Could this be the beginning of the drop in gold possibly culminating the Fall?
Click download link to listen on this device: Download Show
Rick is talking about a $120 U.S. dollar, how do you feel about that?
Totally agree Al, its not like it hasn’t been there before, any US rate hike will put 120 in play, glad to see your feeling better Big Al
Thank you very much “Original”. Everyday is different, but the trend seems to be in the right direction. Now, all I have to do is loose twenty pounds and that is on the way.
Best to you, my friend.
I doubt that very much, Al. This rally is for selling and that’s what I’m doing.
Lets face it Matt know of us really know where anything is going, what we do know is ECB is adding more QE this summer while the US spin is a rate hike cycle to kick in, that plus negative European rates will drive the $ far higher, its not based on anyones opinion just the law of trading, I let the chart guide my trading regardless of 120 US$ index or 80 “opinions” , the indicators will lead the way as they react to central bank policy
none, not know
I get your point, but we can’t avoid trading opinions. For example, some guys trade off only support/resistance lines while others put more emphasis on momentum/strength indicators and moving averages.
I buy weakness and sell strength. This means selling breakouts while others buy. Yet both approaches can work.
I disagree with your opinion that a rate hike will put 120 in play.
Time will tell on the rate hike reaction God only knows what the global hedgies will do
Buy weakness sell strength is a basic approach to any bull market, that approach has been fantastic off the March 2009 lows in US equities
Yes, buying weakness etc is basic but few do it. Most would rather buy strength/breakouts with the intention of selling, either into more strength or a downside breakout (weakness).
I assume that you are referring to my comment about “eventually doing well”
I’m referring to your question above, Al: “Rick is talking about a $120 U.S. dollar, how do you feel about that?”
I continue to insist that gold/silver bottomed in Nov of 2014.
Here I go again:
Gold will NOT drop below $US1160
I had been much more sure of silver and the miners, but now I am nearly equally sure that gold has also bottomed.
… and if it does break 1160? I will never post of KER again. Promise.
Don’t make that promise Brian. I believe it is almost a guarantee we see gold below 1160…..but its nothing to fear anyway. Just a natural part of the bear market bottoming process. We really ought to look forward to it happening.
Brian…..you can always come back under a different moniker…….., but, I am with you no way for 1160……….
100% agree Matthew…..sell the rally in the dollar.
Bird, the biggest tool the feds will have to cool off a much higher US$ as the main driver is ECB QE and European negative rates is a rate cut in the US and the only way they can do that is raising rates first so that they can cut and eventually go negative if need be to cool the $ surge, I’d hold off selling the $ today until fed minutes release Wed
Declines in crude are leading the dollar up right now, JJ so that’s what I watch. So what I am looking for is crude to turn back up shortly and thus the dollar will continue to fall. I am not too concerned.
Brian won’t post but Nairb will
Peter r.
Now THAT was funny ! ! !
Good one Peter R.
Totally disagree with Rick on this one. Th dollar is far more likely to retrace most if not all its rise and mean revert. Ricks high dollar hypothesis is predicated on the deflationary outcome that might be expected however interventionist policy is still working hard to overcome that trend and I believe it is within the power of monetary strategists to defeat that through currency weakening.
With rate hikes now being a clearly vocalized part of policy goals it is virtually certain the dollar will decline into the coming period of normalization of the Fed Funds Rate.
In fact, the dollar MUST decline to permit rate normalization and the pattern of the dollar chart has defined that outcome for us already as USD did in fact experience a parabolic climb from which recovery is all but impossible in the world of technical dynamics.
For the dollar to reverse and then exceed its recent peak would be quite unusual if not wholly improbable. I really cannot understand why Rick sticks with his theory given the chart pattern.
People are going to sell low and buy high. These kind of sudden up and down movements are designed to shake people out of their positions. It is not a trading behaviour by a mass number of small traders. It is dominated by a large organization.
ditto Lawrence……………..
When an asset is stuck in a bear market the only way to make money is with short term trades. Just ask anyone that held metal positon from the beginning of 2013 how well holding has worked.
3 year cycle lows are very scary events. One doesn’t want to be holding through one of those.
Weak hands, weak mind……………… 🙂
Gary does sound defeated. Cann’t believe him. Most people are like that. They will scream buy at $1900.
Sorry, I meant to say Cann’t blame him. Cell phone auto changes.
I’m just waiting for the end of the bear market. It’s still too early and everyone that tries to jump on too soon is going to have to weather one hell of a beating at that 8 year cycle low later this year or early next.
Gary when we get that 8 year cycle low then we will see who has “Weak Hands” not to buy the low
8 year cycles can take 9 years, though.
I have been adding and continue to do so. I am glad I sold a lot at high.
I too am glad that you a lot at the high.
Wish that I did that with some of my stocks!
By bear market you mean it is market behaviour. I think it is a market intervention by governments.
I really hate to agree with Mr. Moscow, but in this case I do.
Only one weak mind on this site, Mr. Moscow!
🙂 plus 1
Doc mentioned yesterday that the Commercials had gone short by a extra 3,000 gold contracts.
When we get the COTs on Friday – for today – it would not surprise me if they had gone shorter on gold and also on silver.
To be frank, let’s hope that it is the bloodbath phase down over the summer rather than more of this sideways manipulation where only the big boys truly profit.
I agree with you about the sideways movement and the big boys!
I hope Gary is correct as I really want to see a bankruptcy phase. Not convinced Gary is correct buy hopeful. I don’t think we need to see a major drop to see a bankruptcy phase. It will come even with gold in the 1200-1400 range as many projects were based and are only sustainable on 1500 or greater. However, Gary’s big drop will speed up the process.
I was watching an episode of ‘American Dad’ last night and, bizarrely, the following line cropped up in it:
“From now on I’m gonna call you “Allied Nevada Precious Metal Exploration Company,” because you, Gina, are a gold digger.”.
Whatever happened to Allied Nevada?
🙂
last I read. The company is toast but the debt holder was going to keep the operation going and shareholders still had a glimmer of hope. Have not kept up to speed though.
