Graceland Updates 4am-7am

Nov 22, 2009

1. Attention gold bear economist bustouts: Welcome to the gold scoreboard. In case you forgot, you are measured by the PRICE scoreboard, just as the traders and investors are. Let’s take a look at the gold price scoreboard this morning: Gold: New high at $1168. How does it FEEL to be a total LOSER on the SCOREBOARD?

2. “This is WAR!!” – Subscriber Babe Ruth in email to me. Nov 20, 2009.

3. “History tells us the dollar shouldn’t start rising on a sustained basis until 12 months after the Fed starts to lift rates,” said Callum Henderson, the Singapore-based global head of foreign-exchange strategy for Standard Chartered.” – Bloomberg News. Nov 23 2009.

4. The US dollar bear market will continue for YEARS. There’s a lot more to understanding a currency bear market that taking an economics course at university. Economics is ONE TOOL employed by the greatest fund managers. In the arena of price prediction, understanding people’s minds, is at minimum, just as important as economics. All people have greed and fear. If you don’t make a serious effort to understand those character traits within yourself you’ll never be able to engage in successful price prediction because price is ultimately determined by liquidity movement, not economics. Liquidity movement is literally buying and selling. What does occur in a market based on pure economics study, and what should occur, may be similar, but sometimes it can be the opposite of what economic theory dictates.

5. When I was 11 yrs old I joined the “100 kilometre club”. I had to run every day and document how far I ran until I got to 100km. Then I got a certificate. Now I operate the Graceland 100 kilo club. More of you are reporting in as members. Subscribers who own 100 kilos of gold or more. Those who own shall we say, “somewhat less than 100 kilos” might want to consider LISTENING to what the kilo club has to say from time to time. Some of you in the 100 kilo gold club have listened to gold top callers with modest portions of your gold, various academic geniuses, and proceeded to the gold penalty box, but emerged with a vibrant “I just fired all my top callers, I had a temporary loss of sanity but I’m back in control!” attitude.

6. Welcome Back. Back to the Gold Party.

7. Bloomberg’s number one headline this morning said aprox, “stocks rise, gold makes new high”. That was then yanked and replaced with “stocks rise and dollar declines”. The banksters do NOT want the public in gold. They want them in bonds, which is where the idiots ARE. The lower the grade of the bonds, the higher the promised payout. The banksters have done a magnificent job of explaining to Joe Public Idiot Investor all the reasons why he needs low grade income investments. “Those stupid t-bills don’t pay anything! You don’t need that kind of nonsense, it’s an insult! Here, try some of these Enron Zombie bonds on for size. Wow, a perfect fit, just as we thought! Congratulations on your latest master move in the market. Whatever hi-yield corporation bonds you want, you name it, we’ll put your name on the bond ownership cert. Remember to re-invest those yields back in more hi yield bonds, to maximize your free money!” –Banksters, non-stop all thru 2009. “Sure, here’s my life savings. I’m so glad to be safe! I was worried for awhile there, I almost bought a penny stock called Gold Bullion. Some loser named Paul Tudor Jones bought it instead. Thanks for saving me!” – Joe Public, all thru 2009.

8. “Can I get some more of those short junior gold - long seniors otc derivative contracts on 10 to 1 leverage?” – Joe Fund Manager, 2009. “Absolutely. You’re up bigtime on all the ones we sold you in 2008, so you can use the paper profits there for supermargin. Now, about that soul you promised us in return. We’ll throw in some 20 to 1 leverage for ya, and catch you on the flip side!….” – Banksters, 2009.

9. Gold versus gold stocks. Listen to me very carefully on this one. Gold stocks tend to rise drastically at the beginning of a bull market and in the later stages. The middle doesn’t go so well.

10. Let me re-word that statement: The middle goes very well, if you are a buyer of the huge weakness that presents itself.

11. I’m getting a lot of emails from hardworking but smaller investors, who are worried about the gold stocks. Most are asking, “should I move money from gold stocks to bullion? The bullion is leaping higher and I’m being left behind!”

12. That is NOT the actions of the 100 kilo gold club. They are BUYERS of the juniors HERE.

13. What the smaller investors need to understand is that the larger investors view their move into the juniors as a war.

14. Worse, I’m afraid that you need to understand that the 100 kilo club views YOU as the prime enemy in their war.

15. One member of the 100 kilo club reported in yesterday that that you own “only” 100 gold junior explorers to go along with your 100 kilos of bullion. He is selling these juniors into strength with both the stocks and bulion, yes, but NOT with his CORE postions.

16. So let’s cool it on the failed top calling and focus that energy on the buy side of gold’s blood relatives, if this current gold price action is a little overwhelming. Because items like food and gas have not moved much, you can get involved without all the emotional baggage that goes along with the gold market right now.

17. The gold stock indexes like GDX are NOT overbought, except on the daily chart, and even then not in terms of RSI, relative strength. The same with the Dow. The monthly chart shows both the GDX and the Dow in near super-buy technical situations. This is hard to understand for the fundamentalists. How can the Dow keep rising with 20% real number unemployment and P/E ratios that are arguably at 100 to 1, and certainly at 20 to 1, how is this possible?

18. Answer: The movement of liquidity. Not the movement of intelligence. If there are more buyers than sellers of toilet paper, the price rises. End of story. In world war two the stock markets went UP while tens of millions were killed.

