Deja vu all over again… are stocks just following the 2008 playbook?… Bill Jenkins shares his favorite global currency… Gold bugs beware: Gold chart forecasts a sell-off… Yet league of famous funds (and Chris Mayer) are buying up gold stocks… Plus, are we reading this right? A bank bails out the government?

We’re scanning markets of the world today and scratching our heads… haven’t we heard this before? There was a scare at the start of the year – banks were in trouble, the housing market was crashing and unemployment was rising. The S&P fell at a rate unseen in a long, long time. But then,a sucker’s rally! The worst was likely over, they said… stocks were oversold. The U.S. consumer, China and oil companies promised to lead us out of this mess. And of course, the current administration’s new multibillion stimulus

Remember the old expression, “I wouldn’t do that for all the tea in China.” People used to associate China with tea. Well, now it’s time to associate China with gold, and a lot of it. Because the Chinese recently announced that they control over 33.89 million ounces of gold for monetary purposes. That’s an increase of 75% in Chinese gold holdings over the past six years.

This kiloton of Chinese gold makes the Middle Kingdom the world’s sixth largest holder of the yellow metal. The U.S. — courtesy of President Roosevelt’s gold confiscation in 1933 – tops this list of the world’s largest gold holders, followed by Germany, the IMF, France and Italy.

How did the Chinese accumulate so much gold? China purchased it over the past six years through its State Administration of Foreign Exchange (SAFE). SAFE is quite distinct from the People’s Bank of China (PBOC). The SAFE

For the first time in a couple of decades, some of America’s most successful, big-name investors are buying gold.

David Einhorn, the hedge fund manager who predicted the downfall of Lehman Bros., recently bought gold for the first time. And then there is John Paulson, the guy who made billions of dollars by correctly anticipating the housing bust and credit crisis.

Paulson just plunked down $1.3 billion for an 11% stake in AngloGold (NYSE:AU). He’s also got a big position in Kinross Gold (NYSE:KGC).

Peter Munk, the 82-year-old chairman and founder of Barrick Gold, also offers up his own anecdote about gold’s broadening appeal. “I have had more phone calls in the past six months than ever before – from people who have $120,000 inherited from grandmother, and from hedge fund managers with millions,” he says. “I am not saying George Soros, but people of that caliber have told me they

By Henny Sender in New York and Javier Blas in London

Published: March 8 2009 18:13 | Last updated: March 8 2009 18:13

Hedge fund investors who made money last year by betting against investment banks are now buying gold as a way of betting against central banks.

The gold bulls include David Einhorn, founder of hedge fund Greenlight Capital, who last year came under the spotlight for his short selling of shares in Lehman Brothers, after arguing that the bank did not have enough capital to offset its exposure to falling property prices. Other funds looking at gold include Eton Park and TPG-Axon, investors said.

Their belief in bullion is being expressed even as gold prices have retreated from last month’s break above the $1,000 an ounce level. Spot gold in London closed last Friday at $939.10, after falling last week to $900.95 an ounce.

Investors such as Mr Einhorn

Despite a sharply rising US$ all through Far East, Europe and the Comex open…gold managed to stay within five dollars of its Friday closing price in New York. Gold and silver’s prices peaked at 9:00 a.m. in New York…when both had managed to claw their way into positive territory for the day. But once the London fix was in at 10:00 a.m. in New York, the rug got pulled out from under them.

As per usual, either [or both] JPMorgan (NYSE:JPM) and HSBC USA (NYSE:HBC) should be considered prime suspects.

Both the gold [above] and silver [below] charts show where they pulled their bids on three separate occasions during the day, and whatever sellers there were…were forced to sell into a vacuum. It’s the ’same old, same old’.

Let me start off with a morsel of clarification. I don’t hate gold. I own it, or more accurately, an interest in gold via gold mining shares.

And I believe a small allocation (5% to 7%) has a useful place in a well-diversified portfolio. Over the long haul, studies confirm it helps increase returns while minimizing risk. A benefit we can all agree is desirable.

But over the short-to-intermediate term - the next six to nine months - I think gold is a terrible investment. After breaching the $1,000 per ounce mark again, as I suggested would happen to my subscribers on February 2, it is overdue for a retracement back to roughly $700 per ounce.

Those of you who expected it to drop the day after I suggested shorting gold need to understand that “short term” doesn’t mean “this week.” Just because it moved higher doesn’t negate the point

Shorting Gold: 8 More Signs Gold is Overdue for a Correction

by Louis Basenese, Advisory Panelist Senior Analyst, The Oxford Club

Two weeks ago I told you it was time to start shorting gold. And the recommendation, as I expected, ignited a brew-ha-ha on our Investment U message board.

That’s because there’s not much middle ground. Most investors are either fanatical or supremely skeptical. If you have any doubt, check out the comments - and all the wonderful names I got called - on our website.

But since I’m a glutton for punishment, and since gold moved in exactly the opposite direction I predicted, it’s time for an update and a little clarification.

A Morsel of Clarification on Shorting Gold

Let me start off with a morsel of clarification. I don’t hate gold. I own it, or more accurately, an interest in gold via gold mining shares. And I believe a

Sprott Says U.S. Depression Will Boost Gold Price

By Stewart Bailey

Feb. 3 (Bloomberg) — Eric Sprott, the Canadian money manager who last year predicted banking stocks would collapse, said the U.S. is at the beginning of an economic depression that will help gold prices more than double.

Bullion may top $2,000 an ounce in coming years amid a series of financial catastrophes, the chairman and founder of Toronto-based Sprott Asset Management Inc. said yesterday in an interview. Banks will battle to replenish capital, Treasury auctions stand the risk of failing and the moribund economy will create a dire operating outlook for many companies, he said.

“The trend is down, and there’s not one signpost that says it’s changing yet,” Sprott said yesterday from Toronto. “We’ll stand by to wait to see those, and until it does, you have to assume it gets worse.”

Sprott, who manages $4.5 billion, said in March that the world

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As expected, the Thursday morning rally at the Sydney open got snuffed out in short order. Gold remained flat in Hong Kong until 4:00 p.m. in their afternoon …3:00 a.m. in New York. Then the boyz showed up, and down gold went until the London open, a short rally got turned over, and the bottom for the gold price came at the London a.m. fix. From there it rallied gently until the London p.m. fix…and then away it went to the upside.

Silver was the same, except it didn’t wait around for the London p.m. fix before it headed up. Its rally began promptly with the Comex open in New York. Both metals remained strong even in electronic trading after the Comex closed…and despite the strength of the US$.

Gold open interest dropped another sizeable chunk on Wednesday…down 8,387 contracts to 345,804. In silver, o.i. went the other way for the second

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The base metals were all glowing green on Friday. Copper rose from the pre-dawn hours to the New York open and tailed off from there, but still hung in positive territory to finish at $1.5089/lb., up 3¾ cents.

Nickel shot up in the pre-dawn hours, then traded flat through most of the day, closing at $4.8376/lb., up 18¾ cents. Zinc had a lot of ups and downs, but ended at $0.5542/lb., up two-thirds of a cent. Aluminum was little changed, adding less than two-tenths of a cent, to $0.651/lb., while lead was modestly higher, tacking on a penny, to $0.5129/lb.

Copper led the industrial metals higher, rising the most in a week after the Bank of America (NYSE:BAC) bailout raised hopes that government stimulus plans might help to revive the economy.

Rising equities also helped. “Everything in copper is about the U.S. stock market, the government recovery packages and foreign