June 22, 2011

1. FOMC day! Elmer Fudd Public Investor gets to sit with his golf ball advisor this afternoon and watch Ben "Grand Poobah" Bernanke cut rates, and make Fudd richer! All golf ball advisors report to the price chasing stadium, now! Chase that "growth with safety" price, because Dr. Pinocchio promises free money times are coming back to town any day now,as he photocopies a recovery to end the debt crisis!

2. Oops, rates basically already are at zero. The Grand Poohball Emperor has no more rates to zero clothes. Fudd and his golf ball advisors may soon be watching the FOMC action from TV screens the banksters set up on the bread line, but, of course, Fudd knows it can't happen, at least not to him. The Gman and the banksters will get the "chase houses on a credit card to the photocopied sky" wealth building show restarted for Fudd, "any day now".

3. Question: Did the banksters say, "any day now", or "any decade now"?

4. Many of you wrote in up to Monday night detailing "life on the buy in the discomfort zone". Well, life on the buy while other investors around you give you zero support, or even beat on you while you are down, life in that exact severe discomfort zone...is how you get richer in the market.

5. Life on the non-buy on price weakness is how Elmer Fudd Public Investor Idiot lives his market life, and that normally produces nothing but a lifetime of market losses, marked to model by the constant flow of new monies from his job/biz that he shovels into the market.

6. This crisis has the potential to reduce Fudd's garden hose cash flow to a drip, and send the entire Western world down the standard of living ladder, to levels now deemed totally impossible by 99% of the population. Then again, almost all major market moves, up or down, that eventually happen, are deemed, literally, "100% impossible" by 99% of the population, before they happen.

7. Yesterday's gold market action gave you a taste of why you stay on the buy while Fudd the coward chases price. These are days that give you a taste ofvictory.

8. Here's a bit of a bad news flash for some members of the gold community waving their "I want my QE3 mommy to photocopy me some ounces of gold wealth" flags:

9. "The Fed is not inclined to do more easing in the form of asset purchases, and it would create something of a dilemma for them if there's such a dramatic near-term fiscal tightening put in place that it prevented the Fed from achieving its mandate" for full employment, said Maki, chief U.S. economist at Barclays in New York. The prospect of fiscal tightening "certainly is a factor pushing the Fed to delay its exit strategy." - Bloomberg News, June 22, 2011.

10. Exit strategy? Try....explosion strategy:

11. "When markets lose confidence in the U.S. and say that they don't trust us any more, rates will skyrocket and the crisis will be upon you." - James Bullard, head of St Louis Fed, May 2011.

12. My suggestion to YOU is: Note Mr. Bullard's use of the term, "SKYROCKET". Houses to the photocopied sky on a credit card? Get real. Reality on the gold punisher's breadline is what is coming to Fudd. It's rates, not houses, that are going to the sky, and the question is,

13. Are YOU onside?

14. "Fire that evil man James Bullard, and that fund manager Bill Gross, too! They should not be allowed to say things that disturb our price chase of growth with safety!" -Elmer Fudd, June 22, 2011?

15. Yesterday the gold punisher delivered a crushing blow to Team Seasonal. The classic "I know what is coming next" wiener-based mindset was the main catalyst of their destruction. Ego in the market is a highly destructive force.

16. Respond to price, not seasons. Seasonal analysis, like all analysis, should be used to tweak your pgens, not to rule them. Don't try to rule the gold price grid with theories or analysis. If you do, your failure will be epic.

17. Personally, my great worry is for the dollars I bought into weakness, not the gold I bought into weakness. It's too early to know whether today's FOMC meet becomes the driver of a huge gold market rally, but it may force members of Team Seasonal to rethink the amount of ego they had in play.

18. Buying the dollar asset into 73 on the forex price grid with a range pgen to 70 is a modest and professional action. Screaming, "crash alert now for Dow!", "if you think gold stocks are down now, wait till you see the real blowout, sell everything, now!".... These are not professional actions.

19. Drawing arrows straight down from $1500 to $600 on the gold chart and claiming "supercyle C-23.ba triple wave guarantees the crash happens on July 2 at 2:23pm, so sell everything now or you are doomed!"... are the actions of a market idiot.

20. If blowing out all positions because some scenario might happen really was the optimal way to operate in the market, then the banksters would be doing it all the time, because they not only have the best information, they create a lot of that information. If they are not blowing everything out,ever, should YOU? Tell team seasonal to have a nice day, alongside the rest of the analysis ants, while you drive in your gold price grid pgen steamroller. Try not to run them over. Thanks.

21. Because so much has been delayed, and most particularly the delay of central bank buy programs, the ultimate gold price required to make the debt payable has risen accordingly, and dramatically.

22. That, in turn, has raised the potential ultimate high price targets for gold stocks. You need to understand that gold stocks are almost infinitely more riskier than gold bullion. [Why? Cost of energy? Liklihood of increased state assessments/royalties or nationalizaton? Future income vs. present value? Reserves overestimated?] It's a hard concept, but not as hard as understanding gold as currency. It seems that "1 +1 = 2, so if gold bullion is low risk, then gold stocks should really be not that risky too", but that is a horrific error.

23. Focus on the real risks of gold stocks and the possible reward that is created by the link to the commodity they produce or look for. It's hard for me to envision gold stocks going parabolic before the bond market implodes, but it is possible. The ultimate potential targets for gold stocks are delayed greatly in time, but expanded exponentially in price.

24. I would say that $1000 for GDX is possible, and $100 has a 90% probability. IF the banksters engage in some sort of marking to market of the otc derivatives-based crisis, gold could go to $5000, $10,000, or even $100,000. Envisioning GDX at $1000 and GDXJ at $2000 is not impossible if gold is $10,000 and the bond is blown to smithereens.

Gridtime! While GDX $1000 is now on the "table of possible reward", we live on today's grid, not tomorrow's pipedream. It could be many many years before the bond implodes, or it could be weeks or days away. We can't know. Hi ho, hi ho, it's on with the grind we go!

Thankyou

Cheers