Graceland Updates 4am-7am
Email: s2p3t4@sympatico.ca
Oct 8, 2009
1. A long update today. I cover the barrage of questions I got from a lot of you over the past 48 hrs, about whether the USD could actually go off the board, and what that means. Also, a lot of charts to post on the site today. First, some lighter fare…
2. I’d like to make an introduction soon. It’s time for Mrs. Pgen to get married. The single life has to end. I’m arranging the marriage. The groom will be: Mr. PoGen.
3. I’ve started work with superman on a Portfolio Generator. This will take a few weeks. I’m working out the rough parameters/ideas now.
4. Roughly speaking, I’m looking at having a “recommended portfolio” based on conservative, moderate, gambler classifications. The Pgen started as an “in my head” calculator, then became a bag of pennies spread out on my desk. Then it morphed into the pgen. The Pogen will have a similar development.
5. The PoGen will have certain risk management tools that are unique. For example, Gold is trading around 1060 (yes, another kachingo this morning!). If you built a pyramid on gold, you could select “gambler” for example, and it would give you the percentage of your total risk capital to allocate.
6. Even if you used a RANGE pyramid, meaning one with a peak and base in a price range, not one with the base at zero, it would calculate some additional percentage risk based on the fact your pyramid is not extending to zero and then make a recommended % allocation, one smaller than a foundational pyramid (one that extends to zero).
7. Superman is going to be setting up a subscriber input section, which will be in the form of a poll/vote in multiple choice format. That will be used to create an AVERAGE portfolio for GU subs.
8. Then you will be able to tweak the pogen to suit your personality.
9. It’s important to know that the average sub is doing.
10. It’s also important to keep things simple. Laying in 2000 categories isn’t going to help anyone. Most of you are carrying too many items, although a number of you have made incredible progress simplifying things. Don’t use the pogen to make your life MORE complicated. If a function appears valuable but sucks up time, what is the real value? It could become a cost, not a benefit.
11. The Pgen uses very little time. That’s how I picture the Pogen. Combined with the trade robots, which are more than 50% done (there’s a working prototype now), the Pgen-Pogen-GU Robots will be a triple play comprehensive risk/reward management tool. One that opens the door to the next step on the road to competition with the banksters: A Graceland Fund. Then a BANK. It’s one careful step at a time. I move fast, too fast, compared to many people in certain ways. Where I move too fast, however, doesn’t BLOW UP people, including MYSELF. In other ways, I move very slowly. When you dealing, directly or indirectly, with people’s money, you need to focus on the word TIME. Most writers haven’t handled people’s money, so they focus on “my system gives this performance, my chart says buy, what’s the matter, don’t buy that stock, this one is the best, what’s the matter with YOU!” There are a lot of INDIVIDUAL considerations and personality traits that go into an investor’s decision to act in a market. The Pgen was created to MANAGE those considerations. Time is the ultimate measuring stick, the ultimate proving ground. Two people in the same financial situation may NEED to approach the SAME stock in VERY different ways. This is what people who haven’t handled money for others do NOT understand. Watching you as a group working with the pgen is just as important as backtesting performance numbers. There were a lot of BUGS in the original pgen. Those have been resolved. There will be bugs in the pogen. I don’t like to move up the staircase to the next step until you are COMFORTABLE with the first step. Hundreds of you are now fully comfortable with the pgen in a PRACTICAL sense of using it for months COMFORTABLY. So now it’s up the stairs we go to the Pogen! (actually, we plod up one stair)
12. Onto the markets. When the profits get obscene, the temptation is to start picking at the core positions. Like the alcoholic that says, “I’ll just have one drink”. Sure you will. Next thing you know your gold bottle is empty at gold $1100, only gold isn’t 1100, it’s 1500! “This run up is so big, it has to pull back, I know I really can get in cheaper.” Wrong. This is GOLD. I’ve beat into you on the buy side, that you are operating with the world’s lowest risk investment, so the odds of it going off the board are as close to zero as you can get without actually hitting zero. Get in cheaper when it IS cheaper. That will come. Those days of, “something is REALLY wrong here, it shouldn’t keep falling like this, I’m really getting concerned”…those thoughts in the GOLD market… WILL return. Wait for them with your buys.
13. On the reward side, let me repeat the same words: THIS IS GOLD. We’re coming out of a MASSIVE head and shoulders continuation pattern, and doing it AS the banksters create a USD panic. SOME institutional US dollars ARE being switched to GOLD. Anything can happen. Gold could run to $1500 before people really know what happened. Yes, there will be big sell-offs, but they could be very short in time and/or very shallow in price. I’m not predicting we run straight to $1500, and I’m a continued seller into any and all strength all the way there, but all bets are OFF in terms of playing top callers.
14. Head and Shoulders continuation targets, per Edwards and Magee, are basically UNPREDICTABLE. The technical target is around $1300. I’ve used $1200, to deliberately shave $100 off the reward side of things to manage expectations. That’s where my $1200 target comes from. It’s a “managing in the real world” target. Not a technical target.
