The Gold Ocean and The Brain
1. The ocean. The Gold Ocean. As an investor, you are like a boat out at sea. The sea is a powerful entity. A fellow newsletter writer and subscriber to my newsletter sent me a story yesterday about an ore-carrying freighter that set out in November on Lake Superior. The water on Lake S never rises above 42F.
2. That means the human body sinks. To the bottom. The powerful tanker, like the Titanic, was deemed unsinkable. Lake Superior cracked the ship in half like a toothpick. All 29 brave sailors went to their graves along with the ship.
3. The unexpected and the impossible are the two most powerful forces that affect markets, after fear and greed. A tidal wave at sea looks like any other. A foot high, but travelling at 300mph. As it storms onto land, it rises up like a raging monster, and all in front of it are disintegrated.
4. Let's review the gold charts now, and the gold-related charts, and see if a US dollar tidal wave rally may be at hand. My view is quite the opposite. The US dollar is the boat. And the gold punisher tidal wave is roaring towards the shore. A US dollar burp may be at hand, but the USD boaters will quickly find they don't have the speed to turnaround and get back to land.
5. I believe the banksters have hatched a scheme to transfer the carry trade from the fundsters to themselves.
6. Since it was the banksters that funded the leveraged carry trade scheme, it makes sense they know exactly how much price movement upwards in the US dollar is required to produce a forced liquidation of the fundsters, and just general "get me out of here, I'm on fire!" action.
7. Before looking at the charts, let's review our mindsets. Who in the gold community feels greedy right now? I'm getting letters from lifetime market losers with no gold who feel left out. Where were they at 905? The mindset in the market is: "I'm nervous". Not "gimme that gold I need more, more more!" I don't see any greed.
8. I see overbought conditions in some areas of the gold charts. But not greed. What the bears don't understand is: The Carry Trade. The carry trade is a machine built by Ben Bernanke and his limitless electronic printing press and control of the rates he charges commercial banks to borrow money.
9. As long as Dr. Pinocchio keeps rates he charges commercial banks lower than the rates other central banks charge commercials to borrow their currency, the carry trade continues.
10. I don't think most in the gold community understand what is barrelling down the pipeline. It is an institutional money tidal wave.
11. The fund industry has been decimated. Hello? Anyone listening? Only about 300 new funds formed over the last year worldwide. Institutions are sitting on a monster pile of money, close to 10 trillion dollars in cash.
12. Joe Blow Public just missed a 60% move in the Dow. He missed a 75% move in gold. He thinks the crisis is over and he's wondering about the market again, wondering if he should start chasing price.
13. The stock market bottom was made when the fundsters and the public liquidated their stock and fund holdings into Dow 6500. The banksters and insiders took the other side of that massive changing of the guard trade.
14. I have repeatedly stated that the way the markets work is first the insiders and banksters buy. They make the momentum money. Amateur chartists think the momentum money is made by funds. Wrong. The momentum money is made: Out Of The Hole. The 40% superspike in the Dow from 6500 occurred in the blink of an eye.
15. The funds are now moving into the market in larger and larger numbers. Buying from the banksters and insiders. The banksters are targeting the carry trade now. Not the Dow. But the flow of money into the Dow has only just started. You can tell that by looking at the volume numbers for the Dow. Down, down, down, as the market has rallied from 6500 to 10,300.
16. We are on the edge of a major currency crisis. Nobody knows the full story of Dubai, and the effects on the London banks, but it looks very very bad. Ask yourself this: If a currency crisis erupts in the British Pound because of new bank loss horrors, where is that money going to flow? To the US dollar? You need to look at this from the mindset of somebody living in the UK. I'm in touch with a fellow I call "goldblood" on a regular basis there. He is telling his billionaire buddies to get their cash out of the pound and into gold and silver. Not into US dollars.
17. When your bank faces possible closure (and think about the statements of the British central bankers that we barely avoided not only closure of the UK banks, but mass street mayhem), let me ask you this: Are you thinking of investing your money in US banks, where the problems could be even bigger? No. You want: Gold.
