Wednesday and The Doctor Is In
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Thanks, Doc!
BTW,
HEY ALL…MY COIN DEALER WAS OUT OF PHYSICAL SILVER IN TEN MINUTES FROM THE TIME HE OPENED UP THIS MORNING. In anybody’s book, that is a tell-tale sign of things to come…..all the best,
Marc
Interesting Marc,
That certainly does say something!
Big Al
I have send it before early last year but bares repeating. The gold bulls are like the tech bulls in 2000. They are trapped into having to sell at huge loses so keep on holding on “waiting for it to come back”.
Heck, I got long some PMs again (GORO, NEM, GG) in Feb of this year and down nearly 25% in two months. after being short for nearly 2 years because I thought these pigs were going to bounce.
Now I am to the point where (1) Wait for a bounce and get out (2) Sell now at a 25% loss (3) Keep riding – Just like the tech bulls in the 2000s.
Look at the expansion of the money supply. Gold seemed to track (that vertical) monetary expansion coming out of the (call it what you want) 2007-2009 bust. The money supply, at least on the chart I’ve been looking at, has started to go vertical again. If the money supply keeps on going straight up, gold should do OK. And if gold does OK, the gold stocks (with the initial gold rise) should do OK.
Exactly Mr Feibish
Big Al
har,
I won’t feign intelligence and dare tell you what I think, but just to point out an error in your comparison…the tech bulls of 2000 constituted tens of millions of investors (perhaps 100’s of millions worldwide), during the nascent beginnings of algorithmic trading. There are, statistically, no gold bulls. It’s a “gut instinct” guess, but across North America, if we suppose only 1 person in 100 might have some savings held in gold, and perhaps 1 in 100 of those might own mining stocks…you could count gold bulls in the tens of thousands only. I don’t think the idea is to wrestle gold (or mining shares) from weak hands, so much as it is to lower gold as cheap as possible so it can be mega-accumulated by central banks and interested nations.
We’re not even considered collateral damage…in this type of market, we’re nothing at all.
Great point John W.
By the way, Kathy and I are seriously looking at Arizona again. Can you help?
Big Al
Not directly, as I’m pretty busy here in FL, but let me know when you’re thinking of visiting. Perhaps I can show or suggest you some of the places I think you might like.
My point is most of the gold bugs were not investing in tech stocks and most of the tech bugs were not investing in pms. They are kind of in the same boat – trapped with huges losses that keep growing everyday and everyone wonders why they did not get out before they were down so bad.
I agree completely John. Your’s is a hypothesis that seems much more logical every day.
Investing Rule #1: Don”t go broke being right.
Thanks Brad. Har does bring up a good point though.
Har,
There’s one BIG difference between now and @000 Tech.
The fundamentals, as in the dollar is going to collapse.
Also at a dividend of 5.7% Goro, for example, is going to pay you to wait!
I believe the Yen and Euro will collapse first which will drive the USD up.
I think tomorrow BOJ is going to announce another big QE type program.
Note: Yield on GORO is now 6.04% that kind of tells you how fast the price is falling – LOL Waaaaaaaa.
Bold stimulus. http://www.independent.co.uk/news/business/news/bank-of-japan-chief-signals-bold-stimulus-8557585.html
Could be another PM bloody bath.
GORO sure sounds like a BUY to me!
But I’m tired of being stopped out right now. I’ll catch it at 5.9% on the way up.
I do hold a few thousand shares of GORO and I’m not selling those and they do not have a trailing stop; being part of a core holding.
I got 37823.456 shares and was going to sell @ 14. Did not pull the trigger and it felll 8% the next day. Have been sitting like a deer in the headlights ever since.
The divy is paid monthly just so you know.
Just noticed 23456 that should of been an omen – lol
The yen and euro are both doing pretty well today, however.
Big Al
Short covering.
I definitely buy your argument, cfs!
There is a big difference today as compared to then.
Big Al
That was supposed to be 2000 Tech above
Har, You should read this too:
http://etfdailynews.com/2013/04/02/financial-collapse-inevitable-as-the-derivatives-bubble-grows/
Then you will have a reason to hold gold, maybe forever.
My Grandfather, whi lived through the first great depression, carried a gold guinea in his wallet till the day he died. (Possibly as a toll to get him through the golden gates?)
Unfortunately that is one place where gold is not accepted for entry.
I do believe that He does not need any of what He created!
Big Al
har – I am not trapped at all. I have no reason to sell an ounce. As a matter of fact I am thinking about adding more!
Wait and see what the BOJ pulls out of the hat tomorrow. Rumour is a multi trillion Yen QE.