Good point, Peter R!
how come the hedge funds sold at the top of this rally…isnt that better than selling at the los…hmmmmm
On the weekend I said that the Canadian dollar rates a “buy the dip” and that dip is here. It can go lower, but not much, in my opinion.
http://stockcharts.com/h-sc/ui?s=$CDW&p=D&yr=0&mn=11&dy=22&id=p68617884699&a=404784889&listNum=1
Put up a chart of CDW with WTIC running in the background, April 15th was a breakout for oil as it blew past resistance at $54 sending the loonie breaking out above 80.60 both these levels need to hold or both are going to test new lows if weekly close below these levels hits the charts
Who would name their kid, wocsom morf knarF?
daD dna moM
!meht nmaD
Now I understand Mathew!!
Funny…
funny Brian…….
Tell me about it, Al, cruel ain’t it?
Al, Brian, FFM, and WMK – You guys are all funny 😉
Cycle timers have been calling THE BOTTOM as the end of June /beginning of July for as long as I remember now. If one acknowledges that prediction may be correct then we have the timid selling and the sharks buying.
With the distinct possibility of one month left before the cycle ultimately bottoms now is not to be confused with May of 2011.
CRJ was held back by the seller at .75 its now testing key support at .65
Be interesting to see where CRJ closes this week.
Al, your comment that Gary was spot-on is a bit of an exaggeration. Gary was generally correct in how gold would move directionally, but gold fell short of the 1250-1260 target. Rick also had a ‘minor’ target at 1250 and Doc said 1255. It’s amazing that all three had almost identical targets for gold.
Yup!
Point taken PF
Yup, from me also. I remember 1255 with a chance at 1280 first………like just yesterday!
Ya, gotta love these sub-1000 gold folks & yes they may be right. But, Harry Dent was just on Fox Business saying buy gold for the summer and then the dump like Rick to 800 or what ever number. A different route than Gary but the same long range forecast for this year.
Dent is the biggest junkie in this field. I will ignore him completely. You will not get a more shameless person than this guy.
He’s a pretty sharp guy Lawrence and his theories on demographics and trends are well worth the time. The problem is that they are broad macro themes and often do not play well for trading where timing is critical.
But it would be nuts to write him off as he has made some excellent contributions to market theory that were not being promoted elsewhere. I have listened to enough of his comments to internalize the basics and they make a lot of sense to me for getting the bigger picture.
I don’t however agree gold is going to fall to 250 dollars though. That idea does not square with the level of market interventions we know exist all over the planet and it is far likelier we see serious inflation eventually break out.
I have thought for years now that the floor is about $1000.
There is the possibility tho that a lot of tons come onto the market.
He has the worst forecasting record of all. I don’t recall he got anything right. For example:
He called DOW to go to 36,000 in 1999
He called on his subscribers to buy into dips in 2008
He asked people to get out of stock market and stay in cash right at the low of 2009 and stayed the same ever since.
He made statement that India would outperform China economically based on demographics theory since late 90s and turned out like a fool.
He asked people to hide in gold in 2010 and predicted all kind of target depending on which interview he was in after the crash in gold. His worst prediction is $250 gold and now he is saying to buy gold.
What a ton of garbage.
ditto…….Lawrence…… …he might be sharp as a knife, but, a knife in the wrong hands is dangerous……….Uncle Wally 1988
I agree Lawrence. Shameless is the right word.
I would not hang the guy out to dry just because he has a gold call that’s crazy.
I’m not; it’s due to his long history of “shilling.” I disagree with many bears, but most are probably decent/honest and I would not call them shameless.
Fair enough.
You saying they are clones, PF?
Must be an interesting but somewhat dyslexic group!
My portfolio of almost 30 mining related positions is down a whopping 1% today and I’ve been a buyer of many issues.
This is the action I was hoping for yesterday.
I think that sooner rather than later, we will all do really well in our junior miners.
Yup.
I am looking at my portfolio and cash position and thinking:
“What should I buy this morning?”
Brian, it is funny, but I was very distressed with our positions in 2008 and then 2009. I certainly do remember 2010 which was a year with no distress.
Matthew – we’ve had a few good discussions last week and this week about GDXJ (very helpful by the way) where we both felt the Jr miners were going to get a pop, and they did. You expected a pullback to the $25.80 area over the weekend, and then the Hubbart charts from 321 Gold echoed this idea that GDXJ would pullback to the high $25’s and then turn around and surge to around $30.
Well, when I saw the expected snapback we were discussing on Monday to $25.85, it looked pretty dang close to me, so I took a position in afterhours trading in JNUG at $23.62. It is very likely that GDXJ has further to climb before this rally is over.
Here’s the back story from yesterday on GDXJ – check out the Hubbart chart:
___________________________________
On May 18, 2015 at 9:13 am,
wocsom morf knarF says: Based on weekly closes, GDXJ has not yet broken out.
On May 18, 2015 at 9:18 am,
Shad says:
WMK – GDXJ did pull back some this morning, but didn’t fill the Gap up on Wednesday. It did surge to over $27 dollars though and has come back some. Do you expect it to still pull back to the $25.80 area before running higher?
On May 18, 2015 at 9:39 am,
wocsom morf knarF says:
Based mostly on the 1 and 2 hr charts of gdxj and gld, I think the odds are pretty good that we’ll get the pullback. But that doesn’t mean it will happen tomorrow. We might have to go a little higher first.
On May 18, 2015 at 9:28 am,
Agatha says:
Shad- you read Hubbartt on 321gold last Friday..
On May 18, 2015 at 9:48 am,
wocsom morf knarF says:
Thanks Agatha. I’m going to watch his video win a minute. Shad, here’s the relevant chart:
http://www.321gold.com/editorials/sfs/hubbartt051515/gdxj_first_target.png
On May 18, 2015 at 4:56 pm,
Shad says:
Thanks WMK – that seems to be in alignment with expected snapback in GDXJ to $25.80 and then a surger higher up towards 30 in the mid-term.
Definitely food for thought.
____________________________________
WMK thanks for your thoughts. Agatha, thanks for the heads up on the Hubbart charts from Friday on 321 gold. Once I reviewed his thoughts, it seemed to line up with what we have been discussing on GDXJ since last week, and when I saw the $25.85 level right on cue, that was entry point I was waiting for in a swing trade to $30. We’ll see if GDXJ has further to rise before pulling back. I think it does for the remainder of the week.
