Let's just fantasize for a moment... As the markets open on a bustling Friday morning, there is a sudden flash, and the COMEX is vaporized. Terrorists? No, vengeance. Never in the history of mankind has a criminal act such as that which occurred today on the COMEX been witnessed. At precisely 10AM est the rug was pulled out from under Gold AND Silver. Only on the paper pushing COMEX could an event in Precious Metals like that witnessed today occur. This "event" was NOT about a weakness in Gold and Silver. It was about an opportunity for Dem RAT F***ING BASTIDS on the COMEX to once again STEAL from the public. NOT ONE SINGLE OUNCE OF SILVER OR GOLD WAS SOLD TODAY in New York. Just a lot of paper flushed down the toilet and the prices along with it. Disgusting!
So what do we do? We get right back on the horse, and attack these SOBs. They WILL be destroyed. Everything that's occurring globally to the financial system of the planet all but guarantees the imminent ascent of Gold AND Silver to the stratosphere and beyond. The Fed in the end will have to SLASH interest rates at the behest of the power base in Washington. This will crush the Dollar. Crush it I tell you. The absolute destruction of the US Economy is upon us all here and now. Unless the Fed throws Wall Street a bone, our children are destined to grow up in a third world country.
Laugh if you must. Gold and Silver "should" be vaulting in an environment such as we've seen the past two weeks. If things are so bad that the "money of last resort", Gold and Silver must be sold simply to raise cash, then things are perilously serious at this very hour. What we have witnessed today is absolutely shocking. It's time to back up the truck people. Folks should be selling everything they own to buy Gold and Silver now...NOT selling their Gold and Silver.
Relatively, Gold has held up quite well in the face of this carnage. Silver has been the victim of blatant criminal activity. I suggest buying Silver on the way back up, and forget about catching the bottom. Attractive buy opportunities may be found along the mountain face as we climb back up it. They are: 12.11, 12.33, 12.58. These numbers all represent old support, that has now become new Resistance. Breaching them one by one should build momentum as we scale the mountain.
Gold's volatility may persist a while longer, or end just as abruptly as it tanked this morning. They key to Gold is 658. Old support, now new resistance. Regain and hold 658, and the mountain top launching pad at 700 is back in site. Moving forward in time only lowers the price at which the downtrend line off the May 2006 730 high will be breached. Today that price is 679.
I got as screwed as the rest of our community today...but I remain firmly committed to the inevitable ascension of Gold to it's rightful place as The World's Real Money. And it's little albino brother, Silver, following in it's footsteps. In a sea of liquidity, only "real" money floats to the top.
Thursday, August 16, 2007
Reckless Abandon
In the U.S., a new forecast suggested Tropical Storm Dean could pass to the south of the Gulf of Mexico, missing the region entirely or returning much diminished in strength.
Traders had worried that Dean, bearing down on the Caribbean from the central Atlantic, could damage oil and gas infrastructure in the Gulf, cutting supplies. Dean is expected to become a hurricane on Thursday.
"The storm is on a projection for a path to stay pretty much south, there's less likely to be great damage, so it's seen as less of a threat to markets," said Tobin Gorey, a commodities strategist at the Commonwealth Bank of Australia in Sydney.
What does a commodities hack from Australia know about Atlantic Hurricanes? Dean won't even enter the Gulf until Monday at the earliest. Hurricanes have minds of their own and seldom follow the "projected path". I will suggest that by Next Tuesday they will tripping over themselves to buy Oil contracts. And I will boldly predict that Hurricane Dean will smash Galveston Texas.
The storm concerns on Wednesday overshadowed a U.S. weekly government report that showed larger-than-expected declines in oil and gasoline inventories last week, but an increase in refinery activity that was in line with expectations. The decline in crude inventories supported higher oil prices, though the rest of the report was viewed as largely neutral, analysts said.
In its inventory report, the Energy Information Administration said refinery utilization rose 0.5 percentage points to 91.8 percent of capacity in the week ended Aug. 10, in line with the expectations of analysts surveyed by Dow Jones Newswires. Refinery utilization fell by a surprise 2.3 percentage points the previous week.
