global Money Trends.

And Mr. Dorsch wrote in Safehaven article "Maverick McCain" and the Resurrection of the US$ that "As soon as you think you've got the key to the stock market, they change the lock," lamented Joe Granville, who is mostly remembered for his bearish calls on the US stock market during the 1970's, 1980's, and the 1990's. Nowadays, many currency traders are scratching their heads, trying to figure out what's behind the sudden resurrection of the US-dollar, which is flexing its muscles for the first time in two-years, and defying conventional logic, by climbing sharply higher against most foreign currencies, including those that offer much higher rates of interest.

The Euro has plummeted 12% vs the US-dollar since July 15th, tumbling to as low as $1.410 today. Earlier this week, Euro-zone Finance chief Jean-Claude Juncker gave currency traders the green-light to trash the Euro. "Things are developing in the right direction, in line with the commitments of the US Treasury that it stated in recent months. The Euro is less than $1.44, and it reflects economic fundamentals better than the Euro flirting with $1.60. I still think that the Euro is overvalued, not only against the dollar, but also against other currencies," he said.

What's behind this sea-change in market psychology towards the US-dollar, where the focus has shifted away from interest rate differentials, and instead, has veered-off towards other key factors? They are several reasons that are beyond the scope of this article, but were highlighted in the August editions of the Global Money Trends newsletter.

Throughout the US-dollar's tortuous 40% slide over the past six-years, the Arab oil kingdoms in the Persian Gulf stayed loyal to their archaic US-dollar pegs, even while the Fed's indifference to the sliding US-dollar sent inflation shock waves through their dollar-linked economies. Saudi Arabia was forced to expand its M3 money supply by more than 20% in order to defend the dollar peg, which in turn, fueled inflation to +11.1% in July, it's highest in 30-years. In Abu Dhabi, the biggest member of the UAE federation, prices were 12.9% higher in June.

The Arab oil kingdoms rescued the US-dollar from the brink of collapse, by rapidly expanding the supply of Kuwaiti dinars, Saudi riyals, and UAE dirhams, and then recycled about $250 of Petro-dollars into US Treasuries over the past 12-months, through their brokers in London. In return, the US armed forces are defending the Arab Oil kingdoms from their dangerous neighbors to the north in Iran, which seeks nuclear weapons, and is closely aligned with czarist Russia, and Venezuela's mercurial kingpin Hugo Chavez, - forming the "Axis of Oil."

The recycling of Arabian Petro-dollars into US Treasuries put a floor under the US$ Index at the 70-level this summer, and persuaded bearish currency traders to cover massive short positions that had been built-up in the US$ over the past six-years. King Abdullah of Saudi Arabia upped the ante, in support of the dollar, by boosting the kingdom's oil output by 1.1 million barrels per day (bpd) from a year-ago to 9.7 million in July, which finally deflated the crude oil bubble by $45 barrel so far.

On Sept 3rd, Saudi Arabia announced that it had started pumping crude from the Khursaniyah field, which would boost the kingdom's output capacity by 500,000 bpd to around 11.8 million barrels, and aims to boost its total oil production capacity to 12.5 million bpd by the end of next year. But with crude oil experiencing its largest slide in history, (in dollars) OPEC hawks Iran and Venezuela called for production cutbacks, to put a floor under the market at $100 /barrel.

On Sept 8th, OPEC chief Chakib Khelil said he expected the oil market to be oversupplied at the end of this year. "There is plenty of oil in the market, stocks are pretty good. There will be an oversupply of one-million bpd by early next year," he predicted. Khelil also noted that oil prices were easing as the value of dollar rose. US crude fell to under $102 as the dollar hit an 11-month high against the Euro. "What we are seeing now is the inverse relationship between the US dollar and the oil price is verified. The dollar is strengthening, the oil price is going down," he added.

In a compromise, to placate the mullahs in Tehran, the Saudis agreed to a surprising cutback in oil output, in an effort to stabilize the market. OPEC is pumping roughly 790,000 bpd above target, the bulk of which comes from Saudi Arabia, the central banker of oil, which is pumping around 750,000 bpd above its official quota. "If you do your own calculations properly, OPEC will be a lowering its production by about 520,000 barrels per day," said OPEC chief Khelil.

But the Arabian monarchs also have their eyes on the US political calendar, and have driven oil prices lower, in order to help John "Maverick" McCain get elected, and become the next commander in chief of the US armed forces in the Persian Gulf. On August 31st, South Carolina Senator Lindsey Graham reminded the Arab oil kingdoms that Democratic vice-presidential nominee Joe Biden lacked the backbone to stand up to powerful foes or to fix broken governments in the Middle East.

"Biden has national security experience. But experience and judgment need to come together. Biden voted against the first Gulf War to evict Saddam Hussein from Kuwait. He opposed the surge in Iraq. He wants to partition Iraq," Graham said. As chairman of the Senate Foreign Relations Committee, Biden did oppose the recent US troop buildup to defeat al-Qaeda and has called for separating Iraq into three autonomous provinces - Shiite, Sunni, and Kurdish, which is diametrically opposed to the views of the Arab oil kingdoms in the Persian Gulf.

Between now and Nov 4th, the Saudi and Kuwaiti monarchs will attempt to put a lid the oil market, allowing US gasoline prices to trickle lower, and ease the anxieties of jittery swing voters who are worried about the economy. Soybean and corn prices have already plunged by 30% since early July, in sympathy with lower oil prices, and with a little bit of luck, Americans might see lower food prices before the November 4th election. What's likely to happen to the oil market after Nov 4th, will be presented in the upcoming Sept 12th edition of Global Money trends.

Not since the contest between Jimmy Carter and Ronald Reagan in 1980, has expectations of the outcome of a US-presidential election impacted the currency markets in a big-way. In 1980, any signal that Carter was pulling ahead in the polls, would send the dollar plummeting in the foreign exchange market. Conversely, Reagan's landslide victory, by a 51% to 41% margin in the popular tally, and a whopping 489 to 49 in electoral-college votes, set in motion a vigorous four-year bull-run for the US dollar, and lifted the greenback to 3.50 German marks.

In 1980, when Reagan defeated Carter, the British pound lost 10% vs the dollar after six-months, 22% after one-year and 47% by the end of Reagan's first term. The "Reagan Revolution" included big tax cuts, and wide swaths of working-class Democrats defected to the Republican Party, which Mr McCain hopes to attract in the weeks ahead, with his plan to stimulate the US economy by cutting the corporate tax rate 10% to 25%, and extending the Bush tax cuts beyond 2010.

There are several reasons that explain the sudden plunge in the Euro, including the unwinding of "yen carry" trades, but few traders have noticed that the dollar's resurrection is mirroring the odds of a McCain victory in November. Futures traders dealing at the on-line parlor Inntrade, based in Dublin, Ireland, have lifted their bids on "Maverick" McCain to a 47.5% probability of winning the election, up from 30% in mid-July. The perceived shift in "Maverick" McCain's" political fortunes are linked to the latest Gallup poll, putting him 5% ahead of Mr Obama, due to a huge 15% shift of independent voters and women, leaning towards Alaskan governor Sarah Palin.