Just for clarification because that was confusing at the top…..We were discussing at the end of the last week, the weekend show, and on Monday that GDXJ was doing well, but that a snapback to $25.80 was projected soon, and that it would then turn and go up to test the prior highs at $30.10. Then yesterday (Monday) Agatha asked about the Hubbart charts from Friday. He was expecting the exact same pattern. So today (Tuesday) when GDXJ closed at $25.85, that did it for me, and I took a position after hours this evening in JNUG, to put money on the postion.
Now maybe I’m an idiot (very likely), but what is the point of charting and projecting if we don’t take action when the exact setup we are expecting plays out? Nobody knows if GDXJ will head up the rest of the week, but the probability based on the TA is leaning that direction.
I may turn into Jason tomorrow though with my JNUGgets crushed 🙂
I’m not into JNUG, but I did plenty of buying today including a bunch of SPY puts in the .50s that I sold at .96 (I mentioned buying the first few of these yesterday).
Considering the action into the close today, I wouldn’t be surprised if GDXJ makes a quick run at the next gap at 25.43, but the slow sto and MACD are where I want them for buying on the 30 and 60 min charts.
It will be interesting to see how the dollar does with overhead resistance.
http://stockcharts.com/h-sc/ui?s=%24USD&p=D&yr=0&mn=11&dy=22&id=p92897691410&a=408921682
Gold looks fine for now:
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=0&mn=11&dy=28&id=p70510180609&a=408868819
Cool. Thanks for the response WMK.
I play JNUG/JDST because I like the 3x’s leverage in the GDXJ direction, and I don’t play the options personally, because I am not smart enough to keep up with all the variables in contract expiration and don’t like the ticking clock.
With the leveraged ETFs, I can hold if I’m wrong without the clock ticking. Decay is not a problem because if you buy at one price and sell at a higher price then who cares? But if one chooses wrong on options they can lose all value to decay.
Having said that, congrats on the SPY puts, and I remember you mentioning that recently.
As for the dollar you know where I stand…… still waiting for it to get down to 92 at the 38.2% retracement, and then in my opinion it is going to turn around and head up. I think the latest action in dollar is a bull trap, and people will be sad they went long the dollar too soon.
As for Gold, yep…I concur, I’m not concerned at all by the pullback and thought we were all expecting it to pullback on Tue or Wed?? I will stand by my position that it is still going higher in the very short term (1-2 weeks). First resistance at $1238.20-$1239, and next resistance at $1252.30 (that is where I expect it to top out).
This is why I bought JNUG in afterhours trading – to buy the friggin’ dip and ride the next wave up, and why I didn’t start a position yesterday when everyone was in euphoria mode (I trimmed yesterday to make money to buy the dip today)
It is funny to me that people get overly bullish when things are ready for a pullback, and then when something pulls back (as expected) before we get the next leg up then they immediately reverse and go bearish at the exact wrong times. Oh well, that is what drives the markets – near-sighted flavor-of-the-day attitudes.
From what I’m seeing Chinese gold demand in Q1 was 500-600 tonnes, though the WGC wants us to believe it’s only slightly more than half of this (273 tonnes). The gap, as I’ve previously called it, has mushroomed to over 3,000 tonnes of gold in total since 2009!
https://www.bullionstar.com/blogs/koos-jansen/sge-withdrawals-vs-wgc-demand-q1-2015-the-mystery-continues/
Anyone notice Bitgold? Up about 40% again today.
It will be very interesting to see how that story unfolds. Could be really great but could also go the other way.
I have some questions about it like: the 1% transaction fee which can get to a pretty meaningful number with a significant purchase. And, I would bring up Chris Temple’s comment about why own an asset that you may not want the world to know about?
These are just a couple of my thoughts.
Well, I guess that would require physical you “panned” yourself maybe.
1% transaction fee is huge. So, buy your physical at 1% and take delivery, anyone else sell for 1%?
This bitgold is the opportunity to use constitutional money, or, as the Koran suggests.
Think about this, buy gold anywhere, have it stored in another country, its your choice where to store it. So much for a government stopping you from moving gold out of a country.
It has no boarders, except for the states.
It has nothing to do with the price of gold, it is using gold as currency.
The implications are huge.
Its going to take awhile for people to realise what this means, all that qe has got to go somewhere. why not a currency that’s not printed? or digitaly created like bitcoin etc.
Some people say, that 50% of every transaction is corrupt, this bitgold could have ramifications nobody expects.
Travel from france to china, buy in renmimbi, no exchange fees.
Eventually, people will have the option to drop their currency and use gold.
Its just started, and theres less than 40 million shares available, its already skyrocketing watch what happens when the cards get distributed.
This could end up so powerful it could effect government decisions.
Shut it down? Nope, they didn’t shut down Bitcoin they incorporated it, they will absorb this too.
This is a big option for people with the wealth to travel and purchase gold.
Corporations will provide accounts for executives etc.
Big for people that want to own gold and not worry about storage, there are no storage fees. That is freakin big.
Guess I just think most people have not thought this thru.
Certainly all reasonable comments, bb!
I like Garys thinking, pretty much everything is going to get hit, except Bitgold, people are going to move to doing business in gold as faith in currencies/ governments becomes suspect.
The washout on gold is finally here. It should be short lived and not last through the summer. Oil is on plummet mode too.
I doubt the dollar hits 110 or 120, but it looks like the run up has started.
Been waiting for this for months! Finally we got it…!!
It probably won’t last the week. 🙂
Lol, okay man… ( – ;
Just a little washout and up we go ?
https://www.dropbox.com/s/ikbn2afdkkwlc2w/gold%201975%20vs%202011.jpg?dl=0
I expect we’ll be going up in PMs soon, but will get a turn in a week or two and then start heading down in June/July/early August.
bb, I really don’t think that the chickens have come home to roost on this story yet!
Al, its gold as currency. Millions of people want to use gold as currency, Millions around the world want this product. MILLIONS!.