18. Another wakeup call: London is very close to New York in terms of being the financial centre of the world, and arguably it is number one, not number two. The London gold market is vastly bigger than the New York gold market. As I have said for decades, "New York sets the price and London trades the volume." The COMEX is a tool of the London gold market. Not a ruler of it. When the number 1 or 2 financial centre of the world is on the verge of a currency implosion, after watching their own currency and empire turned into sawdust by their Gman, do you really think they see the American Empire as some sort of bastion of safety? The English are starting to experience what the Chinese people like the rest of the gmen already know: Gold and hard assets are protection against the Gman, and nothing else. Let's see how many pounded pounds are placed into US dollars. My bet: some, but a storm into gold from the pound will occur that will blow everyone's mind.
19. Looking at the price charts, the Australian dollar MACD on the daily chart is near a buy signal. Not a sell signal. The Canadian dollar monthly chart shows the mighty TRIX 15,9 series (the "KingDaddy") on a gargantuan buy signal !
20. Gold itself is overbought on the daily and weekly charts, basis the RSI. But again, the Kingdady 15,9 series TRIX is just now touching on a possible buy signal!
21. Silver was viewed by amateurland as "nonconfirming" gold's rise. Here's a reality check for team nonconfirmation: Silver rises most at the end of an intermediate rise in the metals. Once again, Kingdaddy TRIX is on a giant buy signal right now. You can sell all your metals if you want.
22. I won't be joining you. I sell 2% to 5% of my metals into each $50 to $100 rise in the gold price. When gold rose out of the triangle formation in the 980 area I tweaked my profit lock points in favour of reward, not risk. (a triangle that Jim Willie correctly labelled as the handle of what I term an epic cup & handle pattern). I also told subscribers to buy metals call options. And I called gold players to the starting gate. To play the massive move to 1200 and possibly 1400. Those who did buy the call options have made not just hundreds of percent, but thousands of percent.
23. The head and shoulders pattern is in play now. Bigtime. Don't fight the gold punisher you will be punished. I'm getting letters from some gold newbies. Letters that go, "I'm missing out! I need advice on whether to buy or sell right now! I want in the gold action!" OK, here's the bottom line on that one: When you show up at a rock concert halfway thru the show and start yelling, "hey man, why don't you play my favourite song!", my answer is, "I already did bud, you missed it!" If you rode zero ounces from 250-1200, you can't walk into the gold restaurant and start demanding meals that have already been eaten. The professional investors that buy only weakness and sell only strength should be travelling light on their trading positons now. By definition. When you sell at a profit you are by definition getting lighter and lighter on your positions. If you sell a huge gob of your gold at a single price point while this head and shoulders is active, which it is, you are going to freak out as gold makes one new impossible high after another. I say again, be a gold price sculptor. Not a vandal. If you are a player, you need to understand that a 10 dollar drop from a high point must be bought. You can't "order up" a nice correction where you buy where you feel comfortable and then the price turns around and you start whistling gold Dixie. You are playing the lotto with that mindset. Gold hit 1217 last night. It then fell to 1207. If you have no gold, did you buy any? If not, why not?
24. I'm making arrangements now to fly to New York to meet with some ex-JP Morgan people. Likely next week. The way to beat the banksters is to compete with them, not try to have them arrested. I took a survey and 40% of my subscribers voted they would rather have the banksters arrested, rather than get the same free money the gman handed the banksters. I voted for the free money. I'm flying to New York to begin talks about building a bank. Not some offshore garbage. A real American bank. If you really had the banksters all arrested, what do you think would happen to your bank deposits? Answer: Before the banksters and their accountants who run the mark to model scam, before they are arrested, they would mark a thousand trillion dollars of OTC derivatives to market, and your bank accounts would ALL be GONE. The Chinese people have essentially defeated a force far worse than the US gman. They defeated thousands of murdering communist scumbags. A communist, by definition, is a murderer and a robber. That's what he is, his aura, his soul, his entity. The way the Chinese people got rid of him (or are on the road there) was one drip of capitalism at a time. Soaking a communist dry sponge with capitalist water. The communist changed his ways. That is the only viable solution. My goal is to change Ron Paul's tactics from the hammer to the water. With an eye to directing every drop of it on the US Gman and the US bankster sponges.
Let's see what happens.
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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am. The newsletter is attractively priced and the format is a unique numbered point form; giving clarity to each point and saving valuable reading time.
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