Governor Sarah Palin of Alaska introduced herself to America before a roaring crowd at the Republican National Convention last week, as "just your average hockey mom" then pitched herself as a champion of government reform, sliced and diced Democratic candidate Barack Obama as an elitist, and attacked the liberal media. McCain wants to put Sarah Palin in charge of US oil and energy policy if he becomes president, to lessen American dependence on foreign sources of oil, which in turn, could have a big impact on the dollar in the years ahead.

Alongside McCain's jump in the polls, the US-Dollar Index rallied 12% towards the 80-level, gaining support from the emergence of a militaristic Russia, which invaded South Ossetia and Abkhazia, and threatened to cut-off energy supplies to Europe. Kremlin kingpin Vladimir Putin has refurbished the US-dollar's traditional status as a "safe haven" currency. Not since the end of the Cold War, has the US-dollar been treated as a "safe-haven" currency in times of dangerous geopolitical turmoil.

Nowadays, the Persian Gulf oil kingdoms regard the possibility of a nuclear armed Iran as a "dire and direct threat" to their own existence, and are flocking to the US-dollar as a safe haven. The sovereign wealth funds (SWF's) controlled by Dubai, Abu Dhabi, Kuwait and Saudi Arabia have roughly $1.7 trillion between them, dwarfing the largest private equity funds in the world. During the first half of 2008 alone, Saudi Arabia raked in $192 billion from oil exports,just $2 billion less than the kingdom's total oil export revenues in 2007.

With their enormous size, the Persian Gulf SWF's can easily move global financial markets. By 2015, the Persian Gulf SWF's could grow to $5-6 trillion. If Chinese, Russian, and Korean SWF's are taken into account, the total global SWF value could top $12 trillion, or almost equal to the output of the Euro-zone's economy. SWF's are quickly becoming the most powerful investors in the world, and account for 12% of the trading volume in commodities. Their activities will increasingly impact financial markets, and the distribution of strategic resources.

Russia holds the world's largest natural gas reserves and the eighth-largest oil reserves. It supplies one-quarter of Europe's oil supply and 30% of its natural gas. In July, deliveries to the Czech Republic through the Druzhba pipeline were cut by 40% after Prague signed an agreement with the US to install an anti-missile shield. The emergence of a militaristic Russia, under former KGB spy master Putin, in alliance with the "Axis of Oil," has tarnished the Euro's stellar image, and added an extra degree of risk in investing in European stock markets.

Putin has declared that a new Cold War with the West has already begun and is considering arming Russia's Baltic fleet with nuclear warheads and pointing them at European cities. "Of course we are returning to those times. It is clear that if a part of the US nuclear capability turns up in Europe, and, in the opinion of our military specialists will threaten us, then we are forced to take corresponding steps in response. The strategic balance in the world is being upset and in order to restore this balance, we will be creating a system of countering that anti-missile system. Naturally, we will have to have new targets in Europe," Putin warned.

Since Russia invaded South Ossetia and Abkhazia on August 7th, the Kremlin's foreign exchange reserves have declined by $16.4 billion, the biggest outflow of capital since the country's financial meltdown in 1998. Foreign investors, who hold roughly half of all Russian shares outstanding, many listed in London and New York, have sold an estimated $20 billion of Russian stocks. The Russian central bank was forced to sell US$5 billion in the foreign exchange market to stabilize the Russian rouble, after it tumbled 10% against the resurgent US$, to a one-year low.

While the Kremlin's coffers have mushroomed, the Russian corporate sector is still heavily reliant on foreign investors. The local bond market is small, with just $60 billion worth of ruble issues. Russian companies borrow funds on the world capital markets, and foreigners own half of the $1 trillion debt. But now, Russian companies are facing a liquidity crunch, since foreign lenders are balking and won't touch any Russian paper. The impact on the Russian stock market has been severe.

The Russian Trading system Index (RTS) was roiled by the exodus of foreign investors, who are on high alert for political risk. Since peaking in May, the Russian stock market plunged 40%, shaving roughly $500 billion from the value of Russian stocks. Foreigners dumped large blocks of Russian mining companies after Kremlin kingpin Putin, accused a large steel and coal mining company, Mechel, MTL.n of tax evasion, causing its share price to collapse. When Putin targets a company, there can be dire consequences, such as the demise of Yukos, a big oil company that was bankrupted on trumped-up tax charges.

Roughly half the RTS Index is comprised of energy related companies, which have also been hard hit, by the slide in crude oil prices to $102 /barrel. Soaring oil prices were behind Russia's political and economic resurgence, and help lift the RTS Index by an astounding 720% from six-years ago. But nowadays, the term "Peak Oil" is invoking images of a peak in oil prices and global demand, due to a synchronized slide in the global economy, rather than fears that the world is running out of oil.

One big surprise at this week's OPEC meeting was the presence of Russian deputy prime minister Igor Sechin, sent by Putin, who announced that "Broad cooperation with OPEC is one of Russia's top priorities. OPEC is one of Russia's key partners on the global oil market." In the past, Russia has agreed to trim production in line with OPEC output cuts to support prices, and traders must monitor Putin's next move.

Most interesting is the observation that the Euro's slide against the US$, is the near-perfect inverse image of the US-dollar's climb against the Russian rouble. The emergence of militarist Russia, ready to aim its nukes at Europe, and a stranglehold over Europe's energy supply, has triggered a mini-flight of capital from the Euro and the Russian rouble. In contrast, the US-dollar, backed by the world's most powerful military, wins by default as a safe haven.

The foreign Exodus from Brazil's Bovespa stock exchange, EWZ, and undermines the Brazilian currency The Real.

Yet there appears to be more reasons behind the US-dollar's rally against all major foreign currencies, than just its newly polished image as a "safe-haven" currency. Brazil is not under any threat of military attack from Russia or Iran, and it's self-sufficient in energy, yet it's currency, the real, has lost -14% against the US-dollar in recent weeks, even though Brazil's interest rates are +11% higher.

Foreign investors pulled money out of Brazil's stock market for a third straight month in August, triggered by the steepest plunge in commodities in five decades. Slumping commodity prices led Sao Paulo's Bovespa stock index sharply lower, to below the psychological 50,000-level, or 34% off from its May 20th all-time high. More than half of the Bovespa index is made up of natural resources companies and steel mills, whose fate largely hinges on the direction of the global economy.

The Dow Jones Commodity Index has tumbled 27% from a record high set eight weeks ago. Steel prices have plunged 30%, and soybeans are 30% lower. Brazil had posted a trade surplus of $40 billion last year on exports of $160 billion, and strong demand for commodities helped secure a 27% jump in exports, from January to July of this year, compared to the same period a year ago.

An unwinding yen carry trade unravels Brazil's trade surplus.

Latin America's largest economy enjoyed a current account surplus for the last five years, its currency rose to a nine-year high while the central bank stockpiled enough US-dollars to pay off its entire foreign debt and become a net creditor for the first time. But imports are growing at twice the rate of exports this year, due to the super-strong real, and Brazil's trade surplus plunged 42% in the first half of this year. Now the virtuous cycle is moving in reverse, as commodity prices slide, and foreigners repatriate their money, to avoid losses related to the Bovespa index.

The unwinding yen carry trade has deleverage the top two emerging markets.

The Brazilian real has plunged 10% in the past 10-days to 1.77, its lowest level against the dollar since February. The performance of Brazil's currency and stock market, which largely hinge on the direction of commodity markets, haven't differed much from Russia's. These top-2 emerging markets are leveraged plays on the global economy, and when commodities trend lower, it has a double barreled selling effect on emerging markets.