The only thing to think about is how the business is run, they have had a few predecessors to work the kinks out. This is a product people have been waiting for.
What have all the blogs been talking about?
H@ll, the goldbugs havnt even caught on yet, and wait till the crypto collectors see it.
Can we say mania? lol Its coming, bitcoin with what value? went to $1000.
Whats the ceiling for a digital currency that is gold? That you can take possession of, lol
.
I don’t agree with you short term time frame Chartster.
Chartster, I am also awaiting the washout, but don’t believe this is it quite yet, and think the rally in gold and the miners are not quite finished yet.
As stated above, I just put on a short-term swing trade in JNUG, because I feel that GDXJ has done exactly as expected and pulled back to the exact level we were waiting for at $25.85 (we were waiting for $25.80) when it got above $27 on Monday. Next stop $30.
Now next week or the first week of June the rally will likely top out, and then the slow grind down could begin. We’ll see how it goes…….
Cheers mate!
P.S. – I am with you on the dollar heading higher, but don’t know if it will get up as lofty as 120, but do believe it will test and take out the recent March highs at $100.39.
However, I am still waiting on it to get down to the Fib retracement at 92 before waiting for the climb higher, and think the recent action in the dollar is just a bull trap, and people that believe the USD has turned are a little premature.
Shad,
The metals and miners are pretty hard to get a read on regarding timing. The wash could be now, but could be down the road. I’m thinking the drop in oil that’s about to happen, along with so many other commodities will coincide with the big run up on the dollar. All of that seems to be right now. Oil is about to get clobbered. I’m sure gold is going with it.
I think the dollar doing only about a 7% retrace means it will be a short lived run and then a blowoff top. After that, PMs and commodities are running up.
It all looks like it’s happening now and we see the bottom of PMs and the top of the dollar pretty soon. Maybe a month or two and it’s done. It’s very possible that the Fed will announce a rate hike and it’s off to the races.
That’s my hope, but the charts and financials sure are giving me more than hope.
Best
Good thoughts Chartster and in general I completely agree with your thinking and the overall thesis. I really do. My opinion is just that we have a little lower to go in the dollar, and a little higher to go in the commodities in the next 2 weeks. Then, I expect exactly the same scenario to play out. Maybe I am just 2 weeks behind though : – )
cant keep silver down. It has shown a lot more strength than gold in the last three months in my opinion. Hard to keep down.
Agreed that Silver has shown more strength as of late, and that it has a little further to run in the short term. However, I am expecting it to start pulling back hard in June/July/August.
I wonder if this is the last rinse cycle before we see $1250-1$317? We should know very soon.
Gold 500s , silver 8 and change.
Well maybe so but before such lower numbers can be taken seriously you will need weekly closes below $1160 and $15.50 then we’ll talk, lol how about a weekly close below $1200 and $17 before such silly targets, so many support zones to fall before that happens 500-8….where as the US$ has very little resistance on the way to 120
Peter R,
As you know, I have always liked silver a lot!
I simply don’t see that scenario, Chartster!
You’re not alone, Al!
Most aren’t supposed to see it happening.
Oil should drop at least 6 bucks by week end.
Chartster, I think you will continue to be off.
Join the club , Peter.
But you’ll see.
Just weighing in on Harry. Just the facts. I like Gary….
http://www.avaresearch.com/articles/1732/Moron-Of-The-Month-Harry-Dent-Take-2.html
PS it may be offensive to some but as far as I’m concerned its about your $s EOS.
Nobody said they did not like Gary…….I think he is a swell guy, and appreciate his contribution to the site. You can disagree , does not mean you do not like the person.
Harry who? has the guy correctly called any big move, in anything? if I guy bats 400 he is a super star, what do you call a guy who bats 000, Harry, the guy is a self promoting book seller
Nice post on Harry…….. Bill………thanks………… 🙂
Stathis is a charlatan himself, if not a paranoid schizophrenic, if he really believes that everyone he shows at the 1:36 mark is a charlatan. He has some gullible followers.
Bill,
There are a ton of “Listen to me, I am the smartest person in the world” pundits out there.
As I have repeated over and over, “When you start to believe that you are the prettiest baby in the nursery” you are set for a fall. But the fall will not happen until people quit believing your marketing!
I’m late to the party today. Busying trying to get my boss fired. I hope gold drops down to $1175. I also want to see the $ climb. I want to make some coin on gold bear and oil bull positions.
Jason…..I think today at the close was the time to by JNUG.
BTW – you were “busy trying to get my boss fired”. Sounds like quite a task.
That possibility could very well exis, Jason!
The VIDEO is HILARIOUS to me….
ditto
Do you mean the main AVA research video with the cheerleaders? I did crack up during it a few times.
After so much talk about gold up or down, I decided to review the charts this morning. I have concluded that there is nothing unusual about the trading. More specifically, 1230 is a good halting place for a test of 1200. Absolutely nothing unusual here and nothing would change my view one way or another since the November 2014 bottom when I became bullish. Gold still remains in a bear market and still has much repair to undergo; however, I could envision trading in a range of 1200 – 1400 for the next several months, possibly into the year end, but I don’t look out that far. Too far to attempt to draw conclusions 😉
Richard, I totally agree….
from jsmineset Jim SInclair
Here come the TRUTH BOMB(s)!
Author : Bill Holter
Published: May 19th, 2015
Print Friendly
A few months back I theorized the rest of the world led by a Chinese/Russian alliance might let loose with a “truth bomb” or a series of them. It is clear the U.S. has been on a pathway in the desire to start a war. We have pressed in Syria and the Ukraine but so far to no avail. From the standpoint of the U.S., it is my opinion that a war is “necessary” to point at and blame for the financial collapse surely coming because in no way can “policy” be blamed.
The upcoming month of June will be a telling one as the situation in Greece comes to possibly a final head. Tiny Greece is important for several reasons. The first and most obvious, they are certainly a firing pin for the derivatives market. Should they default, what will it be called? Somehow, some way, a Greek default cannot be classified as one because a cascade of failures will immediately follow. Financially, Greece can take the Western financial system down all on its own.
