Markets Quiet

Gold/XAU Ratio 4.93 CEF premium/discount 10.3

I look for spot gold to test recent lows--then a rally into September for HUI--barring any other subprime--interest rate problems.

Computer problems and airconditioner failure caused me to miss posting yesterday. Biggest news is the near panic in short term interest rates. Will the Fed panic also?

"For years, greed has been the underlying force in the markets. Now fear is replacing it. Once underway, fear is an even stronger force. While central banks try to hose down the market's fear-flames with money, it doesn't change the liquidity problem. Lenders fear to lend and borrowers fear to borrow. Money "in the system" is of no real help. Someone has to borrow it. Who will?

The modern financial world runs on credit, so if fear rises to a level where fewer are willing to lend -- and fewer are brave enough to borrow -- the situation can get a lot worse before it starts improving." Harry Schultz