My Personal Investment Strategy
ActionPoints in article Index Watch For September 15, 2008 provides the article Weekly Dollar Chart which shows $80.40 to be strong resistance for the US Dollar.

Gold trades inversely of the US Dollar, and so the implication is that gold has the potential to go up, as the US Dollar hits resistance and falls lower.

Jesse documents that there is a terrific number of futures contracts long the US Dollar in article US Dollar Weekly Chart with Commitments of Traders which says: "The explosion in the open interest, which is unprecidented in our memory, and the record level of funds long positions suggests a blow off top driven by forced panic buying probably in some short of squeeze or unwind."

I take the comments recognising that Jesse is a Dollar Bear and a Gold Bull, so I tone it down a bit and think that there is a massive position long that is supporting the US Dollar.

From reading the Gary Dorsch article "Maverick McCain" and the Resurrection of the US$, I conclude that the future postions are probably owned by the Saudis, who are likely to hold their position until their McCain-Palin team is elected.

The falling EUR/JPY, that is a falling Euro, FXE, since the selling by speculators of oil futures on July 14, 2008, enforced by a historic level of longs in the futures market for the US Dollar, $USD, has sent the price of gold lower, and will likely continue to send gold lower even more ... FXE and FXY ... Chart of FXE:FXY -- EUR/JPY

Soon we will have a systemic risk event, most likely, a "liquidity scare" will come, on issues surrounding mortgage backed securities, credit default swaps, CEDS, counterparty risk, and the inability of financial organizations to obtain capital due to FASB 141.

When the world wide financial breakdown comes, and only then, will gold rise in value, and establish itself as the defacto international currency, and means of garnering and maintaining wealth.

I am currently long a few SKF and have a few gold coins, so it's going to be a while before I see any investment gain.

Gold could easily fall to the $650 to $675 to $690 range shown in the July 11, 2007 Kitco Alf Field article Gold We Have Lift Off

The Jesse article Gold and Oil Long Term Weekly Charts As of August 27, 2008 provides the chart of gold where $675 is seen as strong support.

Dollar Exuberant Stocks Will At One Time Fall ... I Present These Charts As Tombstones To The Bygone Era Of Prosprity
CY, BBBY, PLCE, AAPL, AZO, ITB, QCOM.

In fulfillment of Bible prophecy of the Revelation 13:1-4, a Beast System has arisen to dominate mankind: a major component of the world system is the trans-Atlantic EU US Western World Government which was announced in Washington DC on April 30, 2007 by President Bush at the 2007 EU US Summit.

A confrontation between the trans-Atlantic EU US Western World Government, and Iran, is imminent over its nuclear ambitions, and will manifest as a military strike on Iran, by the EU US naval armada currently residing in the Persian Gulf.

The Beast System is totalitarian and sovereign in nature; and rules over three other world governments, the East, the North. and the South, prophecied to come a final world conflagration, know as the Battle of Armageddon, of Revelation 16:16, to be located on the expansive plain of Mageddo.

The prophet Daniel wrote that the EU US World Governor, the Sovereign, will meet his doom at Mageddo: "But rumors from the East and from the North will disturb him, and he will go out with great wrath to destroy and annihilate many. "He will pitch the tents of his royal pavilion between the seas and the beautiful Holy Mountain; yet he will come to his end, and no one will help him. (Daniel 11:44-45)

I. An Early Morning Financial Market Report For Friday August 29, 2008

A. Dollar And Gold Traded Volatily As The Battle Unfolds For Rulership As The World's Currency
Charts from Kitco.com showed high volatility in gold, $GOLD, and the US Dollar, $USD today.

The Yahoo Finance 5 day chart of the gold ETF, GLD, and the Dollar ETF, UUP showed gold up and the Dollar down in early moring trading; but by the end of the day, the situation reversed as the Euro, FXE, fell throught the day ... GLD UUP at end of day shows UUP up 0.04% and GLD down 0.6% ... FXE fell throughout the day.

Of note: August was a very good month for the dollar with the currency seeing its strongest 1 month rally in more than 15 years.

Mr. Danish in FXDD article USDJPY Breaks Supports behind Japanese Economic Stimulus Package provides a handy chart of the USD/JPY.

The struggle between the US Dollar, $USD, DX, will soon be over with gold, $GOLD, rising supreme and the dollar vanquished

INO.com provides the ongoing US Dollar Index, DX, Dow and Gold, $GOLD, Chart page.

B. USD/JPY Fell Trading To Trade Around First Support Level Of 108.95
FXStreet reports that the USD/JPY fell to 108.7. The dramatic news here is that the dollar carry trade is unwinding.

PFGlobal provides an ongoing chart of the USD/JPY; it shows that the USD/JPY has fallen to the edge of its channel.

James Chen in article FXStreet article USD/JPY Update - Key 108.50 Level provides this chart of the USD/JPY.

My-Zue presents the article Action Forex Market Overview Aug 30 08 Yen Could Dominate in a Week of Central Banks and Key US Data which relates: "The Japanese yen was the biggest winner last week as seen with yen crosses topping the top movers chart. While most of the moves were done on Friday following the 170pts fall in Dow, such declines did have the significance of indicating that yen is regathering strength for medium term rally. As discussed before, most yen crosses should have topped out in Jul, except USD/JPY. The pair has been steady due to dollar's strength but upside momentum was seen diminishing after making at high at 110.66. Outlook is mixed in the pair for the moment with possibility of a reversal. And if the last defense is taken down and USD/JPY does reverse, further massive buying could be seen in the yen which pushes other yen crosses further lower. This will probably be the main focus in September."

Marketiva ocvers the USD/JPY and provides this hourly chart of USD/JPY trading on Friday August 29, 2008 as well as the daily chart which shows 'Peak Dollar' on August 15, 2008, and Friday's breakdown and fall through a 'broadening top pattern' at 109; one can see how the USD/JPY took the US Dollar Rally up both in the Dollar itself and in stocks on July 15, 2008.

The effects of today's fall in the USD/JPY are limited -- oil and gold are stabilizing, as well as the US Dollar. These are in a struggle of their life for supremacy and sovereignty as the global ruling currency.

Ye Xie and Gavin Finch of Bloomberg report that Dollar Falls Against Yen as Personal Spending Slows in July

C. The Dollar Rally Is Over
Although the Dollar is trading higher, the Dollar Rally in stocks is over as the financial sector, IYF, having risen to 50 day support is falling sharply; and as is seen in the ratio of US Stocks to World Stocks, VTI:VEU and VTI:EFA, turning lower on August 15, 2008.

The fall in the financial sector has caused the Russell 2000, IWM, $RUT, to fall, causing a doji candlestick to form at 73.83 which is immediately below strong resistance at 74.00. Support lower for the Russell is found at 73.40, 73.00, 72.00, 70.75, 70.11.

The chart of the Russell 2000 Value share compared to the growh shares, IWN:IWO, shows a dark cloud cover candlestick, suggesting that the value shares, IWN, are now going to start to fall faster than the growth shares, IWO.

Of all the indices, the Nasdaq, QQQQ, $COMPQ, is off the most, that is 2.2%, being taken down by the Nasdaq 100, QTEC, which is off 2.9%.

Semicondutors, SMH, are off 3%.

Google, GOOG, is off 2%.

