Tanzanian Royalty Exploration Watching the Clouds Pass By by 24hgold

Re:        Chairman's Corner - Thursday, December 13, 2007
Title:     Watching the Clouds Pass By
Author:    Jim Sinclair

Dear Friends:

Don't let the black boxes get you down. These trading machines will turn on a dime as they have no brains, just algorithms. They do not think - they act. Fundamentals to these machines simply do not exist. Jesse Livermore, arguably the world's greatest stock trader, once said that it is better to have fundamentals and the trend blowing at your back if you are playing for major profits. You and I are in no way playing for peanuts.

The dollar is up today and therefore gold is down. There are significant profits that are long gold and short the US dollar. This is one of the reasons for the volatility in the marketplace. But the report below is NO reason for dollar strength.

When the analysis of the report below is done you will see a difference in a matter of days. Nonetheless, supporting arguments designed to make things look better will appear in an effort to keep the general equities up and the bond market calm for TIC purposes. What would you expect when we are facing the greatest financial crisis in history? In actual fact, this balancing act is not sustainable.

If you believe that the US is headed for increasing consumption, I will sell you a bridge in Brooklyn, NY.

There is no fundamental basis for the dollar rally other than short covering by institutions to lock in profits before year end. Managers in these institutions do not get paid unless the profit is booked. Since the dollar rally has no sustainability on the upside, gold has NO sustainability on the downside.

The media analysts are gleefully dismissing any thought of a recession and hailing a return to the good old times. That is total madness.

Some advice:

1. Be calm as today is but another passing cloud you have seen a million times already as gold heads toward $1050 and on to $1650.
2. Prepare to defend yourselves. Get your paper certificates in share investments. Reduce exposure to internet financial entities. Use days like today to increase or shift to Cando and Swiss Treasury instruments. Take delivery of your coins from your dealer. Check with your local bank to be sure they are not exposed to ANY kind of SIV. Be sure your credit union and retirement entity is not exposed in any way to SIVs of any kind. Pay off debt or carry a fully paid gold position equal to the debt. Keep some cash on hand but not so much that you would not be willing to give it up.
3. Know that this is the most serious financial crisis ever.
4. In my opinion there is no PRACTICAL solution to the current situation.
5. Review the Weimar inflationary disaster to see the test case for what is happening now. Simply replace the words "War Reparations" from the Weimar example with "Credit and Default derivative meltdown."

PLEASE PREPARE TO DEFEND YOURSELVES!

U.S. Economy: Retail Sales Rise More Than Forecast
By Joe Richter and Bob Willis

Dec. 13 (Bloomberg) -- Retail sales exceeded forecasts in November, while wholesale prices jumped the most in 34 years, diminishing both the need and scope for the Federal Reserve to make deeper interest-rate cuts.

Retail sales rose 1.2 percent in November, the Commerce Department said in Washington, twice as much as economists anticipated. Separate figures from the Labor Department showed prices paid to U.S. producers climbed 3.2 percent. Excluding food and fuel, expenses rose 0.4 percent.

Treasury notes fell after the reports, which signaled the economy might avert a recession even as the housing slump shows no sign of abating. The figures are consistent with the Fed's prediction two days ago of a ''moderate'' expansion next year, while energy and commodity prices may stoke inflation. Morgan Stanley and Bank of America Corp. raised their estimates for fourth-quarter economic growth after today's reports.

''We should still see reasonable sales growth and no recession,'' said Allan Meltzer, professor of political economy at Carnegie Mellon University in Pittsburgh. ''It's quite reasonable to expect high energy prices will slow business investment and, eventually, consumer spending, but people are working, the unemployment rate is low and Christmas is Christmas.''

Sales Slowing

The government numbers for November contrast with some industry reports that suggest spending may weaken this month. Sales fell 2.7 percent in the seven days through Dec. 8, following a 4.4 percent decline a week earlier, Chicago-based research firm ShopperTrak RCT Corp. said yesterday.

''This may be the calm before the storm, but so far the consumer is weathering the bad news out there,'' said Chris Rupkey, senior financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.

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Message sent on Thu Dec 13, 2007 at 5:51:37 PM Pacific Time

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