Crude oil inventories fell 5.2 million barrels last week, the EIA said, and gasoline inventories dropped 1.1 million barrels. Analysts had expected crude stockpiles to fall 2.1 million barrels and gasoline inventories to fall 400,000 barrels.
Supply and Demand. That's the bottom line for all commodities. Unfortunately Gold and Silver have been lumped into the commodities arena. Too "risky" to hold in these ever increasingly inflationary times, both Gold, and particularly Silver, are getting bashed around in the markets by fools that have lost the monetary respect for them.
Gold demand surged in Q2, recent market turmoil to underpin price - WGC
http://www.forbes.com/markets/feeds/afx/2007/08/15/afx4021321.html
LONDON (Thomson Financial) - Reduced price volatility and robust Indian buying lifted global gold demand in the second quarter, said the World Gold Council.
In an interview with Thomson Financial News, Jill Leyland, the Council's economic advisor also said current worldwide financial turmoil will serve to underpin prices further as investors rush into safe haven assets, like gold.
Global demand in tonnage terms, which refers to physical buying, rose 19 pct to 922 tonnes in the April to June months compared with the same period a a year ago. Demand from India, the world's biggest physical market, accounted for 317 tonnes of the total amount.
In recent weeks broader financial markets have collapsed largely because of defaults in the US sub-prime mortgage lending sector and on fears of a credit crunch. Gold was one of the first commodities to fall as players sold the metal off in a bid to raise cash to cover losses elsewhere. Investment into the metal as a safe haven asset caught gold's fall, however.
'A lot of people misunderstand gold as a safe haven and expect it to react immediately,' Leyland at the WGC told Thomson Financial News. 'It's more of an insurance people buy when they are worried.'
Prices are currently hovering around 665 usd and, while lower than the near 700 usd level gold has flirted with several times this year, they remain well supported by safe haven investment flows.
'You don't get an immediate response because people will be running to cash in, the gold price has been jerked around a bit but it's pretty stable,' said Leyland.
Other experts agree, with UBS (nyse: UBS - news - people )' John Reade just this morning noting that 'the longer this credit crunch goes on, the more likely that gold will attract safe haven buying,' adding he expects the credit crunch to continue.
On the physical side, seasonal demand is expected to pick up in the fourth quarter, after the summer lull and amid Christmas, Diwali and Eid festivals which could spur buying.
And that's the bottom line. Gold and Silver may not look pretty today, but they're likely to be the Belles of the Ball come Fall. It goes beyond frustration to watch the action in the Precious Metals as this sub-prime contagion infects the World's financial Markets. All "should be" rising rapidly. The fact that they are not perhaps is an indication of just how truly serious this financial crisis is. If people are forced to sell their Gold to raise cash, as many have suggested, then things must be really be bad...as in a lot worse than we are being led to believe by the media. But for every seller there is a buyer. You can be sure a few Indians are lined up to buy as you read this.
Yesterdays CPI numbers were a hoot. Anybody that believes them probably lives in a cave. One number that got lost in the maelstrom of bad news yesterday was the TIC report. The monthly TIC net flows decreased to $58.8 billion in June, down from $107.3 billion in May. This is significant because the June Trade balance was -$58.14 billion. Uncle Sam was able to keep his checkbook in the black by ONLY $660 million. The TIC [Treasury International Capital] report measures the flow of money out of the US vs. the flow of the money in. When the money coming in falls short of the money going out, Uncle Sam has Insufficient Funds in his account, and he can't pay his bills. Of course, I guess with his connections he could just print up some, but I think you get the picture...Interest in investing in America is on the wane. And in light of this credit crisis that was manufactured on Wall Street and endorsed by the Federal Reserve, I doubt many foreign investors are going to be rushing to Uncle Sam's Bank to make a deposit in the future.