19. I’ve said only 10,000 times that you need to seek a state of mild confusion in the market. Be sure of your ability to be wrong, not your ability to be correct. When you are sure of your analysis, you are in danger of acting on it with large money. When you are confused, you must turn to price and respond to it.

20. Our own Babe Ruth reported yesterday that he bought the GDXJuniors “large” last week, and he’ll do another large buy or two in any further weakness and from there lay in his pgen. Again, another example of a successful market WINNER acting in the market with the “player-professional” tactics, the [1]player-[2]pgen, that I’ve highlighted as THE best risk-reward action in the market, so long as the current head and shoulders pattern continues as the key driver of gold market action, which it is now, and will continue to be all the way to gold 1400 by definition, and less so, but still a force, towards 1700.

21. When you take action against the major trend when the monthly major technical indicators are on huge buy signals because of some daily sentiment “too many bulls” peanut play, you may call a couple of micro sell-offs, but the gold steamroller will run over you like a traffic cop holding a stop sign in front of an earth mover at a mine. The driver of the giant earth mover can’t hear you, can’t see you, and couldn’t stop anyways even if he did.

22. Gold bullion daily charts ARE overbought. RSI is in nosebleed territory. But it can stay there for months, and when it does come down, price could only slightly decline or actually end up HIGHER than it is now by the time the RSI and MACD give buy signals.

23. In the US dollar graveyard, on the liquidity movement front, the bulls are facing off against most of the world’s hedge funds, the US govt, central banks of the world, and the US treasury. It’s a wipeout. The bull coffins are being lowered into the ground like the dead in a global ebola pandemic. A few zombies stagger around clutching their textbooks or some technical indicator before collapsing into dust.

24. The Chinese Gman is now totally silent. His threats to sell bonds are gone. If he actually sold, the banksters’ front man Ben Bernanke could buy those bonds 10 times over with printed money and give the dollar another smoking while raising the t-bond quotation. What a moron the Gman is. Does he really think holding an 800 billion dollar threat against a thousand trillion dollar OTCD hammer is going to do ANYTHING but blow himself up? “Let’s see now, we’re not worried about a thousand trillion dollar collection problem, but we’re terrified of a problem 1% as big.” –banksters? Wrong. They aren’t terrified of the Chinese Gman. They’re dangling him on a string and laughing in his face, then giving him ORDERS. He’s silent because he’s following bankster ORDERS to be silent.

25. When the banksters are ready to start BUYING US govt bonds, they’ll order the Chinese Gman to bail, and throw him millions and maybe billions in wash money, for doing the deal. The investment performance of global Gmen has been pathetic. A quick run-by: Gold: Sold to the banksters into the lows of a 20 year bear market. US dollar: Bought from the banksters into the highs of a multi year bull market.

26. Here’s a look at the gold bullion daily chart. Look at RSI. Massively overbought. I suggest you read the comments I posted on the daily chart I posted this morning on the site. Gold Daily Nov 23

27. In a few hours I get on the phone with the Brain and interview a possible fund manager for a gold pgen fund. We need somebody very meticulous. I’ve involved some of you who are business owners, not financial professionals. There’s a certain learning curve as you transition from business to markets. Once you understand how a fund works at a professional level with absolute transparency and gold bullion being the twin hallmarks of that fund, once you see the day to day action of the fund manager, you will quickly realize that the billions I’m talking about here are very very realistic. As far as the manager goes, we don’t want Mr. or Mrs. “I know where the market is going!”. Nor Mr. Leverage. We need a meticulous worker bee.

28. By the way, the Brain, who has two doctorate degrees, who grew up in poverty, also got to grow up alone from age 15. As an orphan after both parents died. There’s a certain rawness that most of you bring to the table. I try to draw that out to a high level as you proceed onto the market battlefield. I try to pick at you to keep that rawness there, and draw more of it out in those who maybe have shown less of it. Asked about his secret to success, Arnold Schwarzenegger said without hesitation, “Stay Hungry”. This is why I knock the golf ball advisors, generally, although there are many great advisors out there. Once you get soft, you lose the edge that got you there. ABBA used to record their records in a little shack-like house. Warren Buffet focuses on building businesses, not padding himself. You have to be able to act in the market in a hungry and raw manner to succeed consistently.

29. When you grow up in poverty and alone you have nothing but yourself. You are hungry, very hungry. When I take away your analysis, your gurus, your market views, your charts, and leave you only with the ability to respond to price, I’m essentially putting you in that kind of situation. And this, to come full circle, is essentially how the members of the 100 kilo club act in the market, although in a modernized way. You don’t have to move into a bunker, although for some that is required to succeed. But you have to do it mentally. The key realities in the gold market are difficult to grasp right now. Gold must be sold professionally into strength, but it can also be bought in a play that is vastly skewed to the reward side. The largest players are doing both. The player-pgen. Gold could sell off here, but it could also continue this staircase action upside for MONTHS. Are You Prepared?

30. If you sold gold into strength and it has not pulled back according to “your schedule”, don’t be alarmed. It’s a learning process. You didn’t make a “mistake”. But if you sell into your core position because you are sure gold “must” turn down, you WILL be making a mistake. IF gold falls, you’ll convince yourself you didn’t make a mistake. You can win in the market by luck while making tactical errors on the battlefield, but over time, the errors will translate into market blood.

Cheers,

Stewart Thomson

Graceland Updates