Monday, September 13, 2010

I Smell A Rat Bastid

Forgive me I must be brief... back to reality today, and it has been a loooooong day.

Stocks Continue September Rally; Nasdaq Surges Nearly 2%- AP
Wall Street climbed Monday as investors gained confidence in the banking sector following the passage of new global regulations, and China's economy continued its robust growth.

This is a load of crap! The equity markets were up today because the Dollar got spanked pretty hard today. The Dollar closed down 1% today at 81.86. The Dollar is in trouble... The 200 day moving average for the Dollar is at 81.59. Drop below there, and things could get ugly in a hurry. Support at 80 is tenuous at best.

The U.S. Dollar Is In Trouble
By Dave Kranzler, The Golden Truth
Gradually the dollar is being eliminated from the foreign-trade settlement flows,” said Dariusz Kowalczyk, a Hong-Kong based senior economist at Credit Agricole CIB. “People are beginning to trade Asian currencies without intermediation via the dollar.”

This quote comes from a Bloomberg article last week which reported that China and Russia will bypass the U.S. dollar and engage in trade with each other using yuan and rubles. This could start freely occurring sometime this month.

In the words of one analyst: “Given the risk to the dollar and U.S. assets from their fiscal position they want to reduce their dependence on the dollar as an invoicing currency...” Here's the link to the article:
Dollar R.I.P?

This bearish chart is reinforced by the poor fundamentals supporting the dollar. The latest of which is an arguably de facto failure of last Thursday's 30-yr Treasury bond auction. Although this factoid received very little media commentary, the Primary Dealers (Wall Street banks) were forced to buy 62% of the long bond auction last week. In and of itself, this means that the traditional buyers of long-dated Treasury bonds - the Japanese, foreign Central Banks and institutional asset/liability fund managers - were reluctant to make a long term bet on the dollar.

With the Dollar tanking, it was NOT unusual to see the equity markets higher [these days]. What was VERY unusual today's was the reaction to the falling Dollar in the Treasury Markets and in the Gold Market. Treasuries were up today. It is not very often Treasuries rise when equities are rising, but Treasuries rose as the Dollar fell. Why would investors buy a country's debt if it's currency was tanking? And why was Gold down [only fractionally], with the Dollar down 1%? Today's markets have the stench of US Government intervention all over them.

Folks, drag out those bullshit detectors, and man them faithfully. I smell a Rat Bastid screw job in the works. Traders beware! The CRIMEX goons are so desperate to stop the rise of Silver and Gold here that they are now throwing themselves at the markets. They have run out of everything else. The cupboards are bare, the sinks are long gone, their wives and children long since forgotten. They will now give their own lives in an effort to stop the bullion freight train bearing down on them. I have yet to see a human stop a train, but stack 'em like chord wood on the tracks, and we could see one last gasp by these Rat Bastids before they are trampled under the feet of a bullish stampede.

On their Weekly charts, Gold and Silver are poised to move much higher. Their Daily charts warrant a pause, particularly Silver. No market goes straight up [or down]. Fundamentals have been the Precious Metals friend for over 10 years now. Yet fundamentals have no quarter in a rigged market. The harder the CRIMEX goons works to slow the rise of the Precious Metals, the more explosive there move higher is going to be when these Rat Bastids are finally overrun. This could be their time to get crushed, as they are printing paper Gold and Silver as fast as they can to supply the market, but it never hurts to keep one's guard up against a crooked banker.

Traders, beware.

Investors. Be right, and sit tight. Buy weakness aggressively at support.

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