Gold and especially Silver are looking ugly at this hour. The Yen is on one hell of a banshee train run up right now. I like many of you am a bit dismayed at all this, but remain resolute in my belief that everything occurring now is ultimately going to make Gold the overlord of all currencies. This mega move up in the Yen is definitely causing a lot of selling in Gold, just as a mega move up in the Dollar would here. This is why Gold has been weak overnight the past two nights. The Japanese have been selling as the Yen has risen. The Dollar looks particularly weak against the Yen today as it has come back down some over night. If this drift in the Dollar continues into the trading day today, perhaps this slide in the Precious Metals will abate. Predictions now would be foolish. We must let the chips fall where they may. You're either in, or you're out. I'm in 'till they throw me out kicking and screaming.
Traders had worried that Dean, bearing down on the Caribbean from the central Atlantic, could damage oil and gas infrastructure in the Gulf, cutting supplies. Dean is expected to become a hurricane on Thursday.
"The storm is on a projection for a path to stay pretty much south, there's less likely to be great damage, so it's seen as less of a threat to markets," said Tobin Gorey, a commodities strategist at the Commonwealth Bank of Australia in Sydney.
What does a commodities hack from Australia know about Atlantic Hurricanes? Dean won't even enter the Gulf until Monday at the earliest. Hurricanes have minds of their own and seldom follow the "projected path". I will suggest that by Next Tuesday they will tripping over themselves to buy Oil contracts. And I will boldly predict that Hurricane Dean will smash Galveston Texas.
The storm concerns on Wednesday overshadowed a U.S. weekly government report that showed larger-than-expected declines in oil and gasoline inventories last week, but an increase in refinery activity that was in line with expectations. The decline in crude inventories supported higher oil prices, though the rest of the report was viewed as largely neutral, analysts said.
In its inventory report, the Energy Information Administration said refinery utilization rose 0.5 percentage points to 91.8 percent of capacity in the week ended Aug. 10, in line with the expectations of analysts surveyed by Dow Jones Newswires. Refinery utilization fell by a surprise 2.3 percentage points the previous week.
Crude oil inventories fell 5.2 million barrels last week, the EIA said, and gasoline inventories dropped 1.1 million barrels. Analysts had expected crude stockpiles to fall 2.1 million barrels and gasoline inventories to fall 400,000 barrels.
Supply and Demand. That's the bottom line for all commodities. Unfortunately Gold and Silver have been lumped into the commodities arena. Too "risky" to hold in these ever increasingly inflationary times, both Gold, and particularly Silver, are getting bashed around in the markets by fools that have lost the monetary respect for them.
Gold demand surged in Q2, recent market turmoil to underpin price - WGC
http://www.forbes.com/markets/feeds/afx/2007/08/15/afx4021321.html
LONDON (Thomson Financial) - Reduced price volatility and robust Indian buying lifted global gold demand in the second quarter, said the World Gold Council.
In an interview with Thomson Financial News, Jill Leyland, the Council's economic advisor also said current worldwide financial turmoil will serve to underpin prices further as investors rush into safe haven assets, like gold.
Global demand in tonnage terms, which refers to physical buying, rose 19 pct to 922 tonnes in the April to June months compared with the same period a a year ago. Demand from India, the world's biggest physical market, accounted for 317 tonnes of the total amount.
In recent weeks broader financial markets have collapsed largely because of defaults in the US sub-prime mortgage lending sector and on fears of a credit crunch. Gold was one of the first commodities to fall as players sold the metal off in a bid to raise cash to cover losses elsewhere. Investment into the metal as a safe haven asset caught gold's fall, however.
'A lot of people misunderstand gold as a safe haven and expect it to react immediately,' Leyland at the WGC told Thomson Financial News. 'It's more of an insurance people buy when they are worried.'
Prices are currently hovering around 665 usd and, while lower than the near 700 usd level gold has flirted with several times this year, they remain well supported by safe haven investment flows.
'You don't get an immediate response because people will be running to cash in, the gold price has been jerked around a bit but it's pretty stable,' said Leyland.
Other experts agree, with UBS (nyse: UBS - news - people )' John Reade just this morning noting that 'the longer this credit crunch goes on, the more likely that gold will attract safe haven buying,' adding he expects the credit crunch to continue.
On the physical side, seasonal demand is expected to pick up in the fourth quarter, after the summer lull and amid Christmas, Diwali and Eid festivals which could spur buying.
