Saturday Morning

The European bourses ended up a useful 3% to 5% though the Dow ended down a little. There was nowhere near the volatility that options traders had feared - maybe the Plunge Protection Team were intervening, I doubt that we will learn the answer for at least ten to fifteen years.

We are seeing a commodities bounce (with the exception of gold, silver and oil). The bounce is right across the spectrum, both hard and soft commodities. There is no doubt in my mind that commodities are oversold and for those of you who are looking for somewhere to invest, now might be a good time to look at commodities - maybe a commodities fund. Of course this does mean that inflation might move up again, led by commodities.

Gold and silver are almost certainly being manipulated down by central banks. Most industry experts expect gold to rise to $1000 fairly soon (the futures are, today, at $788). I note that there seems to be more availability of gold coins in London - there has been a huge shortage, with investors queuing up at bullion dealers to buy anything they can. If you are prepared to carry the risk, then now might be a good time to buy your gold coins. The risk is political - governments are trying to discourage the holding of gold so they manipulate the price down to scare people off. It works.

Oct. 17 (Bloomberg) -- Confidence among Americans fell by the most on record and single-family housing starts hit a 26-year low, posing an increasing threat to consumer spending that accounts for more than two-thirds of the economy.

Over the weekend I shall be posting about the wider situation and the suggestion that a new Bretton Woods is introduced. In essence, this would surely mean the end of the US Dollar as the world's reserve currency. This is a truly huge issue and the ramifications would be felt around the world.