“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)


"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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Monday, December 1, 2014

Moody's Cuts Japan's Credit Rating

Moody's Investors Service, a credit ratings firm, cut the credit rating of Japan one notch this morning to A1, down from Aa3.
This has further spooked gold bears and we are seeing a rash of short covering in the gold market as a result.
Let's see how long the impact from the Moody's decision will last and whether or not it can attract any concentrated NEW buying.

42 comments:

  1. Perhaps a sign of new buying would be if it can punch through that stubborn 1200 plateau.

    ReplyDelete
  2. Would like to set the HUI outpace gold by 2.5X margin at least. Gold up 4% so far yet miners only up 6%. Let's see how they close. Remember AISC is about 900-1000, so any move in bullion will have a huge impact on cash flow.

    Hold on to breeches, kiddos. This is going to be a volatile ride. When deflation really gets going then gold will soar, nominally and in real terms.

    ReplyDelete
  3. What a performance by gold thus far. Was a nuke dropped somewhere?!

    ReplyDelete
    Replies
    1. Its been a nice pop but i dont buy it.

      Delete
  4. Moody's is not pronouncing anything not known by everybody anyway, the yen is trash. The market is rigged, the syndicate is just reaping some over exuberant shorts on the Swiss no vote.

    ReplyDelete
  5. FINALLY gold is being manipulated UP for once. I was so tired of it being manipulated down. ;)

    ReplyDelete
  6. Wow...that was some pretty crazy action since last nights initial plunge!
    That might've been the most dramatic and unlikely reversal I've seen in a long time or maybe ever.
    Given the Swiss vote, the Japan downgrade and the first of the month hedge portfolio's that were rebalanced I'm not sure how long todays gains last or if it's just another December end of year ramp.
    No shortage of curveballs out there or beanballs just waiting to happen.

    ReplyDelete
    Replies
    1. Welcome to the world of computer algo trading. I find it comical that the Moody's rate cut on Japan was initially more damaging to the dollar than it was to the Yen. Talk about lunacy........

      Delete
  7. I'll be happy if 1200+ sticks into January. I want to sell some more coins in the new tax year.

    ReplyDelete
  8. Anyone with half a brain shouldn't give a damn about Moody's ratings. They are completely unreliable & incompetent shills as history has proven. The crazy swings in the price of commodities over the last few weeks are the result of computer algos going mad in a low volume environment. Algos and markets which clearly have no relationship to the real world. Markets are on the edge of meltdown and year end balancing will no doubt make it worse. Suggest no position is the best position at the mo.

    ReplyDelete
  9. Eric, why did you buy them in the first place?

    ReplyDelete
    Replies
    1. A long term hedge against uncertainty and disaster. I no longer think they serve that role particularly well. I find myself overallocated.

      I now realize the best hedge against uncertainty and disaster is to be nimble, and to not be dogmatic about anything. Even in the teeth of disaster, there will be a trend in something, and I intend to identify it and ride it as best I can. But there's no way to know ahead of time what it will be.

      Also, with metals, I find the people involved in the metals industry to be completely distasteful. I don't want to be associated with these charlatans and agenda pushers in any way, shape, or form. Even to the point of being uncomfortable with a small token, such as physical gold, being present in my house. It turns my stomach. The only joy I get from metals now is picking out which coins are next to be sold. Begone!

      Delete
    2. Eric, I doubt they are any more distasteful than other financial pundits. Where there is money there will always be dishonesty and corruption.

      Delete
    3. Eric O, I was wondering if you feel the same way about silver as you do about gold? And if so, what about silver's role in technology, energy, medicine, water treatment, etc. and on all of the yet to be discovered uses for this unique element?

      Delete
    4. This comment has been removed by the author.

      Delete
    5. From the perspective of owning physical metal, I like silver even less than gold. I've been there and done that, and I found I really didn't like the weight and bulk involved with having a significant amount of money involved with silver. The more silver I acquired, the more I started to think, "This is silly."

      The bigger picture for silver lies entirely in it's potential as an industrial commodity. Let me emphasize: Commodity. I'm not impressed with claims about silver being money, 3000 years of chinese history, blah, blah, blah. And whenever I see the phrase "constitutional silver", I immediately write the author off as a nutcase. But anyway, as a commodity, the most optimistic thing I can offer is to paraphrase JP Morgan's quote : It will fluctuate.

      Better to monitor things and try to ride a trend now and then rather than to lay in a supply and wait. You could be waiting a long, long, time for a new run in silver.

      As for new applications, yes maybe, but human ingenuity, combined with your hopeful higher prices, generally result in them finding ways to do the same critical thing with smaller and smaller amounts of the stuff. So, you are back to the same situation as most any commodity.

