All is NOT as it seemed today Soros.......
1. Did you see CNBC's Larry Kudlow literally - "go off" on Gold the other night ?
...I think it was Tuesday. He went way over the top (and that's hard for Kudlow to do - since he is usually already over the top) saying "Gold is done... people ought to sell gold - there is no inflation, the US Dollar is strong, jobs ramping, the economy is growing - sell gold, gold is dead, there is no reason to hold gold here"...yada, yada, yada.
His message was much more "Anti-Gold" that it was Pro-Economy.
I have pointed out many times that Kudlow and Steve Forbes in particular, have been continual willing lackeys in pushing the official "talking points."
It is very, very important here for the Canary in the Coal Mine - which is Gold; to not sound it's alarm on either the USD, inflation, the weakness of paper assets or the Economy.
Tonight... Kudlow attacked gold again and said quote/unquote:
"Gold is on a Death March"
- this from the mouthpiece of mouthpieces for talking points.
They are targeting Gold here...and Gold is holding pretty damn tough on the ropes in my opinion.
2. Did you notice the market & currency reactions when the RMB was allowed to bounce a bit to the extreme range of it's Peg recently.
3. Did you notice that the Fed came back to add that very important little sentence AFTER the market tanked when it was deleted.
4. Did you notice yet another Chinese Re-Peg "Trial Balloon" floated ...that was once again blamed on a "mis-translation" and an error from a "Junior Chinese Official".
5. Have you noticed all of the comments of late on the signs of Derivatives blow ups and rumors of Hedge Funds being in trouble ?
6. Have you noticed the recent rally of the USD into seemingly less than positive underlying fundamentals and it's continued strength here today ?
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< from Jim Sinclair's MineSet>
- is this strength ?
US real wages fall at fastest rate in 14 years
By Christopher Swann in Washington
Published: May 10 2005 17:59 | Last updated: May 11 2005 15:20
Real wages in the US are falling at their fastest rate in 14 years, according to data surveyed by the Financial Times.
Inflation rose 3.1 per cent in the year to March but salaries climbed just 2.4 per cent, according to the Employment Cost Index. In the final three months of 2004, real wages fell by 0.9 per cent.
The last time salaries fell this steeply was at the start of 1991, when real wages declined by 1.1 per cent.
Stingy pay rises mean many Americans will have to work longer hours to keep up with the cost of living, and they could ultimately undermine consumer spending and economic growth.
Many economists believe that in spite of the unexpectedly large rise in job creation of 274,000 in April, the uneven revival in the labour market since the 2001 recession has made it hard for workers to negotiate real improvements in living standards.
Even after last month's bumper gain in employment, there are 22,000 fewer private sector jobs than when the recession began in March 2001, a 0.02 per cent fall. At the same point in the recovery from the recession of the early 1990s, private sector employment was up 4.7 per cent.
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7. Have you noticed an unprecedented level of what can only be defined as "testing, or probing" the Markets of late by both the Fed and China of late ?
WHY is this going on ?
Greenspan has warned the markets that they should NOT be on the wrong side of rising rates, he has warned the markets about derivatives.
Paul Volker, Bill Gross and Steve Roach et al...have also sounded the alarms on the structural problems in the US Markets...Gross calling for DOW 5,000; Roach says less than 50:50 chance of the US dodging a Rogue Wave Event, Volker citing the highest levels of economic/market risk that he's seen in his multi-decade career.
...and GOLD Bulls are getting shaken out HERE ?!?!?!
Was there a SINGLE BUYER of Gold, or Goldstocks on this thread today ?
(hello people !?!?!?)
I'll tell you what kind of Gold Bull got shaken out here of late and that was NOT a buyer here today.
- the ... "Gold is a Commodity" - Bull is NOT a buyer here.
- the ... "Gold is MONEY & Gold preserves wealth" - Bull IS a buyer here, or should be.
Reading todays action was not all that difficult.
THE major trade position of many momenteum Hedge Funds has been Short the USD & Long Oil & Commodity stocks and to a lessor extent; long Gold and Goldstocks.
The US Dollar has been "gunned" here ....to shake out the US Dollar Shorts and to fire a warning shot against the bow of those Hedge Funds that think they are going to do any "Soros-esque" Student Body Right Runs on Shorting the US Dollar on the China re-peg.
This shakeout of the Hedge Funds took a lot of their ammo away and certainly will make them a bit hesitant on over-playing their hands on the coming RMB-USD re-peg.
The 1st half of the Gold Bull Cycle here of late has been based primarially on a weak US Dollar...and correctly so.
But, that is about to change.
Goldstocks actually have a better correlation coefficient to the real return of the capital markets and especilly to the S&P 500...it has been this way since 1988.
My favorite piece of research shows a Gold:S&P500 correlation coefficient as a negative .85 and since 1994 it's increased to .94. Longterm the Stock Market and not the US Dollar has been the best predictor of Gold Prices.
We are NOW breaking away from Gold being traded purely as an anti-US Dollar play and will soon begin to trade inversely to the stock market as GOLD will rise again as the ultimate hedge to preserve wealth and below average returns from other financial paper assets (stocks/bonds.
We had a very strong HUI rally, converge directly right into the Rally of the Dow closing in on 11,000 in February & March.
That convergence will now revert to it's historic negative correlation.
The 2nd half of the Gold Bull has begun and now Gold will become a vehicle to preserve wealth and as a hedge to below average returns from paper assets that may last a decade.
Don't be caught out of Gold here... at these price levels you can afford to trade in & out - even into a declining market and still maintain a core position.
Another positive buy indicator:
financialsense.com |
