''Midas'' commentary for Friday posted at GoldSeek

Hint of a Bottom in Gold?

By Jim Sinclair
a href=http://www.jsmineset.comhttp://www.jsmineset.com/a
Thursday, March 4, 2004

Today gave us a hint of a bottom as gold made a nice move
to $395.20 until the squaring of currency portions in front of
the jobs report settled it back to $393.20. The financial world
has a habit of fixating for no apparent reason on one report
or another.

It will take much more than we are seeing on the job front
these days to restore employment levels to what they were
four years ago. Keep in mind that the jobs report is not a
reliable indicator of the actual state of employment and you
have high anxiety over nothing.

The real mind teaser was brought up twice today. Early this
morning I received a note from C.L. Jr. from Edina, Minnesota,
and this afternoon Monty Guild called to discuss the same
subject. At the time, I had just handed the paper to Victoria,
my CFO, for her thoughts.

Since I do not believe in coincidence, the subject matter we
discussed is high on my agenda as a quot;need to know morequot;
item. What I am referring to is the chairman of the Federal
Reserve, Alan Greenspan, being specific enough to refocus
attention on the impossible financial condition of the Social
Security program and the problems that seem to surface time
and time again at Fanny Mae and Freddie Mac.

Those problems are, in my opinion, the natural outcome of
too much dealing in over-the-counter, interest-sensitive
derivatives. Then last evening we heard a statement by the
secretary of the treasury, John Snow, that categorized Fannie
Mae and Freddie Mac as stand-alone businesses not guaranteed
by the U.S. government.

I was quite surprised to hear that and surprised that there was
no backtracking away from the statement today, only silence.

So what are we being prepared for? Is this a way of pandering
to those conservative think tanks that put forward the
privatization scenario for numerous government services, from
Social Security and Medicare to prisons and the FAA? Or are
we being prepared for the inevitable result of a U.S. budget
deficit gone wild and getting wilder by the minute regardless
of who is president in 2005?

What would it take for the AARP, the nation's leading
organization for people age 50 and older, not to send an army
of grayhairs to lay siege to Congress and the White House?
Are we seeing early signs of the platform of the incumbent
that contends that it takes a strong man to run a government
and country in a crisis? Are we headed for a crisis where it
might be argued that anyone new in command would be
inadequate and the country must be guided by the
experienced team already running the show?

In any event, I see gold staying strong well past the
election so the fundamental case that is required to
sustain the technical conclusion cannot be one of calm.
Of course gold will ebb and flow over time but my
technical conviction tells me that everything that
happens to gold before the election is only a prelude
to what comes toward the end of the present budget
projections in 2012.

My strengths have always been in seeing ahead and
thankfully I have a significant record of good insights into
the future. So here is the question.

We have just seen two key administration personalities
in high office sound an alarm concerning the financial
viability of key government institutions. Such
pronouncements are usually to be found in newsletters
that are considered rogue by the establishment. (I'll let
you decide whether www.JSMineset.com is one of them).

This is very much an anomaly in performance and
procedure, signaling a change of course at the Treasury
and the Fed toward an end-game event.

Why has this occurred?

Whatever the answer is, it is good for gold.

The generational bull market in gold appears now to have
solid fundamental and developing technical evidence
certifying the conclusion I have given you. It is sufficient
that we have identified and are now focused on the
anomaly in the behavior of the Fed and Treasury leadership.
It is enough to know that whatever their plan is, it will
certainly be good for gold.

We will monitor the developments in order to determine
exactly the order of events.

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