1) Tuesday GOLD fell despite record high inflation on a volatile dollar. Gold last traded in NY down $4.40 to $794.30/oz., silver fell $.04 to $12.99/oz. "Gold is being treated like a commodity when in fact it is the ultimate currency. When investors finally accept that the rush to buy gold will be overwhelming. There have been six major 'corrections' to the current long-term secular bull market in gold that began in 2001:

1. 2003 - Gold at $382 dropped to $319 (-16%)
2. 2004 - Gold at $425 dropped to $375 (-13%)
3. 2005 - Gold at $536 dropped to $489 (-9%)
4. 2006 - Gold at $725 dropped to $560 (-22%)
5. 2007 - Gold at $841 dropped to $778 (-8%)
6. 2008 – Gold hit $1002 on Mar 17 then dropped to $786 on Aug 15 (-21.5%).

Year-over-year perspective: "One year ago gold traded at $650/oz. and the Dow traded at 13,000. Today gold is trading up 23% near $800/oz. while the Dow is trading down 14% at 11,350. So, although gold suffered a 21.5% drop from the $1002 high, the shiny yellow metal is still running circles around stock indexes year over year," said Swiss America CEO Craig R. Smith.
* "A bull market can stand a correction of 30% and still remain intact. The events of a few days, or even a few months, do not necessarily undo what is an event that has been going on for seven years," said George Milling-Stanley, a director at the World Gold Council to MW.
* "Stage two of the gold bull market is just beginning. Gold at $800 looks like a bargain in the new world currency disorder. What we are about to see is a race to the bottom by the world's major currencies as each tries to devalue against others to shore up exports," reports Telegraph.
* "Just as central banks manipulate currencies in concert, so gold can be manipulated by massive selling of central bank reserves. But markets can be manipulated by only so much and for only so long without fixing the underlying problem," reports GlobalResearch.
* "Gold downmoves are corrections within the mega uptrends. Considering the oversold nature in most metals and shares, it looks like the worst is at hand, rather than this being the start of a bear market," report The AdenSisters to MW.
* "The fundamentals for gold have not changed, and with negative real interest rates in the U.S., this is a good time to maintain exposure to gold investments. July and August generally mark a low for gold before prices climb into the fall buying season," reports Frank Holmes at USFunds.com.
* "Every year the July to September period has marked the bottom for the year," reports metals analyst Warren Bevan (see chart).
* "Gold's average increase from August to the end of the year between 2003-2007 is 14.6%," reports MoneyWeek.

2) INFLATION: "Wholesale inflation surged in July at the fastest pace in 27 years. Wholesale prices shot up 1.2% in July, was more than twice the 0.5% percent gain economists expected," reports AP. "Growing evidence suggests American consumers, businesspeople, and political leaders should all be bracing for double-digit inflation, probably as early as 2009. Most Americans will have to tighten their belts and accept lower living standards unless this inflationary spiral can be stopped," reports Busin essWeek. The government reported the CPI rose .8% in July on last week. "Over the past year, consumer prices were up 5.6%, the biggest on-year increase since January 1991. The CPI has surged at a 10.6% annualized rate in the past three months, the second-worst spike in inflation in the past 26 years," reports M W. "Wages are primed to jump as surging oil prices prompt the triumphant return of 1980s-style cost-of-living allowances (COLA), sending the U.S. INFLATION rate to 6% by 2009, said Jeff Rubin, chief economist at CIBC World Markets to FP. "Coming to a store near you: Even HIGHER PRICES. "While most price increases have not been passed on at the retail level, it is inevitable that they will be at some point," reports AP.

3) The US DOLLAR index traded higher, then turned lower on Tuesday after news that wholesale inflation spiked to 27-year highs lifted Fed interest rate hike odds. "The market is seizing on any data that suggest interest rates need to go higher," said Stephen Malyon, co-head of currency strategy at Scotia Capital Inc. in Toronto. "Inflation is winning out today. On a near-term basis, it's helping the dollar," reports Bloomberg. "The U.S. currency retreated from its strongest level in almost six months against the euro Monday before housing and inflation reports," reports Bloomberg. "We are not witnessing a dollar rally so much as a collapse in European and commodity currencies. My fear is that the US will tip into a second, deeper leg of the downturn, setting off a wave of savage job cuts. This will start to feel more like a real depression," reports Telegraph. The buck rose 2% against the euro last week in its longest stretch of weekly gains since February 2006. "The dollar may not be much help in coming months, because its run may be coming to an end," reports Fortune. "Confidence in the dollar is what's kept the US going despite the twin deficits. Lenders to the US government have suffered significant losses, not been from non-payment but because repayments have been in a constantly debased currency — the dollar," reports B SI. "The bear market in the dollar began in January 2001 with the index trading at 120. When it dropped below 80 last August, it cracked a multidecade support floor on its way to setting an all-time low at 71 this past March," reports Barrons.

