Graceland Updates 4am-7am

Oct 24-25, 2009

1. Click this link to view the monthly chart on the Australian Dollar: xad monthly. Aussie Monthly Chart. What I’m seeing there is a picture of something that looks like it wants to go higher, but has the door of possibility open to some shorter term weakness. Here’s the weekly chart, also over about 20 years. Aussie 20 Year Weekly. Here I see a major overbought situation, but not necessarily one that must be resolved with severe weakness. Generally speaking, situations like this on the tend to see the market sell off by around 5 full cents or more, but the monthly chart means anything is possible. It’s also true that any selloff could be followed by another huge period of strength, like we’ve seen on this intermediate rise, which has carried the aussie up 50% against the USD, in just a single year.

2. If you want to play currency trader, you need to think VERY BIG. You need to think in terms of huge lengthly campaigns, or you risk being steamrolled.

3. The daily aussie chart here is also overbought. Click here: Aussie Daily Chart

4. Some have fallen into the trap that because the aussie has risen more than gold against the US dollar recently, somehow this MUST continue and gold is a bad investment if you live in Australia or Canada. OK, go ahead and lay down your bets with Marc “Gold Sachs” Carney and Some of you that live in Australian are a little less sure that all is as wonderful as Americans are being told it is. The IMF recently issued a warning about Australia’s real estate market. A fall in prices could trigger a banking crisis.

5. If I lived in Australia and had to choose between operating gold pyramids and aussie dollar pyramids, I would be HOSTILE if forced to chose the paper play. I believe the global crisis will last for DECADES, and NO major country will emerge without experiencing an economic WIPEOUT. Who’s leading the “raise rates to prevent inflation” charge? The Australian Central Bank. Question: Is THAT a positive for the Aussie real estate mkt? The Australians dancing the “we never had a recession, we’re better than you!” tune, remind me of the Dow dancers after the initial Nasdaq hit in 2000. Don’t celebrate too early. This is a 15 round fight. Not a two rounder. There will always be periods of real growth and talk of “a new bull market” at different points over the coming years. By various fantasizers. All will meet the GOLD HAMMER before it is over.

6. It was another winning trading week. The Pgen is full of surprises. [This is his little computer program that, for a secular bear or bull market, lays out a series of small buys on weakness and small sells on strength.] It surprised me this week with the additional strength in the aussie and especially oil. If I’d bet against King Pgen, I would have thrown away my week’s profits, and then some. Instead, I booked them! When I spoke of oil falling $11 and asked “Is anyone paying attention?”, well, I never thought it would rally so fast and ring the cash register so many times. Don’t fight your Pgen, you will lose!

7. Most longer time trading subs[cribers] are ALL, including myself, travelling a little LIGHT in the gold mkt right now. With our TRADING positions. I know it, you know it. Gold has rallied $165 from 905 to 1070, so OF COURSE we’re travelling lighter NOW, than at 905! That’s the NAME OF THE MONEY MAKING GAME. Would you rather buy heavy at 1000 and then lighten up at 905? Price strength is for lightening up. Price weakness is for accumulating. The current flagship thoughts in the gold community are: “But what if there is NO weakness in the gold mkt?” and “But what if gold tanks, maybe I should sell everything”. Both are dangerous thoughts if translated into action…

8. IF you sold too much too fast, no you don’t rebuy it $200 higher to play catch up. Wait for REAL weakness. It may come from $1400, it may come from 1070. Some gold writer will nail it perfectly this time, just as SOMEBODY has nailed every single top and bottom since gold $250. The problem?

9. It’s never the same guru at each turn!

10. I want you to think back to near the end of the gold head and shoulders consolidation pattern. The gold writers mostly wondered “maybe too many people know about this so it won’t work?”. Does THAT sound like a person LOADED up on gold? NO.

11. Now they are saying, “Maybe gold won’t pull back to the neckline, maybe we should just buy huge now” OR they are saying “Maybe the breakout is false, a huge USD rally is coming, the short term charts are overbot, let’s sell now, all this talk of the Dow in a bear rally is too much, I can’t take another hit like last year.”

12. This action suggests to me the most likely action is a near-perfect pull back to the neckline, to complete the near perfect “Michaelangelo” H&S pattern itself, but we’ll see, and RESPOND.

