Graceland Updates 4am-7am

Aug 20, 2010

1. Gold is actually not gold. Sorry, but it’s true. Gold is actually wheat or natural gas.

2. Let me clarify: Gold banged into the 1240 marker basis dec futures yesterday. That’s about $80 from the lows around 1160. At $8 a bushel, Russia banned exports and blogland went crazy announcing wheat as a superbuy while the banksters shorted thousands of contracts.

3. The banksters cleaned up, again. As YOU sell gold items (and juniors are particularly strong, up 20% in a month) INTO this strength, while the technicals go to overbought, price CAN go higher and higher, as it did with wheat.

4. The idea you’re going to sell the top is just as crazy as the idea you “really knew 1156 was the bottom and should have loaded up with leverage then”. Looking at the daily chart, the shorter term indicators are starting to go “nosebleed high”.

5. When you can SEE strength on the CHART, it has to be SOLD, but done so WHILE GRIPPING YOUR CORE POSITIONS TIGHTER THAN EVER, DOING WHATEVER IT TAKES NOT TO CANIBALIZE YOURSELF.

6. The REASON no monster wealth is built from TRADING TECHNICALS is because you become a bankster MARK. As the trade size grows, you start to appear on their radar screen. If you are running a $100 million hedge fund, and you are leveraged, you might be carrying $300 million or more in positions. Once you start placing large orders of size, the banksters’ hunter-killer algo robots FIND YOU. These robots look for mathematical and technical analysis trading patterns. It’s not long before they know who you are and how you trade.

7. Only the Pgen protects you against the banksters, either as a retail investor, or as a fund, because rather than liquidating as price falls, you are buying an competing with the banksters, although at on a vastly smaller scale. The banksters aren’t interested in “pgenners”. They want MARKS; overleveraged clowns and price-chasing MORONS. They want the other side of the trade of the WEAK and GREEDY, and they want it in SIZE.

8. The clown looks at gold this morning and thinks, “I know it’s rallied $80, and I have a vague memory of how horrible I felt on the fall into 1156, but it FEELS ok here, so I just don’t see any reason why I shouldn’t grab a little here, yeah I feel good, I’m pretty confident!” –The classic price chaser rationalizing his GREED, aug 20, 2010.

9. Gold could BLAST $100 higher than your highest trading sell point on some of your pgens, here and now, just as wheat did into 837. Where is the wheat party now? Who is rushing to buy now? CANCELLING your sell orders because you FEEL the market could go higher is idiotic. TWEAKING them is one thing, taking a chainsaw to them is another. If you were a fund manager and a large pension fund interviewed you, what would they think if you arrived carrying a chainsaw, would they give you money to manage or show you the door?

10. I’m starting PHASE TWO of my natgas foundational pgen. Gas is about $4. The $2-4 area for me is phase 2. I doubt we go down there, but who knows. Phase 3 is the zero-$2 arena. If you got carried away on the buy size when the gold community got the “natgas urge” a year ago, all you need to do is remember the words of GoldLIon, “STOP BUYING”. You own an asset at a certain price band on the grid. Just leave it alone. Don’t exceed your pre-set risk capital for any deal. You can start a new deal, but remember that gas ETF’s are not GOLD BULLION. Think RISK MANAGEMENT, not “I gotta be a player!”

11. The key point here is whether the market is the US dollar, the Stk Mkt, or GOLD, or whatever, you don’t know where the bottoms and tops are, and nor does anyone else, except, arguably, the banksters, who have the ability to CREATE those bottoms and tops at least in some markets, thru their control of thousands of financial advisor puppets and their unlimited financial resources. When you do sell the exact top, what you did was barely escape alive. Do you REALLY want to play that LOTTO consistently and expect to be anything but a loser and a bag of nerves? You WANT to sell EARLY and BUY EARLY with a PORTION of your risk capital. All other plans of action are MARKET MADNESS.

12. Some of you have noted the Chinese economy might not be as strong as it appears. Of course it isn’t. We’re at the START of the industrial revolution of 1.3 billion people, with HUNDREDS OF MILLIONS still on the farms. Calling the economy weak, is like calling America weak in 1900. The 1907 crash looks like a ripple in a bull tidal wave NOW. Who cares if the Chinese economy is “really weak”, all YOU need to care about is responding to price on the BUY if you are LUCKY enough to see price collapse ,which I highly doubt, but, again, maybe you will be LUCKY enough to buy a 1907 style hit.

13. In 1906 the Dow was at 100. It tanked to the 50 area in 1907 in a crisis, that at least so far, DWARFS the current crisis, in terms of PANIC. By 1909, the Dow was back at 100 again. Using the PGEN, you would have laughed your head off in 1909, as you looked at what YOU BOOKED while a MILLION MORONS spent YEARS ANALYZING THE CRISIS, WRITING MASSIVE BOOKS AND PAPERS AND HAVING ENDLESS DEBATES ABOUT THE CAUSES AND DIRECTION ALL WAS HEADED IN.