Next, Greece is also a member of NATO, what will they do when the current economic and financial sanctions on Russia run out? Will they vote to extend the sanctions or vote in their own interest against them? Or, will they accept financial help and the cash flow from the proposed natural gas pipeline? A lesser question is what will happen to their EU status? Will they quit, get kicked out or remain as a black sheep in a dirty family?
I ask these questions again because Greece now says they will run out of money on June 5th. They have already pilfered pension funds and sequestered local agency monies, while pleading for the previously pledged but so far withheld aid. Atop this and more important are the sanctions on Russia due to end also in June. June is a very pivotal month!
To this point, the Chinese and Russians have been patient but firm dealing with the U.S.. Russia has warned about arming western Ukraine and placing firepower on Russia’s borders. China has sternly warned the U.S. regarding the disputed islands in the South Sea, a near spark incident was avoided last week. My point is this, the U.S. has been pushing while Russia and China have stood their ground. How long this can go on without some sort of “accident” morphing into conflict is questionable. As an example are the recent events surrounding the Spratly islands in the South China Sea , can the U.S. really push China in their own back yard? China and Russia are fully aware of the U.S. falling further and further into a weakened position in many ways, time is running out before a financial collapse and they know a wounded animal often strikes in desperation. They must in my opinion do something very soon to neutralize the U.S. or face the reality of fighting.
As I began with, I believe the only form of neutralization is some sort of “truth bomb” or a series of them. How best can this be done? I believe it must and will be done “financially”, let me explain. If the ROW can neuter the U.S. financially, they will seriously hamper U.S. efforts to make war. As a side note, “the truth” will also take most all public support away for making war. I believe the process may have begun this past week.
While you may react with “oh it’s just propaganda” because of the source, Pravda posted an article over the weekend speculating China will very soon announce their gold reserves. The article speculates China has amassed 30,000 tons of gold. This may or may not be true, but I can easily prove 10,000 tons just on the back of a napkin. Whether the number is 10,000, 30,000, more or somewhere in between is moot in my opinion because it is MORE than the U.S. “claims” to have. It would also call into question “where” exactly all of this gold came from. As I have written before, China need not ask for an “audit” of Western gold, should they provide audited numbers; market participants will make the connection themselves.
I believe there are several questions needing to be asked. Is this a “30,000 ton bluff” by Russia? I don’t think so but if it is, what is the upside? Would Russia really throw this figure out publicly without clearing it with Beijing? Would China really bluff about how much gold they have? My opinion is no, they would not. I have said all along I believed China would announce their holdings probably this year. If this is the “pre pre announcement”, it is a very big number and one I believe only as an opening salvo. Should China themselves make this announcement, please understand the “golden nuclear bomb” this would actually be. The financial system of the West will be destroyed overnight!
Before going any further, let me put a few of the various dots on the table. First and maybe what they were waiting for, the Western credit markets have had two very big convulsions in the last 10 days, these flash crashes have occurred as nearly all liquidity was briefly lost. While speaking of liquidity, this seems to be drying up across the board including the equity markets as volume has gone comatose. U.S. economic numbers are unmistakably weak and recession will be known by the end of June or early July. Another classic sign of illiquidity is the shortage of collateral available to the shadow banking systems in both the U.S. and in Europe. A “margin call” to a system undercapitalized and under collateralized is a deadly recipe.
We also saw a story last week where several of the larger ETF’s have contracted for rather large credit lines to use in a “market event” causing mass liquidations. This is an entire story in itself and a humorous one at that! What makes the ETF’s believe their financial institution will be left standing and able to lend during a panic? And even if standing, during bad times the old saying goes …”credit lines are made to be pulled”! Worst of all, if they actually do use the credit lines because their various investments cannot be sold, won’t this ultimately injure remaining shareholders and make those who panicked first …the best? And especially if their investments do not immediately snap back, they will be required to sell more and at lower prices just to pay the loans (if they get them) down! Very poor “preparations” if you ask me.
Other dots include, the AIIB, an alternative clearing system to SWIFT, currency hubs all over the world, physical metals exchanges and even the ABX which plans to arbitrage between Eastern and Western markets. China has very rapidly recreated the “old silk road” trading route which includes both Iran and Greece, both sticking points in the side of the West.
I believe the Sino/Ruso alliance now sees weaknesses in the West, it is exactly what Sun Tzu would look for. The economy is slowing, liquidity is drying up and leverage is maxed out. Volatility has now struck the all-important credit markets of which are relied on to support the West’s way of life. What is next? I believe an announcement of China’s holdings will only be the beginning and put the U.S. on her heels as to our holdings. Next, and I mentioned this previously, I would not be shocked if Edward Snowden has done a data dump similar to what was feared with Mr. Assange of Wikileaks.
We already know of so many and various “dirty deals” which banks have pleaded guilty to, “proof” of Western deceit will be believed because of all the fines and “non” admissions of guilt already paid and entered. In essence, it very well may be the East pulls the curtain back on the Wizard of OZ! A data dump by the Russians and Chinese regarding the finances of the West (including a lack of gold), how markets are rigged and economic numbers “created”, along with information regarding various false flags and the misdirection of the public would go a long way. The “questions” are numerous and may have a starting date of 9/10/01 when Donald Rumsfeld announced the Pentagon’s “missing” $2.3 trillion …which was never spoken of again after the following horrific day.
Much, if not everything has a paper trail to it. Enron’s misdeeds and hollow derivatives were conveniently washed away the following day as well as any paper trail to the “world bonds” issued during the Reagan years …and cashed in within the two weeks following 911. Nearly everything since then still has a paper trail attached to it, should Russia/China have the ability to expose and prove some of it, our financial system will be toast!
In the event of a little sunlight touching Western “dirties”, currencies and bonds will be smoked along with of course the precious Dow Jones. An exposure would effectively cripple us financially, torpedo public support and effectively make it very difficult for the U.S. to run around the world further swinging a bat and stirring up war. In essence, an exposure would take the ability to point blame elsewhere off the table …and the past policy itself will finally eat the blame it deserves!
thanks for posting……..I suggested … SD MARC to read this ………
What a crock of sh*t that guy writes.
