Mailbox

Dear Friends:

So many unprecedented events have occurred that even we are getting hardened to the economic absurd. The Western world was once again on the brink of a financial collapse last evening. For if it wasn't, you can be assured that the Fed would not have ponied up swaps as large as they have. The reason I discuss this tonight is to drive home the realization that the Western world's is financially crippled with bandaids of trillions. I can only imagine what size offering of euro took it down from over $1.30 to the present $1.2887. You pledge almost $1 trillion to do all necessary to support the euro, and it fails to take the prize on the
day of initiation. "Pretend" comes at an every increasing price, this time $200 billion more than TARP. "Extend" becomes less and less effective. Be very careful as this last save has not yet occurred.

Respectfully,
Jim

I can only add that the market is beginning to discount/recognize a reality fraught with the consequences of the unprecedented liquidity dump across the globe. There are subtle changes within the capital flows that reflect increasing uncertainty by deep pockets and connected money.

For example, gold is acting strongly during an A-wave advance. It should break above the C-wave high soon. A break to new highs is not a dominant characteristic of the A-wave cycle. This subtle change reflects the growing loss of confidence, a fear that no amount rhetoric can dissaude, within the fiat system.

Eric