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Good Morning: Gold and Silver appear to be accelerating to the upside on the news that some analysts are calling for $600 by year end. That might seem like an overly optimistic forecast, but one only needs to go back to December 1979, to know that on or about 26 years ago today, December 7th, at $440 per oz, Gold was trading around $75 lower than where it is today at $515, prior to breaking out to what was then new all time record highs of $452, on the way to a stunning $435 gain or near doubling in price over the next 28 days, in one of the most dramatic advances ever in history, taking Gold to its breathtaking all time record high of $875.

Compare what happened 26 years ago to Gold prices today, that are already setting new 24 year highs by some measures, ie the December 2009 contract yesterday closing at $612.9, and this morning's spot of $515 plus, and it may well be just beginning to dawn on investors the enormity of what is taking place before our very eyes and the awesome ramifications of any such potential.

We have been warning for some time now of the probability for Dr Bernanke, the new Fed Chair appointee, to be greeted with some kind of similar crisis that befell Paul Volker soon after he assumed his role as Chairman of the Federal Reserve and if anything like what happened in 1979 ~ 1980, were to occur, this could top everything and bear out what we suggested at the start of the week, don't be surprised if the Gold and Silver's seemingly unassailable extreme all time highs are taken out by a significant margin.

The current momentum in Gold is palpable and if it is really true that some Gold producers are still hedged or short Gold at as low as $300 per ounce and if there is anything like the rumored Trillion Dollar short position in Gold out there, be ready to witness the Deja Vu move of our lifetimes dead ahead. There is nothing more bullish than a market going up on no news or similarly potentially negative news such as yesterday's impressive and so called anti-inflationary productivity numbers.

At times like this it is tantamount to be exposed to Gold and Silver in as large a way as seemingly possible. We already know Gold and Silver are likely to head much higher in the years ahead, but as is often the case with markets, they don't wait for everyone to get on board before they move. Investors who are not invested in Gold are likely to deeply regret this down the road in just the same way as those who have not heeded some of our previous calls such as the Japanese Nikkei have seen it soar almost 40% this year. Yesterday the Mexican Bolsa once again soared to new all time record highs near 17,500, well ahead of our long expected timeline.
The S&P 400 MidCap also again set new all time record highs, by a smaller margin, indicating a market pause may be at hand...

Recently: If you thought we were being too over-zealous on the state of the economy, yesterday on CNBC, the former United States Commerce Secretary Don Evans re-defined his zeal for the US Economy, describing it as the envy of the World and 'Phenomenal' in his words and the best economy of our generation, in particular pointing out what we had overlooked but predicted as long as a few years ago, that at 150 Million, more Americans are working today, than at any time in US history. The news yesterday again, that US productivity soared to its highest level in two years expanding at a much faster than expected pace, strongly endorsed what we've been saying for years, that the US and the World at large were likely to experience huge repetitive waves of productivity increases as technological advances continue to unfold powered by 'Moore's Law' of a doubling of processing power every 18 months. Gordon Moore is a co-founder of Intel Corp and developed this theory 30 years ago that has quite amazingly, adhered very closely and precisely to his now legendary dictum, rendering 'Moore's Law' if not a household expression, a tech-household name. In today's fast-paced World, fast is not fast enough, so the advent of the Pentium 5, Windows Vista and an Ultra-High Speed net is likely to usher in a whole new wave of productivities, that we believe with continue to improve overall worker productivity for decades.



Productivity Grows at Fastest Pace in Two Years, Helping to Ease Inflation Concerns

The productivity of American workers shot up at the fastest pace in two years during the July-September quarter, helping to ease fears that inflation pressures were threatening to get out of hand. The Labor Department reported Tuesday that productivity, the key component for rising living standards, rose at an annual rate of 4.7 percent during the summer, a big upward revision from the 4.1 percent initial estimate made a month ago and the best showing since a 9.6 percent surge in the third quarter of 2003. In a rather surprising reaction, Gold and Silver briefly pulled back and then advanced to new highs completely ignoring yesterday's great report. This kind of latent buying power behind this current accelerating precious metals advance is bearing out what we have been saying for weeks now in this column, that just like the Energy markets earlier this year, we are in a powerful synchronized metals advance.

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