"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


Thursday, December 8, 2011

Up and Down we Go - where we stop nobody knows

Yesterday gold was anticipating a stronger policy response coming out of the upcoming meeting in Brussels dealing with the sovereign debt crisis in the Eurozone. That brought buying back into a host of markets as well with equities rallying and the risk trades back on in full force. Today? Well, that was yesterday.

Once current ECB President Draghi basically squashed the idea of large bond purchases by the ECB, the market promptly threw away everything it put on yesterday totally reversing the risk trades as disappointment that the liquidity punch bowl was not going to be spiked as strongly as most were expecting took hold.

This madness will continue as long as uncertainty remains with traders seizing on every single bit of news to cram gobs of money into the markets or yank those same gobs back out again.

At some point it will resolve itself one way or the other but until it does, up and down is the order of the day. Perhaps something will come out of that meeting in Brussels tomorrow but who knows at this point.

As it now stands, gold remains mired in its coiling pattern. Notice how the downtrending upper resistance line is holding rallies in check.


  1. I thought pretty much Armstrong was dead on in his assessment of the cure, but the correspondent at BI Simone Foxman almost quotes Armstrong word for word here: "Let's face the facts: the only plan that EU leaders are going to be able to agree to that would keep the eurozone together is eurobonds."

    Read more: http://www.businessinsider.com/one-solution-to-the-eurozone-crisis-short-term-2011-12#ixzz1fyU0mdVQ

  2. Going to be tough to talk Germans into it after fiscally "untrained" southern states are. I bet a few of the lesser trained states are let go. I also am unsure of the ECB is a "all for one" and "one for all" type of printer. It is clear to me that until there is some type of long term plan, Rating agencies are going to jack up their borrowing costs, making this long drawn out project rather "deflationary" on all assets. First commodities, then stocks. Certinly stocks will suffer less as that is the Central Planners plan.

  3. Dan, some of the ETFs are listed as trading on NYSEARCA instead of NYSE. What exactly does that mean?? Many thanks!

  4. FCM's and the largest holders..GS? JPM?
    Hopefully it all gets worked out. Wonder why som many people are pulling their money? Same people who hold an awful lot of the naked gold and lease positions.

  5. Forgot to add. Dan, some how and for some reason I found you, Sinclair, Turd,Weiss, and Edelson. Then came Sprott, the big M and many others. The Big E has cost some oppty losses, but never lost real money. Jim, Turd, eternal optimists. You, a real technician. Combining all, I would say they give a layman with some curve analysis backgound a "fighting chance". Anyhow, required reading on Jessee's site gave me more insight into the controlled market we are playing into. A fighters chance is better than what I started with and I thank you. Article on the gold open interest market you wrote some time ago provided great insight.

  6. you still have a triangle if you take the lowest point of the recent low, and then we are already at the end of the triangle. What next? Usually nothing, when you go to then end of a triangle without any direction, it often means more uncertainty and no direction later on for a while. So I expect this stalemate to keep going further until year end.
    As for Europe, what about this :
    countries like greece, corrurpt, bankrupt, with 30% of population paying no taxes at all, will be 100% bankrupt, so bad for the banks, so bad for Societe Generale and Co, but there will be no more useless QE for those broke countries. They will remain in the Euro Zone. Noone will lend them money anymore, as they are bankrupt and they erased their debt. So what? They will drown? So what? It's unevitable anyway, and it can only be worse if it spreads to the whole EU.
    I guess germans may eventually leave the euro, but not now. They are not ready, they are not prepared yet, it would cost too much. They'll wait if they must leave. QE to infinity is unlikely to happen in Europe, thanks to Germany, unlike US, and I think it's rather a good thing.
    The city and the apple do everything they can to turn the eyes away from the situation in the US and UK. Truth is they are just as broke as EU, but do nothing to even try to dampen the situation or reduce their deficit whatsoever. We'll see eventually who will pay the bitter price. Sad sad times, and quite dangerous.
    I just hope this doesn't turn into foolish wars anywhere.

  7. Not so sure Asia is ready to rock n roll too. I think the world has seen enough QE's to infinity everywhere, even in the den of inequity and ingenuity, for now. Won't last forever, but as Mr. Bass so eloquently stated, bankruptcy is to "capitalism" as heaven is to hell. I would not count out the Americans. Somehow, someway, we have done our share in this world. I think their is a country over there near the Arc de Triupmh, someone saved. I think we all need to re-evaluate the world. And quickly.

  8. If not, the team captains will change, as well as the playgrounds. I am not so sure I like the alternative playgrounds.

  9. What is the Fed to do ?
    What is the ECB to do ?
    What is the USG, Germany, France, Britain to do?
    Buy PMs, BUY.


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