13. When you respond to price with a pyramid formation of buys and sells, you are effectively taking the market one day at a time, and there is NO DAY that you are not prepared for.

14. Bloomberg headline: “Bernanke says financial firms should pay for closings”. I agree. Let’s start with: closing the fed. I’ll go a step further. Let’s not charge Ben anything to close it. Ben, just close the thing down and get lost. We’ll cover your plane fare to move in with your hero in Zimbabwe. Question: what CEO of a business gets appointed for a fixed term of FOURTEEN YEARS, no matter how bad a job he does? No, the banksters don’t have unlimited power. Just 14 years of absolute power with NO AUDIT EVER. My mistake. I apologize. Attention all CEO’s of public companies: You can now refuse all audits by the tax dept and you can’t be removed from your position for 14 yrs. I’m sure Ben is ok with it… And remember, that’s NOT absolute power. That’s HELPING the public. In Ben’s words.

15. In his latest speech (a “masterpiece” available on Bloomberg), Dr. Pinocchio just announced a brainstorm: When times are GOOD, banks should save some capital, for when times are bad. Thanks Ben, none of us thought of that idea…

16. Then the man goes on to say that he’s noticed that the banks have actually INCREASED what he terms “quality capital”. This appears to be another brainstorm on his part: If we print 10 trillion and hand it to the banks, then give the bill for that 10 trillion to all taxpayers (who are penalized with JAILTIME if they don’t hand it over), that is truly “quality capital”. I agree with Dr. Pinocchio, the banks have indeed added quality capital to their asset base. Just as a successful art and jewel thief has added quality capital, after his latest heist of a major museum.

17. Some of you have told me of entire communities in America that are holding meetings. The bulk of those participants are ARMED and ANGRY. What the general public doesn’t understand is that a large portion of America separates the financial crisis from freedom, and place the freedom of the individual above her financial condition, with her maximum freedom as the PRIMARY responsibility of the federal govt, not her financial condition, nor her SAFETY. That is a reality that is part of what I term the GOLD RAPTURE. These communities are not revolutionaries, nor are they planning any “assault” on the govt. They are simply seeking to protect themselves. However, the mainstream population is very FICKLE. Should THEY somehow believe that govt money printing is not working (it isn’t), they could then be the ones to demand a dismantling of the Fed. I don’t think that will happen. I do think the public will “lose it”, but I believe the banksters will be successful in directing that rage in another direction.

18. For those of you on the “fringe”, wondering if the banksters plan some “extermination” of the global population, and so global war is coming: I don’t believe that will occur, at least not NOW. The banksters have clearly stated they want to eliminate national armies and reduce the global population by BILLIONS. But why have a risky war now, when you can wait until you have a world govt in place with sole power to exterminate who you choose while they have no ability to fight back? As the crisis accelerates, I think the general public will leave FREEDOM behind PERMANENTLY as the banksters WIN the choice between “If we have a world currency, your economic pain will end” and “If you smash the size of govt, your economic pain will not end, but the era of big govt playing God will be over”.

19. Nouriel Roubini should not have said what he did about GOLD. Picture Muhammed Ali in his prime. Now picture him fighting overweight, older, out of shape, against Larry Holmes. Beaten like a child. Do NOT slander gold. It will come back to haunt you and it will come back to haunt Nouriel with a beating he will never forget for the rest of his life. Remember Henry Kaufmann? He thought he was Mr. Smarty Pants too. Nouriel will look like a COURT JESTER as this gold bull market accelerates, just as Henry Kaufmann did as the bond bull mkt accelerated in the 1980s. I think Jim Sinclair is likely paying a level of respect to the man (while disagreeing with him on almost every point about gold), because he knows the end won’t be pretty for Nouriel, and he knows the banksters are using him…

20. I believed from the time Nouriel showed up on the scene that he, unknown to himself, was a bankster puppet, used to gain the trust of the public. What member of the public is going to buy gold after listening to Nouriel calling $1500 gold NONSENSE?

21. The dollar has already taken a 98% beating at the hands of gold. A further 50% beating during the greatest money printing, freedom robbing, and govt spending extravaganza in American history is NONSENSE? Suggestion: If I were you,

22. I wouldn’t bet too much money on Nouriel Kaufmann…

Cheers,

Stewart Thomson

Graceland Updates