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To: Goose94 who wrote (10464)	12/2/2014 10:13:47 AM
From: Goose94	Respond to of 202988

What's Driving Gold Now?Stewart Thomson email: stewart@gracelandupdates.com email: stewart@gracelandjuniors.com email: stewart@gutrader.com Dec 2, 2014 Gold enthusiasts around the world are trying to figure out what just happened in the gold market. The price action has been dramatic, and I think I can shed some fairly bright light on the situation. The general consensus is that the price of gold fell on Friday, due to anticipation of a Swiss citizen rejection of the “Save Our Gold” campaign. The Swiss vote went as anticipated, but by Monday morning, gold had soared $80, and silver had surged $2. How can this bizarre price action by explained by the events in Switzerland? The likely answer is: It can’t. In the big picture, events in India have always been a key driver of gold prices. It appears that India is also now becoming the main short term driver of the price, and rightly so, in my professional opinion. He and she who have the most gold, should make the most rules, and India has the most gold. Thus, the front lines of what I call the “gold bull era battlefield” are no longer in America, but in India. In time, I think central bank governor Raghuram “Raj” Rajan will be recognized as the world gold community’s Trojan horse. By the time he retires, Raj is likely to be remembered as the greatest central banker in the history of the world. Raj killed the 80-20 import/export duties rule on Friday, and what that did, in the immediate timeframe, was allow supply coming into India toincrease. The COMEX price decline on Friday was more likely a quick response to the actions of Governor Raj, than to events in Switzerland. Simply put, the price of gold is being determined, more and more, by the demand/supply ratio in India. The Indian government has been pressuring Governor Raj to increase the restrictions on gold. Instead, he’s reduced them, and there’s more good news for gold price enthusiasts. Please click here now . Econoday News reports that Governor Raj left rates unchanged at 8% at today’s policy meeting. Here’s why he did that: He’s sending a statement to the government that fiscal policy, not monetary policy, must lead the way forwards to a lower rate environment. The government must do more, and if it does, Governor Raj will cut rates early in 2015. Governor Raj and Narendra Modi are the world gold community’s greatest allies, and that will become very apparent over the next twelve months. Modi is the supercharged engine driving an economic boom that will dwarf anything China has achieved or will achieve. Raj is the governor that makes sure nothing gets out of control. The incredible wealth that Indian citizens build, will be used to buy near-incomprehensible amounts of gold jewellery, sourced from the mines owned by the Western gold community. Please click here now. Raj is looking for inflation in the 4% range by 2016, and great fiscal responsibility from the Modi administration. This tells me he will be cutting rates over the next two years, while the Fed raises them. Bill Dudley is president of the New York Federal Reserve bank. He just issued what I consider the strongest indication yet that the Fed will raise rates, even if that causes stock and real estate markets to crash.To understand how serious this man is about rate hikes, please click here now. Western mining stocks are going to soar as India gets immensely richer, and imports astronomical amounts of gold to celebrate. Unfortunately, America is not set to fare quite so well, to put it mildly. America could essentially implode, as the price of oil tumbles much lower, in the second half of 2015. Oil supply is beginning to overwhelm demand, and the imminent Fed rate hikes will only add fuel to the lower oil price fire. There’s more bad news for America. Oil-related bonds make up about 15% of US junk bond markets. Those bonds are already in trouble. They could collapse, triggering a nationwide crash in US real estate and stock markets. Even CNBC admits that India is the world’s largest beneficiary of lower oil prices, noting yesterday that 67% of the nation’s current account deficit is caused by oil imports. I predict that India will have a huge current account surplus by 2016,and gold import duties will go the way of the dodo bird. On that note, please click here now. It’s apparent to me that Governor Raj is not interested in playing tiddly winks with the Indian government. He’s his own man. Why should Raj cut rates, if the government refuses to cut the duties on gold? These duties are no longer economically justifiable. They have put control of one of India’s largest industries into the hands of the mafia. India’s finance ministry had been pressuring Raj to increase restrictions on gold, and refused to cut rates. Instead, he killed the 80-20 rule and cut rates. The bottom line: Indian government officials tried to play hard ball with Raj. He responded by introducing them to my favourite game: Rock ball. Let’s take a look at the technical side of the gold market, and see if the charts support the fabulous fundamentals. Please click here now. That’s the hourly bars chart for gold. There’s support for gold in the $1190 area, and a pullback is needed after yesterday’s incredible price advance. To view the daily gold chart, please click here now. With hourly chart support at $1190 and daily chart support at $1180, gold feels solid. It’s poised to rally to the $1240 - $1255 target zone. Please click here now. That’s the daily chart of a very dangerous investment vehicle, DUST-NYSE. It has caused a lot of damage in the gold community. DUST was designed for professional day traders, not for amateur gold community investors suffering from gold stock drawdowns. Investors looking for a “quick fix” have purchased DUST, which is a triple-leveraged bet against GDX. Substantial pain has followed, as is clearly evident on the chart. It’s a highly inefficient vehicle to capitalize on gold stock price declines. The massive head and shoulders top pattern now in play suggests it may face a reverse split, and could be delisted from the exchange. Investors have better odds gambling in a casino than purchasing dangerous items like DUST. Please click here now. That’s the daily chart for silver. The downtrend line from the $21.50 area is being tested. A bullish inverse head and shoulders bottom pattern is “under construction”. Be alert for an upside breakout, to trigger a strong rally to my $17.85 target zone! Please click here now. That’s the weekly chart for GDX. Note the superb upside breakout from the downtrend line. This breakout “meshes” perfectly, with the action I’m seeing on Indian and Chinese jewellery stock charts, and with the hugely significant elimination of the 80-20 rule by Governor Raj. The gold bull era is underway, fuelled by the potential destruction of America and the miracle of India. For the gold community, there has never been a better time to be alive than now!Dec 2, 2014 Stewart Thomson Graceland Updates website: www.gracelandupdates.com email for questions: stewart@gracelandupdates.com email to request the free reports: freereports@gracelandupdates.com http://www.siliconinvestor.com/readmsg.aspx?msgid=29832949