GOLD IS HOLDING!
gold closed at 2pm. I would hope so.
Yes, The Greater, uncertain it certainly is!
Big Al
Heck just the time I posted 2 comments my porfolio is down another 5 digits and that is not including the decimals. LOL.
VERY NICE unbiased objective analysis Doc!
Mark, what’s interesting is that the PMs and some of the PM stocks are entering oversold on the technicals—-of course, they can stay oversold for awhile. But if there is a positive, it’s that one factor. The ADP report on jobs came out today and it was the slowest growth in 5 months and almost all the jobs were low paying jobs. If Friday’s job report is unexpectingly poor, watch out. Also the dollar is struggling at it’s recent highs and if it struggles much more the next 2 weeks we’ll probably head lower.
har – I am talking about the physical gold, you know the one that is traded 24 hours a day, 365 days a year, not the paper crap that floating around…
It is down from the 2pm closing price.
Axel merk was interviewed today and is buying Euros for his fund.
Euro chart is forming a giant head and shoulders. Will probably go to 1.20 to retest the low before it has a tradeable bounce.
Bingo. Euro is going into the ooze.
Axel Merk has always struck me as pro-EU.
Trust me, John W, he is!
Big Al
I should check my brokerage account more often. Damn. Just got stopped out of JJG.
That was a trailing stop placed at 10% behind.
I was sitting on a nice profit, but stopped out at about even.
My trading account screen is constantly laughing at me.
Doing great trading none PM stocks. Bought a bunch of GD yesterday and sold for a 2.4% gain on a down day but PMs are toxic on the long side.
I’m not really a trader. I like to take much too much vacation time to keep up.
I am going to have to break out some old charts of Homestake and Dome, and guess just how far Kondratieff cycle will take mining shares down.
Well let’s see what the BOJ springs on us later. Should be for a lack of better terms: interesting.
Thanks Doc for a very good interview as usual.
Dollar up against Euro and Yen – gold down. Yen and Euro up against dollar, gold down.
Looks like there simply isn’t a bid for the precious metals and that’s it.
More buyers than sellers, despite all the ultra hype from some sources on Chinese buying, etc as usual.
Goinf further: Fallin stock market: gold down (on safety trade), rising stock market, gold down (on risk trade). Let’s face it, gold was MASSIVELY overbought after a 12 year bull market and has to be sold off to a sufficient degree to get the speculators out, those speculators who keep cheering every time they think it is the bottom – and there are lots of those, including me.
As usual, like clock work, the Fed’s John Williams comes out today and says the FED may start scaling back on its QE in the summer. This would be funny if it wasn’t so wickedly dishonest. This after Lockhart said we need to wait before altering QE. This is all timed for effect. Ive said this over and over again. It is all a deliberate attempt to keep us twisting in the wind. They cannot scale back, they cannot end QE. The economy is not improving no matter how many times they say it.
James, you’re absolutely right on about the Fed—after awhile you would think people wouldn’t even listen to anything they say—I sometimes feel the folks that trade on their pronouncements do so because they know the usual reaction even though they don’t personally believe any of it themselves.
If gold can perform as it has over the last 10 years while MZM money velocity plummets, imagine what’s in store when mv reverses. If (when) we see it rise as it did in the ’70s, there’s no telling how high gold (and especially silver) could go.
http://research.stlouisfed.org/fred2/series/MZMV?cid=32242
Matt, I’ve thought the same thing—-we’ve been in a “supposed” dis-inflation environment for years—can you imagine if we see velocity and demand pick up—at that point it has to scream increasing inflation for months and years.
That would really make life interesting guys!
Big Al
http://research.stlouisfed.org/fred2/graph/?g=XT
http://research.stlouisfed.org/fred2/series/MZMV
I was hoping these would go up.
Meaning my silver would go up.
See how the graph was rising up to April 2011.
On net, it has fallen sharply since the bull market began. It appears to me that the small short term rise ended at the start of 2010.
Or rather, gradually fell to April 2011, then slid down.
I’m not laughing about this:
It is terrible thing that North Korea and South Korea are divided by foreign troops in the demilitarized zone.
Now is the time for The US and China to come together with The Koreans and negotiate a lasting peace and that means bringing the US troops home. DT
DT….Agreed…….There are those who would use North Korea for their own ends…..
Scary times.
DOUBLE AGREED.
My thoughts exactly. I live on the West coast of the US and do you think my own government might decide to drop a big one here on West Coast and blame it on North Korea if they thought it might help their insanity somehow? Nothing from what I have seen is beyond what my own government would do, nothing.
Made good change on the defense stoxs yesterday. Maybe I should of held over night.
