Traders need to hang in with the goldminers here UNLESS AND UNTIL Greenspan states unequivocally that the Fed will continue tightening for the foreseeable future. If there is any accommodation by the Fed, then gold will do well.

This move in gold and goldminers started right on my cue, the morning of May 16 (see Cara headlines), and is now for real, in my opinion.

If you are hesitant to buy the stocks and/or the call options of the leading goldminers, then write puts.

In addition, once the gold shares market starts to lift, the gold promoters will come out of their caves and crank up the printing machines. The hype for every penny stock related in any way to precious metals will be simply unbelievable (and you can take that statement any way you want). So, if you have a small position in a 25 cent gold or silver stock, it could now double or triple or more, in the next couple months.

The only event that can hold back the PR printing presses will be Greenspan screaming that Dallas Fed Bank head Fisher was wrong in making an announcement yesterday that the Fed was in the final inning of raising rates! He's not likely to say that as the Texans in the White house may have already targeted Mr. Fisher as next head of the Fed.

BTW, lower interest rates will also lift the homebuilders, banks, consumer loan companies, REITs, and so forth. It could also give a boost to the broad equity indexes here. We'll see.

But, mark my words, this policy change by the Fed, if it's true, is NOT the way to go. Inflation will jump here, and we'll all pay for it. I suspect this decision was made by the Bush Administration -- not the Fed -- when they finally got the message from Mr. Joe in Beijing that the monetary authorities there were not going to release the peg of the yuan to the USD.

So, if somebody else won't do the dirty deed, and take the blame for this Fed move, a la the People's Bank of China, you have to do it yourself and take the heat. Greenspan is now going to take a lot of the heat that ought to be directed at the Administration, and the free-spending Congress, and others.

If the Fed starts now to accomodate, the bond market would not continue to do well. That 3.90 pct yield on the U.S. 10-year T-Notes would soon turn into 4.90 pct and then 5.90 pct -- but isn't that what I've been expecting?

And crude oil prices would also lift because the OPEC producers are not interested in receiving monopoly money or wooden nickels.