15. The ONLY sell target I’m focused on now is: $1070. My next profit booking point. It’s very easy to forget your rebuy points as gold goes into “I’m overbot, yes, so what, come and catch me!” mode. After hitting 1060 this morning, 1030 is the rebuy, using the buy every $10 down, sell every $30 up. You can only rebuy a position you have booked profit on. There is no “doubling up” in the basic approach. YOU can do that if you want. I don’t. I demand my profits are booked, I’ve got enough risk on the table now without adding to it before booking any profit.
16. Reminder, again, of gold’s leverage to the US dollar. Money coming OUT of gold into the US dollar is like filling a huge lake with a garden hose. The fundamental drivers that send players OUT of gold and IN to the dollar are the SAME, but note this key point:
17. It is LIQUIDITY THAT MOVES MARKETS. Money flowing out of gold into the dollar will NOT make the dollar rise much. When the dollar bottoms, the money coming into the dollar will be from other sources.
18. But let’s focus on TODAY. Today we have a TINY amount of money flowing OUT of dollars and into gold. That is BLASTING the gold price higher.
19. Now you understand the volatility that could hit gold, that IS hitting gold. You’re seeing it on the upside now. Wait till the banksters have the funds “steadily” moving money into gold because rising gold is “here to stay”. Then they’ll show up with a monster “rug pull”. The funds will jam the exit doors and gold will plunge hundreds of dollars like a rock. Then they’ll say, “oh, wait, we were wrong, the gold bull is still on, look at this surprise bull data we just found!”. And the funds will charge back into the gold arena trampling each other to get in. No other major market is so OPPOSITE to the US dollar, and other major market is so tiny.
20. Gold’s technical indicator hit the currently overbot levels on the weekly chart on the first touching of $750 in this bull market. Gold rose “impossibly” to $1000 from there. I’m not predicting that repeats, but the monthly MACD for both gold and silver is flashing a huge buy signal. Be prepared for anything.
21. Here’s a look at the silver chart, the 60 minute version. Click this link: silver 60
22. If you look at the 2nd indicator from the top, the Williams%R, you’ll notice it has risen to the -20 overbot line 5 times in the past 27 days or so, and fallen to the oversold -80 marker 4 times.
23. Roughly speaking, every couple of days it is either overbot or oversold.
24. Price doesn’t have to move much, or at all, for those indicators to move. It could move a lot, but it’s not a necessity. Still, price GENERALLY moves lower as the indicator moves lower. Don’t bet on exceptions. You may end up like those betting they can fill the US dollar lake with the gold garden hose, or worse, those betting they can stand in front of the US dollar lake coming thru the gold garden hose like a laser beam. You’ll get cut in half if you play NAKED GOLD SHORTER.
25. Unless you are using the pyramid system, it’s TOO LATE to buy gold now for 99% of investors. They will NOT be able to stand the volatility. For Joe Public, the bull mkt in gold might as well be OVER.
26. Jon Nadler. He’s Kitco’s main commentator. A number of you have commented that he seems to bash the gold community and is a sort of perma-bear, always talking down gold. The facts are that he does recommend ALL investors keep 10% in gold, and pay any price for that 10%, then “set it and forget it”. I think 10% is FAR too low. If you paid 880 in 1979’s bull mkt, I doubt you really are very happy with that entry point. By 1999, I think that 880 entry point would have been followed with a $300 exit point. But at least Jon is saying hold 10% in gold. I think MOST gold writers are over-focused on the supply-demand issue for gold as a COMMODITY.
27. The gold seasonals chart I posted going back 34 years is a powerful argument to sell gold here. I don’t sell my trading positions on anything but PRICE. I use things like the seasonal chart to TWEAK the SIZE of the buys and sells, not to make the decision whether to buy or sell. ONLY price makes that decision. Because gold is now trading mainly as a CURRENCY, the seasonals chart becomes much less a sure thing. I wouldn’t bet against it, but it isn’t the powerful tool it is during the 90% of the time that gold trades as a COMMODITY.
28. I want to cover a horrific possibility that some of you have asked about in different ways, relating to the possibility the US dollar is actually destroyed. First off, because the bankers control the printing of the US dollar, they can increase or decrease the supply of dollars to suit themselves. While my own view is that the current bankster buying of USD is nothing more than the same range pyramids some of us are playing, at some point they will execute a MAJOR buy program on the US buck.
29. The question is: What if the USD goes “out of control”, it DOESN’T stop falling, what happens to the bankster USD positions (and to us if we’ve moved large monies into USD at that point)?
30. First, if YOU controlled the money printing machines, and YOU were buying the dollar, would you seek to print more dollars, or would your thoughts be, “maybe I better turn this money printing tap off, I don’t want to DROWN MYSELF. In fact, let me switch it to: suction.”
31. But the bigger question is, what if, somehow, that didn’t work, what if there are some unknowns that the bankers hadn’t thought of, or what if they have a bigger plan, involving the real complete destruction of the US currency?
