Graceland Updates 4am-7am

Mar 31, 2010

1. I think Bloomberg News needs to look at a quote machine or a chart before writing some of their articles. I told you previously about a gold article they did talking about a hit on gold that didn’t even occur. That was bizarre, although they pulled it by 5am.

2. Today we have Bloomberg’s “Chinese bear mkt in stocks” story. We’re told that China entered a bear market in august 2009, and we just had the worst quarter since that “bear mkt” started.

3. Really? Here’s what I see looking at the actual chart, not standing there with my puppet strings while Bloomberg talks: In august 2009, the FXI-nyse was at about 43. It’s about 42.50 now. Wow, big bear mkt. For the quarter, the FXI started the quarter at about 42.50. Guess where it is now? About 42.50. The Chinese bear market started in the fall of 2007, not 2009. With the FXI at 70. It fell to about 20, a mindboggling 70% wipeout, and ended that bear mkt in October of 2008. Since then the market has “only” risen about 130% in less than 18 months! (If that’s a raging bear market, give me more of it while I ring my cash register, as I did YESTERDAY in that mkt!). A new bear market could start any time, but this is a 130% return bull market, and counting.

4. When you act in the market, when you take action, you want to do it from a state of mild confusion. Not knowledge or assumed knowledge about what might happen. Act as a hardened professional moving capital in modest increments responding to price, not guessing where it will bottom or top. As we transition to the theme of the bond market as the main driver of the bull, here and now, there is going to be confusion and thoughts of “what does all this mean?” Be satisfied with your confusion and use it to respond even MORE professionally to price.

5. I was literally BOMBARDED with emails from small investors yesterday, confused by yesterday’s update. Some thought I was saying “short gold”. Others thought I was saying “gold stocks are gonna crash, sell everything!”

6. It takes TIME to make a major point in writing, many days, not one, just as it takes much time for a major bond market like bonds to become an actual gold price upside driver. Focus on the theme, not the transition. If you start trying to predict transitions, it becomes like betting on the next short term move. It’s pure gambling and you’ll lose money over time consistently instead of making it. Shorting the Dow is NOT translated to: Gold stocks are gonna crash! In the 1970s, investors shorted gold during its biggest rise, as they saw the US dollar rising. The dollar kept rising so they shorted more, and more, and more, as gold “had to fall” because “the dollar is rising!”.

7. Then gold sent them to the poorhouse. Those people then, are many of you now, thinking about the Dow and gold stocks relationship. There IS a relationship, but it won’t always be there, and if it does end while you’re OUT of gold stocks while they go parabolic, how will you feel?

8. Look out your market window: Do you see the US dollar rising? Yes. Sell strength. Do you see the DOW rising? Yes. Sell strength. Do you see gold rising? NO. Buy weakness. Which of the 3 items is a buy? Answer: GOLD.

9. This is a critical point: Most of you remember 2008. The bond market was not in play in 2008. It is now, with the saturation issue moving quickly to front and centre. This is NOT 2008, and an overbought Dow is not a “sell all gold stocks, they might repeat the 2008 wipeout!” call. I never mentioned selling gold stocks, but I wrote what I did yesterday to draw that out of you, and it worked. You really need to work to understand that market relationships can change, and that IS happening now.

10. Listen to my richest subscribers. Those worth hundreds of millions and billions: Stop telling your friends who can’t pay their mortgage to buy junior golds. Excessive risk taking got them into their situation. Even bigger risk taking with their food and medicine money will not get them out. THEY CAN’T MENTALLY HANDLE THE VOLATILITY NOW, DO YOU SERIOUSLY THINK THEY CAN HANDLE A MASSIVE RAMP UP OF THAT VOLATILIY? NOT IN A BILLION YEARS. It will rip apart their families. They need to DOWNSIZE their LIVES, not take on the banksters in the junior golds arena.

11. This is NOT the 1970s. This is NOT a greed-based market. This is a crisis and your relative increase in wealth is going to come from a mass impoverishing of the general population.

12. Most hardcore BUSINESS OWNERS can’t even buy price weakness in the market with ANY capital. They couldn’t do it in good times, let alone NOW. They are mentally BROKEN. It’s too hard to do it, that’s a cold hard fact. So how is some joe blow with an underwater mortgage and 9-5 job on the rocks going to do it? It’s not going to happen. That’s a total fantasy. With gold juniors, the highest risk stocks in the world, they will be blown out of the water by the banksters long before they even think about booking a profit. Think, very seriously, about what the banksters did to hardened business owner investors in the stock and real estate markets. It’s was a fish in the barrel shootout party. Taking money from the public in gold juniors is EASIER than taking candy from a baby for them. As rates begin to rise, mortgage rates could go astro. Prepare friends and family to handle THAT coming nightmare, because if the Gman doesn’t print enough money to buy his own bonds, rates are going to the levels of the 1970s. Rates at 20% in 1979 is a totally different scenario than rates at 20% now. Raising rates to 20% now is that picture of the boxer who just fought 15 rounds and is barely alive, being shoved in the ring to fight a fresh fighter for another 15 rounds. Death is a possibility and winning is NOT. I absolutely believe you’re looking at a high probability of a 90% wipeout in real estate prices if that happens. It’s either 20% rates (or more) or a mangled US dollar, and there’s a real possibility that it could go out of control and be BOTH.

