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                            TigerSoft Freedom News Service   12/17/2008     www.tigersoft.com  


                    "REMEMBER WEIMAR!"
                "REMEMBER   ARGENTINA!"

                     TigerSoft's Charts of Gold, NEM (gold), US Dollar,
                        Yen, Euro, Crude Oil and Treasuries.


by William Schmidt, Ph.D. (Columbia University)
                                             (C) 2008 All rights reserved.  Reproducing any part of this page without
                                                             giving full acknowledgement is a copyright infringement.
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                                   THE GOLD BUGS ARE SHOUTING
                     "REMEMBER WEIMAR!"
                     "REMEMBER   ARGENTINA!"

                              While I have written Blogs about the dangers of a collapsing dollar
                    and the lessons of the Argentine and Weimar Germany inflation, the circumstances
                    now appear very different.  The biggest risk now is that a galloping, spiraling Deflation
                    will become a Depression.   Deflation is not possible if the Dollar collapses.
                    And we can readily now see very real signs of deflation, especially in rapidly
                    falling housing and oil prices, not to mention stock prices.  The rising unemployment
                    and underemployment numbers would seem to make inflation a very low

                             Gold's rise may now be getting over-done.  A 40-day Stochastic shows this.
                    TigerSoft shows a simple trading system using this tool would have gained an
                    investor 65% for the past year.  That system is very close to giving a new Sell.

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                          NEM's rise (below) from 22 to 42 in the last 3 weeks,  almost 100%,  would seem to
                    place it in the over-bought category.  A 6-week 120 rally like this in 1998, from 14 to 30
                    completely evaporated in a few months.  You can see all its yearly fluctuations
                    in a TigerSoft research report -

                             Much of Gold's demand comes from jewelers.  But purchasing expensive
                     jewelry is not high in this year's Christmas shopping list for most hard-pressed
                     consumers.   Mining companies are certainly benefiting from lower fuel costs.
                     But that may stimulate more production.

                             When Silver was topping out in early 2008 at $21/ounce and when
                    Gold was peaking at over $1000/ounce,  you could readily find investment
                    advisors and self-interested coin dealers that were every day readily assuring
                    anyone who would listen that the Dollar was about to collapse and people
                    should immediately go out and buy all the silver and gold coins they could find
                    and afford.  Many of these folks are always bullish Gold.  But the plain truth
                    is that markets fluctuate, and so do gold and silver markets.  Investors would
                    do much better not to buy and hold Gold forever, but to use TigerSoft's
                    charts to spot insider buying and selling and trade their swings.  Our TigerSoft
                    Blogs have offered nearly all the instruction you need if you start using
                    TigerSoft to catch these price swings.

                               We have done many, many studies of insider trading.   Probably
                    more than Bush SEC has done, in their non-regulatory, insider-trading-is-OK

                                See the warnings we put out this past year as illustrations.
2/21/2008 - TigerSoft on Gold and Newmont Mining's Predictive ...
8/6/2008 - Use TigerSoft's Unique Technical Tools with Gold, Copper and Silver Stocks
                                     9/4/2008 TigerSoftt New Service/Blog - How To Trade Silver (SLV) and SIlver ...
                                And public comments noting the bottom.
12/10/2008  Tiger Software's Stock of The Day - Newmont ...
See also:  Commodity/Futures Trading (1) (2)    Commodities    Grains
                      Gold     Silver   Silver, Gold / Silver Stocks(1) (2)       Gold Stocks,   Metals   Crude Oil   (1) (2) (3) 

                               A Look at TigerSoft's Charts of NEM (gold), the Dollar, Yen, Euro,
                       Crude Oil and Treasuries Show The Dollar Is Stronger Than The Gold Bugs
                       Would Want Us To Believe.

            Gold Stocks like NEM (Newmont) are rallying strongly.  Look at the
               TigerSoft chart of NEM below.  You can see how sharply it turned upwards
               just after a successful test of its low near 22 in November.  Our powerful
               tool, the TigerSoft Closing Power called the turn nearly perfectly. 

                    Now that the stock has reached 40, the "
Gold Bugs", investment
               advisors that are perpetually bullish on gold and gold stocks, are shouting
               that the  US Federal Reserve is risking the destruction of the Dollar's value
               by giving trillions to banks to stave off a banking collapse and prevent
               a 1930's style Depression.   They correctly warn that the amount of money
               they have put in potential circulation has risen a "staggering 76% in
               just 3 months".  But, as we all know, banks are NOT lending this money,
               not even to each other.  They don't trust one another!  They are using
               these colossal sums to stay solvent and meet the 8% capital requirements
               banks have as home prices keep on falling.  So this new money is
               not going into circulation.  "Velocity", like interest rates, is approaching zero! 
                   Will that change?  Not until housing prices stop falling is my guess.
               Or Obama public works programs change the picture enough to get consumers
               to start buying again. 

