Graceland Updates 4am-7am
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Nov 8, 2010
1. Spring Forwards, Fall Back. The clocks here in the Toronto area were turned back an hour yesterday. Some of you had the same experience, others...no.
2. Wealth building. While I began LEG TWO of my natural gas accumulation program last week, which allocates a minimum of 200% (max 300%) more risk capital to NG than LEG ONE, the Fed also, coincidentally, began LEG TWO of its "wealth building" program, via QE2.
3. I posted a "what if" question on the site over the week-end, asking: What if the Fed had committed to a 600 billion dollar buy program on GOLD, rather than on govt bonds? What if the Fed committed to build wealth for the taxpayers, rather than remove it from them?
4. A long term small BUT STEADY AND UNENDING gold accumulation program should be the foundation of any govt that seeks to build wealth for its taxpayers. The response of Elmer Fudd and his golf ball advisors to my suggestion is, "Gold doesn't pay any interest!". While I could ask how the interest payments are coming along on Fudd's Nortel and Enron holdings, let me be more direct:
5. Fudd forgot to compound the rate of purchasing power LOSS, when doing his interest rate calculations. Still, Fudd is one hundred percent correct about the interest rate payments, the vast majority of which are collected as EXTORTION PAYMENTS, by the banksters from the Gman. Interest rate compounding is the road to wealth. Bankster wealth. That's why they INVENTED it.
6. Had the Fed/Treasury/US govt operated an extremely TINY gold accumulation program for the past one hundred years, instead of a debt accumulation and paper money destruction program, American Taxpayers would today be sitting on tens of trillions in wealth in today's dollars, basis gold holdings. Instead they OWE tens of trillions in paper money DEBT, courtesy of ther Gman masters, courtesy of the Gman's freedom removal plan, and they may owe HUNDREDS of trillions via OTC derivatives paper money blow outs.
7. Instead of a wealth building plan, a wealth removal plan has been in place, for a hundred years.
8. Now, after totally failing to buy ANY gold at $250-1000 except for at the 2006 and 2008 HIGHS, a wave of business owners and their golf ball advisors are surging forwards to tell ME that "gold is a buy, it's an asset here to stay, if it goes over $1400 we should all buy, but don't buy any gold stock, those are too risky!".
9. Thanks for the brilliant analysis, Mr. Golf Ball Advisor, I'll be sure to put your recommendation right beside the one that NORTEL AND ENRON were superbuys here to stay, at $80 a share.
10. Luckily for the golf ball advisors, even though they have ZERO clue what they are talking about, GOLD is not Enron or Nortel, and they can't be wiped out in gold like they were in Enron/Nortel, UNKNOWN TO THEM. Gold is the king of all assets, something they STILL don't understand, despite issuing their new here to stay garbage.
11. Unluckily for them, the banksters don't need to attempt to send gold to zero to get rid of the new gold buyers crew. All that is needed is a real hit, along with enough media propaganda to terrorize the pathetic price chasers out of their gold.
12. The buying of gold by IDIOTS is JUST STARTING, so odds are high that any major hit is likely some ways off, at least in terms of price, and probably in terms of time as well.
13. Remember than when you are buying anything in a pyramid formation, you are buying when price falls by the amount of the buy increment into your price, into your "buy net".
14. You are NOT buying "a correction". You are NOT predicting a correction. You are simply buying by the amount of the buy increment. Crisp. Clean. Clear.
15. There's a fair bit of "I demand a correction" thought going on, particularly in regards to gold stock. I view that as a dangerous error. If you look at the long term charts of many gold junior components of the GDXJ, many of those stocks, like Jaguar for example, are dramatically below their longer term highs. The correction is massive, and the plum is on the tree. Pick it.
16. If you could turn the clock back to gold 1033, would you demand, say, 980 before you bought, or would you be satisfied with getting fills by the amt of your buy increment all in the $990-1100 range? Sometimes Pgen buys are filled in an uptrend. At other times they are filled in a downtrend.
17. Sometimes technical indicators like RSI work to predict corrections of size. At other times they go massively overbought and predict: Nothing. You need to invest on fundamentals and technicals. For example: Since $1156, I'm carrying the most gold I've carried in the bull mkt, but I'm also carrying the most cash I've carried. If gold sells off, maybe gold stocks sell off, maybe not.
18. Regardless, I'm going to be a lot more comfortable, in terms of possible coming upside reward, in adding to gold stock positions on any and all weakness, because if gold bullion is able to sustain itself in the $1200-2000 area, I absolutely believe a near parabolic upside move in gold stock will occur. Gold does NOT need to rise ANY higher than where it is NOW to create that LAUNCH.
