If in fact the Fed must cut rates at least one or two more times, and must press Fed funds to 4.25-4.00% during this rate cut cycle -- avert recession and stimulate economic growth -- then just maybe the "inflation genie" will be allowed out of the bottle for a while. We will know that if and when Silver (not gold) starts to accelerate to the upside. When rising inflation psychology takes root, it will be the less obvious "precious" metal that flashes its buy signal.

Based on the enclosed long-term chart of spot silver prices, the technical work argues that it is a matter of when, not if, silver takes off. Since May '06, or for the past 16 months, silver prices recently emerged. The trick will be to stay the course with manageable risk in the high-priced Silver Trust ETF (Amex: SLV) to capture a potentially powerful upmove of 25% to 30%.

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

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