Let’s also look at the gold chart.

I looked at the mexicomike link. Thanks again 2point.

My thought was that they are doing wave counts from a HUI chart. Not one gold chart. Unless we think Sinclair is bong wrong we can’t be looking at a longer wave 4 at this point, imo.

We could just as easily write that due to the speedup from the derivatives mess the wave 4 ends early. Sinclair has said that if the price objectives of gold arrive sooner it is because the mess is worse than he thought. So a shorter wave 4 could be a natural outcome of the inventiveness of the greed gouls who brought us this mess.

It is axiomatic that price and time are related. So a shorter time frame means conversely that price goes higher, sooner. This is what Sinclair has been hinting at.

My point is that gold has risen to new highs, and has yet to reach inflation-adjusted new highs. So it has a long way to go in this current environment. This leads me to think that pm stocks will continue to respond to higher gold prices and silver prices.

With this in mind [and with the usual caveat that short term declines are part of the bull market] it is hard to imagine a scenario that leads from here to longer term lower pm stock prices. For argument’s sake, however unpleasant, let us look at one.

This involves a long slow grinding bear market in all equities. How could this occur? Let us dissect the past source of liquidity for the bull market from 1987. Or should we say after 1998 and the lessons learned from LTCM [Long Term Capital Management.]

The man behind the curtain knows the source of the money. If it was the trillions from the CDO’s and other derivatives, and if this has ended, and if the banks etc., have no other source of bulling the general markets, then it is reasonable to imagine them declining.

To what end? Well, the charts would suggest, and if Neely is correct that 2000 was a wave 3 and the 2002 low as the 4a, the recent high could be a 4b, and the next low could then be a 4c. I have been toying with the idea that the 2000 high would be the end of the current wave down. If it is a 4c, the the Dow Industrials would end their decline near it, as would the other major indexes end their 4c down near the 2000 highs.

This would be a natural place to begine a wave 5 up. If the 4c ends this autumn with major news services announcing the death of equities, [again as in 1982] we could begin looking for the end of 4c and the beginning of wave 5 up. It could be a natural moment for some pros to rotate out of pm stocks into another sector. It might be wise to be watching for pm stock weakness at that time.

And where does the money come from for all this? Since I am not a banker, I don’t know how to create trillions out of nothing. I can only guess that some new method will be found. Monty Guild one explanation, and has said it very clearly. This can be read at Jim Sinclair’s site at the

Saturday, March 15, 2008, 3:26:00 PM EST

CONCLUSION

Events seem to be validating the opinion that Jim Sinclair and I have been propounding on these pages for a long time.

NO MAJOR U.S. BANKING INSTITUITON WILL BE ALLOWED TO FAIL TO MEET ITS COMMITMENTS TO DEPOSITORS AND COUNTERPARTIES. To do so would be an admission of defeat by the governmental agencies and institutions that exist to prevent events like these from happening including the Great Depression of the 1930’s.

CENTRAL BANKS EVERYWHERE HAVE NO OPTION BUT TO REFLATE AND SUPPLY LIQUIDITY TO THE WORLD FINANCIAL SYSTEM. FURTHERMORE, THEY HAVE BEEN DOING THAT SINCE THE CRISIS BECAME OBVIOUS ABOUT 6 MONTHS AGO.

All of the themes that I said had to be fulfilled to solve the problem are not yet finalized. But congress is working to create an agency to buy bad loans and the U.S. Federal Reserve has been doing it for months now.

Some countries have been slower than others to recognize the problem. But now all do and they will make haste with liquidity, government bail out programs for banks, bank nationalizations if necessary, government aid to mortgage holders and many other programs designed to get the problem behind us as soon as possible and to buy votes in the process.

WHAT LIES AHEAD?

THE SHORT ANSWER TO WHAT THE FUTURE HOLDS IS MORE INFLATION, HIGHER GOLD PRICES, HIGHER COMMODITY PRICES AND A LOT LOWER PRICES FOR BONDS.

If you review the statements by Jim and by myself in the past several years all of the events currently taking place have been predicted and explained.