Kind of reminds me of some of your stuff………. just kidding…. 🙂
Kind of reminds me of all of yours……not kidding.
kind of you….like bird sh*t…….. 🙂
The happy faces do not hide your personal hatred. Stop using them and act like a man for a change.
Sorry Bird…there is no personal hatred……… 🙂
Don’t bother apologizing. You and I will never be friends so I really don’t care to hear it.
Hang in there.
YOUR loss………… 🙂
Reminds me of an expression we used in the Farces years ago, “Crock a whale shit my boy”
As for friends? We got 7 billion people to choose from.
kind of like ….want a friend…bb a friend………. 🙂
Sure Frank, we friends.
Well, I see below…Al, thinks Colter “makes a good and valid point”……. 🙂
If you believe Rickards …
Why Most Gold Bugs Are Dead Wrong
http://bonnerandpartners.com/weekend-edition-why-most-gold-bugs-are-dead-wrong/
Mr. Colter makes a very good and valid point.
Wow, long article. It is quite possible that China has accumulated a lot of gold; however,
Wall Street doesn’t give anything away for free and attempts to make a buck on anything. If China was really accumulating that quantity of gold, don’t you think they would mark it up in price?
The only situation that I could envision in that regard is that China is due something that they cannot be paid for and they are getting help accumulating gold. Some type of derivative that has gone bad. But this is a far off guess and speculation.
Just got a buy signal on HOD.TO
I hope you are talking a short term trade Bill because that chart has further declines written all over it. Check the weekly if you doubt me. A double top that pronounced cannot go unnoticed. The trend for oil is up, not down and thus HOD will retrace to much deeper lows.
In short, you are gambling unless you are just swinging for a short term profit.
HOD weekly chart….does this really give you confidence to buy?
http://www.barchart.com/chart.php?sym=HOD.TO&t=BAR&size=M&v=1&g=1&p=WO&d=X&qb=1&style=technical&template=
Bird, the chart you posted is completely useless regarding any indication of a buy or a sell, no trend lines no key indicators, a cave man drawing would be a better chart, lol
It was about the overall trend JJ.
You call yourself a chart analyst but cannot divine any good information from that chart?….very weird to me jj. The fact you call it useless only tells me you have a huge blind-spot in your thinking. How the hell can you even trade with that disability? No offense but you are missing something here.
I don’t call myself a chart analyst I am one
First off its a 5 year weekly chart of a 2X etf which if it doesn’t have decent volatility the value decreases so using a 5 year weekly is not a chart to use for an indication to buy or sell or read a trend correctly, the Wtic chart would be a better indicator.
The chart I use which you can’t see is stockcharts and the indicators suggested a buy at $8.10 last Fri it also suggested a sell at $12.40 I don’t trade HOD I use UWTI and DWTI which has me holding a short oil position at $63 which I added today at $71 holding a position at $67 closing at $73 as Wtic closed at $58.27
This is a barchart of HOD which shows a buy, even you can see the difference between this chart and the one you posted, unless your missing something?…..lol
So Birdman …
… How was your first day at chart school with Professor JJ?
Waste of my time.
Seasonally shes down from here. Major more supply looks to continue coming at us. There’s been a large pop and better to have a good retest or hit back down at the moving averages. By fall I think it would be safer to go long…Way More reasons for a short trade than a long..
52-54 test so a good trade on HOD Bird.
Bird its a bounce not a bull.
http://stockcharts.com/freecharts/pnf.php?c=%24WTIC,P&listNum=1
Yes, that’s what I was saying. Just a bounce but don’t marry it because the chart has a lot of declines ahead. Are you also using HOU?
HGD.TO
Why Most Gold Bugs Are Dead Wrong
By Jim Rickards, editor, Jim Rickards’ Strategic Intelligence
One of the most persistent story lines among gold bugs and market participants who foresee the collapse of the dollar goes something like this:
China and many emerging markets including the other BRICS are looking for a way out of the global fiat currency system.
That system is dominated today by the U.S. dollar. This dollar dominance allows the U.S. to force certain kinds of behavior in foreign policy and energy markets.
Countries that don’t comply with U.S. wishes find themselves frozen out of global payment systems and find their banks unable to transact in dollars for needed imports or to get paid for their exports. Russia, Iran, and Syria have all been subjected to this treatment recently.
China does not like this system any more than Russia or Iran but is unwilling to confront the U.S. head-on.
Instead, China is quietly accumulating massive amounts of gold and building alternative financial institutions such as the Asia Infrastructure Investment Bank, AIIB, and the BRICS-sponsored New Development Bank, NDB.
When the time is right, China will suddenly announce its actual gold holdings to the world and simultaneously turn its back on the Bretton Woods institutions such as the IMF and World Bank.
China will back its currency with its own gold and use the AIIB and NDB and other institutions to lead a new global financial order.
Russia and others will be invited to join the Chinese in this new international monetary system. As a result, the dollar will collapse, the price of gold will skyrocket, and China will be the new global financial hegemon. The gold bugs will live happily ever after.
The only problem with this story is that the most important parts of it are wrong. As usual, the truth is much more intriguing than the popular version.
Here’s what’s really going on.
As with most myths, parts of the story are true. China is secretly acquiring thousands of tons of gold. China is creating new multilateral lending institutions. No doubt, China will announce an upward revision in its official gold holdings sometime in the next year or so.
In fact, Bloomberg News reported on April 20, 2015, under the headline “The Mystery of China’s Gold Stash May Soon Be Solved,” that “China may be preparing to update its disclosed holdings…”
But the reasons for the acquisition of gold and the updated disclosures, if they happen, are not the ones the blogosphere believes. China is not trying to destroy the old boys’ club — they are trying to join it.
China understands that despite the strong growth and huge size of its economy, the yuan is not ready to be a true reserve currency and will not be ready for years to come.
It is true that usage of the yuan is increasing in international transactions. But it is still used for less than 2% of global payments, compared with over 40% for the U.S. dollar.
Usage in payments is only one indicium of a true reserve currency, and not the most important one. The key to being a reserve currency is not payments but investments. There needs to be a deep, liquid bond market denominated in the reserve currency. That way, when countries earn the target currency in trade, they have someplace to invest their surplus.