To: Goose94 who wrote (10464)	12/2/2014 12:18:11 PM
From: Goose94	Read Replies (1) \| Respond to of 202988

Gold: Deflation Looms As Europe's Economic Bugbear It's the D-word that's pushing the European Central Bank into a corner.But it's not debt — Europe's main economic problem in recent years — that is driving speculation the ECB will switch on the printing press to help the economy. It's deflation. At first glance, deflation, which is generally defined as a sustained drop in prices, sounds good — getting goods cheaper surely warms the heart of any consumer. The problem lies when prices fall consistently over time, as opposed to temporary declines, which can give economic activity a boost. The recent sharp fall in the oil price, for example, is expected to help growth. Longer-term deflation encourages people to put off spending and can prove difficult to reverse because it requires altering people's expectations. It can lead to years of economic stagnation, as in Japan over the past two decades, or at worst, into something more pernicious, such as the Great Depression of the 1930s. The determination to avoid another Great Depression was largely behind the U.S. Federal Reserve's activist response to the financial crisis of 2008 and the ensuing recession. Former Fed Chairman Ben Bernanke spent much of his academic career studying deflation and in a major speech in 2002 — before taking the helm — he laid out a strategy to counter deflation should it rear its head again. Much of his prescription was put into action during the financial crisis — slashing interest rates to near zero and injecting new money into the economy through a program of government bond purchases. The ECB has long held off the last bit — the large-scale bond-buying — but as the risk of deflation grows in the 18-country eurozone, it is finally considering it. "Sustained deflation can be highly destructive to a modern economy and should be strongly resisted," Bernanke said in his speech. "Prevention of deflation is preferable to cure." Deflation in Action Deflation has been a rarity in modern economic times compared with high inflation, in which the price of goods spirals higher. However, both can cause economic havoc. A consistent drop in prices chokes an economy mainly by enticing consumers to delay big purchases beyond everyday needs such as food and energy in the knowledge that they will cost less down the line. Keeping money under your mattress suddenly becomes an appealing investment strategy. And faced with lower prices, businesses also make less profit and start looking to reduce costs. That means job losses, wage cuts and a growing reluctance to invest and innovate. The economy is weighed down further, prompting businesses to cut costs further, exacerbating the deflationary spiral. Deflation can also worsen public debt and that's not what Europe needs. Though the nominal amount of debt remains the same, it in effect grows because prices are lower. Europe on the Deflation Edge Unlike the Fed and many other major central banks, the ECB has held off massive bond-buying to fight deflation, not least because it is technically more difficult across a bloc of countries. However, ECB President Mario Draghi has hinted that the bank is ready to launch such a program, called quantitative easing, if needed to get inflation back toward target, though most analysts do not expect a big announcement at the next meeting on Thursday. The eurozone is not witnessing deflation at the moment though several member countries, notably Greece, are seeing sustained price falls. At 0.3 percent in the year to November, consumer price inflation in the eurozone is perilously low and way below the ECB's target of just under 2 percent. In effect, a central bank creates new money when doing quantitative easing. By buying the bonds, it can keep a lid on longer term interest rates and the value of the currency, helping exporters. And financial institutions, awash with cash after selling their bonds, can lend the money on to households and businesses. Overall, the hope is such a program stokes activity and gets rid of the deflation. In Germany, the idea is met with caution. As well as conjuring up images of the 1920s hyperinflation, there are more immediate concerns — bond-buying could lead to German taxpayers being lumbered with the debts of countries like Greece, Italy and Portugal. A belief in sound finances is as German as Bavarian beer. "What Germans are worried about right now is the cancellation of southern European debt," said Albrecht Ritschl, a professor of economic history at the London School of Economics. Deflation Stickiness What historical bouts of deflation show — from the U.S. experience in the 1930s to Hong Kong after the Asia crisis of 1997 — is that, once embedded, it can be awfully difficult to get rid of. Cue Bernanke's warning that preventing deflation is better than curing. In theory, the best option available to a central bank to deal with deflation is to cut interest rates. Lower borrowing costs can boost consumption and help increase demand for credit. But when rates are already at rock-bottom levels, as they are now in the eurozone, other methods have to be pursued. And that is where bond-buying comes into play. Its effectiveness, however, is a matter of debate. Proponents say it helped in the U.S. and Britain, where growth has rebounded. Not so in Japan, the country that can best testify to deflation's stickiness. Two decades on from when deflation took root following a stock and real estate collapse, Japan is still trying to rid itself of deflation. Over the past couple of years, Prime Minister Shinzo Abe has launched Japan's most sustained effort to combat deflation. So-called "Abenomics" involves huge amounts of stimulus from the Bank of Japan, heavy government spending and wide-ranging economic reforms. The jury is out on whether it will work — Japan fell back into recession in the third quarter.