This is what happen when someone over goreng a counter until the wok also pecah

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Dear Traders,

Last week there were 2 watershed events that solidify the bull trend in gold and commodities. The first was Warren Buffets purchase of Burlington Northern Railroad for over 44 billion dollars. He used his cash hoard in his Burkshire fund to make the purchase.

In my opinion he would rather hold a real asset such as a railroad than US dollars and Treasury bonds. At least the railroad pays steady dividends and offers a play on the US economic recovery. What does the US Dollar currency offer ? Gradual Depreciation in value, backing by the thieving bureaucrats of the US Federal Reserve and almost zero interest rates.

I think Mr Buffet has more faith in a profitable well managed rail road than the empty promises and socialist agenda of Obama and his chronies. Obama and his chrony Bernenke at the central bank seem to be hell bent to print their way out the economic mess. The result will be inflation as evidenced by the rise in the gold and commodity prices.

Obama has plans to raise taxes on capital gains, small businesses in the form of mandated health insurance and tax surcharges on the wealthy. This will put more pressure on the US Dollar. Why would anyone want to invest in America when there are many low tax, business friendly environments to invest in such as Malaysia, Indonesia, Thailand or Singapore ?

That is why I think Asian currencies will continue to strengthen vs the US Dollar.

The other watershed event last week was the purchase by the Indian Central Bank of 200 tons of IMF gold for an average price of USD 1040 per ounce. paid for by some of their US Dollar reserves.

Although the price was close to the high they would rather hold gold than US Dollars. The Indian banking system has a reputation for conservatism. They were never involved in the toxic instruments peddled by the US investment banks.

It is very rare that a commercial or professional trader will buy at a high. That is a good way to go bankrupt. A professional will usually wait for bad news to panic the crowd of uninformed investors and then buy at a cheaper price. Why did the Indian Central Bank buy high ? They are very smart traders. In the CPO market the Indians always buy cheap and buy after bad news.

Perhaps they know of a secret agenda and want to scale out of their US Dollars ?



Have a good week
Bill
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