Graceland Updates 4am-7am
Email: s2p3t4@sympatico.ca
July 5 2010
1. The Gold Parabola. What went wrong? At a minimum, hundreds of millions of dollars in losses were booked by the gold and funds communities on Thursday, July 1st.
2. I’ve named it Black Thursday. It’s critical not to avoid analyzing a “mess day”, but rather to focus on it in great detail, if further booked losses are to be avoided.
3. The losses in gold stocks were bad, but not as bad as the losses in bullion. The futures markets saw incredible volume and it there that the banksters operated their largest “gold vacuum cleaners”. It’s easy to draw a chart and ignore the reality that a massive wealth transfer just occurred. It’s easy to say, “the sell-stops got hit”, but a lot harder to focus on what entity absorbed all the selling. What I’m hoping is that if gold broke below 1196 basis august futures, there would be more apathy than panic. If so, price would likely just drift a bit lower. Given the astronomical leverage employed by the funds in the gold futures markets, I’m not too confident in my hope.
4. What could transpire is a situation where the Dow and gold stocks rallied, while bullion declined. Let’s take a look at how likely that possibility is:
5. Here’s the GDX via the 60 minute chart. GDX 60 minute Chart July 5 Liquidity flows define where markets are headed, and volume multiplied by price gives you the amount of liquidity flowing at any given point in time. In a bull move, volume should be increasing as price rises, and waning as price declines. Looking at shorter time frame charts, like 30-60 minute charts, can give you a reasonably decent picture of what is happening in terms of liquidity flows.
6. Here’s a video look at the 30 minute chart: GDX 30 min chart volume update The 30 min gives an expanding picture of what is happening as prices made the top at GDX 55 and declined into the 49 area, where we are now.
7. There is HINT that volume is starting to come into the gold stocks on the buy side that overwhelms the sellers, but that is all at this point. The great disaster for the gold stock traders is that in time the current 55 to 49 range sell-off will occur as a blip, and when we are at GDX 100, the same traders will be trying to “figure out” the GDX. You need to put faith over analysis, and simply get a toehold into the GDX in this weakness. My pyramid generator lightened you up into the 55 area highs, and is now adding capital into the decline, regardless of what the volume charts are saying.
8. The reason the Gold Parabola chartists have failed, and will continue to fail, is the same reason the Gold French Curvists failed; failure to listen to Dr. Ben Bernanke.
9. The gold market is the ultimate money market. Gold is the safe haven market. Treasury bonds are a safe haven from stock market volatility, not a safe haven from financial system and paper money collapse risk. Because liquidity flows drive markets, to create a gold parabola, you need institutional money flows or mass public flows, in a PANIC FORMATION, into gold bullion.
10. The reality is the banksters are trillionaires, who have virtually unlimited money. The comex long position of the banksters is almost as large as the fundsters’ long position, and the banksters are net short! The gold community simply doesn’t have the wealth, either in paper money or gold, to create the kind of buying power that will fuel a surging gold price, at least not now. The public is selling gold at the pawnshop and slowly liquidating their investments to pay bills and hold cash. Institutional money managers are not interested in gold.
11. The crisis is all about OTC derivatives, and Ben Bernanke has clearly laid out the steps the central banks will take. Gold DOES play a role in terms of raising the gold price, but it is not a primary role until the initial steps have been taken.
12. Charts have APPEARED to indicate the long-awaited Gold Parabola “must” be near, but the reality is that the liquidity flows happening NOW involve buying of govt bonds, bills, and paper money, as the primary target. Ben Bernanke has clearly stated that only if Quantitative Easing FAILS, will there be a gold revaluation, and clearly stated that only if gold revaluation FAILS, will the nuclear weapon of all-out money printing be unveiled.
13. QE, quantitative easing, involves the purchase of items like govt bonds with printed money, as a TOOL, as an attempted solution. Money printing itself, as a tool, does not involve the purchase of any assets; it is simply the printing of money to whatever level is required to reverse deflation.
14. The action of QE has a POSITIVE effect on gold’s price against paper money. But it is critical that everyone in the gold community understand that the number of failed OTC derivatives vastly outnumbers the amount of govt bonds issued. Buying $1 trillion of govt bonds when $20 trillion in OTC derivatives have imploded is NOT inflationary in terms of net liquidity flows. It is deflationary, by simple math. If you buy 100 shares of General Electric stock, while 1000 shares are liquidated because of margin calls, the net liquidity flows are NEGATIVE, ie DEFLATIONARY.
15. The mark to model accounting has fooled a lot of the gold community into predicting the Gold Parabola will occur “before its time”. The amount of QE to date has had a positive effect on gold’s price, but not a parabolic effect, because assets are still being marked to market at a greater rate than the rate of quantitative easing.