14. China is a SUPERSIZE VERSION of the USA in the year 1900, and I CONTINUOUSLY MAKE MONEY TRADING THE FXI. If China had a SUPER MELTDOWN, and the FXI went to say, $5, that would be a GIANT GIFT, as I’d be trading it with vastly less risk of it going to ZERO, vastly less dollars TO ZERO from $5 than the current $40. Of course, there’s the “minor pgen detail” that it ALREADY fell 70% in the 2007-2008 crisis, and I bought it and sold it with the PGEN profitably then, as I did OIL as it tanked from 127 to 28 then soared to $90.

15. The bottom line is that the FXI, currently at $40, is likely going to 40 THOUSAND dollars a share over the coming decades, and THEN you WILL have reason to be AFRAID as you look off a 40,000 point cliff to zero. While it might not be YOU that gets that fun, it WILL be the coming generations of your families, and the banksters WILL make them feel REAL FEAR. Let’s hope they are Pgen Prepared. Telling me to be afraid of a 40 dollar cliff at the START of China’s INDUSTRIAL REVOLUTION is not going to create ANY fear in me. It’s a statement so ridiculous I have to call it an “Orville Redenbacher Moment”.

16. The other point being put forward by the China bashers is that the PROFITS made by Chinese corporations are TINY, so no real wealth is being built. That’s also so wrong it’s hilarious, and it’s wrong on numerous fronts; first, the Chinese are ploughing these supposedly tiny profits into commodity assets while Americans buy T-bonds. [ “Speculators are prominent in both the inflationary phase in which they go long in the commodity and short in the bond market, as well as in the deflationary phase in which their long and short legs are switched around. Just about the only way to make money in a depression is to speculate in the bond market on the long side. The bull market in bonds in a deflation is completely ignored by mainstream economists. Yet this is the key to the understanding of the reversal of the money-tide. Speculators do arbitrage between the bond and commodity markets. When they think that the saturation point has been reached, they reverse their position. They replace their existing straddles with the opposite ones. That is, they enter their long leg in the commodity and short leg in the bond market. This then heralds the end of the deflationary and the beginning of the inflationary phase.” See Fekete on propensity to hoard & Kondratieff cycle.] Hello, knock knock, anybody home? They are buying vast tracts of mining and energy properties. As prices rise, they’ll make an EPIC killing while the bond bozos are INCINERATED BY THE GOLD PUNISHER. More on the gold punisher below… Second, the UNDERGROUND economy in China is ENORMOUS. The Chinese don’t trust the Gman, because they’ve had more experience with his nonsense for longer than most societies. CASH transactions are the NORM for a SOLID PORTION of vast numbers of business transactions.

17. The most blatant point where the “low profit margins” argument is ALL WRONG is on basic economics. LOW profit margins are the HALLMARK of EMPIRE BUILDING. Bloated profit margins paid for by DEBTORS are the hallmark of the END of an empire. It’s called COMPETITION and giving the CUSTOMER the BEST VALUE. How big would American-based corporate profits be if Americans were forced to start PAYING what they OWE? Never mind if the debts were CALLED. The Chinese corporations are operating a lean and mean machine. They could BEHAVE like America, and borrow TRILLIONS to create FAKE wealth marked to PAPER MONEY MODEL. If that marked to model wealth isn’t SAVED by a GOLD STANDARD it is at MAJOR risk of being VAPOURIZED in the hyperinflationary BLOWOUT. America’s “rebuild the empire” scheme headed up by the Gman is: Borrow trillions and then HIKE prices to the sky and call it wealth building. The Chinese empire WILL implode in time, and most Chinese citizens know the CYCLE of Empires is just that; it starts with a lean mean low margin machine, and ends with a BLOB that implodes on itself while trying to recreate the empire with more of what ended it! But the empire at DAY ONE, not the END. Let’s wait for it to built, before predicting the END of it! What I’m seeing out there is various gurus predicting the Chinese empire BABY will die of OLD AGE “any day now”. Does THAT sound logical?

18. Some of you were confused by “Gold on the Aggressive in 2010”. I’m not talking about price advance against paper money. I’m talking about the ENTITY that IS GOLD. The PUNISHER. If you take any successful business owner in 1999, let’s just turn back the clock and take a ride in the time machine and visit him in action in 1999. He “knew” the market was a risk, but it “looked good”. Real estate was “here to stay” and bonds were ancient history. Gold was something for WEIRDOS. Most of them called me an IDIOT for FAILING TOKNOW THAT GOLD WAS FOR LOSERS AND WEIRDOS and was HIGH RISK.

