Graceland Updates 4am-7am

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Jan 27, 2011

1. Here's the daily chart of the US T-Bond. This is what institutional land believes is the Death of Gold chart...

2. And what I believe could turn out to be the Death of Institutional Land chart, if they are not careful.

3. The Gold Community got your taste of "don't wish for something too hard or you just might get it", as the bond began to sell off. I told you this type of gold weakness (and more) is the NORM at the beginning of a major bond bear mkt. We can't really know if this IS the beginning of a bond bear, but it certainly appears to be the case.

4. That daily chart shows the bond technical indicators are very weak as the bond tries to rally, and the current symmetrical triangle-type of action has a 2/3 chance of consolidating the downtrend, despite the intermediate decline in place now.

5. Institutional Land thinks the bond can decline moderately, with the t-bond rate rising to say, just under 5%. That allows a modest correction on the Dow, a bigger correction in gold, and inflation remains officially low. Then the Dow starts rising again and the rising tax revenues end the debt crisis or at least give a feeling of CONTROL. A goldilocks scenario.

6. Nice wish during the greatest crisis since 1929. I don't think this particular wish is going to come true for institutional land.

7. "This is very sad. The fraud moves on. The can is being kicked down a dead end road." - Jim Sinclair, Jan 26, 2011.

8. Note Jim Sinclair's words...DEAD END ROAD.

9. There are those believe all debt must be paid, either by the creditor or the borrower, and those who think all debt can be restructured to infinity. The gold community is in the first camp. You will be proved correct. Team restructure to infinity is on a dead end road driving a Model T into a blast furnace, not on a star ship to a new frontier.

10. I think I've done a reasonable job of preparing you for the rising volatility theme of gold which is already here for 2011, a theme that will grow much more going forwards. The only way to prepare you for that theme is to instil a level of fear, and create an ability to manage that fear. If you don't face the worst case scenario fears now, when they really happen, and they will, you will look like the dead ants that are inside the bankster jars now, who just liquidated their gold and gold stocks. The banksters are throwing those ants in the garbage now, and preparing the jar for a new crew of ants. Don't be one of them. My concern is not with THIS decline on gold. This is a peanut play. FAR BIGGER HITS ON GOLD ARE COMING THAN WHAT YOU JUST WITNESSED. Of course, so are far bigger bursts of UPSIDE action.

11. You survive ONLY by buying these hits, or just holding on. Learn to buy now, buy your own FEAR. You have to do that. There is NO OTHER solution.

12. There is only NOW, in the market. The rebound yesterday in gold stocks was phenomenal. SanGold surged from the lows the day before of about $2.60 to 3.05. That is a 15% move up in 24 hrs. A 15% bag of money into YOUR CASH REGISTER and CORE POSITION LOCK DOWN REGISTER in 24 hrs! How does THIS feel !!!

13. We don't know what is coming next, but I issued a GoldLion "Juniors look like they did at $1156" pgen buy alert for the juniors sectors into what was close to the tick lows on Tuesday. My alert service on Graceland Juniors is totally different from most "alert" services. There are no back up the truck points, and you know GoldLion himself dumped $2.5 million into juniors a few days BEFORE Tuesday's meltdown, via his pgens. Those positions went straight into the red, and were followed by even larger buys. That's the PGEN life. My alerts are reminders to put your pgens in play, calls to tweak them, not cancel and replace with plops of slop.

14. When the market does turn, as it did yesterday, after bottoming Tuesday, your largest pgen buys are in play at the turn lows, but you should NOT even WANT to have "called the turn" with all your risk capital. You want NOT to have called the turn, and have much many more buy orders below the turn point. In essence, you want to have "FAILED".

15. Building wealth with the PGEN, exactly as the banksters operate, is about repeated consistency, not super timing at turns. If you have not been left "in the helpless zone" where price falls below your turn call point, and then drifts there for months or years, you can't really understand the DEPRESSION that develops. Elmer Fudd Public Investor is learning all about the folly of his price plopping ways, but not learning enough to change. He knows about depression, but he's not taking responsibility for his actions. He still clings to the idea that since he built a successful business, or solid employment position, he MUST somehow also be successful in the market. That's like saying, "since I was a local boxing champion, I'm going to take on a major prison gang in jail. I don't see any problems for me on my road to victory."