16. My position is that no amount of QE can work to reverse deflation, so long as the focus is govt bonds, because the bond assets are simply too small compared to the OTCD assets. The truth is likely that hundreds of trillions of dollars need to be printed to buy the numbers of OTCD’s that have failed. THAT action WOULD set a real gold parabola in motion.
17. What the banksters did was work with the governments, who I refer to as the “Gman”, to mark hundreds of trillions of OTCD’s to a fake “model price”. The Gman thinks if the OTCD’s are locked in a closet, then QE of normal assets, like govt bonds, could buy the needed time to get asset prices in paper money higher. My position is the OTCD trades are effectively frozen, so it’s like your margin trading account is frozen. You can a statement showing your $200,000 account that went to $5000 is suddenly at $200,000, but you can’t touch the money. The fact is that if you bought $200,000 of stock that fell to $5000, you are taken OUT OF THE GAME regardless of what your account statement says. New buyers need to be found.
18. Where are the new buyers to carry the OTCD’s higher in price? The banksters are telling the gold community that the QE of govt bonds is enough to do it, so the gold community gets their gold parabola right now. My position is: WRONG. You don’t fix a 500 trillion dollar problem with $5 trillion of QE. That can’t work. The credit has been turned off, the OTCD money is no longer available as collateral; the show is over regardless of what price model is dangled in front of you.
19. Gold’s price should take another LEG UP on the next wave of QE, but there will be no parabola unless you get PARABOLIC LIQUIDITY FLOWS INTO GOLD. In the gold community, only Mr. Macro understands what I’m talking about.
20. The gold wiener patrol goes on and on, and on and on, about “if 1% of institutional money goes into gold, price skyrockets to the sky in a tooth fairy parabola that never ends”. Wrong again. If more trillions in OTCD’s are marked to market pricing of ZIPPO, which is their real market price, than money flows into assets, price movement in gold is LIMITED.
21. Not even gold revaluation can trigger a gold parabola. Only MONEY PRINTING as a tool of the central banks in and of itself, can do it. Ben Bernanke has clearly stated that money printing IS on the table as a tool, and is the final tool. That’s what money printing is; A Gold Parabola.
22. Are we a long ways away from money printing in terms of TIME? That is UNKNOWN. We might be a 6 months away, or we might be 10 years away.
23. The gold community has called for the collapse of paper money since the 1970s. Many got bunkers in 1979. We hadn’t even reached the point of QE in 1979, let alone gold revaluation, let alone money printing. Calling the move into bunkers in 1979 an ERROR is a vast understatement. There was no quadrillion dollar asset destruction hydrogen bomb. I’d term the 1979 move a “superspike” or a “miniparabola”.
24. To get a full gold parabola, you need money printing to the sole tool of the central bank IN action. We are still in the QE stage, and while just ONE more huge OTCD implosion could cause Ben Bernanke to announce (to himself if not to us) that QE has FAILED, and it is time for gold revaluation….the reality is that you will NOT see institutional money flows IN to gold of a parabolic nature, until BOTH QE and GOLD REVALUATION are deemed by Ben Bernanke, not the gold community, to have FAILED.
25. A real gold parabola involves closure of banks and stock markets. It is economic Armageddon, and it really could happen, because of the size of the assets that have been destroyed, and the power that sits in the banskters’ hands as a result of that destruction.
26. Gold is going VASTLY HIGHER but the Gold Parabola can occur only once the QE and revaluation tools have been employed and shown to have FAILED. The banksters are still in CONTROL of the unfolding of the crisis, and whether an actual parabola occurs or not depends on the rate they mark to market the worthless marked to model OTCD’s. It is the rate of marking to market that determines the rate of liquidity flows into gold. Just because the banksters have painted a fake picture for the fundsters and Elmer Fudd Public Investor does not mean that the situation is a light switch. If you look at how my pyramid generator flows money into and out of gold, which is exactly how the banksters operate their own trading programs, and compare THAT to how most of you formerly operated in the market before becoming subscribers, you need to understand that this FLOWING is how the banksters are dragging on the crisis from one phase to another. The gold community is looking for a “light switch” event, where the govt “defaults” or “fails”. And the skies open up and gold juniors go to the Heavens. That’s not reality. We can’t know whether QE fails this morning, or in 2020. Charts are created by the flow of money. The flow of money is not created by charts. SORRY to all chartists, but that is FACT. When you look at a chart, you are seeing what money has already flowed, and you are attempting to project where the next money WILL flow, where it COULD flow. It may flow to your projected region (or POINT if you are that DEMANDING) on the chart, or it may not.
