Dear CIGAs,

The Fed will fail to contain the price of gold for the following

reasons:

1. The amount of money in the global system versus the tenderhooks which the international financial system hangs.
2. The fact that once the real insiders who benefited from the $9.5 trillion dollars so far injected into the system recognize they have the largest possible paper currency and paper asset problem.
3. The size of the bankrupt OTC derivatives in the system.
4. The impact of any recovery in psychology on the velocity of money and therefore inflation.
5. A recovery in energy prices along with drought conditions internationally as it effects edible commodities.
6. The fact that Central Banks, like it or not, benefit from the increase in the price of gold.
7. The fundamental condition of the US dollar at which its present level is violently overpriced.
8. The fact that any separation in their inverse relationship of gold to the dollar is temporary and algorithm driven.
9. The fact that the message lower gold makes is contra productive to the message the Fed want to communicate regarding business activity psychology.
10. The fact that business conditions are not going to put on a sustainable recovery here.
11. The fact that banks are not lending in any manner that can be considered positive for the housing market.
12. The fact that the commercial credit market is on life support.
13. The fact that the general public is starting to get quite angry internationally at the bailout of the big wigs and the screwing of the little guy.
14. The fact that unemployment is going double digit.
15. The fact that only the paper gold market is the tool of the Federal Reserve in any attempt to dissuade gold.
16. The fact that the bullion market is in demand over the paper market for gold.
17. The fact that hedge funds in every market are acting based on algorithms. This is creating such huge dislocations that traditional relationships are skewed, making every market a mindless speculation and eventually reducing activity to funds trading with funds.
18. Because TA-wise Alf is right. TA and fundamentally Armstrong is right. Add to that Trader Dan and Monty. All of these men have decades of market experience.

Regards,
Jim