16. Check your ego at the door when you enter the world of the banksters, which is the world of the MARKET, or you will find yourself on the FLOOR with a bankster boot grinding your market face into the dirt. PERMANENTLY. Fudd can't admit personal fault, so he stays on the floor....What does it take for a person to change? Obviously, in the case of Fudd, the answer is: More Pain. In the bond market, that pain is coming. Hopefully, it is accompanied by some LEARNING.

17. Gold has rallied from about $1323 to $1347.50 and drifted back down this morning. My next sell order after buying into the lows is $1348. That's life in the market reality zone. When you have bet ALL your risk capital on a buy or sell point, an event like this morning's rally to 1347.50 but not to my sell tgt at 1348, such action can be CATASTROPHIC for price ploppers. With the pgen, it's just another yawn and a check on your BUY orders below current price of $1337.

18. Will price rise to 1348 and higher into more sell orders, or back down into a mountain of buy orders? I don't know the answer, but I do know that my personal trading accounts ground their way to another new high yesterday, and that is, perhaps, all the knowledge I really need. Partly on agricultural gains, and partly on the huge turnaround in the gold and gold stock situations. For those of you who are trading too big, I really urge you to cut back the size of the trades, think in bigger ranges, and think less about the size of potential rewards, and more about being HAPPY in the market. For every person who beats up the prison gang singlehandedly, there are a BILLION who end up DEAD.

19. Fear is real. Gold really sold off because real institutional fund managers really believe QE could really end. Real is the theme. There are the real themes that are going on out there, and then there are the real TACTICS you need to bring to bear IN THE MARKET. What I've tried to show you the past few days is the critical importance of buying into what seems to be the greatest threat to gold. No media story will finish you in gold, IF you use professional tactics in the market.

20. In 1980, the banksters bought gold into the greatest decline in the history of the market, while the public sold gold at mind boggling losses.

21. Think about the recent decline in gold and gold stocks. And do NOT repeat it with your... PAPER MONEY CURRENCY ASSET. You just had a chance to BOOK PROFIT on paper currency assets in gold ounces of money. Did you take it?

22. If you think you were AFRAID recently in the gold market for your gold, wait till you FEEL the FEAR that is coming in the PAPER MONEY market. Goldland thinks some sort of party is coming as gold skyrockets and paper money tanks. That's the likely scenario with PRICE, but not with how the gold community will FEEL. The fear that will rise out of the coming paper money panic will rip thru all of us in a way we can only barely imagine now. The threats to the financial system are not gone, but increasing. So...

23. Let's hope you are BOOKING PROFIT on some of your paper money you are getting from your businesses, since it has just rallied against gold money, since you got it from your business. Book profit as your new paper money asset rallies, not horrific losses as it crashes and FEELS LIKE IT IS GOING OFF THE BOARD. That's the plan the banksters have for you: Massive loss booking on your paper money currency. Are you prepared?

24. Face the reality that gold could fall to $1100. Face the reality that gold could skyrocket to $1700. Face the buy and sell and face it PROFESSIONALLY.

25. Some of you have said, "I can't take another 2008". Unfortunately, the crisis is accelerating, not improving, so you are in store for WORSE THAN 2008, in many ways. Not really in terms of threat to the gold price, but threats to the financial system. The odds are that you feel greater fear than you did in 2008 going forwards, but it will be manifested in different ways.

26. The reality of the bond chart is that price is trading like there is "something wrong" with QE. It could all be a bankster fakeout, but I don't think so. I think the Gold Community has become too focused on QE as the driver of gold, rather than financial system risk as the driver of gold.

27. The Chinese Govt has become a net SELLER of bonds. Bill Gross, the world's largest bond fund manager, has declared the bull mkt in bonds to be OVER. Institutions think QE is ending and rates will rise a bit. The bottom line is the DEMAND for bonds is drying up. Losses are growing already for bond holders as the price has dropped. Here's the bottom line:

28. I argued vehemently a year ago that the Gold Community's theory that there was not enough demand for the govt bonds being issued was WRONG, but really just an EARLY CALL as that situation was NEAR. Near is now here.

29. If Ben Bernanke slows or even stops purchases of the bond, WHILE China and institutions slow/stop/reverse purchases, what do YOU think could happen to the bond price? [And concomitantly, with interest rates -FNC]

I'll be out of action for 2 hours for a hedge fund conference breakfast. Back in touch then..

Thanks

Cheers