4) US HOUSING: "U.S. home builders sharply reduced the number of new homes starting construction in July and dropped the number of new single-family permits to the lowest level in 26 years, the Commerce Department estimated Tuesday," reports MW. "Existing U.S. home sales fell to a 10-year low in the second quarter and the median price for a single-family house dropped 7.6 percent as the real estate recession deepened," reports Bloomberg. "One dollar can get you a large soda at McDonald's, a used VHS movie at 7-Eleven or a house in Detroit. The fact that a home on the city's east side was listed for $1 recently shows how depressed the real estate market has become in one of America's poorest big cities," reports Detnews. "U.S. home prices fell a record 16% from a year earlier in 20 major metropolitan areas, according to the S&P/Case-Shiller home-price index, with every region measured showing year-over-year drops for the second straight month," reports NYT. "U.S. FORECLOSURE filings more than doubled in the second quarter from a year earlier as falling home prices left borrowers owing more on mortgages than their properties were worth," reports Bloomberg.

5) CRUDE OIL prices fell $.60 to $112.27 a barrel on Tuesday on weaker demand for oil worldwide as concerns eased over the potential for energy supply disruptions in the Gulf of Mexico. Government data last week showed a surprise fall in crude stockpiles and a bigger than expected slip in gasoline reserves.Concerns over a deceleration in global oil demand have been offset by news that Russia's military conflict in Georgia is expanding. "Victor Shum, analyst with Purvin & Gertz in Singapore, said last week, "the market has been ignoring supply-side concerns lately, but it's looking like the world powers will go forward and place more sanctions on Iran," reports CNN. Wednesday crude inventory data showed a climb of 1.7 million barrels last week. Signs of "demand destruction" and economic slowdown trumped concerns about a tropical storm in the Gulf of Mexico and Iran's nuclear program dispute with the West. Iran has rejected any deadline to give its final response to a package drawn up by world powers seeking to end the nuclear crisis. "Many analysts caution: Don't mistake a healthy correction for the end of a multi-year bull trend," reports CNBC.

6) "U.S. STOCKS dropped in early trade on Tuesday, continuing a slide from the previous session, with concerns about the economy fueled by weak housing starts and a stronger-than-expected rise in wholesale prices and Fannie Mae's ongoing stock slide," reports MW. "Robin Griffiths, technical strategist from Cazenove Capital told CNBC last week he expects the normal downtrend associated with a bear trend will resume in September or October as people return from the summer vacation season. He expects another big down leg in that period." "Governments caused the credit crisis, but capitalism gets the blame. State error led banks to ignore the lessons of history and overdose on too-cheap money," reports Telegraph. Wednesday Freddie Mac reported a quarterly loss of $821 million. "Major U.S. stock indexes, already trapped in bear territory, face a tough road to recovery," reports Reuters.

7) RUSSIA: "Georgian President Mikhail Saakashvili said Friday he signed a cease-fire agreement with Russia that protects the former Soviet republic's interests despite concessions to Moscow. Secretary of State Condoleezza Rice, standing beside the pro-American Georgian leader, said she had been assured that Russian President Dmitry Medvedev will sign an identical document," reports AP."Russia threatened a nuclear strike against Poland after a landmark deal to site American global anti-missile shields in the country," reports Tele graph. President George W. Bush said the U.S. would stand behind its ally Georgia and warned Russia that it must respect the "territorial integrity" of the Black Sea nation, reports Bloomberg. "Sending US forces into Georgia represents the most serious military escalation between Washington and Moscow since the end of the Cold War. Not since British paratroopers came nose to nose with Russian soldiers at Pristina airport in 1999 have the old East-West rivalries resurfaced in such explosive form," reports TheTimes. "Russia is the second largest producer of crude in the world and they have been rather quiet since the Soviet Union’s breakup. Putin is KGB all the way and a very good friend of the Iranians. Russia, while denying claims they targeted oil pipelines, is having a hard time selling that to the international community. The Baku-Tbilisi-Ceyhan pipeline carries oil that is headed for the West to the Mediterranean Sea, much of that oil finds it's way to America," reports Swiss America CEO Craig R. Smith.