      Delete
  10. The big question is whether there will be any follow through on gold's huge rise. Even if gold holds above $1200 the shares will go up for a while. However, I expect gold to slither down below $1200 quite soon and shorting the shares will be very profitable. Alternating the etfs JNUG and JDST these past few weeks has been an amazing investment, and I think one can expect more of the same. Wait just a little while for JDST. After a big washout, in the not very distant future gold will rise like a Phoenix from the ashes, because our economic situation is parlous beyond words, but no one wants to see it, so they invent every imaginable nonsensical reason to pretend we will come through unscathed.

    ReplyDelete
    Replies
    1. Isn't shorting the gold shares at this point picking up nickels? Isn't there more risk than reward? What if a central bank announces a gold operation? That little 300 dollar runup last week over a hour might have been a test run. Rather than announce a bid/ask around 5000, they might run a a stairstep program in which the price methodically ascends by ten cents a minute. After a few hours the paper shorts will realize something un-natural is happening and the CB's are giving them a chance to minimize losses at much lower prices. It could start off a ten cents a minute then after a few hours and the first 1000 dollar rise then the ascent angle could be tapered to 100 bucks an hour to allow for a more orderly adjustment. Then whenever the ultimate price band is the CB's want it, the grip can be loosened allowing for a new adjusted paper gold halo to manage the new equilibrium price. Just speculation.

      Delete
    2. From my own perspective I do it mainly to protect the profits of my actual physical gold which I bought a long time ago. However, as a secondary consideration I play the gold market up and down using these very convenient etfs JNUG and JDST? Gold in all its forms is the only investment I am comfortable with and I have worked with it for more than 30 years. When I strayed off into the NASDAQ in 2000 I paid the price. To each his own.

      Delete
  11. One ominous fact to consider is that if oil continues to fall it could have a bad effect on the other markets such as the S&P and the DOW. A substantial percentage of these markets consist of oil and gas related stocks. Also, the falling oil price raises the specter of deflation, the currently perceived bogeyman, whether real or not.

    ReplyDelete
  12. I found the results of Dan's PM poll very interesting. I was one of the 5% who said "The bottom" was in. Markets will do their best to inflict the most pain on the maximum number of participants. The folks who thought that "The bottom" was in was the one of the smallest groups. Its worth thinking about.I think we continue to rally from here. I'd not be surprised to see gold yet another $40-50 straight up higher tomorrow. Everyone is convinced its never going to go back up. Trust me it will fool the most it possibly can.

    ND

    ReplyDelete
  13. Hi Dan,
    I've been watching whipsaws in Gold and here's my observation.

    Manipulation is more in Gold futures and when US markets opens, it's pure reversal.

    It looks like BIG BOYS in US market wants gold to go up. I may be wrong.
    But currently , this seems to be the case

    Thx

    ReplyDelete
  14. I was waiting for a bounce on gold at 1243. Look at the daily bollinger bands.
    This is a range here, between grossly 1140 and 1220. That's it.
    Gold chose to bounce also because imho WTI bounced on the area of the mlh inf weekly andrew's fork pointed last week (66 area). Again, watch chart.
    There is no rallye as long as 1220 is broken, i.e the sup bollinger band daily time unit.
    Greedy shorts have spiritual experiences, just as bulls sometimes.
    But it's too early to know if it's again a one day wonder.
    I'll wait for a confirmation that the bulls are back.

    ReplyDelete
    Replies
    1. Good to hear from you HDH.
      Will I see you on the other site?

      Delete
  15. Agree with this, Kkandru, pontifical blessing gives green light to gold. Why? Because rising gold prices give anti-deflationary message, and is anti rising dollar. After initial fall, gold may well be allowed to go up, as there is presently absolutely no reason to keep it suppressed.

    ReplyDelete
  16. It is interesting that after an early fall below $1200 gold is now back above it. If $1200 holds today I think I would have to change my view that gold will fall back. If it does hold we could be off to the races.

    ReplyDelete
  17. TRX at 90 cents. 20 cents more down and the GDXJ will b dropping it from the index. GDXJ owns some 14 million shares. Poor certificates holders.

    On the bright side, at these prices, Steven van Tongeren will be gifted some 500.000 shares per year. Joseph Kahama will be gifted some 400.000 shares per year. Jim Sinclair will be gifted some 200.000 shares per year. Hey even the corporate secretary will be gifted some 120.000 shares per year.

    If this company will survive its management, management will own it.

    Hows that for GOTS?

    ReplyDelete
    Replies
    1. Jims response is tgat you can call h8m and hell hold your hand and most likely will tell you things that cannot be in a press release.