Right now, if you earn yuan trading with China, all you can do with the money is leave it in a bank deposit or spend it in China. There is no large yuan-denominated bond market to invest in.
In addition to a bond market, you need the “plumbing” of a bond market. This includes a network of primary dealers; hedging tools such as futures and options; financing tools such as repurchase agreements, derivatives, clearance, and settlement channels; and a good rule of law to settle disputes, secure creditors, and deal with bankruptcies.
China has none of these things on the needed scale or level of maturity. When it comes to true reserve currency status, the yuan is not ready for prime time.
China is also not ready to launch a gold-backed currency. Even if it has 10,000 tons of gold – far more than it currently admits, the market value of that gold is only about $385 billion. China’s M1 money supply as of April 2015 is about $5.4 trillion. In other words, even on assumptions highly favorable to China, their gold is worth only about 7% of their money supply.
Historically, countries that want to run a successful gold standard need 20–40% of the money supply in gold in order to stand up to bank runs in the market. China could reduce its money supply to get to the 20% level, but this would be extremely deflationary and throw the Chinese economy into a depression that would trigger political instability. So that won’t happen.
In short, China can’t have a reserve currency because it does not have a bond market, and it can’t have a gold-backed currency because it has nowhere near enough gold.
So what is China’s plan?
China wants to do what the U.S. has done, which is to remain on a paper currency standard but make that currency important enough in world finance and trade to give China leverage over the behavior of other countries.
The best way to do that is to increase its voting power at the IMF and have the yuan included in the IMF basket for determining the value of the special drawing right. Getting those two things requires the approval of the United States because the U.S. has veto power over important changes at the IMF. The U.S. can stand in the way of Chinese ambitions.
The result is a kind of grand bargain in which China will get the IMF status it wants, but the U.S. will force China to be on its best behavior in return. This means that China must keep the yuan pegged to the dollar at or near the current level. It also means that China can have gold but can’t talk about it. In order to “join the club,” China must play by club rules.
The rules of the game say you need a lot of gold to play, but you don’t recognize the gold or discuss it publicly. Above all, you do not treat gold as money, even though gold has always been money.
The members of the club keep their gold handy just in case, but otherwise, they publicly disparage it and pretend it has no role in the international monetary system. China will be expected to do the same. It’s important to note that China will not act in the best interests of gold investors; it will act in the best interests of China.
Moreover, just because the grand bargain is in sight does not mean it will be easy to realize. Both sides are jockeying for leverage.
Beijing launched its own development bank to put pressure on the IMF. The U.S. Treasury blames the tea party for delays in approving China’s new votes at the IMF. Meanwhile, the White House does nothing to break the logjam in Congress. The White House is happy to let China twist in the wind while the game goes on behind closed doors.
Meanwhile, China will probably announce its increased gold holdings later this year. But don’t expect fireworks. China has three accounts where it keeps gold – the People’s Bank of China, PBOC; the State Administration of Foreign Exchange, SAFE; and the China Investment Corp., CIC.
China can move enough gold to PBOC when it is ready and report that to the IMF for purposes of allowing the yuan in the SDR. Meanwhile, it can still hide gold in SAFE and CIC until it needs it in the future.
China will also probably be admitted into the SDR basket later this year. Far from launching its own gold-backed currency, China will be acknowledging that the SDR is the true world money as far as the major powers are concerned.
Why would China want to give up on fiat money any more than the Fed or the European Central Bank? All central banks prefer paper money to gold because they can print the paper kind. Why give up on that monopoly of power?
Gold is still the safest asset, and every investor should have some in his portfolio. The price of gold will go significantly higher in the years ahead. But contrary to what you read in the blogs, gold won’t go higher because China is confronting the U.S. or launching a gold-backed currency.
It will go higher when all central banks, China’s and the U.S.’s included, confront the next global liquidity crisis, worse than the one in 2008, and individual citizens stampede into gold to preserve wealth in a world that has lost confidence in all central banks.
When that happens, physical gold may not be available at all. The time to build your personal gold reserve is now
BOTTOM LINE…………..
Post the link not the whole paper!?
Thanks bb. That was one of Rickards better articles in quite awhile.Very smart thinking on his part.
Thought someone would find that an interesting read Bird.
Welome.
I always like what Richards has to say. What did you guys think of his last book?
I havnt read the death of money, only currency wars.
I guess I could read it again, would be like the first time.
Thanks dementia, lol
I found it an interesting read, but disagreed with the statements around gold bugs thinking China is aiming to have the world’s reserve currency status from the US. It is nothing like that at all. What is happening with the AIIB and NDB and all the countries joining it is a definite shift in power away from the US being a superpower, and the dollar as the world’s reserve currency. Anyone that can’t see that shift in influence is ignorant (stemming from the word ignore).
What is sought by the planet and in particular the BRICS and other emerging markets is a basket of currencies to replace the dollare (not the Yuan as the world reserve currency as Rickard claims is the overwhelming thesis…..which it is not). I have not see hardly any articles, blogs, or even discussions about China becoming the world reserve currency.
I completely agree with Rickards that China is nowhere near ready for taking on that role, and I again, no guru or economist, no website, no news agency, and no philosophy comes to mind that places China in the reserve currency status, yet he camped out there for most of his article. What??
People in the world are looking for new ways of dealing with currencies, and would likely prefer a basket of currencies where the dollar, Euro(or whatever happens to it), Yen, Franc, Ruble, Loonie, and many world currencies are included – along with the Yaun. The middle east wants to ditch the Petrodollar, and OPEC is moving that direction, but they won’t be moving towards the Yuan, so I just don’t understand Jim’s miscalculation of the investment community expecting a gold-backed Chinese reserve currency……that’s poppycock.
If anyone really understands the plan being orchestrated at a much higher level that the country level, they’ll come to understand that we are heading towards globalism and one world currency in the mid to long term. The goal of most of the Rothschild and Rockefeller organizations is one global currency, and they don’t give a crap about the Dollar, the Euro, the Yen or the Yuan.
