$CCI - Commodities Index

Are you getting the idea that it is the job of the Federal Reserve Chairman to LIE to the American people about his desire and obligation to fight inflation when in reality - all the Fed does is create inflation?! This former Princeton professor gets a big fat F from me for his answer to this moral-hazard question recently posed by Ron Paul [R-Tex]. http://www.youtube.com:80/watch?v=AeHWW5gbc0w&eurl=http%3A%2F%2Fwww%2Eprisonplanet%2Ecom%3A80%2Farticles%2Fseptember2007%2F200907%5Fdollar%5Fmeltdown%2Ehtm

Hasn't He Left The Building Yet?
I was sick of Greenspam 5 years ago - now he's trotting around the country hawking his book on how he sold us out? He's "The Thing That Wouldn't Leave"! I much prefer the lasting memory of Congressman Bernie Sander's loving and well deserved "farewell" to Greenspam just before Mr. Bubbles retired to writing and giving $50,000 speeches. Tears to my eyes, really. Here it is if you haven't seen it: http://video.google.com/videoplay?docid=-7198499845513514804&q=bernie+sanders+-+greenspan&total=1&start=0&num=10&so=0&type=search&plindex=0

"But I can't pay the rent, I can't pay the rent!"
Too much cheap credit from Greenspan for too long, corrupt rating agencies, and zero-interest money from Japan caused a huge bubble in credit instruments backed by toxic, subprime borrowers shackled with falling housing prices. Let's see, you bought no-money-down/interest only, your mortgage has now doubled and you are sitting on negative equity. Are you going to go without eating to pay the mortgage or walk away?

Homebuilders Index - ETF

Ben "Helicopter" Bernanke to the Rescue!....uh, NOT!
So what's a Helicopter pilot to do? Well, Ben the "genius" lowers short term interest rates and injects even more liquidity into the system by the hundreds of billions! Unfortunately - the problem is the Fed does not control long term interest rates - investors do! Make that especially foreign investors, many of whom were duped into buying what they thought was AAA credit and which is now virtually worthless. In the meantime, these foreign investors are losing billions holding dollar reserves as the $USD falls to record lows. Let's just say they are going to probably demand much higher interest rates from US for the corresponding higher risk if they are going to continue to finance our profligate spending.

$USB - 30 Yr Treasury Bonds - Monthly

Is it any surprise that the $USD is getting creamed, and along with it our savings, purchasing power, and standard of living? I just love being happy in my little hamster wheel while the bankers and politicians feed us false statistics, destroy our way of life and get rich financing war and waste. Thank you, Sir - can I have another?

$USD - R.I.P.

Gold is powering higher in response to the tanking $USD, rising energy costs, and global political uncertainty. Gold's daily chart is definitely "overbought", but that doesn't mean it couldn't go higher in the short term. It's not like there is a huge supply of goldbugs still hanging around with the supply they paid $850 for in 1980! Essentially, the top was set at $730 in May 06. Gold has been scorching higher since breaking out of resistance in the 680-690 range.

Gold - Daily

Silver should catch up with Gold and the Euro, and challenge it's May 06 high of $15.20. Of course, that doesn't mean it will happen in a straight line. As of last week [09-21-07], Silver broke out of its 8-month downtrend and printed a Major Weekly BUY Signal. This is the setup for the 9-12 month "set wave" we are looking to ride:

Silver - Weekly

Silver's indicators on the Daily Chart are also "overbought", as Silver approaches previous horizontal resistance - a good place to take some profits if you are leveraged.

Silver - Daily - Line Chart

PM Stocks ETF [GDX] - Daily

September 30, 2007

Ruben T. Varela
rvarela@socal.rr.com

Ruben Varela is an independent, professional trader. Ruben attended Long Beach State University majoring in Economics and Information Systems. After a successful 15-year career in commercial and investment real estate, Ruben traded an initial stake of $40,000 into over $1.1 million in less than 2 years and retired from real estate in January 2006 in order to trade full time. Ruben is presently in the process of launching a website [TheGoldenBull.net] focusing on trading the Precious Metals sector. Look for the website launch and additional insight from Ruben in the coming weeks ahead. In the interim, please feel free to contact Ruben at: rvarela@socal.rr.com