And that's the bottom line. Gold and Silver may not look pretty today, but they're likely to be the Belles of the Ball come Fall. It goes beyond frustration to watch the action in the Precious Metals as this sub-prime contagion infects the World's financial Markets. All "should be" rising rapidly. The fact that they are not perhaps is an indication of just how truly serious this financial crisis is. If people are forced to sell their Gold to raise cash, as many have suggested, then things must be really be bad...as in a lot worse than we are being led to believe by the media. But for every seller there is a buyer. You can be sure a few Indians are lined up to buy as you read this.
Yesterdays CPI numbers were a hoot. Anybody that believes them probably lives in a cave. One number that got lost in the maelstrom of bad news yesterday was the TIC report. The monthly TIC net flows decreased to $58.8 billion in June, down from $107.3 billion in May. This is significant because the June Trade balance was -$58.14 billion. Uncle Sam was able to keep his checkbook in the black by ONLY $660 million. The TIC [Treasury International Capital] report measures the flow of money out of the US vs. the flow of the money in. When the money coming in falls short of the money going out, Uncle Sam has Insufficient Funds in his account, and he can't pay his bills. Of course, I guess with his connections he could just print up some, but I think you get the picture...Interest in investing in America is on the wane. And in light of this credit crisis that was manufactured on Wall Street and endorsed by the Federal Reserve, I doubt many foreign investors are going to be rushing to Uncle Sam's Bank to make a deposit in the future.
Gold and especially Silver are looking ugly at this hour. The Yen is on one hell of a banshee train run up right now. I like many of you am a bit dismayed at all this, but remain resolute in my belief that everything occurring now is ultimately going to make Gold the overlord of all currencies. This mega move up in the Yen is definitely causing a lot of selling in Gold, just as a mega move up in the Dollar would here. This is why Gold has been weak overnight the past two nights. The Japanese have been selling as the Yen has risen. The Dollar looks particularly weak against the Yen today as it has come back down some over night. If this drift in the Dollar continues into the trading day today, perhaps this slide in the Precious Metals will abate. Predictions now would be foolish. We must let the chips fall where they may. You're either in, or you're out. I'm in 'till they throw me out kicking and screaming.
Tuesday, August 14, 2007
Is That A Hurricane?
Oil Gains as Storm, Weather System Threaten Gulf Oil Production
Aug. 14 (Bloomberg) -- Oil rose more than 1 percent in New York, the biggest gain in two weeks, on concern a tropical storm and a separate weather disturbance may damage oil platforms and pipelines in the Gulf of Mexico.
Dean is the first storm ``that potentially could be working its way into the Gulf,'' said Dominick Chirichella, an analyst at Energy Management Inc. in New York. ``Everybody is focused on it. Everybody immediately has visions of Katrina and Rita.''
Crude oil for September delivery rose 76 cents, or 1.1 percent, to settle at $72.38 a barrel on the New York Mercantile Exchange. Oil was at $72.75 in after-hours trading. Futures are up 16 percent in the past three months.
A low-pressure system in the south-central Gulf of Mexico could form into a tropical depression ``at any time'' tonight or tomorrow, and coastal areas in its path may not have much warning, the hurricane center said in its outlook at 5:30 p.m. Miami time.
LOL! Hurricanes are nothing to laugh at, but these Oil traders are buffoons. That's right, I said BUF-FOONS. A blind man could have seen this coming. Here are two valuable sites to have bookmarked:
NATIONAL HURRICANE CENTER, http://www.nhc.noaa.gov/
Latest Satellite Imagery, http://www.nhc.noaa.gov/satellite.shtml
I look at these two sites every morning from the first of August thru mid-October. A casual look at the satellite photos of the Gulf yesterday showed the makings of a tropical depression plain as the sun in the sky. It was no shock to me to learn today that a "storm" may be springing from the Gulf itself as I type this. And at this hour, what was yesterday a "ball of counterclockwise clouds" in the southern Gulf now covers almost all of the Gulf. This baby could wind up in a hurry.