I see a number of problems with their reasoning, when they say that
               hyper-inflation lies just ahead. 

    Gold has a strongly bullish seasonality from mid-November to
See Gold''s Seasonal Chart I presented in my Blog on the
               Dollar, Gold and Crude Oil back in  September 13, 2007.    So, some of
               the advance we are seeing owes to that seasonal tendency.

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                       It's certainly true that the US Dollar, against a basket of other currencies,
               has formed a head and shoulders top in the last two weeks and broken its
               recent uptrendlines.  See how the TigerSoft Closing Power broke its
               uptrend recently BEFORE the top pattern was completed.  The Dollar's
               downtrend is clearly in effect now. 

      The US Dollar remains well above its lows of  the Summer of 2008.
               There is no run on the Dollar, yet!

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                      I must say that the Japanese Yen is rising powerfully.  It is now
                at an all-time high versus the Dollar. It showed bullish Accumulation
                and Insider Buying at the bottom and is in a powerful uptrend. 
Japanese policy makers may use its strength to cut interest rates
                there.   That would tend to weaken the Yen against the US Dollar
                and prop the Dollar back up.

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                      The EURO has also reversed upwards versus the Dollar.  The Tiger
                Indicators show that it should go still higher.   So, this chart suggests
                more weakness is ahead for the Dollar.

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Inflation and a weak Dollar usually take place with rising Crude Oil
               prices.   That is not true now, or at least yet.
  Crude Oil, here measured by
               the Oil ETF, has fallen by nearly 2/3 from its highs and the Tiger Closing
               Power is still declining.  So are the other key indicators we watch.

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Another factor working against a run on the Dollar is the strength
                  show in US Treasuries and debt instruments.
  If the Dollar were really
                  so weak, we would expect the Federal Reserve to have to raise not
                  lower interest rates to attract buyers.  The fear that is in the stock
                  market has caused many investors simply to run for cover by buying
                  US Treasury notes.  The Treasury is not wanting for borrowers.
                  This strength gives the Federal Reserve a lot more room to maneuver.

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             Gold Bugs -

                       Wikopedia says:   " The term was popularized in the
                 1896 US Presidential Election, when William McKinley supporters took
                  to wearing gold lapel pins, gold neckties, and gold headbands in a
                  demonstration of support for gold against the "silver menace",[1] though
                   the term's original use may have been in Edgar Allan Poe's 1843 story
                   "The Gold-Bug,"[2] about a cryptographic treasure map.[3] "


                                                Here is a summary of the
                                               document I just received from
                                                       by William Engdahl

          The Federal Reserve has refused to recently disclose which banks were the recipients of more than $2 trillion
          in emergency loans from US taxpayers and to reveal the assets the central bank is accepting as collateral.
          The Federal Reserve is trying to keep "secret that the US financial system is de facto bankrupt"

          This suggests they are afraid of causing a Dollar panic which could cause "a future Weimar-style hyperinflation
          perhaps before 2010." 

              "The total of such emergency Fed lending exceeded $2 trillion on Nov. 6. It had risen by an astonishing
          138 percent, or $1.23 trillion, in the 12 weeks since Sept. 14, when central bank governors relaxed
          collateral standards to accept securities that weren't rated AAA....In response to the deepening crisis,
          the Bernanke Fed has decided to expand what is technically called the Monetary Base, defined as
          total bank reserves plus cash in circulation, the basis for potential further high-powered bank lending
          into the economy. Since the Lehman Bros. default, this money expansion rose dramatically by end
          October at a year-year rate of growth of 38%, has been without precedent in the 95 year history
          of the Federal Reserve since its creation in 1913. The previous high growth rate, according to US
          Federal Reserve data, was 28% in September 1939, as the US was building up industry for the
          evolving war in Europe.

             "By the first week of December, that expansion of the monetary base had jumped to a staggering 76%
          rate in just 3 months. It has gone from $836 billion in December 2007 when the crisis appeared contained,
          to $1,479 billion in December 2008, an explosion of 76% year-on-year. Moreover, until September 2008,
          the month of the Lehman Brothers collapse, the Federal Reserve had held the expansion of the Monetary
          Base virtually flat. ..

              "Despite this, banks do not lend further, meaning the US economy is in a depression free-fall of a scale
           not seen since the 1930's. Banks do not lend in large part because under Basle BIS lending rules, they
           must set aside 8% of their capital against the value of any new commercial loans. Yet the banks have
           no idea how much of the mortgage and other troubled securities they own are likely to default in the
           coming months, forcing them to raise huge new sums of capital to remain solvent. It's far 'safer' as they
           reason to pass on their toxic waste assets to the Fed in return for earning interest on the acquired Treasury
           paper they now hold. Bank lending is risky in a depression. g or a run by depositors".      




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