13. Let me repeat 100,000 times: There’s 8 TRILLION dollars in institutional CASH sitting there. It WILL come to gold, more than is required to give you all the satisfaction you crave with your stocks. Focus on that. Not some guy at the corner store trying to feed his family, who envisions 9% rates as “high”. Clue him in on 18% PAYMENTS he may soon be facing for LIFE, and ask him, in terms of paying his mortgage: Are You Prepared? Help him get prepared for the worst, not put his safe money that he doesn’t have, in the gold juniors lotto. You are doing the banksters the biggest favour in the world by putting the impoverished public into gold juniors. There’s nothing more they like that to see the public move on something, because you know they are going to take that candy away.

14. The banksters look at the public as MARKS. Because they ARE with their market actions. YOU don’t want to see the public in the gold market, because that means it ends with a crash. This is another key point: The banksters “whittle” money from the institutions via fees and buying weakness and selling strength against them for modest money. Like milking a cow. When the public steps into the market ring, the banksters are looking not to milk the cow, but to kill it. For THEIR sake, we hope the public does not enter the gold market on the buy side because the banksters will NEVER let them out ALIVE.

15. Bottom line: You’ve got 8 TRILLION dollars in institutional INTELLIGENT money sitting there. Let’s repeat that together: Eight TRILLION DOLLARS IN CASH. MORE than you NEED is going to come to gold juniors causing the price geyster of all geysters, and it’s starting NOW with players like Paulson and Tudor leading the move IN. We don’t need the public when we have an EIGHT TRILLION DOLLAR INTELLIGENT MONEY BIRD IN THE HAND. Why do you think we need MORE than THAT? That’s crazed madness and greed. The public’s arrival would be BAD NEWS, for both them and for us in the juniors arena. Why? Because some mining companies need another TEN YEARS-and more- to fully develop. You want to see a high gold price for a long time, not a pop and a crash, or many projects will never see completion during your LIFETIME. All is ON TRACK. The institutions and central banks are gold buyers and INCREASING their buying. Gold is going higher and will continue to go much, much higher. The only thing that could derail the gold superbull is the arrival of investors who can’t withstand price volatility, and that is the PUBLIC. As I mentioned, they’re at the pawn shop liquidating, so you don’t need to worry about their arrival. If rates go to 20% or higher, which I put at a 50% probability, rather than looking at the quote machine while clutching their latest drill results lotto ticket, they’re most likely to be standing in a bread line.

16. To me, the price of gold looks set to rally higher. The picture for gold stocks looks like even if the Dow falls, they will tread water or even go higher. If they do fall whether lightly or hard, I’m a buyer, so I don’t see what the big issue is other than much ado about nothing, as Mr. Shakespeare once noted. He was rumoured to be fairly intelligent. A lot of what I do with these updates is twist you around, so you get confused so you have no choice but to respond to price. Because that is ALL THAT WORKS IN THE MARKET, which is why the banksters ONLY respond to price.

17. Silver. One of you noted Jim Rogers is big on silver here and now, more than gold. Monday’s huge move up by silver relative to gold is a very positive sign, and our own Lion of Lebanon is buying silver juniors, not just all the way to zero, but EVERY PENNY DOWN, ALL THE WAY TO ZERO.

18. Is anybody listening? (!!!!!!!!)

19. Notice I said buying on the way DOWN. Not plopping money in because you see today’s quote and get wildly excited and start chasing it. I told you he was a heavy buyer of physical silver into the gold 1045 lows and has extended his outer core sell points to higher targets because he sees silver as a solid intermediate term play, and it’s already working in the right direction. UP. I tell you what he’s doing so you can see what a real pro, an animal does in the market. He has his inner core physical gold that is not sold. He has a focus on physical silver bullion in the intermediate term, but gold in the long term. He understands the low volatility in the market now, and is running his MILK MACHINE by taking every PENNY the market is offering him running the tightest pgens possible on silver juniors, because there’s more volatility and upside there than on bullion. He’s covered his risk and reward for the short term, intermediate term, and long term. Subscriber T-Rex asked me if there was something we could do together on a business level. There IS, absolutely, and I needed time to co-ordinate the right team to ADD VALUE to what he’s doing now, or it’s a waste of time and/or a one-time peanut play. That was the background of my repeated trips to New York and Chicago. I think we’re just about there. It needs to be something that would benefit Graceland subs small and large. ALL. Win-win is the mandate. Win-wiener is the mandate of the banksters, with the public on the wiener side of deal. I like win-win for all, and it makes friends, not enemies. Patience is required on all levels. Players like LL, KingKong, Mr. Macro, and the brain all add value, and in a situation with T-Rex involved, the money could be “sick” and attract massive institutional money out of New York to an ultra SOLID situation that I would argue vehemently is a team that would be world class and perhaps rival Paul Tudor in performance, and in fact one of you said, ‘I see the next Paul Tudor situation in the making, I missed the last one although I was offered at the starting gate, so I want IN.” My response: Yes Sir! I’ve been quiet about this project for a couple of months, as you all know, and the reason is because I’d rather take longer and do it correctly, and the fact is I do a lot of things by “vibe” and it didn’t feel TIME to move. It takes time to build comfort, as opposed to ramming forwards based on what I want, not on what reality is offering, and patience is the better approach, or so I believe.