      My Dear Extended Family,

       

      If you are looking for answers to questions recently raised, I invite you all to contact me directly. I can be reached at the following numbers:

       

      Office: 844 364 1830

       

      Cell: 860 671 0846

       

      Bloggers using false names, social media or chat sites have their own agendas, and it clearly is not to bring our true operations to light.

       

      Two short movies of gold enriched material on the leach pads are now posted on our corporate website. They can be viewed at - insert link

       

      Respectfully,
      James Sinclair
      CEO, President

      Delete
  18. If you still wonder what T.A is worth and why I'm using Andrew's pitchforks...

    [IMG]http://i60.tinypic.com/1497711.jpg[/IMG]

    http://i60.tinypic.com/1497711.jpg

    ReplyDelete
  19. The dollar chart is very impressive. I wonder where the Fed would like it to trade. Yellen did mentioned something about a strong dollar.

    ReplyDelete
    Replies
    1. Can't see it being great shakes for the economy. They need to export not import.

      Delete
    2. Dan

      I am curious if you've reversed your former opinions on gold yet?

      Delete
    3. NicolasDravas
      Let me jump in here. I'll not re-publish Dan's work from the paid site (Trader Dans World - link in the upper right corner of the page).

      I will try to make you aware of Dan's position and that of many here. This is a blog about trading, that means short term.
      Read the price/volume charts and follow the trends. Go counter trend at your own risk.

      Dan has stated that he holds gold as insurance against a collapse of the financial systems. Many of us here are in the same position.

      Whilen we trade, gold, silver, copper, uranium, feeder cattle, pigs, corn beans coffee etc. are just commodities worth what the market will pay, no more and no less.

      Dan will change his opinion when he has new evidence.

      Belief in the value of gold and other faith based notions are a fools errand and set you and me up for big losses.

      Gold right now is in a four year down trend. Yes there has been some action that MAY portend a bottom but it only a slim possibility.

      Want to buy gold, wait a while. Make darn sure the bottom is really in. then wait some more. We already have had several false bottoms and given the world situation this could just be a pause.

      The US Dollar is strong, the Euro is weak, Abe is trying to make the Yen weaker still, the Russina Roble is toast. The list just goes on an on.

      The US Dollar for all our problems is still the cleanest shirt in the pile of dirty laundry. It the obe people are trying really hard to get in. This will continue to for gold and all the resources to yet lower lows until there is some concern about inflation in the USA or some big time Black Swan lands. Until then keep you money in your pocket.

      JMHO.

      Mike

      Delete
  20. Tommorows ECB decision will be key to see where markets are headed in the short term, maybe long term.

    Or will draghi pull another drahgi ?

    ReplyDelete
    Replies
    1. Another Draghi moment and they'll wait until early 2015 to implement their plan.
      I don't see the ECB upsetting the market apple cart before years end when trading is traditionally lower in volume and most people or corporartions have their year end tax strategy already in place.

      If they did so tomorrow I think the volatility would be incredible.
      It seems like the EUR action today is telegraphing something upcoming.

      Delete
  21. Gold is now fair set and should enjoy a substantial rise from here, with the battered gold shares finally coming into their own. This will probably coincide with a lengthy correction in the dollar, and also the main markets. Tomorrow will probably clinch it.

    ReplyDelete
  22. Abe is already warming up his Yenzooka.
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~

    "Japan’s Abe set for landslide victory, polls suggest"

    By Peter Landers
    Published: Dec 3, 2014 8:17 p.m. ET

    TOKYO — Prime Minister Shinzo Abe ’s ruling Liberal Democratic Party is poised for a landslide victory in Dec. 14 parliamentary elections, polls by Japanese news organizations said Thursday, a result that would give Mr. Abe a mandate to pursue policies such as opening Japan’s agricultural markets.

    The polls by the Yomiuri, Asahi and Nikkei newspapers as well as Kyodo News service all said the LDP was set to gain around 300 seats in parliament’s 475-seat lower house, which selects the prime minister...(cont.)

    http://www.marketwatch.com/story/japans-abe-set-for-landslide-victory-polls-suggest-2014-12-03-201031741

    ReplyDelete
  23. Draghi dithered. Again. The man has no balls.

    ReplyDelete
    Replies
    1. It's all become rather silly hasn't it?

      In other news a significant milestone has been reached as China has surpassed the US as the worlds largest economy.

      http://www.marketwatch.com/story/its-official-america-is-now-no-2-2014-12-04

      Delete
    2. Draghi has been playing this game for almost 2 1/2 years. He is the best central banker around. Look at their yields.

      Delete
  24. "'scuse me while I kiss the sky!"

    JPY hit 120
    USD hit 89

    ReplyDelete
    Replies
    1. Adding to China news,chinese investor confidence in the stock market rose to a record high in November after a strong performance. This may well go on

      Delete

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