Just as a rising USD/JPY was benefecial for the dollar driven stocks of the Nasdaq; a falling USD/JPY is now going to be bearish for rimm, adbe, csco, ctsh, orcl, intc, aapl, mcd, hd.

And vice-versa as well; falling Nasdaq stock prices are going to pull the US Dollar down

Losses for these lynchpin stocks are as follows:
RIMM -4%
ADBE -3%
CSCO -2.5%
CTSH -2.5%
ORCL -4%
INTC -3%
AAPL -2%
MCD -1%
HD -.5%

D. The EUR/USD Moves Down Below Pivot Level 1.4729
FXStreet reports that the EUR/USD fell to 1.470. The EUR/USD has its biggest monthly fall ever, this August.

This action came as the yen carry trade unwound as described below; ActionForex provides charts of the EUR/USD in article EUR/USD Weekly Outlook Aug 30 08.

E. The EUR/JPY Moved Down Below 1.60
FXStreet reports that the EUR/JPY to 159.38. The dramatic news here is that the yen carry trade is unwinding which is powerfully seen in the Yahoo Finance 5 day chart of FXE and FXY. Had not the USD/JPY fallen, gold and oil would have fallen significantly.

ActionForex provides charts of the EUR/JPY in article EUR/JPY Weekly Outlook Aug 30 08.

The HUI Indexed precious metal mining shares, GDX, are disconnecting from the price of gold, and are falling lower with the metal and mining shares, XME, the Brics, EEB, the emerging markets, EEM, and China, FXI, as the latter falling the most as it had risen the most up to 50 day moving average.

I have continually documented that the gold shares have been falling relative to physical gold ever since early November 2007 2007; and today is no exception: GDX is down 0.7 while GLD is up 0.5%. The Yahoo Finance ongoing 1 year chart of GDX compared to gold shows the disconnect quite well. The Yahoo Finance six month chart of GDX relative to gold shows the disconnect picked up steam in mid-March 2008 as the Fed announced facilities of TAF, TSLF and PDCF ... One year GDX GLD .... Six month GDX GLD

The Yahoo Finance 3 month ongoing chart of the energy service providers, OIH, compared to gold, GLD, shows that the yen carry traders began to sell their deep investments, that is investments made long ago in the energy service companies, in mid June 2008, as risk aversion grew to decreased invesment opportunities, caused by dwindling growth world wide, and as the announcements of the May 19, 2008 Bank of Japan meeting were released, and carried by news services such as CEP News on Forex websites such as ActionForex.

The unwinding yen carry trade has induced the British shares to fall significantly lower as Lukanyo Mnyanda and Andrew MacAskill of Bloomberg report Pound Set for Monthly Loss as Confidence Holds Near Record Low.

Part of the reason why the yen carry trade unwound today is that Aaron Pan and Tracy Withers of Bloomberg are reporting that Australia, New Zealand Dollars Log Monthly Drop on Rate Outlook.

The unwinding yen carry trade also induced the other commodity currencies Swiss Krona, FXS, and the Canadian Dollar, FXC, to fall.

II. End Of The Day Comments
We are on the verge of an epic investment shift: gold is soon going to arise as the defacto world currency and means of garnering and accumulating wealth.

The struggle between the US Dollar, $USD, DX, will soon be over with gold, $GOLD, rising supreme and the dollar vanquished.

The Yahoo Finance 5 day ongoing chart of the Euro, FXE, compared to the Yen, FXY shows how the yen carry trade unwound this week.

Even though the USD/JPY unwound some as well, the lower Euro, FXE, that came via the unwinding yen carry trade, kept the US Dollar high as is seen in the chart of the Yahoo Finance 5 day ongoing chart of UUP vs GLD. And gold rose 1% on the week, as lack of supply at coin dealers and jewelrs maintained price up.

The Yahoo Finance 3 month ongoing chart of the energy service providers, OIH, compared to gold, GLD, is most helful in understanding the dramatic shift that is about to take place ... 3 month OIH compared to GLD

July 25, 2008 definitely marked 'Peak Currencies', this is seen in the fall of both Gold, GLD, and the natural resource stock leader OIH, falling lower seen in the chart.

August 15, 2008, through today August 29,2008, for all practical purposes has marked 'Peak Dollar' as gold rose from its 'spiked down' bottom as seen in the chart. The word 'spiked' comes from the volleyball terminology like in volley "spike down".

Note the trajectory in gold since August 15, 2008 -- is up.

Note the trajector in the energy service shares -- is topping out and turning down.

The bottom line here is that, wealth can no longer be garnered in investing long the markets, long the US Dollar, and certainly not in any of the commodity currencies such as FXE, FXA, FXS, FXC.

The US Dollar, $USD, closed the week up 0.65% in a doji at 77.31.

The Dollar ETF, UUP, finished the week up 0.63% in a doji at 23.94.

Gold, $gold, closed the week up 0.20% in a doji at $835.20.

The gold ETF, GLD, finished the week up 0.78% in a gravestone doji at 81.71.

Oil, USO, closed the week up 0.36% in a gravestone doji suggesting a fall lower.

The Russell 2000, $RUT, finished the week 0.26% higher in a long legged doji at 739.50

The DOW, $INDU, finished the week 0.72% lower.

The S&P, $SPX, fininshed the week lower 0.73% lower.

The Nasdaq, $compq, finished the week 1.95% lower. Jack Chan of JC's Buy and Sell Signals, gave his sell signal on the Nasdaq, QQQQ, several days ago.

The homebuilding stocks have been at the forefront of the Dollar Rally, that began July 15, 2008. Thier ETF, XHB, manifested a doji at 19.73 after having hitting resistance of 20 and falling lower. Here is the MSN comparsion chart of mth, kbh, spf, ctx, bzh, hov, len.

The weekly chart of XHB shows a 3.9% rise to 50 day moving average on falling volume: this implies a completion of rally.

The trucking group, was the worst performer, falling 7%, led by its single member, Ryder System, R. A brokerage analyst downgraded the trucking sector, predicting that freight volumes in the peak shipping season through November might be weaker than expected because of the soft US economy.

The transportation sector, ITY, like the industrial sector, IYJ, like the overall US stock turned down on August 11, 2008 -- days before Peak Dollar on August 15, 2008.

III. Fiat Wealth Will Be Destroyed By The "Saws Of Liquidity" ... Gold Will Arise As The Defining Measure And Means Of Wealth
The US Central Bank lowering of interest rates and provision of the Facilities Of TAF, TSLF and PDCF, was one of two well springs of wealth. It ran dry on May 19, 2008 as the TAF rally ended.

The other well spring of wealth has been been the Bank of Japan 0.5% interest to fund interest rate differential currency investing, in first the BRICS, and then in the emerging markets, and then most recently in the US beginning on July 15, 2008, as the yen carry traders sold oil, USO, and the metal manufacturing stocks, XME, and the gold stocks, GDX, to take profit and invest in the financial sector. They have been selling their interest in the US stocks on August 15, August 22, and today August 29, 2008, as can be seen in the fanning of the US stock ETF, VTI.

Risk aversion to investing long is rising due to level two assets and level three assets at banks, the announced liquificiation and capitalization of Freddie Mac, FRE, and Fannie Mae, FNM, rising inflation, decreased growth opportunities, and reducing corporate profits: this effectively has shut off the other well spring of wealth.

