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Dallas - Bill's analyses on my speech...

From GATA : Mahendra Magic

Just back from an enjoyable lunch with Mahendra and Nanik from Spain. Charles Pace and I then took them to the airport.

The Mahendra presentation and reception for him was most fun. There were 55 of us there with people coming from Switzerland, Spain, New Mexico, California, Arizona and Oklahoma to hear what Mahendra had to say. Some features of his presentation:

The essence of the outlook for this century has to do with nature, which will be a controlling factor for many decades to come. In that regard gold and oil will be of extreme importance in the years to come, leading to a grab for both by many nations. As we all know, via the Iraq adventure by the US, this grab has already begun. Some of Mahendra’s predictions:

*The best play of all is silver with the downside limited from here. The eventual upside? Pick a number - $48 per ounce to $98 per ounce. If silver can stay above $7.95 for 21 days, it will take off for the $12 area by year-end.

*Look for gold to continue to trade higher, maybe even making new highs before September 4th. From there on, gold and silver could really take off. In the coming years gold will rally to $1600 per ounce, then tank back to $1,000 which will be its long-term base area.

*Years from now, say 5 to 8, certain nations will nationalize their gold firms.

*The price of oil could go as high as $100 per barrel and will play a pivotal role as far as geopolitics and financial markets are concerned. The big run in oil will be over the next five years. After that, alternative energy sources will come into play which will affect the oil price.

*While he was bullish on the stock market for the very short-term (like this week), he is very bearish as this year wears on and for next year, looking for the DOW to eventually tank down to the 5,000 to 7,000 area. This will be significant as so many in the general public have their money in the stock market as compared to 1929 when few did.

*To try and make an extra 3 to 5 to 10% in the stock market at this point in time is not worth the risk. Those who are long the stock market should exit on rallies over the next few months.

*Bank stocks will be hit especially hard.

*The US housing market is in BIG trouble.

*South Africa will come under severe stress in 2008 and have major problems.

*Fiat money will collapse. Not just the dollar, but other currencies also. Mahendra related this as akin to what happened in Zimbabwe where the exchange rate with the US dollar used to be 8 to 1. It is now 100,000 to 1. Even those who once had the equivalent of $100,000 are poor, as it is only worth two to three hundred dollars today. This will precipitate an enormous appetite for gold.

*The exception for currencies will be the yen, which will maintain some independent strength, eventually going to 60 against the dollar.

* *There will be no major terrorist attacks in the US, perhaps some smaller ones. However, some time in August there will be a substantial one in Europe.

Mahendra says his predictions have been 80 to 85% accurate. The reason they are not more so are due to his own limitations as a human. He went on to say astrologers have a bad name today, just like doctors did 150 years ago. This will change in time.

Meanwhile, August gold traded $398 last evening, so he nailed that one almost to the penny. And coffee, which is one of his largest positions, shot up another 5.55 cents today to 85.50 cents.

Exploding coffee:

We all had a wonderful evening at Sipango and I can assure you Mahendra, who has a wonderful relaxed delivery, caught more than a few people’s attention. They will want to know what he has to say and will be much more focused on his insight of what is come in the financial market world, just like so many institutional money managers are doing already.

Almost forgot:

This took the cake to end the evening. As I mentioned earlier, Mahendra’s focus in on nature. Not too long before we were to leave the restaurant, a number of guests returned saying it was raining too hard to go outside. Mahendra got all excited and told me this confirms what he was saying tonight and that those in attendance who acted on what he had to say will certainly profit. I am sure he will say more about this.

Then, the rain stopped. However, as we walked across the street to go to another restaurant for dinner, the loudest thunder and lightening I have heard and seen in a long time erupted. It was wild, almost as if nature was saying to us that Mahendra is right. Not long thereafter, it began to pour again.

A special thanks goes out to my friend Charles Pace of Pace Securities Group who went out of his way the past three days to make sure Mahendra was taken care of properly. Charles, a most thoughtful host, has had a long term interest in the precious metals markets, attending the first Blanchard Conference in New Orleans – when Richard Russell and Bunker Hunt made presentations.

Some feedback on the night:

I wanted to thank you again for organizing this evening with Mahendra at the restaurant tonight. It was a fascinating event with a very interesting group of people. Mahendra was terrific. I emailed him to thank him for coming to Dallas to share his time and thoughts with all of us.

Tonight I felt (for the first time in quite a while) as though I could share my thoughts with others in a room without feeling like I am 'out in left field' or being looked at as crazy. This was a truly amazing event for me and I am so glad that I got to attend. Do you anticipate future local events or meetings for Cafe members? I would certainly like to attend. Thanks again and best wishes.
David Stammer