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The only thing lacking against a backdrop of impressive economic statistics is a new backdrop to the skyline of Manhattan that for many of us should be two bigger, stronger and better Twin Towers. But alas, we do not even yet have the beginnings of the Freedom Tower, which for many will be a lacking substitute. Still, few could have imagined 5 years ago just how well both the US economy has fared and in reality it should be doing better, but as usual the Federal Reserve appears to have gone to far and that is now being manifested in the real estate and financial markets and we are juxtapositioned in a tug of war between the prospect of an easing in Energy prices, versus what the Fed hath wrought and now it is becoming increasingly evident that the Fed in all likelihood will begin to ease rates very soon and this could have a very salutary effect on markets indeed especially in '07, so it looks as if we're coming into a era that should present some valuable buying opportunities ahead of a whole new unfolding business cycle that in many respects, could rival those of the mid to late 90's, especially as this next boom is likely to be powered by perhaps what may still turn out to be the biggest and strongest high tech boom yet. We also do increasingly believe, that we could emulate Japan in the late 1990's as they began to lower interest rates precipitously to do all they could, to re-stimulate economic growth and ended up dropping rates to almost zero before the economy could be re-started and get back on the sound footing it is today. In a way, the Fed may have ended up making the same kind of mistake or maybe a milder version of same, that Japan made in the early 1990's in raising interest rates too high and then having to lower them as aggressively as they then did. We have for some time now believed and have explained within these pages, that the US might actually lower rates in this next cycle all the way back to 1% and possibly even lower because history has shown that these periods of low interest rates tend to last for a very long time a la the 1950's going right into the mid 1960's and if you compare the current cycle, we are only in the third innings: In other words we may have a long way to go right into the next decade and of course the implications of same are profound, because it implies that following what may be one of the last rallies for the US Dollar, that should our thinking be correct, the US Dollar could be headed for an unmerciful decline, very similar to what happened to the Japanese Yen in the latter part of the 1990's and on the same scale, that could see us easily emulate the Yen's decline to the low 60's on the US Dollar Index and of course that would fit well with our longer term view of soaring metal markets, that actually based on these ideas could ultimately see Gold and Silver soar to double their previous highs of $875 and $50 respectively and that could be just a few years away.... Ie Our target for Gold arrived at by different means would be $1,785 and our target for Silver $100 and how soon would that be? It could be a lot sooner than many think since our target for 2019 for Gold is estimated at $3,900 per ounce. But, as we have learned many times, markets have a habit of dissuading participants from the true uptrend, just as the Financial Markets did in the 1980's and 1990's and we believe the pull back in the metals right now may be one of those times, that could potentially offer one of the last chances to buy Gold and Silver at what are historically, incredibly undervalued prices of the current levels and as we have on numerous occasions proponed this time it is different because we have the added dynamic of a World running out of Gold vs increasing Global wealth. Five Year Anniversary Economic Snapshot Manufacturing Up 5.8% Average Earnings Up 3.9% Unemployment Down to 4.7% Corporate Profits up 20% plus Highest Corporate Cash Levels 5.7 Million New Jobs in 3 Years GDP 5.6% Increase 1st Quarter GDP 2.9% Increase 2nd Quarter 15 Quarters of Consecutive Growth Averaging close to 4% Given everything that's happened, we have a whole lot to be thankful for In the week of post 9/11, we pledged to do our part to improve investor's lives Trade Well From the Desk of Savant

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