"Tom, Dealt with that one in Midas. The dollar has to take a big hit - and soon now after Brazil. Good for our camp. Bill M"
Don't know how you've come to the conclusion that Brazil means so much to the USA dollar as you suggest. Debt load has never been a reason for the USA dollar to depreciate, ever. Brazil is unimportant to the USA, but south America isn't. And until you can demonstrate that Brazil problems are systemic of a bigger problem the dollar will survive. And what would that problems be? Debt load gets a back seat to trade imbalances, and where do you see that in April???
"The big boys are moving in. Silver first - gold next. The dollar is headed SOUTH. Gold is headed NORTH. All of our reasoning can be found at the James Joyce Table and in the James Joyce Library of past Midas du Metropole commentary. My guess is that silver should trade $9.78 by the end of the year and gold should reach $405."
Based on what? Silver can easily hit $9.78 for many reason. But what are yours? Gold has lost it's ability to act as a mitigate between risk, because better forms of risk hedging have occurred. The economics of monetary policy under Greenspan has demonstrated that Gold is actually trading on it's upper boundary of premium, and is more likely to depreciate in price over the next years. Sure demand MAY be on the increase, but that is primarily only due to jewelry. What happens if the US FED rises rates. We know that during the last three weeks, that they have backed away from their loosening stance, and have begun to tighten. All the loosening that was done, was done against the technical of the US economy, and for the sake of the currency pegged economies.
What the good Fed giveths, they can taketh too. The followers of M2, have realized that the M2 rate is not as large as before. So where do we go to from here? If you are to look at the 30 Yr. rates, they are telling you something.... NO the USA economy is not imploding, NO the capital outflow is not growing, NO the economy is not over burdened by debt. It's telling you that inflation, which is masked by M2, is still on the upswing. Even in the rush to 4.75% in Oct, that was an abnormality. Inflation in the USA is, has been built into the system. YES it was done deliberately, and for a reason. When the good FED does raise, and raise they will, you'll see the DOW / Nasdaq correct. My analysis has put that around April time frame. And when the 30 yr raise, you'll see an outflow from Europe, and Japan. Cash will always seek a higher return, and when currencies follow that higher return, the POG will drop {since it's US dollar priced} So a $400 POG is out, not even worth considering!!! A $9.78 POS is immaterial as Buffet is a true manipulator in that market.
Your analysis of short positions on GOLD has shown that you subscribe to a biased opinion on GOLD. As I've stated well before the LTCM gold short position was realized {still unproved}. Gold shorts never need to be covered with actually gold purchases. That's not the nature of the loans in the first place. So in FACT : not 1 ounce of gold need ever be paid back to the CB in the form of gold. LTCM has shown that.
Short term projections show a stabilization of GOLD around $275-$290, but around Feb 1-15, Gold should continue it's drop. Gold is fighting the ticker to stay above $275 right now. In real currency terms, it's allready collapsed. You just haven't noticed it, because you're only looking at it in USD terms. And where has the US dollar gone relative to the YEN/MARK{Euro}/POUND? The story of gold will be around for 100 years, and they'll speak well of those whom grasped at the dying commodity as a monetary hedge. Realize this: Gold can't keep pace with monetary effects. And as such must be demonetarized. It's only a matter of years before a world currency is created, and gold will be liquidated from all CB.
Remeber these words: Inflation, can be hidden. But do you know where to look for it? |
