"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput

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Thursday, September 6, 2012

"And She'll Have Fun, Fun, Fun, 'til the Bankers take the Punch Bowl Away

Pardon an old Beach Boys fan for taking Liberties with one of their classic song's titles but this popped into my mind today watching the market response to the ECB's bond buying announcement.

US economy in the toilet? No problem - new 52 week high in the S&P 500. While you are at it, give that 'ol Japanese Yen the Whack-A-Mole treatment. Time for that carry trade again. RISK ON! Damn the Torpedos, Full Speed Ahead!

I really think that some creative genius should make a spoof of the Star Trek, the Next Generation series, involving Draghi and Bernanke as a combination of the Borq Queen pronouncing those fear-inspiring words, "RESISTANCE IS FUTILE!" At least for today, the markets have been absorbed into the Borq Collective and are now assimilated. All sense of individualism has been annihilated leaving only the will of the hive supreme.

Once again the Central Bankers of the West have unleashed another torrent of hot money flows right smack dab into the commodity sector guaranteeing that higher energy prices are here to stay. Did anyone check out what happened to gasoline, heating oil and crude oil today? WTI is now less than $3.00 from the $100/bbl level while gasoline is back over the $3.00/gallon level wholesale. Keep in mind that this is well after the end of the traditional "Driving Season". Anyone expecting or hoping for a bit of relief at the gasoline pump should get disabused of that notion.

Gold and Silver of course wasted no time in promptly blowing right through overhead resistance levels on the chart as the metals are now functioning exactly as they should function whenever a set of Central Bankers decide to further debauch their currencies. Take a look at gold priced in terms of the euro, or Euro-Gold. It moved within 14 euros of its all time high. The ECB's actions are certainly not being lost on European based buyers of the metal. They know damn well what this idiocy is going to precipitate.

Incidentally, Euro Silver has broken its downtrend and looks as if it wants to make a run towards the 28 Euro level. I would venture to say that if it breaks through that barrier, we will see $40 Silver here in the US.

Moving back to the US-centric view, one thing that I am watching that in my mind is even more significant that gold clearing the psychologically-important $1700 level is the fact that this occurred as the HUI has managed, FINALLY, to clear that huge overhead resistance level of 460. This level has held the miners in check since April of this year as any and all attempts to better, up to now, have failed. If the HUI can hold onto its gains into the end of the week, we should see it run to 480 whilst many of the miners reflect breakout patterns on their individual stock charts. A push through 480 sets it up for a run above 500 to 510 or so.

It is always more constructive to see BOTH the mining shares and the bullion markets taking out overhead resistance levels at the same time on their price charts. One has to be a bit more careful when bullion is moving higher while the shares are languishing.

By the way, some of today's market chatter is that the stronger ADP private employment data, combined with the action by the ECB, will make it much easier for Bernanke and company to say "NO" to another round of QE3 right away over here. That is where some of the profit taking in gold and silver is coming from. Let's watch and see how things settle out by the end of the day.


  1. $1700 is a nice milestone, but in the short-term it may just serve to pull in greedy short-term gamblers and dumb money. I am staying long and strong, just not adding right now.

    I primarily use cycles, and at the moment gold is on week 16 of an intermediate cycle. If that's correct we can expect an important low to come within 2 to 5 weeks. Charts here:


  2. Good day Dan, This is the Post Obama Speech rally. Just for a chuckle turn on the Idiot Tube and tune into one of the main MSM news stations and listen.
    Everything is coming up Roses for the " One " on his night of pure rhetoric.

    I bet 1oz AG tomorrows UE number comes in at 7.9 ( and the crowd cheers )


  3. Crappy jobs report results in surging bank stocks and crude oil getting crushed again, all for the sole purpose of sending the XRT and XLY to new record highs.

    The U.S. consumer seems to be completely unflappable in the face of Europe's problems, chronic unemployment, record food stamp usage, and all the rest.

    Gold's huge move today along with the repeated panic buying of U.S. Treasuries assures that ample liquidity and cheap credit will be here indefinitely, thus fueling yet another huge spending boom while our infrastructure collapses.

    Evidenced by the world record highs being reported in Apple, ULTA Salons, etc. while basic materials stocks like U.S. Steel are trading at depression era lows.

    Come hell or high water, the consumer is going to buy the latest iPhone and the new Apple TV, even though he has no job and the roads and bridges in his neighborhood are decaying.

    Thanks to the "Infinite Fiat Firehouse" operated by Ben Bernanke.

    1. Crude oil and gas online is very important and its Main features is to save it and also gold and silver price is always increase so Preserve it.



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