Now the falling currency pairs, USD/JPY, EUR/USD, and EUR/JPY will act to delever all forms of fiat wealth lower; these will act like saws on wood cutting and destroying wealth.

However in the process, the hidden jem of wealth, gold, burried away in the wood, will emerge as that which economically sustains.

Even though stocks sold off, US Treasuries, TLT, did not pick up the slack, they fininshed the week in a a doji, much like the previous dojis in mid December in 2007, and in mid March 2008, suggesting that the bond market place is once again going to call market place interest rates higher, such as the interest rate on the 30 year US Government bond, $TYX, even though the Federal Reserve is keeping its rate at 2%. The US Government bonds are most likely going lower very soon. Here is Jack Chan's, JC's Buy and Sell Signals, chart of TLT.

When trading resumes Tuesday, September 2, 2008, I fully expect the financial sector to lead the US stock market lower next week.

Given the projected fall in wealth, clearly a investment in gold is the way to go to preserve and possibly garner wealth. An insight of caution comes from Here is Jack Chan's, JC's Buy and Sell Signals, chart of the gold ETF, GLD as well as USO, both of which are currently influenced by the same currency trading dynamics.

I envision gold rising in value in relation to oil -- I envision GLD:USO rising from 0.84.

I envision gold and oil stabilizing.

I envision energy service stocks, OIH, falling, just in the same manner, that gold stocks disconnected from the price of oil; a hint of such being seen in the comparative chart of GLD, USO and OIH from August 15, 2008, throught August 29, 2008.

Here is Jack Chan's, JC's Buy and Sell Signals, chart of the energy services ETF, OIH; I believe it will deteriorate quickly compared to gold, GLD.

Prieur du Plessis writing in Safehaven.com article
Words from the (Investment) Wise for the Week That Was (August 25 - 31, 2008) relates: "West Texas Intermediate crude, $WTIC, traded between $115.0 and $118.76 a barrel last week before closing 0.8% up at $115.46 on Friday. The gain was relatively small given the impending arrival of Hurricane Gustav and concerns about the geopolitical situation with Russia, but word from the Department of Energy that it would release strategic oil stocks to combat any disruption kept oil prices in check. (The Gulf of Mexico is responsible for 25% of US crude oil production and 15% of US natural gas production.)

IV. We Have Passed Out Of The Age of Prosperity That Came Via Financialization And Securitization
The Commodity Futures Modernization Act, along with the repeal of the Glass-Steagall Act, set in motion the events that are now battering the financial system; this is desribed in the article 'How Phil Gramm and the Wall Street Investment Banks Helped to Destroy the US Financial System'.

Eddy Elfenbein writing in article August 29, 2008, Ouch! documents how rapidly the power and wealth of investment capitalism has gone toxic: "The $14bn in losses for 2007 and the first two quarters of 2008 equal half of Merrill’s profits since the beginning of the ­decade."

The Summit Of International Bankers in Jackson Hole Wyoming proved fruitless to provide financial stability. Krishna Guha of Financial Times in article Bankers Caught Between Hope And Despair reports that "More than a year into the credit crisis, the world's top central bankers admit they are still in the dark as to what its ultimate impact on the global economy will be. By the same token they are unsure to what extent weakening growth will help to ease high inflation. There is enormous uncertainty about where we stand at the moment,' Stanley Fischer, governor of the Bank of Israel, said at the close of the Federal Reserve's annual retreat in Jackson Hole, Wyoming. His comments came as US Treasury officials worked through the weekend on options for Fannie Mae and Freddie Mac, the troubled mortgage groups, amid expectations an announcement could come this week. "Mr Fischer told central bankers from 43 nations 'we are in the midst of the worst financial crisis since World War II'. But it was still not clear how big an event it would turn out to be. So far, he said, 'in real economy terms we are not looking at anything exceptional'. But the crisis was entering a 'second round' in which economic and financial weakness could feed on each other. Other current and former central bankers shared this view. Alan Blinder, a former Fed vice-chairman, said: 'It is amazing a year later how much is still unresolved.'

Asha Bangalore of Northern Trust in article Consumer spending - strong likelihood of decline in Q3 reports that "Nominal consumer spending increased 0.2% in July, following a 0.6% gain in June. However, inflation adjusted consumer spending fell 0.4% in July after a 0.1% decline in June. Consumer spending will have to advance in leaps and bounds in August and September for a flat reading in the third quarter. In other words, a decline in third quarter consumer spending is nearly certain. Assuming our forecast is accurate, this would be the first quarterly decline in consumer spending since fourth quarter of 1991."

BCA Research reports: "Our investment spending model forecasts that capex growth will drop to zero by the end of the year. Sticky corporate bond yields, and a further slowing in final demand at home and abroad, will cause companies to defer expansion plans: expect more weakness ahead."

BeSpoke Investment Group in article Credit Sreads Continue To Get Worse reports: "FDIC Chairman Sheila Bair commented in a press conference this afternoon that she expects the credit markets to continue to worsen, and judging by the recent action in credit spreads, the market seems to agree. According to Merrill Lynch data, interest rates on investment grade corporate bonds are currently not only at higher levels than they were at the Bear Stearns low, but they are also at their highest levels ever. As of yesterday's close, investment grade corporate bonds were yielding 312 basis points more than Treasuries, which is a 118% increase over year ago levels."

V. Today The World Transitioned Into Kondratieff Winter
If there ever was a trasitional day, an epic day, a watershed day; today was the day that introduced Kondratieff Winter as marked by
1) the fall of Dell stock value on announcemnet of decreased growth and profits.
2) the breakout of the bear market semiconductor ETF SSG and Nasdaq ETF QID.
3) the fall of both the world stocks, VEU, and the US Stocks, VTI,
4) http://my.opera.com/richardinbellingham/blog/ssg-and-qid-have-been-in-breakout-for-two-weeks

We have likely reached 'Peak US Treasuries', with evidence coming from
1) the gravestone doji in the zero coupon bond mutual fund BTTRX,
2) the gravestone doji in the US Treasuies in the futures market place, $USB.
3) The breakout of the Proshares Bear Market ETFs, SSG and QID.

I find the chart of US Treasuries, TLT Daily and TLT Weekly frightening. Most consider government bonds to be the life boat of safety; I do not. I shuddder when I think of the cataclysmic fall that is coming, and the social impact that the fall will have on people living in America.

In as much as I have written the Liquidation Thesis, which holds that government services and payments, service sector jobs, public and private debt of all types, and unfunded retiree benefits are going to be liquidated, that is done away with, I've already done my weeping and mourning.

Kondratieff Winter has a political component as well as an economic component; and commentary by DrKrbyLuv in Elaine Meinel Supkis article 'One Year Of Bad Banking Continues', provides some insight into the dynamic of political chaos.

A systemic risk event or events will quickly unfold, which will be the cornerstone of Kondratieff Winter producing a finanical system meltdown.