Recall yesterday, Oil traders were convinced that Tropical Depression Four was not a threat to the Gulf and sold off their morning futures bids. These storms are ALWAYS quite unpredictable. This morning it became a named storm, Dean. At 11AM it was projected to bend northward towards the East Coast. By the 5PM update it was projected to go south of Cuba towards the Gulf. ...And the price of Oil is rising.
Gold...Silver...lame. Actually the fact that the two were quite firm today relative to the "strength" in the US Dollar has to be somewhat heartening. The Gold stocks again succumbed to the nonsense on Wall Street. Jeez, I swear I heard some talking head telling us yesterday that the markets were now "back to normal" after the central banks flooded the world with "liquidity". LOL...I have a hunch it will be a long time coming before these markets resemble anything "normal" again. And the longer they're paralyzed, the better for both Gold and Silver. Patience people, patience...our time is close at hand. The mother of all short squeezes is closer at hand than many would have you believe.
It was a short squeeze in Precious Metals that began the week of August 7, 2005 that launched Gold through it's $450 Gold Cartel capping saga and launched it to the May 2006 high at $730. It IS going to happen again. This $500billion cash injection into the World Economy will see to that. $700 Gold will fall once again, and dem Rat Bastids will be set to the curb with the rest of the Wall Street trash.
Again the Dollar was up today on "false strength" created by an ECB/US Fed currency swap that has been knitted together in the hopes that it will snare the subprime contagion that has been loosed upon the World by the villainous greed mongers on Wall Street. Do you get the sense that the trap isn't working? This monster is bigger than ALL the central banks coffers combined. There are suggestions that this "derivative deathstar" has been pumped up to the tune of $500trillion. That's Trillion with a "T". The central banking clowns couldn't print money fast enough if they tried to buy that out. Folks, the US Economy is a meager $3trillion annually. ...Ain't gonna happen. Financial Armageddon is approaching at light speed...and Luke Greenspan is retired.
Wholesale Inflation Up Sharply in July - (AP) A big jump in energy costs pushed inflation at the wholesale level up sharply in July. However, outside of energy, price pressures were moderate.
LOL, "outside of Energy"... Give me a break. NOTHING and NO ONE is immune to rising Energy prices. The CPI numbers out Wed. morning should prove that.
Oh look! The trade deficit was $2billion less than the previous month. Let's have a party! Wake up dumb asses! The trade deficit was $58BILLION dollars...there is NOTHING good about that.
The Commerce Department, in a new report, said the U.S. trade deficit narrowed in June by 1.7%, suggesting the economy expanded around 4% or even higher in the second quarter, and will probably grow more than economists had thought in the third quarter.
The trade deficit shrank to $58.14 billion in June, the department said. A $9.4 billion surplus in the service sector offset a $67.5 billion deficit in goods trade. May's deficit was revised down by just under $1 billion. http://online.wsj.com/article/SB118709362608997144.html?mod=googlenews_wsj
Lies, Lies, and more lies. I am sick to death of all the lies. How does $9.4billion equal $67.5billion? Must be that American Math. I hear they use sub-prime numbers...
A close above 673 Gold should kick start an assault on the downtrend line at 682. Support at 663 then 658. There is too much uncertainty right now for there to be much downside risk in Gold. Silver is at Golds mercy, and it's 50 day moving average [now at 12.91 and falling]. Rising Oil prices should keep the metals firm this week. All the central bank hand outs have definitely put a floor under them. Should a hurricane ravage the refining capacity of the United States once again, it will take more than Fed handouts or an emergency interest rate cut to save the American Economy...much more. Unfortunately for us all, there is nothing more.
Save yourself! Buy Gold and Silver today!
Zzzzzzzzzzz... Same Story, Different Day
Euro-Zone Economy Slowed Sharply In 2Q
LONDON (Dow Jones)--The euro-zone economy slowed sharply in the second quarter of this year, growing at its weakest pace since the first three months of 2005.
Although surveys of business sentiment and measures of new orders suggest the economy may rebound in the third quarter, signs that the upswing that took hold last year may be running out of steam will increase the likelihood that the European Central Bank is nearing the end of a series of interest rate hikes that began in December 2005.