19. If the banksters were to work towards driving gold down substantially, and I'm talking about bear numbers like $800, then you would have "Lehman 2", with a total shutdown of the financial system that really happens.
20. Most don't believe that the financial system really was hours away from closing in Oct 2008 and again in March 2009. If gold declines bigtime, all the clown non-believers will learn the very very hard way just what a world looks like, what it FEELS LIKE, with all banks closed and all Dow companies ceased-trading. Only those with handguns and farms will be winners. If Dow 6500 had failed, you WOULD be living it NOW.
21. There was no target of Dow 1000, or Dow 5000, under 6500. That's why I was ranting at the gold community for shorting the Dow in that area. You never would have collected on your bets if it happened. It's like standing in the target zone of a nuclear weapons planned drop, and betting money that everyone will die when the bomb gets dropped. You don't get to collect ANYTHING if you are correct.
22. It was do or DIE at Dow 6500. I bet on DO on the NYSE while pulling money out of the banking system, relentlessly into that low, in case of DIE. The financial system is still totally bankrupt and that breakdown is marked to model, and rising gold is the mechanism of repair, the mechanism to allow mark to market accounting again.
23. The repair mechanism is an attack on the world's paper money creditors.
24. I don't think most current bond holders understand what can happen when the banksters announce the end of QE while backing the dollar with gold.
25. Here's what happens: The bond markets collapse. WHO do the current holders of bonds sell to in such a panic situation?
26. Do YOU really think the banksters are going to step forwards and buy your bonds that are paying microscopic rates of interst, if you are a bondholder in a panic trying to get out at higher prices? No. They will buy all right, but with peanut money while claiming they are buying to save the market, while supply overwhelms demand and price tanks. And while they laugh their heads off.
27. We have the very highest probability of transitioning to a collapsing bond market accompanied by an initially tanking currency. The banksters will claim they have no choice but to "allow" currency meltdown, and the bond market bagholders will cheer these supposed efforts to support the bond, when in fact the banksters are destroying the purchasing power of the bond by mangling the underlying currency through the creation of what I have termed, "The Awakening". And preparing the foundation to wipe out the bond market.
28. The Awakening is: the awakening of the world's major institutional money managers to the real possibility of a RUN on the US dollar. A run followed by a run IN to the DOW. A run by THEM. They are already thinking about what to do if the dollar goes into free fall, studying past govt currency crises now. The banksters are playing the music for the musical chairs game at full volume. The fundsters are going to find that not only are the banksters going to turn the music off, but they are locking most of the exit doors to the bond market dance hall and lighting it on fire. When the banksters turn the music off, then scream "FIRE", the fundsters will come out of there like a high pressure fire hose.
29.INTO THE DOW.
30. Every iota of what is happening has been pre-planned by the banksters, including the entire movement of American wealth to China.
31. Once the currency is low enough, the banksters will likely announce that "QE has been helpful, but it's not enough, and govt debt remains the number one issue that is prolonging the crisis." They will announce that the US dollar, as reserve currency of the world, cannot be allowed to further decline and the Dow, PROBABLY AT NEW HIGHS AT THAT POINT, is evidence that the economy is improving, "thanks to the banksters".
32. So, with the dollar mangled and "in danger of going out of control", with the Dow "proving" the recovery in the private sector is real, despite minor details like the appearance of the first bread lines, the banksters will perhaps announce, and almost certainly execute on, a combo of a new gold standard linked to Gman DEBT via a central bank buy program on gold, and higher interest rates.
33.Translation: Bye bye Mr. Bond Market.
34.While bullion could go "parabolic", the more likely scenario, the more likely irony, is that the gold bullion bull market is likely closer to an end than a beginning, but no ultimate top followed by a tanking occurs. The Pgen rules, and Fudd is reduced to watching another failed price chase go nowhere.
35.Instead of tanking or soaring, gold just trades sideways, and Fudd spins his new gold wheel in the mud, while he watches gold stock and the stock market blast into outer space. Fudd, effectively, withers away on the gold bullion vine, a price-chasing penguin dressed in a gold analysis suit, once again, forced to face...
Market Reality.
While numerous scenarios could play out, here and now, including gold blasting to somewhere between $5000 and $100,000 an ounce, that bullion parabola is more likely the scenario that plays out in the next mega crisis, after the banksters have got their global central bank and global govts going, and they try the super-crisis game again. I think that next crisis, decades away, will see the banksters LOSE. Payback won't be pretty, but they should have thought about that while stealing trillions while children starve to death... Meantime, you need to focus on today, Monday Morning, November 8, 2010:
Need a space helmet?
Call Mr. Dow, yes, but first, give Mrs. Gold Stock a call!