Numerous systemic risk potentialities abound. One is that of credit drought progressing to becomer credit gridlock where corporations cannot obtain cash to refund long term debt as it comes due. Carrick Mollenkamp of the Wall Street Journal reports: "U.S. and European banks, already burdened by losses and concerns about their financial health, face a new challenge: paying off hundreds of billions of dollars of debt coming due. At issue are so-called floating-rate notes -- securities used heavily by banks in 2006 to borrow money. A big chunk of those notes, which typically mature in two years, will come due over the next year or so ... That's forcing banks to sell assets, compete heavily for deposits and issue expensive new debt. The crunch will begin next month, when some $95 billion in floating-rate notes mature. J.P. Morgan Chase ... Analyst Alex Roever estimates that financial institutions will have to pay off at least $787 billion in floating-rate notes and other medium-term obligations before the end of 2009. That's about 43% more than they had to redeem in the previous 16 months. The problem highlights how the pain of the credit crunch, now entering its second year, won't end soon for banks or the broader economy ... As banks scramble to pay the floating-rate notes, they could see profit margins shrink as wary investors demand higher interest rates for new borrowings. They're also likely to become less willing to make new loans to consumers and companies, aggravating economic downturns in both the U.S. and Europe."

Pierre Paulden of Bloomberg reports: "Merrill Lynch & Co., Wachovia Corp., Lehman Brothers Holdings Inc. and the rest of the U.S. finance industry are about to find out how expensive credit has become. Banks, securities firms and lenders have a record $871 billion of bonds maturing through 2009, according to JPMorgan Chase & Co., just as yields are at their most punitive compared with Treasuries. The increase in yields may cost them as much as $23 billion more in annual interest versus a year ago based on Merrill Lynch index data. Higher refinancing expenses will restrict the ability of banks to borrow in the capital markets and lend, further cutting off credit to consumers and businesses and curbing what is already the slowest growing economy since 2001. S&P said last week that it had a 'negative' outlook on almost half of the 50 highest-rated financial institutions in the U.S. as of June 30, the highest proportion in 15 years. 'The gears of capitalism are grinding to a halt,' said Mirko Mikelic, senior bond fund manager at ... Fifth Third Asset Management ... 'There is a tremendous concern over the banking sector and a scramble right now for capital.'"

Another systemic risk event that could easily eplode are issues surrounding the two GSE's. Financial Times relates that in article Fannie And Freddie Doubts Grow reports that "Shares in Fannie Mae and Freddie Mac fell on Friday amid concerns foreign investors were reassessing their exposure to the troubled US mortgage financiers' bonds and guaranteed securities". "Bill O'Donnell, analyst at UBS said: 'If this recent theme of cooling passions for GSE's debt becomes a longer-term trend, then it could be problematic for the GSEs given that the central banks have taken ... roughly 30% to 60% of new GSE issuance in recent months and years." "The US Treasury was granted powers last month to extend its credit lines to Fannie and Freddie and to invest in their debt and equity." The weekly charts show Fannie Mae, FNM, fell 14%, and Freddie Mac, FRE, fell 15%.

Times Online in article Buffett Predicts game Over For Fannie And Freddie relates: "For Fannie May and Freddie Mac the game is over. The Sage of Omaha has spoken. "Warren Buffett, the world's richest man, said it was no longer feasible for America's two biggest mortgage finance companies to exist independently. He went on to forecast that the US economy would remain in the doldrums for at least five months. "Fannie and Freddie, which underpin America's mortgage market by buying home loans and packaging them into bonds, did not have any net worth, Mr Buffett told CNBC. Both face losses of tens of billions of dollars on the bonds. Analysts said they look increasingly likely to need a cash injection from the Government and Mr Buffett said they were too big to fail, predicting: 'You will see some action fairly soon."

I have to ask the question: "If these organizations do not have any net worth, why, just why in the world should they be allowed to keep issuing debt"? Perhaps the answer is like Elaine Meinel Supkis relates: The Purpose Of Modern Capitalist Banking Systems Is To Create Increasing Debt And Not Increasing Wealth.

Another systemic risk is that US automakers will simply run out of money, and lacking access to credit, or sought after government loans to retool to the extent of $50 Billion as CNN News reports, go out of Business.

As a systmeic risk event unfolds, the US Dollar will tumble lower with all currencies; and authoritarian state corporate rule rising to enforce civil security laws such as the Security and Prosperity Partnership of North America, the SPP.

Two current example of authoritarian rule include the Glenn Greenwakd Salon article Police Preemptively Raid GOP Convention Protesters and the Sean Rayment Telegraph.co.uk report that Elite British SAS Force Has Taken 3,500 al-Qaeda Terrorists Off The Streets In Baghdad In The Last Two Years.

Society will become pyramidal with a few ruling elite at the top, government and industry stakeholders overseeing the factors of production, as well as commerce, finance and trade, and a pauperized mass of humanity at the bottom .

VI. Kondratieff Winter Will Be Experienced Globally
Marcus Gee writing in Globe and Mail article Warning Signs From The Centre Of The Boom reports of economic downturn in China:

"The ruling Communist Party is worried enough that Premier Wen Jiabao and other leading officials toured coastal export industries last month. Mr. Wen professed himself “very concerned about the difficulties they are up against.” Since then, the Politburo has met to underline its support for “steady and fast” economic growth, a shift from the previous emphasis on reining in the excesses of the economy.

After fretting for the past five years or so about how to keep the economy from overheating, Beijing is now faced with the novel problem of how to keep it from cooling. “If you're sitting in Beijing, you're saying, ‘We've already lost two percentage points of economic growth. How much more are we going to lose?'” said Nicholas Lardy, a senior fellow at the Peterson Institute of International Economics in Washington.

“That's a big turning point for the Chinese economy. That means questions of profitability, questions of unemployment, questions of social stability.”

In the textile industry, which employs 25 million workers, increasing wages and the rise of the Chinese currency, the yuan, have raised costs and made it more expensive for other countries to buy Chinese-made clothing. Energy costs are up too, and a new law forcing companies to provide social benefits to workers has increased labour costs for employers. As a result, hundreds of companies have moved their production to cheaper countries such as Cambodia and Bangladesh.

China's problems stem in part from its very success at turning itself into the world colossus in low-cost global manufacturing, an export dynamo whose rapid growth has been fuelled by cheap labour, energy, capital and a willingness to accept narrow profit margins.

It's a condition that Vitaliy Katsenelson labels “late-stage growth obesity.”

The director of research with Investment Management Associates in Denver, he coined the expression to describe what happens when economies and corporations expand at such a rapid clip they fall victim to inefficiencies that worsen as time goes on, particularly in a case like China's, where tight government control over the banking system, rampant crony capitalism and continuing corruption mean that capital is not always allocated on the basis of merit or need.

As a result, growth may be high, but its quality is low, which makes it even more likely that decisions on asset allocation will be poor.

He cites the famous case of the vast Dongguan South China Mall, named The Mall Of Misfortune, by Michael Donohue of TheNational, which was opened with much fanfare in Dongguan in 2005. Although larger than the West Edmonton Mall, it draws no more traffic than a typical small Canadian strip plaza and most of the 1,500 stores are vacant. It is the world's leading example of a 'Dead Mall'.

China's worst short-term problems lie in manufacturing, the engine of its spectacular growth.

As any Canadian producer can attest, manufacturing can be a volatile activity, prone to booms and busts. But the Chinese have enjoyed nothing but growth for 30 years, leaving industry with rising fixed costs, lots of excess capacity and workers they can't easily shed when demand finally declines.

As it becomes harder to meet payments on debt (the primary source of capital) and maintain payrolls, all those millions of people who were encouraged to migrate from farms to urban factory jobs will find their meagre livelihoods threatened.

“This is when you discover how dysfunctional this economy was,” Mr. Katsenelson says.

