1901-03
- Fall in the Dow: 46%
- Losses recovered by: July 1905
- The Dow Jones Industrial Average was only five
years old when it fell into its first really
severe bear market.
The 1901-03 decline was rare in being
one of only three bouts of gloom lasting more than two
years - the others were 1939-42 and the great crash of
1929-32. This despondency was caused by a host of nasty
incidents, most notably the assassination of President
William McKinley in September 1901; later in the year, a
particularly severe drought caused genuine alarm about US
food supplies.
now going full circle
back to Dow'sFlat, 1856 Bret Harte:
Dow's
Flat. That's its name
And I reckon that you
Are a stranger? The same?
Well, I thought it was true
For there isn't a man that can't spot the place
In first view....
You see this 'yer Dow
Hed the worst kind of luck;
He slipped up somehow
On each thing thet he struck.
Why, if he's a-straddled thet fence-rail, the derned
thing
'ed get up and buck.....
It was rough, mighty rough...
But they brought him the stuff
For a house on the sly;
And the old woman - well she did washing, and "took
on" when no 0ne was nigh.
But this yer luck of Dow's
Was so powerful mean
The spring near his shack
Dried up right on the green,
And he sunk fortyfoot down for water, but
nary a drop to be seen....
..the chills got about
And his wife fell away
But Dow, in his well, kept a peggin' in his usual
ridikulous way.....
His two ragged gals
In the gulch were at play
And a gownd that was Sal's
Kinder flapped on the bay;
Not much for a man to be leavin', but his all - as I've
heer'd the folks say..........
Let's see - well that forty-foot grave wasn't his, sir,
that day anyhow
For a blow of his pick
Sorter caved in the side;
And he looked and turned sick,
Then he trembled and cried.....
It was gold in the quartz
And it ran all alike;
And I reckon five oughts
Was the worth of that strike
And that house with the coopilow's his - which the
Same isn't bad for a pike....
For twas WATER the derned cuss was seekin', and his luck
made him certain to miss..........
The Real War
By Jim Sinclair
Sunday, October 31, 2004, 1:03:00
PM EST
The real war is not in Iraq or Afghanistan but in the
currency markets.
In his article "From Russia with Love,"
Community friend, Dan Norcini,
set up the subject matter of what is the most important
but unappreciated
characteristic of the gold market.
This characteristic is misunderstood by many but
forgotten by even more.
The Gold Dinar is coming without any doubt now that two
major foundational items, which had caused a delay, are
falling into place,.
Let's review the entire strategy leading up to the
breakdown of the huge
bearish Head & Shoulders formation of the US dollar:
1. The 9/11 attack was staged to create a military
response by the United
States in the Middle East and Afghanistan.
2. The strategy of 9/11 is part of a plan to unite the
one billon Islamic people in the world.
3. Bin Laden is a major unifying factor in the 9/11
strategy.
4. The plan of action was to drain the US dollar of its
reserve status by driving expenditures inside and outside
of the US up to unsustainable levels.
5. As the triple deficits go wild because of the costs
associated with inland security and military actions
around the globe the pre-election efforts to falsify the
US economy as being healthy means the US dollar must
decline thereafter. In actual fact, the decline is now
below the bearish neckline drawn from the previous low
and is a terminal technical
breakdown. If the US dollar was a corporation, it would
indicate clear potential for bankruptcy.
6. The increased cost of oil can only injure the US
economy, driving down
tax receipts.
7. The drop in tax receipts expands the US Federal
Deficit thereby acting
as a further brake on the US economy, injuring business
activities and increasing US Federal demand for money in
the money markets.
8. Middle Eastern dollar holders have been selling
dollars constantly, putting increased pressure on these
markets.
9. In all of Asia and more recently in Russia the US
dollar is coming under pressure.
We stand now at that point whereby a tick below the low
of this entire decline is within range and a new little
Right Shoulder is in place.
Why the Gold Dinar Has Been a Silent Subject For a Year
The argument has been two fold. The first and most
important is that Middle Eastern gold is primarily held
in London, which is now not secure,
and in violation of the Koran instructions concerning
dealing with non-Muslin nations in financial matters. The
second but intellectual argument is the position that
gold was too volatile to tie a settlement mechanism or
currency to.