27. In the case of GOLD, PARABOLIC LIQUIDITY FLOWS are not predicted by the chart, at least not now. The gold bears and the team parabola are ALL living in a DREAM. That fact is that what is in front of us is MORE QE, GOLD REVALUATION, and only after they fail is it is even POSSIBLE for the chart to indicate a FULL GOLD PARABOLA.
28. Leaving the gold charts aside, the fundsters had a huge long gold futures and short euro futures/forex position going, with the banksters on the other side of both trades.
29. Here’s how I see the MINDS of the various players in the world’s major markets. First, Elmer Fudd Public Investor wants OUT of the stock market. He’s had enough risk. He doesn’t know anything about OTC derivatives or banksters. He believes higher prices are a solution to the economic crisis, and he believes the big issue is “restarting growth”. He doesn’t know what QE is and he thinks gold is for weirdos. He has no clue that the central banks prime tool’s involve revaluation gold and devaluing paper money against gold. He doesn’t think in generations. All he knows is he paid price X for his assets in paper money, and they are underwater. Elmer Fudd is more than happy to make 2-4% annually, on investments guaranteed by the govt. That is Fudd’s MIND. His MIND determines his LIQUIDITY FLOWS. Institutional money managers understand liquidity flows very very well. They understand QE very well and believe we are on the cusp of a ramp up in QE. They don’t really know about “banksters”, and they know gold is a HARD SELL to institutional clients. They don’t see the economy in that bad shape, as far as corporate earnings goes, and they believe the govt has a fair bit of room to issue more bonds. They don’t think bond buyers are anywhere near “tapped out”. They don’t see the US dollar in any danger of “blowing up”. Like with Elmer Fudd, THEIR MIND determines their LIQUIDITY FLOWS.
30. The Gold Community, sees, most govts as having MANGLED the constitution, and the levels of spending, govt mismanagement, and overregulation have put paper money on a TIMER to total destruction. They believe a POINT in time is near where THEIR VIEW becomes accepted by everyone else, and there is a rush into gold. That rush would be triggered by an EVENT, like a govt default, or the collapse of a major bank. The MIND of the gold community determines their LIQUIDITY FLOWS.
31. What the 3 groups fail to understand is the stubbornness of the other. Elmer Fudd is not going to do anything different than he is doing now, and I’ve tried to show the gold community that as Fudd becomes MORE IMPOVERISHED, his willingness to buy ANTYTHING, including GOLD, will be ever- less than it is now. Enhanced QE or even a 70% gold revaluation will NOT be enough to attract Fudd to liquidating his ALL-UNDERWATER assets, including CASH, to BUY GOLD. Only money printing, than takes gold to many thousands of dollars an ounce would even START to make Fudd move, and it would be out of terror, not greed. Do you really see Fudd selling his HOUSE, with his family HUNGRY, to buy YOUR favourite gold JUNIORS??? NO WAY. But if money printing did occur, as the prime weapon to combat asset destruction of the banksters marking to market OTC derivatives, institutional money managers WOULD buy gold bullion AND juniors, and do so to a level that even most of you probably haven’t grasped. It wouldn’t be 1%. It would be higher. They would focus on gold, gold stocks, and the general stock market while bonds and paper money imploded.
32. What about the MIND of the BANKSTERS, who hold the other side of almost every major trade put on by the first 3 groups? What I see with their liquidity flows is CONTROL. They live each market day the same way. There is only today, and there is no tomorrow.
33. I want you all to think very carefully about where the gold price would have stopped, on Black Thursday, if the banksters had stood on the sidelines and bought nothing. The gold bull is intact, and all weakness will be bought by the banksters. We can’t know their next move, and we know there is no Gold Parabola until QE and revaluation fail, but just as the Parabola is impossible at this point in time, you should not confuse timing of the Parabola, with the reality that gold must go vastly higher.
34. If you look at the various groups of investors, here’s where they stand in terms of risk and reward, in terms of the Gold Punisher. The banksters will make the most, because they own the most gold, understand the situation the best, and are the most patient. The institutional money managers, while generally only responding to the current phase of Ben Bernanke’s platform, they WILL respond to the next phase once the banksters show them that it is REAL. The gold community holds a chunk of gold with an iron hand, and appears set to “survive” the gold bull market, since while they keep bailing on sell-offs, the general action of the gold punisher against paper assets means that while they have less and asset gold items as we go forwards, those they hold are rising in value against the paper assets. Elmer Fudd is in the worst situation. He doesn’t believe in anything except price-chasing and price-bailing, and he has no fundamental understanding of what gold is.