“It's a highly vulnerable country,” agrees George Friedman, chief executive of Stratfor, an Austin, Tex.-based company that provides global intelligence to clients. “With energy prices rising dramatically as a [cost] component, the ability of the Chinese economy to keep functioning the way it used to is in severe doubt.”

To begin with, China's financial system is not as solid as it looks. According to Mr. Friedman, the government's conservative estimate on the level of Chinese loans on which no principal or interest is being collected is $600-billion (U.S.). Stratfor's research places the actual figure at closer to $1.1-trillion, held by commercial banks as well as so-called asset management corporations, government entities set up to buy debts.

“Japan went south when non-performing loans got to about 20 per cent of GDP. South Korea, about 25 per cent,” Mr. Friedman says. “These guys [Chinese] are conservatively at 40 per cent of GDP. And then they get hit by commodity prices. So for China, it's the perfect storm.”

And inflation isn't licked yet. Though it has indeed moderated after a worrying runup earlier in the year, falling to 6.3 per cent in July from 7.1 per cent in June, a rate of 6 or 7 per cent is far above the average for the past decade of 1.3 per cent a year. And while the consumer price index is down, producer prices – which are what affect companies – rose 10 per cent last month.

VII. Kondratieff Winter Means An EU US Iran War, Fighting Terrorists, And Eventually The Outbreak Of World War III
EU US Iran War: A confrontation between the trans-Atlantic EU US Western World Government and Iran, is imminent over its nuclear ambitions, and will manifest as a military strike on Iran, by the naval armada currently residing in the Persian Gulf.

Fighting Terrorists: Umberto Pascali writing in GlobalResearch.ca article Obama's Running Mate Presents The Strategic Plan For The Next Administration quotes Joe Biden as saying at the Democratic Convention in Denver on August 27, 2008: "The fact of the matter is, al-Qaida and the Taliban - the people who have actually attacked us on 9/11 - they've regrouped in the mountains between Afghanistan and Pakistan and are plotting new attacks. And the Chairman of the Joint Chiefs of Staff has echoed Barack's call for more troops and John McCain was wrong and Barack Obama was right. Should we trust John McCain's judgment? When he rejects, when he rejected talking with Iran and asked what is there to talk about? Or Barack Obama, who said we must talk and must make clear to Iran that it must change?"

World War III: F. William Engdahl writing in GlobalResearch.ca article Missile Defense: Washington And Poland Jst Moved The World Closer To War writes that "The signing on August 14 of an agreement between the governments of the United States and Poland to deploy on Polish soil US ‘interceptor missiles’ is the most dangerous move towards nuclear war the world has seen since the 1962 Cuba Missile crisis. Far from a defensive move to protect European NATO states from a Russian nuclear attack, as military strategists have pointed out, the US missiles in Poland pose a total existential threat to the future existence of the Russian nation. The Russian Government has repeatedly warned of this since US plans were first unveiled in early 2007. Now, despite repeated diplomatic attempts by Russia to come to an agreement with Washington, the Bush Administration, in the wake of a humiliating US defeat in Georgia, has pressured the Government of Poland to finally sign the pact. The consequences could be unthinkable for Europe and the planet.

The preliminary deal to place elements of the US global missile defense shield was signed by Polish Deputy Foreign Minister Andrzej Kremer and US chief negotiator John Rood on August 14. Under the terms, Washington plans to place 10 interceptor missiles in Poland coupled with a radar system in the Czech Republic, which it ludicrously claims are intended to counter possible attacks from what it calls "rogue states," including Iran.

To get the agreement Washington agreed to reinforce Poland's air defenses. The deal is still to be approved by the two countries' governments and Poland's parliament. Polish Prime Minister Donald Tusk said in televised remarks that "the events in the Caucasus show clearly that such security guarantees are indispensable." The US-Polish missile talks had been dragging for months before recent hostilities in Georgia.

The Bush White House Press spoksperson, Dona Perino stated, officially, "We believe that missile defense is a substantial contribution to NATO's collective security." Officials say the interceptor base in Poland will be opened by 2012. The Czech Republic signed a deal to host a US radar on July 8.

The signing now insures an escalation of tensions between Russia and NATO and a new Cold War arms race in full force. It is important for readers to understand, as I detail painstakingly in my book, to be released this autumn, Full Spectrum Dominance: The National Security State and the Spread of Democracy, the ability of one of two opposing sides to put anti-missile missiles to within 90 miles of the territory of the other in even a primitive first-generation anti-missile missile array gives that side virtual victory in a nuclear balance of power and forces the other to consider unconditional surrender or to pre-emptively react by launching its nuclear strike before 2012. Senior Russian lawmakers said on Friday the agreement would damage security in Europe, and reiterated that Russia would now have to take steps to ensure its security".

Mike Whitney writes in GlobalResearch.ca article Nuclear Chicken in Poland: Putin Can't Afford to Back Down that: "If the Bush administration proceeds with its plan to deploy its Missile Defense System in Poland, Russian Prime Minister Putin will be forced to remove it militarily. He has no other option. The proposed system integrates the the entire US nuclear arsenal into one operational-unit a mere 115 miles from the Russian border. It's no different than Khrushchev's plan to deploy nuclear missiles in Cuba in the 1960s.

Early last year, at a press conference that was censored in the United States, Vladimir Putin explained his concerns about Bush's plan:

“Once the missile defense system is put in place it will work automatically with the entire nuclear capability of the United States. It will be an integral part of the US nuclear capability....And, for the first time in history---and I want to emphasize this---there will be elements of the US nuclear capability on the European continent. It simply changes the whole configuration of international security…..Of course, we have to respond to that.”

Nuclear weapons specialist, Francis A. Boyle, says the Bush administration's plans represent the “longstanding US policy of nuclear first-strike against Russia." In Boyle’s article “US Missiles in Europe: Beyond Deterrence to First Strike Threat” he states:

“By means of a US first strike about 99%+ of Russian nuclear forces would be taken out. Namely, the United States Government believes that with the deployment of a facially successful first strike capability, they can move beyond deterrence and into "compellence."… This has been analyzed ad nauseam in the professional literature. But especially by one of Harvard's premier warmongers in chief, Thomas Schelling --winner of the Nobel Prize in Economics granted by the Bank of Sweden-- who developed the term "compellence" and distinguished it from "deterrence." …The USG is breaking out of a "deterrence" posture and moving into a "compellence" posture. (Global Research 6-6-07)

Bush's real goal is to force Moscow to conform to Washington’s diktats or face the prospect of first-strike nuclear annihilation. Putin must respond".

VIII. As Kondratieff Winter Rushes In, Public Sentiment Swells Calling For A Change
Michael Charmichael writin in Huffington Post article Obama Obliterates McCain:

In Denver, Barack Obama faced his toughest challenge to date. In one crucial week, Obama desperately needed to halt his slide in a spate of recent polls. Facing the serious threat of popular momentum toward his opponent, Barack Obama delivered in the clutch and produced a Democratic National Convention that did much more than merely accomplish its mission.

Obama's ringing acceptance speech thrilled the enormous throng at Invesco Field. Turning the tables on McCain, Obama reversed the polarity of the presidential campaign. Obama's spellbinding oratory came not a moment too soon, but it will certainly catapult him upward in the polls with a renewed momentum that will obliterate the faltering surge of John McCain.

Delivering a historic acceptance speech that can only be compared with FDR and JFK, Obama clearly established his vision for America's future in the heart and mind of Middle America.

