G Cole...
They won't have to "trash" gold - just supress any upward momenteum, or breakouts. They can't have Gold moving up steadilly into their "calming & rescue" of the markets & the economy.
Gold is the Carnary in the Market Mine - literally...
I respectfully disagree on your comments on the dollar rally ; that is the first thing that Kudlow & the Rubinites pointed to - quote/unquote - "look at gold, it is not signaling inflation, or market dangers; the dollar was holding into the Fed Cut - as a sign that the US Dollar is still king" etc...
They've allready openly shown what their PR spin will be & thus their gameplan...
Support the dollar during the initial stabilization/intervention Fed Cuts; then allow it to be "walked down" slowly & gradually - and keep Gold from spiking, or breaking out .
I think worst case - that the XAU will rise to TA Traders target of the low-mid 60's very soon - but, in a nice slow & steady stairstep process.
Best Case; the California Utilities get downgraded to junkbond status by Moody's - as Fitch so bravely & honestly allready has done. Once Moody's, or Standard & Poors downgrades them to "junk" status - they go into default on their bank covenants & all hell breaks out.
The Calif Utilities will go BK Reorg & the bonds will create a dommino rift thru the financial markets - these are sizeable entitites.... and this could be the "crisis" trigger that leads to a POG & XAU breakout.
BOA derivative problems are the tip of the iceberg.
All that borrow Gold at 1% & sell it short & then leverage the US Dollar & equities long LTC-esque too smart for their own "inside Baseball" good; will implode.
Anytime that the "insiders" get so greedy on a sure thing; they merely build a supressed coiled spring - whose breakout remains assured in a "when, not if" basis...
The XAU has shown 5-6 major moves in 15 years; nearly allways "V" bottoms breakouts - you allready have to be in - I'm just waiting for a Sept '99esque breakout that can't be supressed by the ESF this time; because they have their hands full with a Ca Utility Crisis allready....
With a 150-200 bp eventual Fed Move - The Dollar could correct to an extent supportive of XAU 75-90ish by year end - without a crisis; with a "crisis" - who knows... lots of 1980esque Deja Vu all over again ripples in the marketplace here.... a True Energy Crisis, Junk Bond Crisis, Foreign cracks left & right... still a US Equity Market a bubblesque valuation multiples & a US Investor class on the verge of finally capitulating to "cash" & not a flight to safety move to food, beverages, drugs etc...
We'll see capitulation & a Mutual Fund redemption run yet imho; the bottom will be in - when "cash" & not stocks is the answer... and Gold will have it's day.... silver looking awfully interesting as well for that matter. |