35. Do I believe in a coming gold SUPERSIKE? YES.
36. Do I believe in a coming Gold Parabola? NO, but once we move into the gold revaluation stage, the superspike stage, evaluating the bankster liquidity flows will be key to reassessing the possibility of a parabola. Sadly, I think the gold bull ends for 90% of the gold community in MENTAL DEPRESSION. Gold is locked to the dollar, and GC wants more and more higher gold prices. Inflation remains high, but gold is locked to the dollar, and those who fail to move to interest-producing investments at that time will be devalued by the banksters. Still, there are lots of wild cards that could change the situation. For now, however, the play is HIGHER gold prices, but not parabolically higher. Hundreds of dollars higher is enough for me, for now. All weakness must be bought. There are no exceptions unless you are trading too big and are buying in pain rather than in discomfort. If you feel pain, stop buying immediately. You’re not that tough….
37. And nor am I, which is why I invented the Pgen.
Thank-you
Stewart Thomson
Graceland Updates
Written between 4am-7am. 5-6 issues per week. Emailed at aprox 9am daily.
Graceland Updates.
Email: s2p3t4@sympatico.ca
Graceland Updates 4am-7am
Email: s2p3t4@sympatico.ca
July 6, 2010
1. For the past 6 months or so, I’ve tried to show the gold community the blood-relative link between GOLD and FOOD.
2. I’m talking about the markets, not the survival pouches of both gold and food, although that should not be ignored either. One of my richest paid subscribers, billionaire T-Rex, has been buying massive tracts of farmland over the past few years.
3. Jim “mighty man” Rogers has done the same, and Mighty Man calls the agricultural markets the best value in the world today.
4. Value plays are where all the real wealth is built, and food is right now the ultimate value play. The banksters understand this reality the best, and, not surprisingly, Elmer Fudd Public Investor has the lowest grasp of the concept, and the lowest wealth. Fudd, if you can believe it, is actually net short the food markets, with huge leverage, against the banksters into the recent lows. He’s burning on fire now. He “knew” the food glut would never end. He’s got it all backwards. Everything he does in the market is all-backwards, totally wrong in tactics, totally wrong in timing.
5. I emphasized the new horror reported on Bloomberg News, the new horror that Elmer Fudd Public Investor has been focused on buying the “principal-protected” derivatives products, a “growth with safety” scam hawked to him by the laughing banksters, after they blew him to kingdom come in the stock and real estate markets. Fudd hates value, and he hates patience. He responds, knee-jerk style, to whatever he sees in the market today or reads in the news. His “knowledge” that low rates are “here to stay” is a prime example of his micro-mind in action. He demands immediate investment satisfaction within his fantasy timeframe, and obviously that mindset is the sole cause of all his agony. Wealth is built with an understanding of TIME & VALUE. Respect time, and understand there’s a reason it’s called “Father Time”, not “My Personal Slave is called Time”. Professionals understand time rules them, not the other way round. Most investors want “the juice”. If a market offers 1000% gains, they want to leverage it to make 10,000%. This thinking is madness for anything but wild gambling money. What the banksters do, and the best hedge fund managers do, and this point is all-critical, what they do is they leverage consistency.
6. If somebody is gaining 5% a year with tiny drawdowns, there is vastly more opportunity in leveraging that performance, than trying to figure out that since gold could rise to $1500, if I leverage that 10 times over, I make $3000. That’s true, but if the item has volatility, I’m wiped out long before I make any $3000 an ounce.
7. Those of you that are gamblers need to sit down and decide the right amount of leverage. You’re probably trading 5-10 times too big. Professional hedge fund managers will typically allocate 1% of their fund assets to a gamble and carry just 1 or 2 gambles a year. The rest of the assets are allocated to leveraging consistency.
8. Corn, wheat, and soybeans are on a short-term tear upside right now, while oil and gold flounder, with the shorter-term charts looking terrible. Much more importantly than any hot streak this week, the food markets may be putting in bottom prices that may not be seen again for 10, 20, or 30 years.
9. Here’s the oil chart, basis USO-nyse. Oil Wedge Chart I see a lot of technicians frequently drawing wedge chart formations on various charts, when there is actually a parallel upchannel. Using high and low points from a previous up or down trend to create a wedge pattern in a current up or down trend produces a “fantasy wedge” (and real losses on positions put on based on these fantasies). The gold community lost millions trying to short the stock market based on a perceived rising wedge that I adamantly maintained was a parallel upchannel. I’ve highlighted a real wedge pattern on the oil chart, using a blue demand line and a red supply line. Here’s the Oil Monthly Chart. Note the huge HSR (horizontal support and resistance) in the 40 area. It is actually more in the 42 area, but I like to deliberately be inaccurate with charts, erring on the side of risk, not reward. It also serves to remind me that I’m not smarter than liquidity flows. What is happening in the oil market now is that investors who bought at the 40 area on the way up to the high at 119, and bought in the 40 area on the way down, well, all want OUT of oil. Many want out of risk altogether. They are going into cash in another price-chase, and doing so at the most horrific time to do so in 80 years, and arguably the most horrific time in all of history.
