Market Update 06-6
by Edgar J. Steele

Sep 14, 2006

Housing prices, down 15-20% nationwide, have only just begun to crater.  This time, it really IS different - well, after all, we're talking once every eighty years or so in fiat money systems, so maybe "different" isn't such an accurate term.  A depression in housing is a regular, albeit long wave, event.  Housing will go to ten cents on the dollar in 2005 dollars, just as it did last century.  This is just the beginning.

I read Richard Russell's latest letter yesterday, wherein he says a 20% decline is the bottom for the real estate bust and forecasts gold and silver to fall much further before they eventually turn back up.  Now that I am of an age where supplements seem to have a real effect, I think Mr. Russell needs to take some Geritol - lots of it, in fact.

Here's Russell's problem: He is as old as our current business cycle (i.e., since Depression I) and has hardening-of-the-analysis-artery disease.  That's what happens when you rely on a tool, which is all that technical analysis or chartism really is - a tool.  In his case, he has become so dependent upon his tool that he cannot let go of it in uncharted waters, which is what we now have entered (poorly charted, anyway).  That also is what being right all your life, as has Russell, will do to you.  He can't risk being wrong at this late date, so just won't let go of what always has worked for him.  To which, I say, "Sorry, Charlie, we want tunas that taste good."

Despite the current metals price crunch, looking every bit as bad as what happened in May, I still have to glance around at the fundamentals:  America has lost her manufacturing base and immigration continues unabated.  Joblessness can go only one direction:  up - and stratospherically.  Ford and GM are teetering, along with so many others.  Servicing the national debt soon will consume the country's entire GNP, yet America still spends like a cheated-on wife.  Yesterday, America told China to revalue the Yuan upward.  War is coming - world war - no longer can there be any doubt.  The NAU is coming and, with it, a variety of revolutions throughout North America.

Even without all the foregoing, the dollar has lost about a third of its value in just the past 5 or 6 years.  That means the Dow today really is at about 7,000 since the tech bust in 2000 and probably at about 5,000 since Greenspan's "irrational exuberance" speech of about 1995 (it was at 4500 then).  That means that gold and silver still are at about $300 and $5, respectively, the levels of the Nineties. Yet stock P/E ratios still are out of whack, showing just how bad are the earnings...and about to get even worse.  'Splain me how metals go down from here, Lucy.

Which all means that the pain hasn't even really yet begun.  Metals are NOT going to go down, rest assured.  Regardless of what the market riggers do, considering the declining influence of America, the rest of the world will make the metals market in the long run.  There will be dips.  This is one of them.  The long-term trend will be for metals inversely to reflect the path of the dollar, with a couple of bubbles thrown in here and there.

Bottom line:  the dollar is doomed.  That is an absolutely inescapable conclusion.  So are dollar-denominated assets such as bonds.  Metals are necessary to preserve wealth while it happens, so being in metals is a no brainer.  Metals will appreciate - possibly in multiples, at least for a time.

Treat dips as buying opportunities.  Frankly, I thought we never again would see gold below $600.  We won't see it there for long.  Silver will do even better than gold as it reverts to its historical 16:1 gold:silver price ratio (implying a silver price of about $38, even at today's depressed gold price).  Silver may do even better than 16:1 as its true scarcity becomes apparent.  Somewhere along the way, a moon orbit seems likely for silver.  When?  Who knows?  Got a better investment, meanwhile?

My name is Edgar J. Steele.  Please visit my web site, www.ConspiracyPenPal.com, for other messages just like this one.


Copyright 2006, Edgar J. Steele

Forward as you wish.  Permission is granted to circulate both the written version of this Notice among private individuals and groups, post on all Internet sites and publish in full in all not-for-profit publications. 


On-Line link:  http://www.conspiracypenpal.com/columns/update0606.htm 


Note:  One or both of the following buttons may not work with your email program.  If so, then please visit www.DefensiveRacism.com and make use of the order buttons there, which should work with your browser...

Buy copies of Defensive Racism - An Unapologetic Examination of Racial Differences, which extensively addresses the problems confronting America, now is available through www.Amazon.com (please consider going there and posting a review if you already have read it), though you can get a $5 discount by ordering directly from the publisher.  Additional significant quantity discounts will be applied during the order process. Visit www.DefensiveRacism.com for more information and on-line ordering information or simply click below (for an autographed copy, simply write in "Sign mine" in the comments section of the on-line order blank): 


Make a difference by contributing to the support of my writing, lecturing, lobbying, activism and pro-bono legal defense efforts:  Your donation will gratefully be applied to my extensive efforts in support of our mutual cause, rest assured.  You will be able to use a credit card in making this donation on line.

Enter Donation Amount $

Donations to help with the cost of our efforts may also be mailed to Edgar Steele, PO Box 1255, Sagle, ID 83860.  Until the politically incorrect begin to get a fair shake in America, and because of unfairly-applied income tax regulations, I regret that your donation cannot legally be deducted on your tax return.  I must also make the following statement, to ensure that I need not declare it as income and pay tax on it and to avoid being charged with misuse of funds, for which some patriot leaders falsely have been charged and imprisoned:  your donation is a gift to me, personally.

Subscribe:  Click here
Change your email address or other list data:  Click here

Unsubscribe:  Click here

Complete archive of past articles, essays, rants, interviews and speeches, including sound files, maintained at:  www.ConspiracyPenPal.com