South Korea
Signals the Beginning of the Second Leg of the U.S. Dollar Bear
Market
Grandich
Letter Special Alert Friday Feb 25, 2005
Peter Grandich
February 25, 2005
According to my Cable Guide, the Comedy Channel is supposed to
be channel 50. However, I get more laughs from channel 24-CNBC-TV.
While the usual merry men of Wall Street's "Don't Worry,
Be Happy" crowd continue to appear daily, the big laughs
for me are coming from TOUT-TV's Senior Economist, Mr. Steve
Liesman (is it just a coincidence that "Lies" is part
of his name?) and their "Five-Star General of Everything
is Okay," Mr. Larry Kudlow. Recently, Liesman made a flip-
chart presentation of why Bill Gates and Warren Buffet are wrong
about their short U.S. dollar position. It was pure humor at
its finest. Not to be outdone, General Kudlow appeared with a
Wall Street Journal Reporter (who appeared too young to even
remember when the D-Mark last traded, let alone be an authority
on why the South Korean news was not bad news), who stated that
foreign central banks couldn't and wouldn't move away from the
U.S. dollar because it hurts them in the end. General Kudlow
commended the "rookie" for seeing through what he termed,
"ill-founded concerns" about the U.S. dollar.
After I stopped
rolling on the floor from laughter, I did what any wise investor
should do - I turned the sound off on TOUT-TV (only time it's
sure to go on is when the one man who has a brain appears, the
gentleman from the bond pits).
We've now heard
officials from China, Russia and South Korea openly speak about
their belief that the U.S. dollar's days as a world currency
reserve are over, and/or a desire to move away from the U.S.
dollar. You can only imagine what they're saying privately. Don't
let Kudlow's dismissal of the awesome deficits we face in America
and the fact that Americans have been robbing Peter to pay Paul
(and Peter is tapped out) fool you into thinking the worse is
over. We've only seen the opening act!
Gold-
Once again gold has completed a two steps forward and one step
back correction and is now likely to challenge its $453 high
in the coming weeks. And once again near or at the bottom of
the correction, I received several emails from gold bears telling
me how the bull market was over and I was a fool to be so openly
bullish. Perhaps when the next correction comes and the emails
stop, that would be a worthy concern. Like I've said for quite
awhile, $500 gold appears to be a question of when, not if. Only
when TOUT-TV sends the NASDAQ babe over to the Comex to report
daily on gold should we consider the end may be near.
Silver -
Hard to imagine but yours truly became quite favorable towards
silver several weeks ago and believes it can run with gold and
more than hold its own.
Base Metals
-
I've been pleasantly surprised by copper's ability to hover near
$1.50. China's demand appears not to have waned as some thought
it would by now. I do think, however, that base metals should
be only evenly-weighted with precious metals holdings.
Uranium
-
I continue to believe it has the best overall fundamentals. Just
about anything with uranium is seeing increased interest. Now,
if I can only figure out how to get Nortel Networks into Uranium.
Peter Grandich
Grandich
Publications
P.O. Box 243
Perrineville, NJ 08535
phone: 732-642-3992
email: Peter@Grandich.com
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