10. Nick Moore, head commodities guru for Scotland’s top bank, says commodities will be back in vogue within 12 months as the “go to” asset. You need to be already in the market when that happens, or you’ll be back chasing pricing, back getting whipped in and out of the toilet by the banksters. Again, remember my statement in the next paragraph, that to avoid being attacked by the banksters, your market entry points need to be isolated from the actions of other groups of size, namely the fundsters and Elmer Fudd Public Investor. Oil looks lower, yes. In time, USO at $42 will look like gold at $400 does now. Don’t back up any oil tanker truck on the buy, but feather in, as the banksters do, using my pyramid generator to execute in action professionally. Preferably, your buys grow in size, all the way to zero. The oil market is getting lonely, which means the banksters are not that interested in mauling the new buyers of these levels.
11. The banksters have so much wealth, that their MARKS are always, by definition, huge groups of investors engaged in mass-action. If you want to survive the market wars, you are best served by not being a target. The idea that “well, everyone else is worse off, so I’m relatively the same” works in a market correction, not in a wipeout. If everyone else is headed to the breadline (very possible if not likely), or the gulag, I would suggest that type of “relative logic” is flawed at best. The lower the price of a solid asset is, the less the odds are of it going to zero. The lower the price of an item is, the more that Elmer Fudd public investor will scream that it is going to zero. With food, if prices fall low enough, starvation occurs as farmers abandon fields. Bottom line: Elmer Fudd goes to zero long before food does. This horror can happen more quickly than most people think, and has many times over history. Starvation tends to be a bit of a wake-up call, agreed?
12. The time is now for leveraged investors to use modest leverage in the grains markets, as it was at gold $300. If you like getting electrocuted on a regular basis with a million volt bankster powerline, then wait for the grains to trade over $20 a bushel before using leverage. Using leverage is VERY difficult NOW in the food markets. At $20 a bushel, it will be hundreds of times more difficult. The typical futures trader uses 10 to 1 or 20 to 1 leverage. That’s vastly too high, and is the sole reason they build a blood bank, not wealth. Options can mitigate some parts of that risk, but how many people build wealth with options? Answer: Almost none. If you bought $4 of wheat with $3 of paper money, that is a huge amount of leverage, and can build enormous wealth. Do you drink a few glasses of fine wine with dinner, or swig down 20 bottles? Approach leverage the same way, with class.
13. If you don’t normally use leverage, should you use it now in the food markets? NO. You don’t need leverage to build wealth, but for those who have a history of using leverage, now is the time to consider looking in the mirror, and making the decision to use leverage professionally to build real wealth with a real opportunity. It means a big step down in the amount of leverage, and a big step up in the amount of time you are prepared to wait for your leveraged wine to age properly. As price rises, you withdraw leverage, phasing down to zero, the exact opposite of the action of most investors.
14. Obviously, I’m ringing the cash registers in the grains markets this morning with my trading positions. Price rises, the pyramid generator triggers the sells into strength. Strength must be sold, and weakness and that’s non-negotiable if you want to build wealth and sleep properly.
15. Just because your analysis tells you a market is going lower does not mean you should not be buying now. That concept is another little-understood one, and big surprise, another key wealth-building tool. The gold chart looks lower. You know it, I know it, the banksters know it, the funds know it, and even some Elmer Fudds know it. The banksters are buying anyways and so am I.
16. Why would you buy now, when you “know” price is going lower? A number of reasons: First, if you are committed to gold as the ultimate asset, you know that over time, the current price gridline points, in terms of paper money, will be dwarfed. Second, natural and man-made super events, like the Iceland volacano that has yet to explode but likely will, or a nuclear attack by a rogue state or terrorist cell, could cause the gold price to explode upside, turning your bear signals on your charts into graffiti. There is the possibility of an emergency G20 meet to deal with a looming US dollar currency crisis, caused by the use of OTC derivatives by now technically bankrupt city and state govts. There are the long term gold buy programs of the world’s central banks. The list goes on, and on, and on.