Most observers would tend to select the UAE as an
alternative for locating gold due to its no tax
environment and history of free trade. However, its
ability to defend itself militarily is doubtful against
superior forces thereby endangering the gold hoard.
Now ask yourself where Iran has gotten all its courage
lately and the answer comes up quickly. Their protector
is Putin's Russia which has much to gain from a full
circulating currency form of the Gold Dinar because of
its positive affect on oil and other commodity prices
which incidentally are quite important to the ruble.
The argument that gold is too volatile for a currency to
be tied to
completely fails in light of the volatility of the US
dollar.
The other aspect is the timing of its introduction which
seems now to be somewhat after the bearish neckline
breaks down as it will for the US dollar so that there is
plausible denial that the dollar forced the Gold Dinar to
emerge as a currency rather than the Gold Dinar forced
the US dollar to enter its inevitable freefall condition.
So the shocker is that Iran might become the center of
the Middle East's gold holding in Dinar form because it
will be protected militarily by Putin's Russia. The
Iranian theocracy plus a new totalitarian Russia will
project the Gold Dinar and the Ruble as superior
currencies to the US dollar.
This strategy then projects Putin's Russia into a major
superpower position and Iran as the leader of a more
unified Middle East.
In conclusion:
1. Terrorism is primarily a financial tool designed to
break the bank of the US.
2. The real war is economic and not political.
3. The reaction of the US was totally predictable and it
walked directly into a bear trap that it cannot now
easily extract itself from.
4. Regaining insurgent controlled towns in Iraq will not
win this war.
5. The military action in Iraq and Afghanistan is a
uniting factor among the one billion Muslims.
6. Capturing Bin Laden would be as meaningless as
capturing Saddam Hussein
7. The price of oil will not become cheap again.
8. Iran is the covert third party behind the Iraq and
Afghanistan
military actions.
The only US defense against this strategy is the adoption
now of the new modernized form of the Federal Reserve
Gold Certificate Ratio tied to international liquidity
and not to interest rate action. The chance of this
occurring is as good as a snowball surviving in hell.
Only by preempting the Gold Dinar by initiating the
Federal Reserve Gold Certificate Ratio in the modernized
and revitalized form that I have spoken about many times
can offset the pending introduction of the Gold Dinar as
a full-fledged currency.
This explains why Asia and the Middle East have been the
major buyers of gold since 1991.
Since no US presidential candidate or any advisor to
either contender has
even a remote idea of what is really happening, you can
wager that the dollar will enter its freefall, the Gold
Dinar will emerge as a full fledged currency, and Putin's
new totalitarian Russia will rise in stature as the US
falls in stature among major nations.
So if I have been wrong about the gold bull market, it's
in considering it as a generational event while in fact
it might constitute the entire foreseeable future.
If you fail to own gold and gold shares but rather depend
on the US dollar to protect your life's work you are in
for the worst of disappointments. The gold writers who
spend their time looking for temporary tops and encourage
you to sell your entire positions will not be in business
much longer.
I have met with key players who will be involved in the
coming events and
I am convinced without any doubt that the above is a road
map from here
until 2012 and well beyond.
Now you know why the survivors of the old European major
financial families spoken of in the book "Our
Crowd" have distributed US securities
and bonds into the pre-election Made in Hollywood equity
market and have been buyers of gold for quite a period of
time.
Please be careful and pay attention. Make absolutely sure
your mortgages have fixed rates. Eliminate any mortgage
obligation that requires a balloon repayment or
refinancing in 2007-2008. Reduce debt if you can and move
your gold and gold share position up to no less than 33
1/3 percent of your liquid net worth.
I will fill you in on more details of this subject but
the above is enough for us to get started as I report to
you from inside the home base of the Gold Dinar.
For those of you seeking an even deeper understanding of
this subject material, there is a book that should be
read. It is "The Return of the Gold Dinar"
written by Umar Ibrahim Vadillo.
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