According to figures published Tuesday by the European Union's statistics agency Eurostat, gross domestic product in the 13 countries that comprise the euro zone expanded 0.3% from the first quarter and 2.5% from the second quarter of 2006.
Of course then the Euro tanks and the destitute US Dollar is the immediate beneficiary. That is until this mornings PPI numbers are released. These numbers should suck...or they may just be more US Government "magic" that declares inflation is benign. That would be a good thing though. If the magic shows soft inflation numbers the Fed would have more room to give the crybabies on Wall Street the interest rate cut they're wailing for. And in so doing clobber the Dollar and assist Gold in it's accent to the heavens. Hey, Gold Bugs are allowed to fantasize too.
Currency swap expected from Fed and ECB
Central banks are expected to continue intervening in the money markets on Monday in an effort to unblock the financial system after last week's turmoil.
Investors braced themselves for further turbulence and speculation is mounting that the
Investors braced themselves for further turbulence and speculation is mounting that the
European Central Bank will seek to arrange a currency swap with the US Federal Reserve that would allow it to lend dollars to European banks struggling to meet short-term dollar funding needs.
Billions in dollar-denominated borrowing by European banks comes due in the next few days amid fears that US banks are unwilling to extend short-term credit to some of their European counterparts perceived to be vulnerable to the market turmoil.
The Fed is likely to be sympathetic to an ECB request for a currency swap since it would be seen as a helpful way of dealing with pressure on the overnight federal funds rate caused by European banks' thirst for dollars. It would be the first such arrangement between the world's two biggest central banks since 2001.
I assume this would explain Monday's "strength" in the US Dollar and thus Gold and Silver's "day of rest". If the above currency swap report is accurate, a "false demand" for Dollars by European Banks to cover their butts was propping the Dollar up yesterday. Combine that with the weak Euro Zone GDP numbers this morning and the Dollar once again has the "false hope" of avoiding the axeman awaiting it at USDX 80.
Fear of World Economic Armageddon appears to have put a floor under Gold at 658-60. The near term key for Gold now is to close above 673. The uptrend off of the June 26 low remains intact despite the challenge posed to it during last Thursday's and Friday's panic attack. This mornings PPI Report should get this stick out of the mud one way or the other this morning.
Silver... Silver is simply adrift. Nothing happens for the Silver Bulls until they regain firm control of Silver's 50 day moving average. Period.
Oil as expected has come to rest at it's 50 day moving average. I expect further risk to the downside to be minimal with SOLID support at 67. Hurricane Dean should be throttling up by Friday and threatening the East Coast. Oh joy. It was amusing to see Oils reaction Monday to NOAA weather reports concerning Tropical Depression Four. Oil rises on the news and then sells off as soon as the forecast eliminates the Gulf from the storms path. You have to be crazy to trade oil. Should a Hurricane enter the Gulf this summer Oil will hit $85. Even if it never makes landfall. You heard it hear first.
Sunday, August 12, 2007
The US Dollar : An I.O.U Nothing
Following a longer than expected gestation period, and daily denial that the economy had an economic time bomb in the oven, an economic crisis is born...
The Fed Primes The Pump
http://www.forbes.com/2007/08/10/fed-rates-liquidity-biz-cx_lm_0810fed.html
The Fed Primes The Pump
http://www.forbes.com/2007/08/10/fed-rates-liquidity-biz-cx_lm_0810fed.html
Lacking any Wall Street buyers for their mortgage loans, commercial banks are left to hold any mortgages they've made in the last few weeks on balance sheet, requiring funds and reserves against them. It's a similar dynamic to what is happening with Wall Street banks that committed to fund leveraged buyouts, only to have trouble selling those loans in the syndicated loan market--they have to hold them on balance sheet until the credit markets come back to life.
Banks are thus forced to go to the Fed for money to cover their funding and reserve requirements. It used to be considered bad form to have to tap the Fed's discount window, where rates are about one point over the federal funds rate, or 6.25%. But the Fed seemed to be signaling Friday that there is no stigma.