In case you missed the news:
http://msnbcmedia.msn.com/j/MSNBC/Components/Video/__NEW/nn_01ren_korea_130403.vembedlarge456.jpg
My second good laugh of the day
Another laugh: Japan is going to shock and awe 50T Yen of fresh QE.
Big Al, I told you the Yen and Euro was short coverning – that was why it was up. When you see something moving up – you have to look at the changes to short positions.
Where are those folks that were shorting bonds? On a realitive bases they are doing worse than the PM bugs.
TTMN (All Inclusive Mining Index on the TSX) is diverging from the POG because of fertilizer stocks. A few of the silver stocks have changed direction from this morning and are green, if I remember what that colour looks like. HGD (Gold Bear Plus) is down from being up this morning; 90 cent swing on a $17 ETF.
IMHO this is a sign of things to come but this could still be a little premature. I am an amateur and am only expressing my views to throw into the pool of ideas for the smarter ones to delineate.
And thank you Richard and CFS and all.
Dan
MACD just crossed over. That normally means lower price: http://stockcharts.com/h-sc/ui?s=gld
Best free chart I can post but they all look the same.
Probably pretty hard to disagree with that, Machine Gun!
Big Al
Noticed that the young author is boasting decades of martial arts experience. Seems like he doesn’t understand anything. I’m not getting excited. Getting away from escalating sanctions that don’t work, and instead allow Kim3 to gain some street cred at home won’t be easy for 0bummer’s Monsieur Chief Ambassadeur, but maybe the Chinese will give him hints. He better listen closely.
Slovenia appears about to pull out of euro:
These grueling corrections are inversely proportional to the rallies they precede. When big money is satisfied that the market is wrung of enough little guys, a bottom will finally form. Sellers today had no trouble finding buyers for all the miners I watch.
Matthew,
Excellent comments that are RIGHT ON…IMHO! Thanks
Some graphs make no sense to me:
http://www.zerohedge.com/news/2013-04-03/stocks-slump-most-6-weeks-bonds-best-close-year
Could be fun tomorrow:
http://www.youtube.com/watch?feature=player_embedded&v=G9hYhTJeLKk
Well, at least, I got to laugh once today
And how much did a NY show, and a golf trip cost the taxpayers?
An expense we should not be making!
Big Al
I appreciated Docs take on velocity of the money supply.
It brings another level Doc can provide in addition to the this way that way stuff.
Takes on the why are useful tools for the tool chest.
My sentiments exactly Dennis M!
This guy is good!
Big Al
At least the RSIs for most commodities are now so low, we should get a rest from the drops.
The Federal Reserve has created for itself an unhappy predicament. Speculation in the stock market is clearly absorbing more and more of the funds of the country.
If the stock market keeps rising, the normal course in the past would be for The Fed at such a juncture to raise the interest rate, thus forcing up the price of money for speculative purposes, rendering speculation less attractive, and liquidating speculative loans.
If they raise the rate now they run the risk of of bringing about a terrific debt smash, and of appearing to do so deliberately and wantonly, but also of seriously handicapping business and consumers by forcing everyone to pay a higher rate for funds. The Fed has no options left at it’s disposal the only way out is not going to be pretty but the market will now decide.
The banks know The Fed has given them a green light to do anything they want, the only out is a baked cake called disaster. DT
Meanwhile back in Cyprus the blame game starts:
http://www.reuters.com/article/2013/04/03/us-cyprus-probe-idUSBRE93213320130403
I don’t think it willaffect you, Big Al, but it might, depending on how the regs are written.
http://www.reuters.com/article/2013/04/02/us-usa-tax-healthcare-investment-idUSBRE9310YE20130402
Always willing to pay my share. In this case, I am not sure it is a n issue!
Big Al
I am always willing to pay my share. In this case it is probably not an issue.
Big Al
Turkey’s Silver Imports Surge 31% and Gold Imports Climb to 8 Month High
1. Turkey increased its gold imports last month to 18.26 tonnes of gold, the highest since July.
2. Silver imports amounted to 6.19 tonnes (1,990,000 oz) a big 31% increase. Last year Turkey imported 120 tonnes of silver or 38.58 million oz)
Generally Turkey is the gateway for both precious metals into the Arab world.
meanwhile UK is scraping the barrel for Cyprus:
I just had a thought after reading CFSs post from Richard Russell. The one thing majorly different this time is people have smart phones to distract them from some of the international economic happenings. Two day old news is old news.
Dan
The problem is not Cyprus. The problem is the Euro.
http://www.tradingfloor.com/posts/blame-euro-cyprus-1580152071
That is a good analysis.
