Dr. Clive Roffey
"Dear Clive,
Your article on Africa made my day. When my Great Grandfather came to Natal in the early 1870's after the Franco-Prussian war, he set up the first trading store in ………. Natal. It was amazing to see what he used to import even then, rifles, shotguns, pianos, organs, farming implements etc. In those days there were few blacks in Natal. This included Durban. Of course since then the population has exploded.
I met a black security guard the other day. He asked me how many children I had. I said none. He said he had 17. I asked him how he could support them on his R2,000 per month wages. He said, 'No problem, they live on the farm. With cows and mielies (corn) they didn't need much more.'
This huge black population increase on ever dwindling resources is insane, but it is the one thing African governments dare not touch. Then, as you say the black governments pull out the emotional blackmail. I think the world should just ignore Zimbabwe and that country should be given no more free electricity from South Africa. They must learn to look after themselves. Zimbabwe was a pretty good country 25 years ago, now it is one of the poorest countries in the world."
"Well I am a ……. farmer and employ a lot of female ………… (workers). With the introduction of social grants by our Government about 3-4 years ago of about R170-00 per child under the age of 14, I had a population explosion on my farm. Now once a month I have about half my staff at work, whilst they collect these grants, and then also take off time because all the kids need to go to the clinic. So absenteeism increases all the time and productivity decreases. I wonder where all these people will find work one day as the youth nowadays do not want to work on the farms because they are educated. When you drive past the schools you also wonder about the standard of education as the kids seem to be more out of the classrooms than inside. Futhermore, the more kids you have the higher your social grant. I wonder how much of that money is used for the kids?"
And those are typical comments from South Africa, a country that has a developed infrastructure and social system!!! Imagine what it is like in the less developed countries.
I believe there is no doubt that politicians and religious leaders should stop hiding behind tribal tradition and start to address the problem instead of attempting emotional blackmail on the developed nations. I note that that the G7 gave the cold shoulder to Gordon Brown's request for IMF gold sales to finance poverty. Lets hope it stays that way and pressure is put on politicians to put their birth rate in order before lining up with their begging bowls.
The gold price bounced off the $410 level that I detailed in the last issue. I need a price above $430 to trigger the next upside count to $485. I note that DROOY bounced off its $1.21 low to touch $1.55 for a 28% bounce. Suddenly all the DRD critics were noticeable by their absence last week. My analysis indicates that DRD has bottomed and should move back into a long term bull trend. Any minor pullbacks should be used as buying levels.
The key chart is in the top frame where the performance of the Dow is measured against that of the $ gold price. For the past two years the two elements have mirrored each others relative performance as illustrated by the sideways range trading levels. But there is a sell divergence on the oscillator in the bottom frame that has refused to follow the Dow to its recent new highs. This indicates a potential trend change for the Dow. If, as I detailed last week, the gold price has bounced off a major support level then the above relative strength chart is likely to break upside in favour of gold. A sideways base of this duration is likely to lead to a strong next move.
The price of silver has resumed its long term bull market. I remain totally bullish on this precious metal. But the key is again the top chart where silver is compared to the gold price. Silver continues to outperform the gold price and should continue in this vein for some time. I repeat my oft stated analysis that I believe silver will be the top performing precious metal. Forget about all the bumps and big dipper moves. The long term trend is up and should remain that way for quite some time.
This is one hell of a powerful chart. The metal price in the bottom frame has recently pushed above a ten year resistance. It has for the past few months tested the breakout by bouncing along the line. It is ready for a serious upside move. The relative performance against the gold price in the top frame has a classic saucer bottom that is about to start accelerating upside in favour of the metal. This is the chart data for Aluminum!!!!!
The HUI Gold Bugs index is shown in the bottom frame. It has a critical support line that has been tested five times. It has held the support and again bounced off. The same support level is shown in the top frame where the XAU is compared to the Dow. This data indicates that, despite the Dow's resurgence the gold stocks remain dominant in the long term.
For FREE trial data contact :-
Dr. Clive Roffey
info@utm.co.za
www.charts.co.za
www.shareaction.co.za
22 February 2005
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