Gold will be the beneficiary of these MASSIVE liquidity injections. Gold was at $250 an ounce when money was last pumped into the system at this rate following 9/11. It has since risen 168%. Sadly, this current injection makes the 9/11 injection look like chump change. If Gold rose 168% from today's $670 an ounce price we would see Gold at $1795 an ounce. And that's a conservative guess...and I doubt it will take another 6 years to put in that 168% gain.
Gold will be the beneficiary of these MASSIVE liquidity injections. Gold was at $250 an ounce when money was last pumped into the system at this rate following 9/11. It has since risen 168%. Sadly, this current injection makes the 9/11 injection look like chump change. If Gold rose 168% from today's $670 an ounce price we would see Gold at $1795 an ounce. And that's a conservative guess...and I doubt it will take another 6 years to put in that 168% gain.
Behind the Subprime Crash
My rough calculation suggests that over the last two days the Federal Reserve has pumped in enough new reserves to increase the money supply by somewhere between 10% and 15%.
This is a stunning number. The money supply in a year rarely grows by 10%, for it to do so in 48 hours is mind-boggling. Yes, the Fed has come to the rescue by further pushing the dollar on the road to collapse. While most eyes are on the current mortgage crisis, the bigger danger is the potential collapse of the dollar on foreign exchange markets. The dollar has been slowly falling in value against most currencies for a while. It is at multi-decade lows in some cases. I have feared a further major collapse of the dollar even before the Fed's moves over the last two days.
The mortgage crisis will pass. The Fed will print its way out of this crisis. But, the dollar crisis is ahead and the Fed won't be able to print its way out of that since it's been Fed money printing that is the cause of the world being flooded with dollars.
Bob Chapman, The International Forecaster
Early Friday morning the latest figures we have are the ECB has injected over $300 billion into the Eurosystem and the Fed has injected $150 billion. We will have more concise numbers later. The Bank of Japan offered to throw in $8.45 billion, the Reserve bank of Australia $4.19 billion, Bank of Canada $1.4 billion and the Bank of Korea just said, “how much do you want?”
The bottom line is the ECB, the Fed and other central banks are flooding the world with money in Weimer fashion. Gold and silver can only go higher.
also:
Goldman again reconfigured its commodity indexes that again lowered the weighting of gasoline, oil, so that is why gasoline has declined in price. The GSCI is changed every time the administration wants lower gas prices. This is rigging the market. They did the same thing a year ago.
What this massive central bank liquidity "injection" is telling the World Markets is that the "sub-prime woes" are not, and have not been, contained. The panic button was pushed last Thursday, and again on Friday. Anybody that believes this central bank "bandage" is going to fix this compound fracture of the World Economic System is a crack head. This bandage isn't going to fix ANYTHING, only delay the inevitable destruction of the US Dollar as the World's Reserve Currency.
________________________________
Gold is on the launch pad. Friday's hard bounce at the open off the 658 low was a classic. Investors are quickly coming to the realization that Gold is NOT a risky investment...it is the ONLY investment. Gold has always been, and will continue to be a "safe-haven" in times of economic crisis. The Gold Cartel is running out of bullets, and the metal itself appears to be sizing up a new suit of armour.
Gold vaulted thru both 663 and 669 Friday before being "capped" once again by dem Rat Bastid Vermin of the COMEX. Resistance at 669 has now turned into support. Should Gold open this morning above 671, the Vermin may find themselves hard pressed to defend 682. 682 IS the line in the sand. I expect that over the next four weeks Gold will clear 682, test the old high of 730, pause to retest the 682 breakout and then vault through the fourth quarter towards $1000 by the Spring of 2008. Please click on the chart above for The Big Picture.
Near term Gold support rests at 663 and 658. Silver on Friday launched a strong bounce and cleared resistance at both 12.80 and 12.96 in the process. There were too few believers however, and at this hour we find Silver stuck back below 12.80 looking up. Silver's 50 day moving average sits at 12.94, and until we get a strong move through that 50 day, and a close above it, Silver is going nowhere. A solid breakout of Gold at 682 would most likely send Silver to within striking distance of 14 quickly. A breach of 700 Gold would give Silver the authority to seek 15 in short order. With the US Dollar about to fold up it's tent, we wait patiently to profit from it's demise.
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