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    Hello Economy Observers, Market Watchers, and Investors
    Wedneday the 17th of November 2004

    home website: http://www.GoldenJackass.com
    HAT TRICK LETTER: http://www.GoldenJackass.com/subscribe.html

    Finally some uncertainty has been removed from our financial markets. The presidential election is over. Our citizens have cast their votes, and we move on. However, foreigners have a vote of their own to cast. They vote in the currency markets and with gold, as well as with US Treasury bonds. In the past three weeks, the USDollar has broken below critical support which has stood for the entire calendar year. Like with a teeter-tawter in a children playground, gold has broken to new multi-year highs dating back to the early 1990 decade. Naysayers of the spring and summer have been proved wrong for the umpteenth time, yet the public still listens to the wrong message. Gold has reached $440 per ounce, and is prepared for the next upleg in the gold bull market, right on schedule.

    So far the euro, currency for a group of nations in the European Union, has done the heavy lifting to register multi-year highs in the last two weeks. The Japanese yen currency has yet to break out and mark new highs. My pending forecast calls for the yen to hit 100 parity by year end. Cut me slack if it occurs in January. Something big is brewing. European finance ministers are angry at the USA for their wasteful spending, huge deficits, and abused of owning the world reserve currency. Europeans demand that Asia participate in the currency adjustment process and put at risk their exports trade. Japanese finance ministers have shaken the foundations of the global USDollar currency system with comments which exhibit unusual hostility. Historic changes are in the making, in early stages. Implications to gold and to crude oil prices are enormous.

    We as a nation can print money as debt and have it easily absorbed by world markets. We can engineer a series of bubbles which fund our lifestyles, and thus live beyond our means on the backs of foreign savings. That which is out of balance has become more out of balance. Our federal and trade deficits go untreated, which foreigners deeply resent. World markets do not believe the current President or Congress put much priority on reducing either federal or trade deficits. Their reaction is delivered with the USDollar and with gold. It is largely a vote of NO CONFIDENCE.

    As if that were not enough, Russian leader Putin and European leaders have entered talks with OPEC leaders to price crude oil in euro denomination. Arab nations resent our military actions and have cooperated with a new European-Russian alliance which has begun to take shape. Implications to revolt against the petro-dollar are clear, only to leave the world monetary system uncertain. The real effect to Americans will be rising corporate production costs, rising household costs, without much of any benefit to rising incomes. My analysis points to accelerated job loss within our shores for as long as China remains breathing as a nation, engaged in active trade.

    Significant prediction forecasts have come true in recent weeks and months. The October trade gap once again came in over $50 billion. We have the extraordinary development of a falling USDollar exchange rate and continued, if not rising trade gaps. The mechanism for fixing this hemorrhaged system is broken. As the USDollar falls further, the trade gap will worsen. We saw record exports in the past month, yet we remain at extreme levels for trade in deficit. The US Economy cannot export generated electricity, nor refined gasoline, nor overpriced drug products. Our car industry is in retreat. We have little to export in order to fix the problem. Our factories are obsolete, due to labor cost differences. The USDollar will continue to fall, gold will continue to rise, until a massive crisis fully unfolds. Everything is on track which my analysis has forecasted and laid out. The investment opportunity presented is enormous.

    A BRIEF LIST OF CORRECT ANALYTIC FORECASTS:
    Jan 2004: Asians will convert USTBond reserves for natural resources
    (see China & Noranda copper, China & Alberta oil sands, China & Silver Standard)

    May 2003:
    OPEC and Russia will resort to euro pricing for crude oil

    Jan 2003:
    GSE (Fanny Mae & Freddy Mac) cracks will be first evidence of mortgage crisis

    May 2002:
    USDollar will decline sharply, but trade gap will stubbornly remain large

    Profits continue while others consolidate. Five new stocks are identified in the November issue, now covering excellent prospects for silver stocks. Two energy stocks show all the indications of becoming a minimum of 10-fold gainers from originally cited prices in the newsletter. In the year 2005, my analysis indicates that silver will vastly outperform gold, even as both flourish.

    The rise in the Canadian Dollar amplifies the gains to American investors. It has risen 15% since my inaugural May issue, rising from 72 cents to 83 cents. The looney has shown itself to be the strongest currency on earth this year, no surprise to me. Chinese acquisitions will extend the rise.

    I hope you decide to subscribe to my HAT TRICK LETTER. A sincere thank-you to those who have already. It is my firm belief that the USGovt and Federal Reserve will unsuccessfully negotiate conflict over the USDollar and with OPEC powers. Look for the USA and China to take gradual and unfortunate steps toward trade war. Chinese purchases of large mineral and energy properties consist of the first step in a quietly growing trade war. The USA will find itself slowly pushed aside as China exerts massive pressures on Canada, South America, and Australia to secure commodity supply. We cannot afford to anger our foreign credit suppliers, even as our foreign commodity dependence mounts.

    The world will become a more dangerous place to live and do business in the next few years.


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    Golden Jackass
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    Jim Willie CB
 
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