17. Here’s the daily gold chart for the GDX, the gold stocks ETF.
GDX Daily Chart. The Sell Signals are Buy Signals for YOU
18. Most in the gold community own gold stocks, and a lot of them. I don’t see anything on that chart to be of concern. Projected lower price and concern should be separated. You should be concerned if you are piloting the good ship Gold Cork; if you are fully invested in gold at the 2006 highs or the 2008 highs, you should be concerned, but not in the way that you are likely concerned now.
19. Here’s where I differ from most gold analysts, and from most investors: If you are a “gold cork”, I would not be concerned about your current positions. That concern is directly correlated to your obsession with paper money, as opposed to wealth building. You should be concerned that you have no ability to buy more as the price of your gold items in paper money declines. That’s a key point that is very well understood by gold fund managers, but not very well by individual investors in the gold community.
20. The $55 zone on the GDX is widely followed in the gold community, because it is such a key high. It is a key high because so many people bought there, afraid gold stocks were “getting away”. To make money, you want to operate against your own emotions and under the radar screen of the banksters. I’ve termed the fall to $49 “Black Thursday”, and have noted to subscribers that I absolutely believe the gold community and the fund community bailed on hundreds of millions of dollars of gold into those lows at gold $1196 and GDX $49, and horrifically, they are using the same failed tactics, now, that failed them then, to look for a bottom.
21. Let me elaborate further. You bought in size basis $55 on GDX and liquidated at $49, or at least considered bailing. The chart now shows some short term signs of bottoming, but it looks like the daily chart “downcycle” has further to go. The problem for you, is that the banksters operate by creating large bait traps. While the GDX may well bottom at say, $45, what if it doesn’t? When you PLOP in a big wad of capital based on your analysis at $45, what happens to you if the banksters maul the price to $40? Answer: You bail. While $49 is unlikely to be any final bottom, price could gyrate between $49 and $55 and you could book profit, perhaps numerous times, while everyone else stands there in audience mode. Move in the market quietly, not waving a flag. “Here I am Mrs Bankster, together with the MACD cross mob, come and get me!”. I don’t suggest you engage in that action unless you have a death wish.
22. Calling tops and bottoms with technical, fundamental, and cyclical anlaysis doesn’t build wealth. All the banksters need to do is whipsaw the market, and since they see where all the stoplosses and entry points are, it is not rocket science for them to say good-bye to you in very short order.
23. Here’s the bullion chart, in paper money.
Gold Daily Chart. Looks Lower. So Start Buying, Obviously.
In time, you’ll find the price of gold in paper money starts to lose power and lose meaning for yourself. “So what if the price is up $30, or down $30”, you say. What matters is how you use that information to accumulate ounces. What matters is your ounces count, not your paper money count. I gave subscribers a very clear picture on the week-end of the difference between a display case full of gold bought last week, and a display case full of toilet paper money that is the remains of failed market plays. That’s a double kick in the financial head. You attempt to buy gold, but buy too much, panic, and end up with even less paper money than you had before you bought the gold! Now you are staring at a display case full of paper money unsure of your next move, totally demoralized. Let’s end that insanity today:
24. I discussed the GLD-n ETF product that is highly suspect, in terms of whether it hold the gold it claims to, for the people it claims to hold it for. This ETF is far more liquid than the others, and trades early in the morning when the others have massive bid-ask spreads. It is the ultimate gold shorting vehicle with the kicker that it could be a fraud! I’m currently running a short GLD-n program with my pyramid generator, using about 15% of my long gold allocation. I would NOT trade GLD-n from the long side. Rather than playing Sherlock Holmes and trying to pick the exact bottom of the gold sell-off, I suggest running an up to 30% short position against your much larger gold long positions, while you buy this weakness of gold against paper money. That weakness of gold against paper money should NOT be a concern for your existing positions of gold ultra wealth, but only a concern that you are in a position to build more gold wealth.
GridTime. But let’s not overly obsessed with what the gold grid says in paper money valuations. It’s a tool to build gold wealth. Not a key measuring stick of your wealth. It was, but not now, and not for years to come.
Thanks
St
Thank-you
Stewart Thomson
Graceland Updates
Graceland Updates 4am-7am
Email: s2p3t4@sympatico.ca
July 7, 2010
1. A picture speaks a thousand words. One of you says this picture speaks a 100,000 words: Gold Bubble
2. As an asset class, 26% of global money was in gold and gold stock in 1981. Now it is less than 1%. Gold is in a reverse-bubble, not a bubble. There is more than 26 TIMES less focus on gold as an asset to own now, than there was in 1981. Not 26 percent less. 26 TIMES.