8) BANKS: "The year-old financial crisis is not only far from over but could actually get much worse, bringing more big shocks to the US economy and stock market," a host of experts said Monday. "Most institutional investors expect another big financial firm to collapse in six months because of the credit crunch, a survey by Greenwich Associates shows, according to the Financial Times, reports CNBC. "More U.S. banks may fail after the collapse of mortgage lender IndyMac Bancorp, straining a financial system seeking stability after years of lending excesses. 'More than 300 banks could fail in the next three years,' said RBC Capital Markets analyst Gerard Cassidy," reports CNBC. "Indymac's failure marks the opening of Part Two of the credit crunch. Best credit crunch line: UBS, which has taken the biggest hits globally, stands for "Used to Be Smart", reports NPost.

9) U.S. consumer CREDIT/DEBT expanded at the fastest rate in seven months in June as Americans turned to their credit cards to keep up spending in the face of rising food and energy costs, a report last week showed. "June consumer credit rose $14.33 billion, or at a 6.7% annual rate, to $2.586 trillion," reports CNBC. On Aug. 21 at various movie theaters around the country will play a documentary titled “I.O.U.S.A.” to teach Americans about the dangers of debt. Three financial big shots taking to the stage to give Americans a good talking-to about the country’s sloppy debt habits: Warren Buffett, Pete Peterson and former Comptroller General Dave Walker. The film’s inspiration comes from the 2006 book, “Empire of Debt: The Rise of an Epic Financial Crisis,” by William Bonner and Addison Wiggin," reports WSJ< /a>.

10) U.S. UNEMPLOYMENT jumped to 5.7% last month, a four-year high. The Labor Department reported that nonfarm payrolls fell for the seventh straight month in July while. "A trio of crises -- housing, credit and financial -- have badly bruised the ECONOMY. In response, employers have cut jobs for six months in a row, bringing total losses this year close to a staggering half-million -- 438,000. The Labor Department reported that layoffs rose sharply last week. New claims filed for unemployment insurance jumped to 448,000, the highest in five years. Meanwhile, GDP increased at an annual rate of 1.9% in Q2. That marked an improvement over the feeble 0.9% growth in the first quarter and an outright contraction in the economy during the final quarter of 2007, reports AP.

THE FED said they remain concerned about rising inflation, stating last week "the inflation outlook remains highly uncertain". "It is clear that the Federal Reserve is not going to pull the economy out of this rut. This downturn wasn't caused by a central bank worried about inflation. And lower rates are not going to turn the economy around," reports MW. "The Fed swung monetary policy back and forth to extremes... This erratic behavior encouraged a series of financial bubbles in interest- sensitive assets -- first the stock market, during the late 1990s tech-stock boom, then housing -- but the Fed declined to do anything or even admit the bubbles existed. The nation is now stuck with the consequences of its blindness," reports TheNation. "Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson will either have to prepare America for a lot more pain or employ all their resources to bail everyone out of the mess with piles of freshly printed money to keep the spending orgy afloat," reports WND.

"President George W. Bush signed into law the HOUSING BILL, the government's most aggressive effort to combat the country's housing crisis in August. The housing package becomes law as bad news continues to mount for the housing sector, reports WSJ. Dr. Ron Paul reports the bill also includes: A provision to increase the national debt ceiling by $800 billion. The Treasury can now buy an unlimited amount of Fannie / Freddie housing securities and stock. Anyone working in the mortgage industry will now be required to be fingerprinted. Every credit card transaction will now be reported to the IRS," reports CFL

1) "The United States Mint announced the release of a new 2009 one-ounce ultra-high relief 24-karat gold coin, creating a modern version of what many have called the most beautiful gold piece ever made: the 1907 Ultra High Relief Saint-Gaudens $20 Double Eagle. The mintage of the new coin will be unlimited for one year. The new collectible coin about 50 percent thicker than other United States Mint one-ounce gold coins. Only 2009-dated coins will be minted. The coins will go on sale in early 2009," reports CoinLink.