I had a thought after I read the link to Richard Russell. One thing that is different now is people are distracted by their smart phones so much that two day old international economic news is old news and is ignored. Information seems so real that now gold seems fake. What is down is up.
Dan
Dan
Sorry, thought I accidentally deleted the previous comment.
There is something about this chart that makes me think about the Stanley Cup:
http://research.stlouisfed.org/fred2/graph/?s%5B1%5D%5Bid%5D=AMBNS
richard: I posted comment on the Tom Luongo interview Al just had today regarding the Feds policy with respect to money channeling. The velocity of money as printed by the St. Louis Fed is dropping like a rock just as you say. Perhaps this is because money channeling is not working like the Fed intends, despite their hook or crook policies. The Fed does not control everything despite the suggestion from a certain Senator that the “Fed is the only game in town”. The congress, president, corporations and media are also responsible to move money to help the Fed in their NGDPLT policy, or perhaps the Feds policy itself is just another failed learning curve.
One thing for certain is happening and that is massive distortions in currencies, equities, bonds and in the many price discovery markets, and I believe this is all do to the learning or better said fail as we go economic policies of these monetary and political mandarins.
Clay, your first paragraph is right on and also your comment about the distortions. We all know the ongoing comment about “don’t fight the fed”—I wonder when that is no longer applicable to the stock markets—-there’s got to be a point at which that statement is no longer relevant.
richard: What happens when the Fed starts fighting the Fed. Oxymoron concept and question but perhaps that is the root of their problems in that they are taking actions only a bunch of conflicting morons would do. So if the Fed is fighting the Fed then the best action anyone can take would be the oxygenated side of the “moronic Feds”.
On Jim Sinclair’s jsmineset the cat is out of the bag. ABN AMRO, the large Dutch bank, cannot deliver physical gold on its coatracts and will settle all contracts in fiat!!!! It appears that “price” of pm’s is driven down to make settlement much cheaper to the banks. This appears to be the Biggie the powers that be are trying to keep under wraps? When does “physical” become the true driver of price????
PMs getting crushed again.
Repeat, rinse.
Someone pushed the dive, dive, dive button.
The first signs from Portugal post-Cyprus that it is having serious troubles
Gold is looking weak going into the jobs report where it will get crushed further. I jumped into gdxj at the gold bottom today and out with the dead cat bounce since it did not bounce much at all signalling further weakness. I picked my most valuable hard asset ever a few days ago: a 997 type 911 from the dealer to have some fun this summer as I have been working 6 to 7 days for years now.
Fisher came out and urged that the FED cut back on QE as the economy picks up.
He said as you approach your goals and things get better you scale back. Can someone please tell me what there goals are and if things are really better? If their goal was to create another stock market bubble then yes they have achieved their goal. This whole phones stock market is driven on speculation the Fed will keep printing. Tomorrow and Fridays employment data will be very interesting…
Keep the end game in mind. If you really think you can print trillions of $ without inflation and the $ will be a store of value in the coming years then by all means exit gold. This can only end very badly…very soon I think…
Anyone have the secret sauce to figure out where the new comments landed?
BOJ just dropped a bomb in the currency war game the masters of the universe are playing. Take that Mr. Bernanke. I will raise you two says Bernanke. If you are in stocks great, you will make a lot of paper profit. Just remember the smart money will be out way before the music stops. It’s the end of the world as we know, and I feel time. Total monetary collapse in a few years as this NWO experiment blows up and anti Christ steps in to save the day with a plan to fix it all. Maybe an SDR. maybe bitcoin, not gold. Mathematical impossible to pull this all back. Lunatics running the place. Truly over…
Good unbiased post. Explains current G&S price moves. Far too much stupid money still in the market with the smart buyers lurking like vultures overhead.
Downside not in yet by the look of it although there seems to be an effort on G&S stocks to diverge today. Can change on the top of a silver dime though.
http://www.kitco.com/ind/Arora/20130404.html
Dan
First we saw signs of Catalonia in Spain wanting to break away. Now there are signs of Italy breaking up:
I very much like the idea of local currencies that are taxed in that currency then after all local stuff is looked after then tribute can be exchanged into Euros to pay the overlords. Local currency instills discipline IMHO and national pride.
Dan
I am glad I am not in the Spanish pension system:
http://www.zerohedge.com/news/2013-04-04/97-spanish-social-security-pension-fund-domestic-bonds
Need to start a new thread. This one is impossible to follow.
I mis-spoke a number—I mentioned how the closing weekly low for silver in June 2012 was important and used the figure of $27.50—it should have been $26.50.