20. I hope you all read carefully what LL is doing in silver, against the background of Jim “Mighty Man” Rogers intermediate term endorsement of gold’s “little sister”, silver, but don’t lose your long term focus on gold and get trapped by the false notion that silver is for poor people. GOLD is for poor people, because it is LOWER RISK. Silver as a replacement for gold is not for poor people. That’s like saying poor people should buy OTC bulletin board stocks rather than blue chips. That’s a maniacal and totally wrong focus on reward, versus risk. Holding silver and no gold is for professional GAMBLERS because it higher risk. Remember, always bet LESS on a gamble, not more, ESPECIALLY if you are POOR. I wouldn’t surprised if some bankster invented the term “poor man’s gold” for silver. Focus not on what you want, not on what you need, but on what the market is OFFERING.

21. I would say you missed the boat on the silver bullion if you didn’t buy into the recent weakness, but you have not missed the boat on silver stocks. Buy weakness, not what you just missed.

22. While residential real estate might be offering some bargains, I’m less sure, and my preference is for farmland. Looking at the downside risk and upside reward, I have to see it as a major play. Some of you looked at shorting real estate, recently and you know I was against that idea. Others thought the bottom was in. If rates go to 20%, I would submit that that bottom will the last thing that is in today. Farmland carries less risk, less taxes, less cost per acre, and can be mothballed for time. The upside is astronomical and does NOT depend on an economic recovery, although it would benefit there too. One of Graceland’s richest subscribers, T-Rex, is very big on farmland. The rich focus on downside risk first. “Where WON’T I get blown up if I’m WRONG?”

23. Farmland fits that bill. Major companies like Monsanto, Dow Chemical, and Dupont have been rumoured to be buying huge tracts farmland here in Canada with numbered companies as fronts.

24. Jim Rogers is big on farmland, natural gas, silver, and agricultural commodities. I see natgas is up this morning, after turning upside yesterday. We’ll have to see, but Kachingo time could be here today. Like a drought coming to an end, when natgas turns, those who failed to buy will experience an intense price chasing urge as natgas surges OUT OF THE HOLE. Remember that the banksters always focus on making out of the hole money, because the profit velocity is the highest. The most profit in the shortest period of time, but you have to be prepared to buy to ZERO, really prepared to do it, or you will be mangled by them. They see the fund positions, so they drive price lower until liquidation occurs. If the funds don't sell, usually price is driven lower. Until they do.

25. That’s the reality behind the feeling, “If I don’t sell now, price WILL go lower, I just know it!” that occurs in a selling climax. Selling climaxes that WE, as in INCLUDING ME, have all lived thru and acted on in TOTAL FAILURE. It is a correct feeling. If the sellers don’t hand over their investments to the banksters, price is taken down until they do. Because the potential sellers bought so high in a frenzy, they are in a terribly weakened state and can’t fight back with any buying, and may be selling constantly to meet margin calls or just to end the agony. There is no logic, just pain. The banksters have a turkey shoot on their hands as a selling climax occurs, and you can be 100% sure they are on it like sharks in a feeding frenzy. The MACD indicator for natgas is touching, verging on a crossover buy signal. “You’ve got to anticipate the cross”- Jim Sinclair. He understands the concept of “out of the hole”. If you anticipate the cross with only one “bullet” of capital, however, it probably won’t go well, not for long anyways. Some of you are very close to grasping the “out of the hole” concept, and if you cut your capital allocations slightly, you’ll have it dialled in with much greater accuracy.

26. Lastly, I’m told that Etrade “pro” does tax accounting for investors or at least makes it easier than a lot of firms. If anyone knows about this, please let me know.

27. I see the Dow is down while gold is up strongly as I get set to send this off. The banksters are slowly unhooking the connection between the Dow and Gold, one little turn of the wrench at a time. Keep an eye on Mr. Dow as he gives it a 5000% effort to keep the upward momentum like a motorbike hauling a tractor trailer of lead uphill, keep going Mr. Dow, you can grind out a few more points while your engine is on fire and your gas tank is empty, you can do it on stimulus fumes, keep going while the gold community that you took to the cleaners 4000 points ago as they shorted you maniacally when you were younger, stronger, and nobody believed in your power…while the GC now watches your uphill slog, thinking, “maybe Mr. Dow IS the bionic man, maybe he’ll never fall down ever again, maybe he can get up the hill to the pot of gold at the end of the rainbow, maybe I’ll wait to see if he falls to 6500, maybe then it will be a big short, but only maybe if that breaks, maybe I’ll just watch a little longer from my bunker”. Yes, that great Mr. Maybe. Sell strength. Maybees are for babies…

See you out there,

Thanks!

Thank-you

Stewart Thomson

Graceland Updates