Gold Bull with Numerous Legs
by Jim Willie CB
Jim Willie CB is the editor of the "Hat Trick Letter"
April 20, 2006
For specific detailed analysis of the Gold, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and Fed monetary policy, see instructions for subscription to my newsletter research reports, which include stock recommendations positioned to rise in the commodity bull market. Articles in this series are promotional.
With the gold price past the $600 mark, many have asked how long the gold bull will run. Simply put, a long way. In fact, simply put, gold will continue to run and run hard as long as the USGovt and USFed resist change, resist a recession, resist a severe decline in the USDollar, and insist on relying upon the printing press to solve its economic and financial problems. These trends are nowhere in sight for change. Gold was doubted way back when it was vaulting past the $400 mark. The $500 mark was critical, passed last summer. Extremely powerful developments reinforce the gold bull, factors which are historically significant, items for the history books. The sign posts contained rather significant painted messages written in defiant language and bold tones, indicating global shifts, such as:
"The Chinese delink from the USDollar"
"King Abdullah Diversifies Toward the Euro"
"Alan Greenspan to be Succeeded by Ben Bernanke"
"M3 Money Supply Statistic No Longer to be Published"
These are very important developments, major events, financial equivalents of serious and damaging earthquakes which work to change the financial landscape. We have just began to dance on the FOREX dance floor. Last year, gold was stepping on euro toes and yen toes, wearing golden slippers and displaying some nifty foot work. In 2003 and 2004, gold stepped on USDollar toes repeatedly and without apology. The night is young, and gold is tireless. Fat and bloated, the USDollar, euro, and yen are fat hogs, slow afoot, clumsy in foot work.
THE NEXT LEG
The next chapter for gold has other strong messages, compounding the powerful forces pushing gold up. These almost as earth shaking as the above factor messages, indicating continued global shifts, such as:
"The USFed is Almost Done in its Tightening Cycle"
"The Perma-War Will Cost billion$ More"
"The Gold Cartel Faces Billion$ in Hedge Book Losses"
Don't be too sure about USFed Governors will avert a mistake in hiking a few more times. They always do, and always will. That is what they do, their reason for being. They engage in blatant attempts to control the market with their "FedSpeak BS" tactics. See the clown Fisher for his "8th inning" analogous comment last summer. Now we have Yellin talking about being near the end of the tightening cycle, "which is data dependent." In other words, the USFed still requires concurrent signals as it ignores future signal, a key indicator of their incompetence and ineptitude. What do you expect from the American Politburo freaks anyway? They are driving a giant bus and ignore signs, preferring to drive until they recognize having gone over the cliff.
War costs huge sums of money and depletes huge supplies of commodities like oil, steel, and base metals. Lately, it seems our leaders refuse to negotiate and to prefer the push toward conflict, even citing opposing faction willingness to talk as a sign of weakness and a justification to cease those talks. War is good for business, certain businesses anyway. It sure does motivate big investments in gold across the globe. The USGovt can play its silly games of taking war costs off the budget, but continue to fund them. Heck, if they remove all expensive programs from the official budget, but continue to fund them, then these clowns can claim a surplus.
The hedge book losses for the gold cartel are real. Soon we should hear about declining jewelry sales (their favorite disinformation tactic), which is great news for gold, since investment demands overwhelms jewelry demand when the gold bull roars. Stated Barrick losses are historically without precedent, with greater losses than any mining company in history. One must wonder if certain connected bank & brokerage houses have the inside track on illicit bailouts on their hedge books. See JPMorgan. Recall the M3 money supply statistic is dead, and JPMorgan has essentially merged with the US Federal Reserve. No longer can the gold cartel expect grand favors by the central banks in official gold sales. Rumblings in the European Union signal a clear unwillingness to play that stupid game. Before long, the only gold left will be in Asian hands. Then comes the decade dominated by Asia, driven off a strong bank foundation.
more
321gold.com |
