Friday, April 29, 2011

04.29.2011



END OF THE DAY REPORT - Gold went up and silver went down and the silver priced in gold went down lower and the gold to silver ratio went higher. A lot is going on, so to make it easy for me, I am going to put down in point form what is important and what should be covered on the weekend.

-Volume on Silver is massive as is volatility and this should signal either a parabolic up move or an intermediate term top
-Apmex is buying coins for three dollars over spot! Does this signal an intermediate top to you? If so, they probably would wait to buy or at least not give you that much of a premium
-1979 Comparison. It seems holding 150% gain is needed to not break down the comparison. 150% gain on 17.78 is around $42.00
-Price Memory within' the $40.00 range. It moved fast from $40.00 to $50.00.
Stock Market correlation with Silver prices.


GOLD IN A BUBBLE!!! HERE ARE THE SIGNS (LOL)


The signs for the gold bubble are found At this link

1- It has very few industrial uses. The author is correct in stating that the gold has very few industrial reasons which is the largest I reason I see the collapse in the gold to silver ratio to keep accelerating. The author talks big about silver how it is so much better and this is correct, however priced in silver the bubble has already burst on gold. It burst in the fall of 2008 when Gold was $700 and Silver was a little over $8.00 and the ratio is down about tho thirds in this time. When you say the bubble is bursting because it has no industrial (tangible) uses it makes me wonder when the item it is priced in (fiat dollars) has no tangible or industrial uses. I remember on CNBC when Erin Burnett said Gold has value because people believe it has value where Oil (her example used) has value. My response to this is the Fiat dollars have value because believe it does and its unlikely the trend for people believing dollars to have value to remain when debt reaches mass proportions as well as people every day waking up to how money is created

2 - Gold has no dividend yield. - Again I don't know if I should laugh or cry when I read this. The author again is correct in that it does not have a dividend yield. The author states the dividend over time can pay for the stock in itself. There does become a huge challenge however for investors to invest in stocks and meanwhile get out of dollars. When you buy stocks you are investing in dollars using a code that can fluctuate up and down that can either yield you a higher or lower return. This is like a casino game really and the kicker here is that you are forced to make your wager with a financial institution during a time when the banking system is dying.

3 - Gold has no dividend yield. - Same as the last argument for #2 and I don't need to expand on this anymore

4 - The US should start selling its gold to pay down its debt. - The debt can not be repaid based on the mathematical certainty explained so well by Peter Joseph who makes the Zeitgeist series. This was also "a should" kind of deal and I guess giving all the gold to Federal Reserve would be a good thing? As far as I know I don't see the USA selling gold to put against the debt and if they did exchange their gold for payments of the debt, where would that leave the debt? The debt explosion should happen due to awareness of such a case and more people waking up.

5 - Interest rates are at zero and the Fed is printing money - The reason why interest rates close to zero being in existence is a big reason to get out of the dollar into real assets (one being gold). This argument states that at some point they will have to raise interest rates which will thus strengthen the dollar and make gold collapse. Again I don't know if I should laugh or cry at this particular argument. Short term a correction in precious metals is very likely to occur on the increase or interest rates but in reality if this were to happen and rates go higher the economy would crash even harder and raising interest rates does not strengthen the dollar and that is a myth. The only way I know of to strengthen it is to peg the currency to real assets and in order for them to do this the price adjustments would be massive.

6 - This guy can't carry the market forever. - This part states and I quote "John Paulson and George Soros, plus billions of dollars worth of their followers, have plowed $10s of billions into Gold in the past few months. Ok, that type of buying won't last forever and is probably already finished." Speaking of stuff not lasting forever, the ability to keep multi millions of humans clueless to how money is created that guarantees debt to massive levels so many people suffer will also not last forever and as he says in probably already finished makes me feel the same way as it has now lasted over three years in this information on how money is created.

7 - Gold production is rising. - These reasons like gold production rising and the tangible uses are reasons for the supply and demand to mean lower prices. If the dollar was not in a bubble I would agree with this, but again how can you say gold is going lower in fiat debt notes when the amount of fiat debt notes is also rising at a much higher pace.

8 - Gold sentiment is at an all-time bullish high. - Just because something is at an all time high does not mean it can not go further to the upside. Does this mean when the Dow Jones Industrials broke past 1,000 making new all time highs in the 80s that it was time to sell even though it increased well over 10x in around twenty years. Can the sentiment not continue to increase? I say it can and will.

9 - Whenever we see gold sentiment at the levels in the below chart, prices tend to pull back, at least in the short-term. - There is no chart below here and if you want to see it then look at the slide show from the link above, but its funny how they (at least in the short-term.) It's kind of a way to save their butt when they are wrong. This way if it goes down 40 or 60 points they can say it went down in the short tun. I don't think this is a smart way to say markets are going lower using charts. Rather look for indicators like a declining 200 day moving average for the long term people and a declining 50 average for the mid term. When we are talking about bubbles bursting we are not talking about standard corrections.

10 - Whenever we see gold sentiment at the levels in the below chart, prices tend to pull back, at least in the short-term. - Same as the article above and I guess I should quit what im doing with chart reading because I can't understand how by looking at the gold charts it shows a long term top being set. (LOL)

11 - The Oracle is a huge gold bear - The oracle they refer to is that of Warren Buffet and their first sentence they use is "Warren Buffet is not always right" which again makes me laugh. They do say when it comes to Long term that there is nobody right than Buffet. Yes, this is the guy who sold all his silver years ago before the explosion happened (Good job Warren) This decade the Berkshire fund has pretty much doubles and gold on the other hand has only went up about 5x its level from before. Buffet maybe rich with fiat debt notes, but I don't really think he even knows how money is created and the implications fiat money has. Maybe I am wrong on that issue, but if I was then why would he sell his silver?

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