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Gold Juniors Geyser Time!

Stewart Thomson
Oct 14, 2009

1. The Chairman and CEO of CIT group announced his resignation effective Dec 31, 2009. 60% of the clothing business of America gets its financing from CIT. Two thousand vendors supply 300,000 retailers with product financed by CIT.

2. Meantime China just announced the fantastic news that exports fell "only" 15% in September. Exxon's total revenues exceed all of China's exports to America. Hello? Anyone listening? Funny, now that the US dollar is really tanking, I don't hear a peep of complaint from the "mighty" Chinese communist Gman. His 100 year plan of securing commodity supplies is a last minute act of desperation, not a masterplan. His last couple of 100 year plans worked well. You know, like the one where he forced his citizens to ride bikes. Well, that only worked for 50 years. How about the one where he gave those with university degrees a choice: Heads you work for 10 cents an hour. Tails we kill you. That also worked well. Now we have his masterplan to burn coal in a zillion plants to generate electricity. Didn't England learn from burning coal 300 years ago? Oh well, what's a little 500,000% increase in cancer rates in a population of a billion people, who cares. Burning fossil fuels is about health, not melted icebergs. China is on the verge of a massive health cost epidemic, fuelled by pollution and McDonalds-style food. However, not to worry, the G20 will soon allocate a full 50 bucks to developing an electric car for delivery in the year 2080 (after handing the banksters another 20 trillion). We're saved!

3. If you think President Obama's health care program is expensive, supersize those problems and you have a view at the costs coming to China's Gman who is the world's largest polluter. with 4 times the US population. But the good news is they just signed a deal with an African dictator to rip off his people's mineral wealth while he murders them by the bucketload. The media applauds how smart they are not to let little details like starvation and murder get in the way of the ripoff.

4. The Chinese population should get a standing ovation for enduring their tyrannical Gman and building the greatest industrial revolution in world history, in spite of their Gman slave masters. I'm personally a buyer of the Chinese "Dow," the Xinhua, all the way to zero. It trades as FXI-NYSE. Support the Xinhua, not the Gman. The Chinese people are working tirelessly to reduce the power and corruption of their Gmen, who make America's Gmen look like Mother Teresa.

5. I consider Richard Russell to be the greatest living expert on the Dow in the world. Here's his view of the Dow:

"...From a valuation standpoint, the March low appeared more like a bull market top!"

6. If the man considered the Dow at the March low to be wildly overvalued, I wonder what he thinks of the valuation now, after a 3500 point upside blast, while unemployment has rocketed to "somewhere" between 10 and 20 percent.

7. What the gold community is witnessing is a bankster-engineered panic out of the US dollar. All it takes is for a small portion of the world's largest market to make its way into gold and you have the potential for an upside blast like has never been experienced in history.

8. The biggest money is normally made "out of the hole", at the beginning of a bull market or rally. When the Dow hit 6500, bearish sentiment hit 98%. Many stocks have soared hundreds of percent since then. Once a bull market is underway it takes a lot more money to move an item higher on a percentage basis.

9. In the case of gold, some in the gold community have noted that gold stocks had a huge percentage rise in the 1999-2001 period, the beginning of the gold bull market. The difference between that period and now is night and day. In 1999, it took only a tiny amount of money to move gold and stock stocks higher on a percentage basis. From $1,000 an ounce, the money required is vastly bigger.

10. We're in a situation now where major institutional players, who control trillions of dollars, are actually placing some of the US dollars sold, into gold. In 1999 the movement into gold meant your electronically traded gold stocks staged a massive rise in percentage terms, hundreds and even thousands of percent in a short period of time.

11. A similar rise now means bank closures, brokerage closures, and armed gangs standing in front of grocery stores. You won't be buying any food with your gold because there won't be any food to buy. Buy foods like rice now and forget the wet noodle fantasy of walking into the corner store with a bunch of gold to do business. And pray for the following, like it or not:

12. There's only one way to end the US dollar bear market. With a gold standard. The debt can never be repaid. The baby boomers just went into retirement mode. The "play today pay tomorrow" jig is up. Just as JP Morgan "saved" the Dow investors by buying the Dow for himself at a 90% discount after the 1929 wipeout, today's banksters have a similar plan to beat down the value of the US dollar and buy it in size after major weakness, just as they sold it in size at the top of the market. That's what a top is; one group of market players selling to another group. The Chinese Gman was one of those on the buy at the 2002 top. He'll bail at the bottom along with the rest of the dollar bag holders. After buying the dollars, the banksters will unveil a new gold standard. A panic IN to the dollar will occur, unleashing a massive bull market. At that point, US T-bonds will have collapsed and rates soared. The banksters will have dumped their gold on the public via central bank buying into the peak of the gold bull market. The bankers will buy US T-bonds featuring a gold-backed US dollar in a brand new bull market, while getting huge rates of real return, paid to them by the taxpayers of the world. Only gold, the US dollar, and bonds would rise as the new gold standard is put in place. All else could collapse as the United States' mini experiment with hyperinflation is ended with a new gold standard. Stock and commodity markets would crash to peanuts as the gold standard is, by definition, the ultimate "the buck stops here" statement of action, not talk. All commodities would disintegrate in price. All except GOLD.

