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“They say the price of gas could soon be under $3 a gallon. Do you know what that means? You can now afford to drive by the house you used to live in, go by the job you used to have, and go see the bank where you used to have money.”
-Jay Leno
Today’s daily will be longer than usual. I have enclosed some pictures from our recent trip to Africa and there are a lot of Email’s in today’s Mail Box section. For those of you who print out the letter, you should probably omit the pictures in the first section.

Yesterday, I covered the first part of our trip to Italy. Today I will highlight the African portion of the trip.

I will finish up with my thoughts on the gold and silver market action that took place Tuesday.

We flew out of Naples and into Amsterdam where we transferred to a British Airways flight to the Kilimanjaro Airport in Arusha, Tanzania. (Apart from sightseeing, Jim and I checked out a couple of gold mines and got the pulse of the political climate in Tanzania.) We spent the first night in Arusha. Arusha is like a third-world country. It reminds me of Tijuana, but much bigger. A lot of real poverty there. Tanzania is a country with more than 120 tribes that speak more than 120 different languages. Swahili is spoken in most parts of the country, in addition to the tribal dialects. Tanzania used to be a Marxist country but it is now capitalistic, but you cannot just thrust Democracy or capitalism onto a group of tribal peoples. Nothing gets done there. There are shortages of all the basics – food, gasoline, you name it. In order to make anything happen you have to grease a few palms. There are a lot of Chinese and Indians, as well as whites in Tanzania. What group do you think controls most of the wealth? You’re wrong! It is the blacks, with the big money concentrated with the people at the top, from the president to his minions. Payoffs rule. Welcome to the REAL world.

The following morning, after sleeping in a bed surrounded by mosquito netting, we left our hotel in Arusha and headed off for a small local airport, and we boarded a 12-seat single engine plane and headed off for the Sasakwa Lodge, about an hour away. Paul Tudor Jones, the billionaire hedge fund manager, built the lodge and it took five years to complete. It has only been open for a couple of years, and it was recently rated the number one resort in the world! It lived up to its high billing, and high cost.

The first picture is the inside the main lodge; the next picture is our cabin; the third picture is a view from the back terrace of the lodge looking out over the Serengeti Plane (from about 50′ – 75′ up, on a ridge overlooking the Plane). The last picture is our bathroom, elegantly appointed, as are the rest of the cabin and the lodge. Everywhere you turn there is amazing African art. The finest South African management company manages Sasakwa.

The Serengeti Plane is Tanzania’s oldest and most popular national park and is populated with hundreds of thousands of wildebeest, zebra and Thompson’s gazelle. It offers the most scintillating big game viewing in Africa. There are large herds of buffalo, elephant and giraffe. Where there is game, there are predators, ranging from the aardwolf to lions, cheetahs and leopards. There are over 500 species of birds. Vultures and hyenas abound. Talk about big – the park covers 5,700 square miles, North to Kenya and bordering Lake Victoria to the West.

Tudor Jones has a 90-year lease on a large section of the Serengeti, adjacent to the National Park. There is no hunting allowed in Sasakwa or in the Serengeti National Park. It is preserved for the wildlife. Tudor Jones built the lodge for his personal use. Once a year, he and his family take over the lodge for two weeks. It only accommodates 20 or so people at any one time. We had our own personal guide who drove us around the reserve from 6 a.m. to 11 and again from 3:30 till dusk. That’s when the animals come out to graze and hunt. They don’t move around much in the heat of the day. It is a fantastic experience.

Pictured below, several dozen buzzards (several species) and three hyenas are feasting on a zebra carcass. At one point, the buzzards were three or four deep, one on top of another, frantically trying to get at the meal. The zebra is on the extreme right of the picture.

Next, we found a pride of lions, and they were moving about freely only 10′ – 20′ from our Land Rover. In the picture below, two of them are sharpening their claws on a tree.

We saw lots of elephants too. You don’t realize how powerful they are until you see them uproot a full grown tree with little effort. I could show you a hundred pictures like this, but you get the idea.

Life on the Serengeti is not all that different from life back here in the states. The predators (JPMorgan, Goldman Sachs, Bank of America, etc.) prey on all of us too. It is survival of the fittest all over the world. The strong show no mercy to the weak. After watching what the Cartel did to the metals today, have you any doubt?

The mistake we made was spending four nights at Sasakwa in total luxury and then flying deep into the Serengeti to live outdoors in tents. It was just too much of a let down. The tents were nice, and the food was great. But where the camp was set up, they were suffering from a lack of rain and controlled “burns,” which left us with no grass and a lot of dust. Not the best environment for the grazers and predators. We had to drive a ways out of the camp to find game.

The first picture is of Susan, unzipping the front of our tent.

The next picture is of our friends, Jim and Diane Cook, having wine and a salad in the dinner tent. Mind you, we were not exactly roughing it, but compared to where we had just come from, the let down was real.

After dark, you could hear the lions and hyenas moving about outside the tent. You would not want to go outside to relieve yourself. The tents had an indoor toilet and shower, but of the most primitive design. We got 5 gallons of hot water a day for a shower and had to be quick or we would run out of water in the middle. The toilet was basically a hole in the ground with a portable potty set on top of it. I guess we are just city folk, not particularly suited for the rough outdoor life. After three nights in the bush, we threw in the towel and cut the trip short. We had seen enough of everything and it reached a point where everyday was not much different from the one before, but they were exceptional.

We cut the trip a week short and chartered a plane and flew back to Arusha, where we boarded a plane for Amsterdam, then Minneapolis, and spent 28 hours in the air and waiting between flights. We did fly business class and it wasn’t all that bad.

This was a trip of a lifetime but if I never leave the US again I am fine with that. In spite of what I write, focusing on the problems, I want you to know that I love our country. It’s just that I cannot bear to see the greed on Wall Street and the incompetence in Washington ruining such a good thing for all of us.

Onto the markets:

My goodness, one would think that the fundamentals have suddenly changed. Nothing has changed! The world is in as bad shape today as it was yesterday. The Middle East is a tinderbox, Europe is broke and falling apart, our banks are failing (Bank America is collapsing), our politicians refuse to stop spending, and the list is endless. So what gives? Most of the fall in gold and silver occurred AFTER the close of the markets, in the thinly traded after market. Typical Cartel behavior. More “paper” manipulation of the market. Even after the pummeling, gold is still up $229.80 in the past 30 days and silver is up $1.81. Get used to this type of volatility. It will become the norm, not the exception. Whenever it happens, ask yourself, “What was silver and gold selling for a year ago?” Look at the result of all the ups and downs and see what is happening over time. These pullbacks are your buying opportunities!

Jim Sinclair had the following to say about today’s action:
“The following was posted August 11th as Gold passed $1764.
1. Those holding gold to hedge the systemic risks of the Western financial world simply stay in your position.
2. Traders lighten up your positions as gold approaches the next two Angels.
3. No market fails to have reactions at some point.
4. Reactions in this market will be deep, but brief when they occur.
5. The undervaluation of good gold shares has passed manic.
6. Utilization of some of your gold profits into good gold shares is pure logic.”
Respectfully,
Jim