3. Unfortunately, there is no magical solution to get gold higher, to get your gold juniors higher. Most of my subscribers are on the buy, as am I. The banksters are on the heavy buy here, and that should be revealed in part in this coming Friday’s Gold & Silver COT Reports
4. The last report shows little, because the report ended June 29. June the 29 was just after the 1263 peak. Gold had declined into the 1240s, so the banks had started to buy and buy back short positions, but at that point they had only started to buy. Here’s a look at the action: Gold 1263 to 1240.
5. I’m sorry to break the horrific news to the gold community, but a selling panic is quickly developing. The sole buying of size is being carried out by those the gold community hates the most. The banksters. ALL the selling is being done, every single cent of it, by the funds and huge numbers of the gold community. It’s going OUT OF CONTROL.
6. Graceland subs are among the richest in the gold community, and we are on the buy, not just every day, but at almost every point of weakness every hour. It is not enough. Send a copy of this writing to anyone you know in the gold community who you suspect is selling gold. The price destruction ends when the gold community stops selling, and not one minute before that happens. No chart reader can help you. Only buyers can help you. If you can’t buy, at least don’t sell. You’re only lighting your remaining holdings on fire as you join the crowd around the bonfire and throw your wealth into it.
7. Show me the chartist who has guided you to profits buying and selling each top and bottom. They don’t exist. Charts are chartists are guides, not answers. Wealth is built thru continuous buying of weakness and selling of strength, not picking where gold is going next.
8. No professional gold trader is selling now. None. All are on the buy. If the banksters were removed from the market now, gold would not rise in the fantasy of the gold community, it would fall, probably by $800 an ounce. Not TO $800 an ounce. BY $800 an ounce. The banksters, alone, are on the buy, in the size needed to absorb the mass frenzied selling by the gold community, as price melts, and removing them could open the market to a NO BID situation. Now you see what kind of intestinal fortitude it takes to operate professionally in the market, and why so few ever build wealth in the market while many if not most, lose their LIFE SAVINGS. If the gold community is having this much trouble in a BULL MARKET, what happens when it ENDS? I won’t even go there, but what is coming when the bull ends, what is coming to 90% of the gold community is an unimaginable pain that defies description.
9. This is the most amount of despondence and pain I’ve seen in the gold market since Oct 2008. It’s a horror, and getting worse, not by the day but by the hour. I expect a “London Day” soon, maybe today, but certainly by the end of the week. We had one on Thursday, July 1st, which I’ve named Black Thursday for gold, like Black Monday in 1987 for the stock mkt. A London Day is when gold trades hands in gargantuan volume as the price chasers bail and the professionals buy. Price may or may not decline further as a London Day occurs. We’ve already had vast numbers of London hours. In the gold market, London trades the volume, and New York sets the price. All of this will be repeated in wheat, in oil, in the Dow, in bonds, and in paper currencies. What is happening is not the end of socialism as Martin Armstrong believes, but the ongoing impoverishment of the Western World’s citizens as socialism is ramped up exponentially under the guise of Quantitative Easing. It’s a deflationary vortex fuelled by hundreds of trillions in price-chased derivatives bets that have tanked to ZERO. The situation is not fixed. It’s a total disaster with no solution. Not counting the OTCDs, the money supply IS rising, as Shadow Stats points out. If the blown OTCD’s are marked to market, the world is worth LESS THAN ZERO. There is no money supply, if you mark assets to liabilities. The banksters are stepping up their confiscation of your gold while you played chart trader at first, and gold bailer now.
10. Graceland Subscribers hold vast amounts of the GDXJ. Here’s the chart: GDXJ July 7
11. If I was a scumbag, I’d issue “buy it all” and “sell it all” signals for gdxj and various juniors, running a pump and dump super scheme for myself, while bankrupting my subs. If Graceland subs dumped GDXJ in a freak-out frenzy as a mob, we could probably take the price down to $10 or $15. Subscriber King Kong has added to his GDXJ position substantially over the past few days. Buying into what is becoming maniacal selling requires discipline and professional allocation of capital over a myriad of price points, not some guess as to “where does this all end?”.
12. Only a professional Pgen works. Not some micro range pgen, which is what many operated because they weren’t getting enough JUICE. Buying gold 20 times between 1270 and 1260 when you have a modest-sized account is not buying weakness. It is PRICE CHASING wearing a Pgen mask.
13. I’ve clearly highlighted that selling now to get in cheaper is a failed play. It’s booked loss number 900 zillion, and nothing more. The fear felt now by the gold community will only be GREATER at lower prices. The news will turn more negative as price falls. More pencil pushers will show you their charts, and more gold will flow into the hands of the banksters. The gold community, instead of getting richer in OUNCES, is engaged in a mass trip to the GARBAGE DUMP.
