["-- currency issues, war, USD collapse, equity crash, scandals, dunno"]
Imho: in formulating a trading strategy here - you must ANTICIPATE (vs. reacting to) what the FED is going to do here at this crisis/flash point vis a vie - the simultaneous USD collapse, equity crash, loss of confidence in Wall St etc.
1. USD Collapse
...the US Dollar will NOT be allowed to "collapse", nor will its descent be allowed to accelerate... a "controlled, managed descent" will be the modus operandi going forward imho.
Capping the POG will also be part of that "managed descent" strategy....it must be in fact.
GOLD is the proverbial canary in the coal mine barometer that will NOT be allowed to signal a panic....NOT in this present environment, not with Wall St basically being "on trial" etc.
I would "anticipate" that the Dollar will be propped up here at any cost and another "whack job" on the POG - will be forthcoming.
That's a reason personally I'm not chasing any interim dips in the Gold stocks here... again; Sub HUI 90, or above HUI 150 - that's where the chains will be broken.
2. Equity Crash / loss of confidence in Wall St.
We must also ANTICIPATE - that they" also see the technicals and "they" will most certainly "stabilize the markets" (read manipulate) at key technical support points.
The economy isn't really doing that bad in a few area's...ie: consumer spending is still strong and is 2/3rds of GDP...and as consumer sentiment - controls consumer spending.... to keep consumer spending humming along - all you need to do is control consumer sentiment.
As it's a pretty safe bet now - that the Fed will keep rates untouched here for some time to come... their JOB #1 is to keep "Consumer Sentiment" propped up - which along with their endless forcefeeding of money & credit into the system - will keep Consumer Spending - (read borrowing) moving along briskly.
This of course is just buying time... as it's creating a when, not if collapse in the Housing/Real Estate Bubble and it's creating a consumer debt load that won't be able to be paid back...just like the Corporate Debt Collapse's we are seeing from Enron, Global Crossing, Lucent, K-Mart ...the collapse of consumer spending under a mountain of consumer debt - is a when, not if reality... but, that reality must be and will be postponed imho.
3. The Re-Election Wild Card
George Bush is fully aware of how a quick turning economy sank his Daddy, who by the way had about the same invincible poll numbers as Jr. does here...the 2004 election isn't that far away - we're nearly half way thru GW's term here...
What ever it takes... whatever deal with the Devil that needs to be made... will be made....I'm beginning to think that Bush may play with the Devil here and "Prop Job" this market regardless of the cost - untill he clears the 2004 re-election hurdle....and Greenspan will most certainly agree to play along - creating a retirement exit for himself, preserving his legacy and postponng the eventual collapse for his successor.
Immediately post the 2004 re-election - is when I think the $hit hits the fan and the real pain comes and the system will be finally cleansed.
The next 2 years will be "stabilized" at all costs... and I am backing my DOW 7000 & NAZ 800 call back to post the 2004 Election.
The next 2 years will be a banded trading range with a negative bias imho... but, the market will be anything but "free" and won't be allowed to reach it's natural cleansing level.
I'm begining to think that POG will be capped @ $345 max - unless we see a catastrophic "EVENT" driven catalyst such as a domestic "dirty nuke" etc.
Post the 2004 re-election...then I think POG will be set free and maybe, just maybe the Derivatives Cartel has been given 24 mos. to get their house in order...
I think we see DOW 8500ish & NAZ 1175ish as the interim supported bottoms during this "stabilize at all costs" period leading up to Bush's re-election.
I think both the Bears and the Goldbugs underestimate just how much ink & paper "they" have... remember when Regan took us sooooooooooo deep into deficit spending that many thought we'd never emerge ?
I think BEARS... just like PIGS should be content getting "FAT"... and they certainly have during the last 2 years.... I think they just need to tread lightly here and not turn into HOGS that end up getting slaughtered under the endless supply of paper & ink that the FED is going to be willing to forcefeed into the economy.
Ultimately - this will allow GOLD to have it's day... but I think that day is going to be postponed untill after the 2004 election. |
