TEOTWAWKI comes and goes. Ike Spike lingers.

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"The End Of The World As We Know It" mega-event that so many had geared up for, took place over the weekend. And, once again, people woke up, ate their breakfast, and went to work as they would on any other Monday while the sky remained in it habitual place. The biggest ever rescue of a financial entity was carried out by the US government. "Frannie" has now been put into conservatorship and half of the US mortgage market is suddenly looking like it will have the support it needed but was lacking in order to avoid a collapse. If ever there was a Monday to wake up to four-digit gold prices, today would have been the day. A scenario that had been prophesized as the ultimate 'prefect storm' for the safe-haven that gold can be in such conditions, resulted in prices barely edging up to the same resistance level at which they stalled last week - near $819. For the moment, that number remains the one to beat while $800 remains the one not to slip under.

There were rallies overnight, allright; in overseas stocks and in the US dollar. Relief spikes in the Nikkei (up 412 points) and the greenback (up .65 to 79.25 on the index and to 1.423 versus the euro) contrasted the sharp drop in Treasurys as investors saw the beginning of the end of the credit crisis in the actions of the US monetary authorities. If anything, gold prices moved higher due to crude oil's advance to $107.85 as Hurricane Ike threatens the Gulf and oil production if it stays on its current vector and as OPEC is expected to come up with some kind of a price floor for black gold at its meeting this week. That, and some pre-festival season buying in India and ahead of the end of Ramadan in three weeks for the Muslim world.

New York spot gold dealings opened the week with a 1% gain, quoted at $810.90 at the start of a day which looked all set to batter the ETFs and other vehicles that are short the financials. Dow futures were sharply higher as more house cleaning took place after the Frannie intervention; WaMu jettisoned its CEO via a 'retirement' amid that firm's heap of recent troubles. Metals traders remain on dollar-watch and will wait to see how much money finds its way into the equities markets while departing the commodities one, now that a floor has been placed under the banking sector. Insiders in the niche have been heavy buyers of their own shares in recent months.

Silver gained 33 cents to $12.55 after it touched the lowest level in a year before the weekend. Platinum fell $5 to $1339 while palladium rose $1 to $270 per ounce. The yen and the pound continued to take a beating and the euro did not look much better as the week started. This, despite a realistic chance of a pause and re-grouping in the greenback after what has been a marathon rally. Some uncertainties will linger since Mr. Paulson's Frannie plan has its share of things to prove as the hard part of the operation gets underway. Trading on such perceptions and on the week's economic calendar news will yield opportunity for buyers as well as sellers. The bias, however, still favors sellers and if the dollar breaks 1.42 against the euro, bullion could experience further problems - of the type which could bring it back under $800 per ounce.

On the other hand, there remain some for whom the world is ending as we speak, appearances notwithstanding. One of them is the illustrious Harry Schultz and numerous times in his writings over the past several decades we have had the opportunity to witness TEOTWAWKI - for different reasons. Harry is back with a chilling account of why this time things are different. Marketwatch and Peter Brimelow bring us Harry's prognostications for worldwide depression and $1600 gold.

"A Fannie-Freddie bailout fillip in financial markets? Maybe, but a megabear says it just shows the world is unraveling right on schedule.

Harry Schultz' The International Harry Schultz Letter was posted last night right about the time the Fannie Mae-Freddie Mac bailout was reported. But Schultz anticipated it, writing sarcastically:

"Flash: As we go to press, the US Government reveals plan to take over Freddie Mac and Fannie Mae, the biggest bail-out by taxpayers in history. It also wipes out the shareholders! Sunday selected to avoid stock market action same day, just as bank closures are told after market close Friday. That tells you what shape markets are in when government and CEOs hide behind holidays."

Schultz had earlier made his overview clear (I'm translating slightly from of his text-message style):

"Fed maneuver room approximately gone. Any $US injection big enough to avert a depression triggers runaway inflation. If not big enough: depression. US on knife-edge. Gold helps you either way.

"Which brings us to [Pimco bond king] Bill Gross. He went crazy last week, urging government to bail out everyone, to save the system. Either he is a closet socialist, a corporate fascist ... or just trying to get government to bail him out of 61% of his toxic waste mortgage backed securities."

Schultz suggests just two alternative scenarios, both equally appalling:

"If Bush bails them all out, the die would be cast for inflation unseen in the West since 1923 Germany. If no bail: Hello, 1929." Gee, thanks.

Schultz' apocalyptic style is easy to ridicule. Two generations of financial pooh-bahs (the sort of people who ran Freddie and their journalist groupies have been dismissing him. And Schultz is having a hard time right now. Over the past 12 months, HSL is down 14.4% by Hulbert Financial Digest count, vs. a loss of 10.1% for the dividend-reinvested Dow Jones Wilshire 5000. It's getting worse: Year-to-date, HSL is down 25.8% vs. a loss of 10.3% for the total return DJ-Wilshire 5000.

This is presumably because the great post-millennium hard-assets bull market has stumbled recently, albeit not for the first time. But the Aden sisters, Schultz protégés and publishers of The Aden Forecast, seem to have handled the stumble better, while remaining true believers. Still, over the past five years, HSL has achieved a 17.82% annualized gain, vs. 7.85% annualized for the total return DJ-Wilshire 5000.

And Schultz was quick to recognize the end of the last hard-assets bull market more than two decades ago. But he still hasn't called the end of this one.

Plus ... well, Fannie and Freddie have collapsed, haven't they?

In his latest issue, Schultz summarizes:

"Widespread stagflation will probably now build more inflation than stagnation, then gradually morph into more stagnation than inflation. Then, deflation takes over, and ultimately, depression. All this over next 9 years.

"For the moment, seal off major wipe-out risks. Exit all money funds and currency time deposits, step up gold & oil positions, move into 1-2 year government bonds (non-US $) in First World nations. Swiss first choice. Think not of yield; think of an ark's life preserver around your neck."

Schultz is currently negative on the stock market. On gold, he writes:

"We were unduly cheerful about gold's path in last HSL. The entire commodity market from asbestos to zinc took a dive, along with most stock markets, not to mention a business slowdown. It was caused in part by the overshoot all markets had in recent years -- many going to record highs -- which eventually called for a mega correction to the mega rise. And in part caused by the global monetary mess which is having a deflationary pull-down effect."

But he concludes:

"Our upside gold targets are still valid, as soon as the currency/metal/oil corrections exhaust themselves, as all storms do."

Schultz' upside target, at last report, was $1,600 in fairly short order."

Nervous, choppy conditions will dominate - specs have further reduced long positions last week. Dollar direction and Ike will remain in the driver's seat. There is a definite absence of gold pundit comments about gold being up due to the Frannie news. Evidently, and by elimination, it must be Ike. Not a good omen for the short-term. See Gustav.

Happy Trading.