32. I think that is highly unlikely, although 100% possible. The “fringe” of the gold community does exist, it is real. I believe there is some good and intelligence in everyone. Nobody is 100% evil or good. And everyone has unique ideas that nobody has thought of. Listening is very important. It’s not a matter of ACCEPTING their fringe ideas, it’s a matter that listening to their ideas produces REAL SOLUTIONS and POSSIBLE PROJECTIONS OF WHAT IS COMING in YOUR head. Like a policeman listening to a criminal. Every movement has it’s FRINGE element. It’s a hard thing to look objectively at the ideas within that fringe element, particularly if you’ve had family members killed or financially mauled, by those in that element. When a major crisis occurs, desperate people engage in desperate and fringe-type actions. And mainstream people are more apt to openly consider fringe-type solutions. So it’s important to be aware of the fringe. The major intelligence agencies of the world monitor the fringe elements all the time, so it’s not a “bizarre” or stupid act to do it. The fringe live their entire lives like the world is about to end every day. Maybe it is, but I don’t want to live like that.
33. For the US dollar to actually disintegrate to nothing or near nothing would involve a full hyperinflation. 65% of all financial transactions in the world are US dollar transactions. A real USD wipeout, not just a bear market, is financial Armageddon, and major war would be a 99% probability. I would put the odds substantial nuclear weapons being detonated, frequently, at 90%, if the US currency were wiped out. You’re talking about a financial holocaust situation of the entire United States of America, would cause even worse problems worldwide. As the financial situation deteriorates, the willingness to use military force will rise, by all players.
34. IF the US dollar did go to the waste basket in a hurry, as the fringe believes it will, gold would go to tens of thousands of dollars an ounce at MINIMUM, more likely to BILLIONS of dollars an ounce. That’s what hyperinflation IS. The banksters’ gains on gold would make up for their USD losses.
35. Hyperinflation DOES happen FAST. There is no question that real hyperinflation could send the US dollar to near zero and gold to billions of dollars an ounce. That is a FACT.
36. So the question becomes, what specifically would the banksters GAIN by doing THAT? It is not a secret that the banksters want to reduce the global population substantially. The fringe believes the tactics the banksters would use are PHYSICAL. Pre-planned disease, war, famine, and other such jolly tools of the trade.
37. I think the tools they ARE using for population reduction are long term processes, and are financial tools. By reducing the wealth of the global population slowly, birth rates will likely decline as well. Lower home prices are at the top of the banksters’ population reduction plan of action. I think they operate in multi-decade stages of action. Like they do in the market, with processes, not events.
38. But the current government of the United States would be ARRESTED by the founding fathers of the country, were they to be transported to present and put in power. Many fringe ideas HAVE become mainstream.
39. IF the US dollar IS destroyed, bank accounts, brokerage accounts, it all goes down. A new social order would emerge, a global order with the banksters in control.
40. I have to stick to my view that hyperinflation is a card in the banksters’ hand, but one that will not be played in full. I believe Bin Laden’s team understands the hyperinflation card and WANTS it played. His team wants DISORDER.
41. If the USD towards the 50 mark on the index, it WILL feel like it did at Dow 6500. In fact, it will feel much WORSE, because it will be worse. “Identify the exact point of maximum pain. And then buy.” – Jim Sinclair. When the US dollar reaches the point of maximum pain, I want you to remember the second half of Jim’s statement: “When the gold bull market ends, 97% of you will NOT believe me.”
42. When the Dow bottomed at 6500, the major banks of the world were within hours of closing. I believe that when the US dollar bottoms, they WILL have closed and re-opened, probably a NUMBER of times. If you think it felt bad at Dow 6500, wait till you get a taste of USD 50.
43. Think back to gold $250. The banksters were the buyers. At USD 50, or wherever it bottoms, it will be 1000 times harder [ for you to decide to] to buy the USD then, than it was to buy gold at $250.
44. The reason is because the end of the gold bear market coincided to the PEAK OF GREED in the mainstream world.
45. The US dollar bear market will end…
46. with the peak of WORLDWIDE FEAR.
47. Are You Really Prepared To Handle THAT Mentally? I’ve mentioned before that Bob Moriarty is a retired fighter pilot. Surround yourself with people who are very mentally strong. It doesn’t matter WHAT they think about issues, you may not like them at all. Feed off their STRENGTH. You will need it going forward.
48. NOBODY ALIVE HAS EVER EXPERIENCED A BEAR MARKET BOTTOM LIKE WHAT IS COMING IN THE US DOLLAR. NOBODY ON THE PLANET. THIS IS THE ULTIMATE MARKET IN SIZE, IN A SUPERPAPA BEAR, SO BY DEFINITION, IT’S “POINT OF MAXIMUM PAIN” MUST BE THE GREATEST PAIN IN THE HISTORY OF THE WORLD. One more time:
49. Are You Prepared?
See you on the site.
Cheers,
st
Stewart Thomson
Graceland Updates
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