Wednesday, May 22, 2013

Gold & Timing

Bull markets I have stated many times are 7, 11, 13 or 21.
Gold has three very interesting bottoms. The 1999 is the intraday low. 2000 is the lowest yearly closing. Then 2001 produces the lowest quarter closing. This is an interesting set up that is rare to say the least. So effectively, both the 11 and 13 cycles come into play since the low was not a single event. So we got the 13 year since 2012 was the highest closing but we got the intraday in 2011 as 11 up from the lowest closing. Had both the intraday and the close been unified in 1999, then the ideal would have been 2010 with a max of 2012.
Likewise, on the way down we should have had a 19 month correction but the move up to create the highest annual closing in 2012 extended the cycle. Everything happens for a reason and this may prove to be the currency crisis.
GCCASH 1982 Decline - Y

This decline will be no different than anything before. The bulk of the drop always takes place within the first 2-3 years. So just as gold crashed from $875 in 1980 to $293 by 1982, the 5 year bear market prevailed but low was $280 compared to $293. The 19 year low was only $254.
Even if gold declines into 2015, the bulk of the drop will most likely take place during this year as was the case 1980-1982. A lower low in 2015 may be marginal. That depends upon the low we see this time. If it is in the 1150 area, then the worse case should be 875-907.
We still see the phase transition for 2017 time frame and that is normally up to a 2 year event so 2015-2017 does not change anything long-term. The rest will be in the report.

Thursday, May 9, 2013

Europe – The Greatest Threat to World Economy

These politicians always look at things that never see themselves as the problem. So every solution must center around manipulating the people, never reforming government. They speak only of the private sector and carry a very big stick. They cannot see that this “bail-in” leads to the same result as the German Revolution insofar as people, albeit the smart ones, will move their money and start to hoard their wealth keeping only minimum amounts in the bank. This will start the gradual rise in interest rates as more and more capital moves away from PUBLIC investment and shifts toward PRIVATE. This is the dominant trend that has taken place throughout history. Everything has two opposites and we must swing back and forth between the two.

Europeans are now better-of buying assets, especially shares that are at least transportable. Real Estate could be taxed – just look at the USA and Greece where they taxed swimming pools. The smart ones will take delivery of their shares and not even leave them at a brokerage house. The fools will not believe it and are too interested in non-political things so they do not pay attention. That is historically why fools are always separated from their money quickly.

Saturday, May 4, 2013

Does "money printing" actually help ?

What Do Central Bankers Really Look AT

QUESTION: Can you please comment on the following. I hear incessant talk about the market being supported by Bernanke. The Fed gets the credit for the market going up. (And when it goes down for not doing enough). How much truth is there in this mantra? How much is the Fed actually affecting stock prices by what they’re doing? It is very confusing to hear day after day CNBC commentators point to the fed as the cause for seemingly everything good and bad in the markets and economy.
ANSWER: Absolute nonsense! The Fed is worried about the rise in the stock market for they are as confused as the talking heads. The talking head’s problem is this constant myopic view of the domestic economy as if everything begins and ends here. We are working urgently to get a new book on the globalization of the economy out ASAP that illustrates this problem that plagues not just the TV comments, but the economics taught in schools. The reason why increasing money supply by the Fed FAILED to produce inflation is the complete failure to comprehend the global economy. It is the global capital flows involving debt and capital investment that drives all world share markets and currency values. The Fed does NOT even control the money supply! International capital does!!!!