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----- Original Message -----
From: newsletter@xxxxxxxxxxxxxxxxxxxxxxxxxxx
To: profitok@xxxxxxxxxxxxx
Sent: Thursday, February 28, 2008 9:04 PM
Subject: Gold, Oil, and the HUI Set Record Highs; the Dollar a Record Low Thursday: McHugh's Comments
The Dollar dove again Thursday, dropping to 73.72, the lowest level ever on a trade weighted basis. At the same time, Gold rose to a new all-time high, as did the HUI Gold Bugs Index, as did Oil. This is a nasty hyperinflation response to current economic conditions. Of course M-3 has been hidden from view by the Federal Reserve, and Congress has failed to demand they start full disclosure again. This is all part of the Master Planners game of Artificial Economics where they pretend there is no inflation, where they pretend there is no recession, where they pretend all is well with the world. The power of suggestion is their favorite strategy, taking us and the markets for fools. This nonsense is why Obama is rising. He is the prototypical anti-neocon-master-planner. Yes, and if you make more than $75,000, get ready to give more of it to him if he is the next president, which is looking more and more likely every minute.
The markets discount the future, so clearly the expectation from them is that hyperinflation will be thrown at this economy to avert depression. The problem is, will Fiddling Ben wait until there is a depression to hyperinflate, or will he do what inevitably must be done before the damage. Back in my banking days, we used to say the Fed examiners were the ones who went into the battle after it was over and shot the wounded. Ben may be using this favorite tactic of this probably unconstitutional organization in dealing with the current economic crisis.
Bonds rose a point and a half, as fear gripped markets again.
In spite of all this, so far our key economic indicators where only mildly dented by Thursday's down stock market day. Many buy signals remain. We still have not seen a normal rebound from the mini-stock market crash that ended on January 22nd. Both the weekly Bollinger Bands and the Weekly Full Stochastics analysis are still awaiting minimum rebound levels, which would be satisfied with 13,000 in the DJIA. This anomaly continues to argue that more upside is coming over the short-run.
We have now entered the period of time when our next phi mate turn date can occur. That would seem to be a top for the March 3rd +/- turn, at this point. That turn could have occurred yesterday, but more likely will occur next week.
The Industrials continue to battle their 50 day moving average. If they can bust decisively through that level, we should see another 300 to 400 point rally at least. The 200 DMA sits at 13,295 Thursday evening, so that is not out of the realm of possibility. Should the 50 DMA hold, then this is it, and we drop hard. However, we expect prices to breakout above the 50 DMA.
Best regards,
Robert McHugh, Ph.D.
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