Against the backdrop of a convention that started cautiously but gradually found its balance and steadily built its narrative of suspense toward the dramatic climax in Invesco Field, Obama calmly yet passionately defined himself and his prescription for America in radical juxtaposition to the record of George Bush and the agenda of John McCain.

Seventy thousand of the faithful gathered in the massive arena to experience their personal epiphany at the epicenter of the Obama phenomenon. Never before in American history have so many people witnessed such an extraordinary political convention.

On the forty-fifth anniversary of Dr. Martin Luther King Jr.'s iconic "I have a dream" speech at the Lincoln Memorial, Barack Obama recaptured the moment when America pivoted from the age of Jim Crow to embrace Civil Rights. In captivating his audience, Obama painted a far broader spectrum of hope for positive change than even the redoubtable Dr. King.

Moving decisively into the process of change at the heart of his vision, Obama exploded every minute particle of the now totally shattered case for John McCain. Pointing to the multifaceted crisis confronting America -- from homelessness to massive unemployment and crushing poverty to the collapse of the mortgage industry then expanding his palette from the unjust war in Iraq to the collapse of confidence on Wall Street -- Obama demolished George Bush's America and his heir apparent, John McCain.

The tides of public momentum are massive and elemental energies. The collision between Barack Obama and John McCain is stirring primeval forces now building waves and crests and currents that ripple and crash against the shoals of time".

IX. Many If Not Most Professionals Take A Position 180 Degrees Different Than I Do And Write Bullishly
In many of my most recent articles I have made reference to the bullish position of the professionals who express the consensus of the marketplace today: the US Dollar and the US Stock Markets are going up.

Jay DeVincentis writing in Safehaven.com relates "Friday is day 38 in our Up Cycle.

The Stock Barometer signals follow 5, 8, 13, 21 and sometimes 34 day Fibonacci cycles that balance with 'normal' market cycles. Knowing where you are in the current market cycle is important in deciding how long you expect to maintain a position.

Potential Cycle Reversal Dates

2008 Potential Reversal Dates: 12/31, 1/11, 2/1, 2/13, 3/6, 4/5, 4/22, 5/23, 6/6, 6/27, 7/13, 9/2. We publish these dates up to 2 months in advance.

With 9/2 only two trading days away, we're within the window for a turn and I believe that turn will be higher."

Bill McLaren writing in Safehaven.com relates "The objective for this move up remains the 3//8 retracement of the entire bear campaign around the 1340 price level. Once the index moves above 1313 it becomes at risk of reversing but the probability of the 3/8 retracement is very strong. The index closed on the high and that could have been a temporary exhaustion but the 1340 level looks reachable. There are a number of Dow 30 stocks that have obvious multiple higher low basing patterns that should rotate out of those bases and bring about the continuation of the rally".

LiveMemories relates "Looking at various charts, I am getting more and more convinced that the worse of this bear market is now behind us ... The good ol' US Dollar seems to be the only bullish trade in town these days. I love this chart. It is a picture perfect bullish chart. While it does indeed look like the dollar is extended here, it can easily get a lot more extended ... The home builders index, XHB, is working on building a nice base here ... This may not be "THE" bottom in XHB. I am willing to bet it is".

The BeSpoke Investment Group takes note of the fact that 64% of stocks in the S&P 500 are currently trading above their 50-day moving averages: "As shown in the chart below, the reading has been creeping higher and higher since mid-July, and looks to be on its way to the 80% to 85% levels seen twice over the last year. Readings above 50% are signs of a healthy market, and it hasn't been above 50% for much of 2008."

J Clinton Hill relates "Hillbent’s advice is to stop shooting, lay down your arms, and prepare for the impending bull market".

Jacob Oubina, Currency Strategist at ActionForex relates "The USD will continue to strengthen. There are a plethora of top-tier US indicators due up in the week ahead. ISM manufacturing and construction spending kick things off on Tuesday. Factory orders and the Fed's Beige Book are due up on Wednesday. We will provide a detailed report on what to expect from the Beige Book next week. ADP employment, productivity and the usual weekly jobless claims data are due on Thursday while Friday closes out the week with the all-important NFP employment report (which) will likely be a case in point (to test the strength of the US Dollar). We will be watching closely to see if the USD is able to shrug off another expected job loss, which would be another indication of the long-term nature of the current USD recovery. Should the USD react more negatively, we'll take it as an indication that consolidation is ongoing".

Corey Rosenbloom, a Chartered Market Technician Candidate, remaks on the US Dollar: "I cannot underscore how powerful and meaningful this recent momentum impulse was and what it means for the US Dollar Index. This is one of the strongest upward surges in the index in years (both on the daily and weekly chart) and the assumption is that it is powerfully bullish for the Dollar. New momentum highs often precede new price highs.

The trend of the Dollar Index is now positively confirmed as “up” (after making a higher low, higher high, and then taking out that high) and then breaking solidly above moving average resistance.

In terms of the moving averages, the 20, 50, and 200 day moving averages are officially in the “most bullish orientation possible” in terms of the 20 being above the 50, with both above the 200. One cannot ignore this development - these moving averages now serve as expected price support.

The downtrend has ended and now we’re into a new environment - be sure to pay attention to all the intermarket relationships and economic realities that will come from this new development".

INO.Com relates of the USD/JPY: The September Dollar closed higher on Friday as it consolidates above the 75% retracement level of the 2007-2008 decline crossing at 77.20 with ongoing INO chart of the US Dollar Index, DX, seen here. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are diverging and turning neutral hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 76.33 are needed to confirm that a short-term top has been posted. If September extends this summer's rally, the 87% retracement level of the 2007-2008 decline crossing at 78.14 is the next upside target. First resistance is Tuesday's high crossing at 77.71. Second resistance is the 87% retracement level crossing at 78.14. First support is the reaction low crossing at 76.17. Second support is the 20-day moving average crossing at 76.33.

Chris Perruna relates "I was witness to the USD gaining some strength over the past few weeks while traveling. The large chart shows that this is the first true buy signal in more than 3 years (2005)'.

I feel it necessary to present my biography: I have no credentials or financial licenses whatsover; I am a low income blogger who communicates an observable and ongoing investment demand for gold and the 'Liquidation Thesis'. As a matter of course any investor should seek advice from a licensed investment professional before making any investment decision.

X. Get ready for some real excitement .... posssibly some shock and awe
DailyFX writes: "Interest rate expectations will play a pivotal role in the overall health of the carry trade next week as four G10 central banks are scheduled to deliver monetary policy decisions. It’s this high level of event risk on the horizon that shines a bright spotlight on the precarious position the popular Forex strategy".

XI. Investment Application
I recommend that one be invested 1/3 long SKF in a trust account, and 2/3 invested in gold at BullionVault and GoldMoney.

XII. Keywords and symbols used in this report
GLD, UUP, IYM, FXE, FXA, FXS, FXC, IYM, QQQQ, QTEC, SMH, EEM, USO, FXI, EEB, EEM, GDX, OIH, XME, VTI, TLT, VEU,

goog, rimm, adbe, csco, ctsh, orcl, intc, aapl, mcd, hd, fre, fnm

$GOLD, $USD, DX, $RUT, $COMPQ, USD/JPY, EUR/USD, EUR/JPY, FXE:FXY, IWN:IWO, $TYX

deadmall, deadmalls