19. Let’s fast forward to today. If you put me in front of any of those investors today, I’ll TEAR THEM TO SHREDS. I’ll make them feel so small they’ll almost be in the FETAL POSITION as I read them the RIOT ACT of their investment STUPIDITY. Their price chasing, their GREED, and their total lack of foresight and understanding of what GOLD BULLION IS as an ENTITY. It has NOTHING to do with the BULL MARKET in gold. The disgusting FAILURE of ALL their advisors to even KNOW what an OTC derivative was, when the outstanding number of them was in the HUNDREDS OF TRILLIONS.

20. When I talk about the gold PUNISHER, and gold on the AGGRESSIVE, it has ZERO to do with the bull market and EVERYTHING to do with what gold IS, and the rise of that role in 2010. The role of gold as PUNISHER is only just STARTING in this crisis. When you stand in front of those who laughed at gold in 1999 today, you are standing in front of somebody that knows ZERO about INVESTING, and ZERO about the FINANCIAL SYSTEM. You, nor gold, does not ANSWER to these people. THEY ANSWER TO THE GOLD PUNISHER AND THAT “KARMA” IS “ONLY” GOING INCREASE EXPONENTIALLY OVER THE NEXT 12 MONTHS.

21. I’ve told you before, NEVER laugh at GOLD or you will PAY a HEAVY PRICE. Buy and sell it, yes, but don’t laugh at it any more than you would laugh at your own mother. Investing in gold and what gold IS, are related, but not the SAME. Gold has NEVER relinquished its role as the BEDROCK of the world’s financial system, NOT IN THE EYES OF THE BANKSTERS. The greater the ignorance of gold and the greater the creation of photocopied money debt, the greater the punishment by the gold punisher. It’s THAT SIMPLE.

22. ALL DEBTS ARE PAID, EITHER BY THE LENDER OR BY THE BORROWER.

23. ALL OF THE DEBTS OF AMERICA WILL BE PAID, IN FULL, AND THE REPO MAN IS: THE GOLD PUNISHER. Americans bashing Chinese citizens and corporations while cheering the Chinese Gman’s clown act ownership of a thousand tons of gold need a major reality check. The Chinese outnumber Americans 4 to 1 and they’re coming fresh out of decades of COMMUNISM that featured the MURDER of tens of MILLIONS of their RELATIVES, not to mention the loss of HONOUR as they had to admit the FAILURE of communism. If you think YOUR forefathers were HUNGRY and LEAN AND MEAN in 1776, try MAGNIFYING that with the MINDSET the Chinese are in, here and now, coming out of COMMUNISM. They’re not going back to the commie routine, and whether the FXI goes to $2 or $200 on the next big move is a FLY compared to a herd of ELEPHANTS STORMING FORWARDS IN A RAMPAGE. The ONLY question is: Are YOU prepared? I’m riding the elephant, not standing there with a sign that says , “my charts, analysis, and gurus know the elephants will stop before STOMPING ME TO DEATH so I’ll just stand here with my sign, like the BLOB.”

24. It’s report card day. Friday. The Euro blew out the lows and the USD is on an upside tear. Those of you that bought the USD are in kachingo mode this morning, and those of you living in Canada, Europe, and Australia are watching your gold price RISE just because of the currency action. Some of you are ringing the gold and usd currency cash registers at the same time! Those of you who did take my advice to consider applying an up to 30% short natgas position against your longs are also “ringing the register” yesterday, and again today.

25. Some of you like Peter Schiff, some don’t. Regardless, one of you sent me what I thought was a picture of simplicity of REALITY, as Pete did a video confirming my view that trying to raise home prices is NOT a solution, but STUPIDITY, in terms of ending the crisis. The Gman scheme of building MORE homes when the MARKET views current home prices as OVERPRICED instead of building FACTORIES is STUPID. I’ll post Pete’s video on the site.

26. One of you who I nicknamed Ironman a while back has developed an incredible Pgen TIMING system and have built quite a track record of buying and selling in a FIVE POINT pgen using 60 minute charts with an emphasis on VOLUME, as well as a barrage of other technical indicators including a proprietary one that combines the actions of others. Ironman is booking win after win with this timing system, and this may be something some of you may have interest in, as I tend of paint things with a broader stroke brush, as opposed to the fine tooth comb used by Ironman. What is particularly interesting is that it is a 5 point pgen really, and would likely work very well for leveraged and RANGE traders. So it works with stoplosses as well as those looking at the big markets as an asset. I’ve never seen him book a loss and his accounts recently hit new highs. He’s also a solid business owner and an extremely grounded individual showing tremendous, steady and solid forwards momentum. I’ll keep you posted on Ironman’s actions, the actions of another tool in the Pgen Party Toolbox…

27. Grid Time. Let’s finish the week off in KACHINGO MODE while our competitors finish it in analysis mode(whatever that is…).

28. Sound Good?

29. That’s because it IS good!

Thank-you

Stewart Thomson

Graceland Updates