To the Rockefeller organizations like the Trilateral Commission or the Council on Foreign Relations or some of the other clubs like the Bilderburgers, Bohemian Grove members, Club of Rome, United Nations etc…the countries are arbitrary lines on the globe and are the cover story keeping the masses busy with Nationalism. The next rung up are the trade unions and agreements like the Trans-Pacific Partnership, and are much more important to creating larger trade zones.
Lastly, Jim Rickards misses the point of the currency wars, as do most. The purpose of these currency wars is already mapped out. Problem/Reaction/Solution. Order out of chaos.
Problem – Currency Wars;
Reacion – we want something done to make this more fair for all countries, not just USA
Solution- Well why don’t we ride in our white horse with a global currency then?
At the same time, we’ll introduce Agenda 21 to grab up private property in the guise of a “green” mask using the ICLEI (International Council for Local Environmental Initiatives) to take over at the local level, and most people will think they’re saving (not enslaving) the planet.
In addition, all countries will roll out the National ID cards, then it will be micro-chips, and then when the Global currency does come out, it will be managed via the micro-chips. Sound Crazy? Sound like conspiracy theory? Then you go friggin’ read David Rockefeller’s biography, you look at the manifestos in the Council on Foreign Relations/Trilateral Commission/ or spend some time really understanding the United Nations Agenda 21. Do some real investigation and you’ll find they openly admit their plan. 1 global currency, and population controls on a micro-chipped public.
China and their Yuan is the least of the worlds problems, and I agree, they’re just positioning now for a seat at the table as the West started this plan in motion long ago and they just want in on the action.
If you want to see who the puppet masters are just follow the money, the ruling families, and who owns the people that act out the daily soap opera called “politics”.
Nice summary. As a Chinese, I think this is likely the most possible approach Chinese government will take. There is a phrase called “量变引起质变”, meaning quantitive changes lead to qualitative change. China will try to take piece by piece and achieve it by bribery and threats. Based on the US behavior of short term thinking, it is very achievable. This approach can make sure there is no military conflict before US will be easilly defeated.
Thanks bb it was a good article by Rickards. As Bill requested a link to the post would be appreciated for those who do not want to scroll down so far.
I posted the article because I have a hard time linking.
If people are toooo lazy to scroll down for 10 seconds, then they can’t be helped and their whining is just that….whining. People are far more likely to read the article if it is posted, and if they’re too lazy to scroll down, then they’re to lazy to click on a link, and follow through by reading the whole article.
Personally I like it when people post articles or links and have tried to include links on most of what I post, but who gives a crap if this blog is 20 miles long…..it is content that someone felt was relevant to the group, and I appreciate anyone that takes the time to post helpful info for the group.
Nobody’s time is so friggin’ valuable that they can’t move their mouse down the side for one second. Not everything can be communicated in funny one-liners or emoticons. I can just imagine the founding fathers going, yeah….. I just don’t have time to read that Constitution…..can you just text me one line with a smiley face? 🙂
You go Shad, preach!
😮
🙂
I never open anything from Dropbox anymore….takes way too long to load and I am suspicious. Maybe just tell me what it says instead.
Bird that’s cause you at 56,900kb LOL just kidding pal. No LTE cell yet? 15meg on the down link.
I live in Africa…..what can I add to that 🙂 …..truth is connections are pretty slow here some days and I lose my lines almost every hour. Never know when it will come back. I can be offline for a minute or a week. It’s murder for trading if you want to watch the charts by the moment. There are a lot of sites I won’t open though. Anything from CNBC and similar news-sites for example because the screens are too rich with data and too damned slow on my end.
Never knew the internet was that consistently bad. Do you live in a city or smaller town Bird?
They are upgrading here, Cory but it never seems to end. They actually have pretty big plans to modernize the internet, mobile and phone communications networks and they are spending a ton of money to get it done. The Chinese have most of the contracts but it is slow as molasses. I am getting used to it though. Mostly they give the bandwidth to the banks in the daytime and then by 6:00 we can connect if there is no upgrades in the works. Next year it should be great though and I can hardly wait.
Haha be nice Bill 😉
It is from sharelynx.com.
Correlation of the gold bear market in 1974-1976 and 2011-2015 … 🙂
Thanks Gabriel.
There is virtually nothing the same about the 70s bull and the 2000.
Duration / inflation/ policy/ housing collapse already is behind us. ect ect
Bitgold finished up 61.35% today.
Obviously I think its just getting started.
Pretty amazing move in the stock. It shows there is interest in this kind of company. I am worried the stock is getting a bit ahead of itself.
I checked the tmx 5 day chart, its a long way from parabolic.
Just a nice steady increase, for now anyway.
It hasn’t found its trading level yet, news is still spreading.
Its gonna take awhile for people to understand the ramifications I think.
It doesn’t have to go parabolic to be way overvalued.
I hear that. If you have cell coverage at all that’s the way to go. Doesn’t matter if its 3rd world you are getting LTE! ( Long Term Evolution Cellular)
Just got fiber to the house (Gpon) 100 meg connection is insane
Do the 3 (4?) musketeers have any opinions on how the June gold options expiry will affect the price? The last trade for the June 2015 contract is on May 26th. I have found that this can really make gold swing wildly for a few days but it often doesn’t get talked about until after the fact. Cheers and thanks.
Ive go a great piece on Greece but copy write. They should have went the Iceland way….The toilet has been flushed…a small piece.
“Now that Greece has made the fatal decision to accept further assistance by the IMF and EU, it will face a much more severe depression in coming years. After the nation’s most valuable assets are sold, the Greek people will face an indefinite period of economic extortion and social reengineering at the hands of the Jewish Mafia”
Interesting comment, Bill.
I think my 1st reply launched up top somewhere Al.
I’m always moving around fr. My laptops and hand sets.
Yes these fine folks have more power then most could even believe.
Absolute control over Wall Street and Hollywood to boot.
Watching the key level in play with gold today at the 150ma now $1206
Added to my short oil position and will exit long pm’s positions with a close below $1206, lets see what Fed minutes and CPI does to the current US$ action as the key level held on the index at 93, Euro$ rolling over as oil falls
US$ puts in a weekly close above 100 puts 108 into its target zone a big resistance area before 120 possible