GOAT MEAT PRICES RISING!!

As we approach "D" Day – in this case "Decision Day" for the Saudis concerning flooding the market with oil – one must wonder how comfortable the Saudi Royal Family is these days. Who is going to pump all that oil if you have to wear body armor to work every day?

So far, I haven’t heard of air-conditioned body armor and I am told that the Saudi oilfields are actually hotter than hell and not just from a temperature perspective. On one side, you have the US as the business partners of  the Saudis; on the other side how much protection can the 2000 members of the Saudi Royal Family expect from the US when the ramifications of their decision on increasing oil production becomes evident?

I don’t know if you noticed, but the number of hostages that were announced as taken in the Memorial Day weekend attack at the expats compound in Saudi Arabia was 50. The real number is 254. The number killed has been given as 22. The correct number, including the seven Saudi guards,is 29.

The three al-Qaeda operatives that escaped from Saudi hands did not actually escape but were let go by the Saudis who claim that they threatened to blow up the hostages if they were not given free passage. That claim is disputed. Yet the Saudi ambassador to the US is quoted as saying the Saudis will eliminate the al-Qaeda menace once and for all. It is not what the Saudis say but rather what they do and they have done very little to prevent al-Qaeda’s terrorist activities in Saudi Arabia.

The talking heads are asking if a Saudi increase in oil production will ease prices but what they should be asking is if that increase will in fact reduce the 2000 member population of the Saudi Royal Family significantly and immediately.

The new Iraqi security force has now mutinied twice. What makes you think that the appointed Iraqi interim government will not mutiny? Haven’t they just done that in turning down the favored candidate for president?

April and May have been the deadliest months for US troops in Iraq since the war started. The bloody fight for the city of Fallujah raged throughout April but has calmed down in the past few weeks but only because the US forces pulled out turning over the city to the former mutinous Iraq security force.

In total, the Iraqi conflict has taken the lives of more than 800 American troops and last week the Pentagon reported that the number wounded in action is approaching 4,700 which independent sources say is probably on the low side.

All of the above does not touch on the systemic economic reasons for dollar weakness which will be the major reason for gold’s coming strength.

Gold is now a currency. That differentiates it from commodities that can be traded by technical analysis alone. No good currency trader deals with TA exclusively because it overstates price up and down that fundamentals will always correct.

Gold as a currency is running into the power of fundamental reality versus lines, squiggles and hoards of mad people running around the floor of the COMEX making fools of themselves. Gold is headed higher than any TA purest is willing to admit
Jim Sinclair

As you can tell this man has a lot of money riding on gold. I don’t really share his blind love for the metal OR the amount of fear that he thinks is currently present, but I do feel gold will move higher due to the shear weakness in our economy’s finances. When you live off the credit card, you gotta stop spending at some point, right? Actually not completely stop, but CONTAIN spending. This containment will bring about unprecedented weakness in our economy and no one really knows how far/deep this weekness it could go & ultimately last. We’re stuck in a downward spiral that will take us through deflation and inflation–one followed by the other.

At the moment, we’re at a very awkward transition stage w/ high oil prices forcing us to contain our spending (deflation), but racing prices in basic goods (i.e. milk, coffee, grains, poultry, GOAT MEAT, gold, etc, etc) (inflation). So as you can see, we’re forced to spend less because we’re spending more on gasoline & energy WHILE we pay our heavy credit card debts, mortgages, car payments, home-equity-line of credit, and the myriad of out other debt that we have sitting over our heads. It’s kind of sad & scary if you think about it. The saga continues next month!