13. I'm not a junior gold stock person, meaning I'm not interested in this deal or that one. But perhaps that's part of the total package needed to make large money in the juniors. I don't really care about what one company is doing or where. Don't take that the wrong way. I play sectors. Major market moves. There are many in the gold community who follow the action at individual companies, like my friend "The Golden Surveyor". But I want to take you back a bit in time. To the hi-tech bubble. Remember how the golf ball advisors had their alphabet soup of tech stocks? You had to cover the micro-sectors to really make big money, right? Question: Did all that micro-selection make you a lot of money?

14. I believe we are on the doorstep of a major surge of institutional dollars into gold. Some are already entering the gold room now. I believe the Dow is rising on a combination of failed short covering, modest institutional buying, and smart money placing tiny insurance bets that a mini-hyperinflation is possible. A failure of CIT group could send the Dow to new lows and possibly even wreck the massive head and shoulders continuation pattern. So there is real risk, but there always is real risk of massive price decline in all markets, at all times. Gold would have to penetrate the right shoulder around 850 to ruin the technical pattern. That's over $200 down from here. Possible, yes. Likely, no.

15. I've long stated that the gold juniors would shine only when the US dollar institutional lake began moving into gold, not just into foreign currencies. I gave $1000 as the rough launchpad where I expected to see the lake start the gold geyser erruption. Assuming there are no new massive OTCD (OTC derivatives) surprises, I think we're at that point right now. I seriously believe there is more leverage in junior gold stocks to gold bullion, right now, than there is with futures contracts. That's the power, that's the tool that is sitting right in front of you in your gold toolbox. Jim Sinclair, the only real bank family member of the gold community, has predicted (knows?) that gold futures markets (the COMEX) will be turned into cash-only markets with no leverage. I'll add that if YOU are long gold futures on the day that is announced by surprise, you'll have the mother of all margin calls.

16. Junior gold stocks are offering you leverage with no margin calls. Now, what happens if there is a CIT group failure, or some other catastrophic event the banksters may have planned for the stock market, and your juniors all melt away again?

17. Answer: Then you have the opportunity to do what you should have done last year; be prepared to buy those stocks all the way to zero. Don't spend all your risk capital today.

18. I spoke to Van Eck funds yesterday. John Van Eck began the company in 1955. I want you to think carefully about this man. He has a Harvard MBA. The period of 1955-1968 was arguably the absolute pinnacle of American economic performance, and John started a growth fund with perfect timing, in that year 1955.

19. Then in 1968 he started the first American gold fund. He moved the bulk of the assets from his growth fund into the gold fund. Again, perfect timing to catch the gold bull market of 1968-1980.

20. Now Van Eck funds, as some in the community know, is starting the Van Eck Gold Juniors ETF. I could be wrong, but I believe the Van Eck timing, again, is absolutely perfect! The ultimate investment at the ultimate time has been filed with the securities commission, the weightings and stocks are chosen, it's just a matter of waiting for the Gman to approve it. I see no reason for it not being approved. Van Eck runs the GDX seniors/intermediates gold stocks ETF. We're not talking about Bozo the Gold Clown here, Van Eck is a real pro and I believe he's about to hit the ultimate home run.

21. As the juniors go on a tear that could make the high-tech bull market look like a bear, I believe "stock picking" will become even more irrelevant with the junior golds that it was with the high techs. The gold juniors ETF could see hedge fund participation. If so, all bets are literally off as to the upside, when you are talking about funds leveraging their investments in junior golds at 20 to 1, 30 to 1, 50 to 1. And more.

22. Last week I asked subscribers to send me their favourite gold juniors and I'd run the technicals on them and post them on my website. I got overwhelmed. I posted all thru the weekend and I'm still only partway done. The bottom line is that the technical situations on almost all the gold monthly charts is the exact opposite of what I saw when they crashed last year. Basis the monthly charts, last year showed one major sell signal after another. What I'm seeing now, especially basis the TRIX indicator that is too boring for most writers and investors to follow, what I'm seeing are major multi-YEAR buy signals! It is absolutely critical that you get out of the mindset of trying to flip your junior golds on some company-related announcement. Use the information from the various junior gold writers to pick the companies to buy, but after that, all those upside pops that seem big now, will be too small to see on the chart. Don't use the advice of the junior gold writers to sell, to "manage" your juniors portfolio. You'll wreck it. As the banksters' grand plan of creating worldwide USDollar panic is played out to perfection, the whole juniors section will launch upside in a move too big to miss out on. That panic is also designed to crash the US bond market, which would add an even bigger engine to the gold bull market. The bond market didn't disintegrate in the 1970s gold bull until near the end. I believe it will be the same this time.

23. Don't focus on some negative mining report and ignore billions of dollars of institutional money flow panic-buying the juniors!


Oct 14, 2009
Stewart Thomson
Graceland Updates
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Wednesday Nov 25, 2009
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Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an invetor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

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