June 7, 2006 2:47 GMT

The following are the Gold and Dollar excerpts from the May 29, 2006 issue of the Sid Klein Comment (SKC), which is available in its entirety via www.sidklein.com. The full SKC report is uploaded on a six-month lag. This excerpt for Gold-Eagle has been published on June 20, 2006.

CONCLUSION:

The massive sucking sound on world liquidity has many effects.

Gold and silver will correct in a largely sideways manner, before exploding toward $850, as forecast earlier this year.

The USD is bouncing on the Bernanke commentary, but the whole thing is ridiculously counterintuitive. With the Japanese holding the upper hand, regardless whether rates are raised or not, the USD will resume its secular bear market versus the Yen, imminently.

The Nikkei may have a sharp sell-off, but most of the damage has been done - certainly when compared to New York - and Japanese stocks themselves offer staggering potential now. Denominated in Yen, they offer an additional kicker. Further, our 50% position (25% of all wealth) in gold, soon to again be 100% (50% of all wealth), match perfectly together. This is SKC's asset mix. Gold and Yen-denominated domestic value stocks, provide the ideal mix, for both safety as well as leverage. What is safer than gold and what, besides Japanese domestic value stocks, have greater leverage? Gold alone will out-pace all major indices and maintain inflation-adjusted value…and then some!

Regarding the US stock market, this month's report wrote: "The Dow is now in its countertrend rally phase, after its initial pullback of about 5.5%. After the dramatic run-up to the 20 area, just as violently, the VIX has almost collapsed back to 14." This meant to short immediately. If you didn't do so, all that I can add is: Short now!

Sid Klein

LEGAL NOTICE: On this 20th day of June 2006, Mr. Sidney Klein has donated this market letter to the public domain.

DISCLAIMER: This market letter is intended to assist in the dissemination of information to private subscribers. The information contained herein represents Mr. Klein's best efforts in good faith to advance knowledge to his clientele, but there can be no implied guarantee as to its accuracy or completeness. The information is given as of the date appearing on this market letter, and Mr. Klein assumes no obligation to update the information or advise on further developments relating to the information provided herein. No solicitation to buy or sell securities is intended, and none should be inferred. Investments are inherently risky, but investment risk itself is a function of individual preferences. Thus any opinions, recommendations, or judgments expressed in this market letter are of necessity abstract and general. They must be modified, accepted, or rejected by individual subscriber/investors whose risk averseness cannot be known to Mr. Klein.