14. Subscriber GoldLion has begun a 2 million dollar buy program on some junior stocks, buying every single CENT down. Do you know how HARD that is? The maniacal selling by the losers, who are selling without any form of reason as they bail at HUGE LOSSES, is being met with equally forceful buying by Graceland subs and by the banksters, but it is NOT fun. It is even less fun when most in the gold community are pretending to be gold fans, while PERSONALLY hitting the sell button ALL DAY LONG in a loss-booking FRENZY.
15. What I want to know, from these writers, is this: Are your subscribers on the gold items buy? Yes or No? If not, what are you doing playing gold cheerleader while pressing your personal SELL BUTTON? The BOOKED LOSS button. Throw that button away, not your GOLD. If I told you the names of some of the writers who have lost everything and are on the bail here and now, while pretending all is fine, you would be SHOCKED. Follow the trillionaires to build wealth, the banksters, not those who have blown their life savings on their pencil pusher analysis.
16. I’ve been thru this at 680, at 800, at 860, at 905, at 1045, and all the other low points. I’ve watched the gold community on their knees in front of the banksters at each of those points while the banksters say, “come on, put your tongue out and lick my boot”. At first, there is resistance, some bravado. After more time in the pain zone, out comes the tongue, without exception, each and every time. Into the banksters’ hands goes the gold, and into the impoverished gold community’s hands goes the paper money. It’s happening again, here and now.
17. I told you recently that the banksters view most investors, literally, as partially insane. Still think that’s a joke? These are GROWN MEN AND WOMEN, many of them worth TENS OF MILLIONS, throwing gold and gold stock in the garbage by the SECOND, like there is NO TOMORROW. That is REAL insanity. It’s REALITY. Not a chart. Not a sugar-coated gold analysis. That’s REALITY and it is NOW. Buying is the last thing on the minds of these people.
18. I’m sorry to report to Graceland subs but “your enemy is your friend and your friend is your enemy.” In terms of ACTION in the market, which is ALL that matters, the banksters are supporting YOUR positions, here and now, WHEN YOU NEED THAT HELP THE MOST. Your gold community and fund community “friends” are SELLING YOU OUT WHEN YOU NEED THEIR HELP THE MOST. Do what you can to end this madness, but in the end, it is you alone who must face the buy button.
19. What the banksters are doing, tactically, is bidding for less than is offered by the bailing funds and gold community. Let’s say some burning wiener offers 100 contracts into the market at 1190. The banksters will bid for say, 70. They ARE buying, but the offers are overwhelming the bids. In TIME (remember that little TOOL?), they will begin to raise the number of bids they put into the mkt.
20. WHEN that happens, price will begin to rise. I’m betting it is either today, tomorrow, or Friday. Monday at the latest. If you bought far more gold than you could rationally handle, THAT is the time to hedge your position. Begin shorting GLD-nyse into strength. I’m sitting on profits on a number of short gold pgen trading programs. I hope I never cover those at a profit. I hope gold never sees these prices again. Maybe it will, maybe it won’t. Who knows, who cares.
21. Some of you are telling me that if gold goes much lower than where we are now, a huge selling frenzy could occur, and it could “get ugly”. I agree, in terms of VOLUME, but not in terms of PRICE. I’ll post the daily chart on the site in a few mins with commentary. There is massive SUPPORT, which is BUYING POWER, at prices just under where we are now. It’s not coincidence that such massive support occurs just around the emotional breaking point of most gold investors. The classic set-up for a London Day situation is at hand. It would be just like the banksters to crank up the bids just before the teckies get a chance to cover their shorts and place buys, as they did at 1045 on the decline from 1225.
22. I’m richer now, than I was yesterday. Why? Obviously, because I own more ounces of gold. Paper money is the rotary phone. Gold is the Iphone. I’ll take the Iphone, thanks.
23. Again, no professional is selling gold here in exchange for paper money. All are buying gold. You decide what telephone you need, the rotary or the Iphone.
24. I follow 200 day moving averages and I follow 2 hour moving averages. The reality is that gold is already up $9 from the overnight lows as I send this off.
25. I booked profit on wheat and corn into yesterday’s highs. Do I get to buy what I sold “cheaper”? I don’t see any part of that question that relates to building wealth, which is why I won’t be answering it. Know what your core position is. Know what your trading positions are. Respond to price professionally. Take some pride in your new ounces. You just added to your wealth. Does anyone reading this seriously believe paper money is going to outperform gold?
26. Remember my words over the past few months: The gold volatility theme will be the only theme bigger than the gold price rise theme, and it started with the last jobs reports. Welcome to the show. Don’t live life by the gold price prediction exception. Live it by the ounces of wealth building rule.
Thanks
St
Thank-you
Stewart Thomson
Graceland Updates