To start this blog I figured my first post should discuss gold. I want to go over something important now. The price action you see is due to the world coming to realize that gold and the other precious metals are the ultimate store of value. This limitation will be noted by me at times, and there will be time to discuss the possibility that there may be other ways to generate and store wealth. But for now we are not concerned that most gold has been mined by slaves (Aztec to Italian) for thousands and thousands of years. The gold is already out of the ground. The damage has been done.
Most importantly, and this is the crux of the issue, we must take our destiny into our own hands, and that means out of the hands of the corporations. The corporations have been the problem all along. Before now, we called them Kings and Queens, now those same families hide behind logos and own shares of the companies whose boards they run. We must take the power away from them. We do this by buying metals, by seizing that which gives the corporations their power.
I like to guess what will happen for the week ahead before it happens. Call it what you will, but that is what it will always be, a guess. My guess for this week is pretty mundane, which means we could see some really big things. What do I mean, well lets look back into the past then, for many answers lie there.
Back in April we all thought (those of us that understand what the Fed is doing is dangerous) hyperinflation was around the corner. I have to admit, even now I am surprised the markets are still functioning, if this is what we call functioning. Then out of nowhere the SEC decided they would try to kick Goldman Sacks in the pants, at least that is what we were to supposed to think. I had been riding the rally up until that point with fervor, saying everybody should pile into hard assets (precious metals) and get ready for a storm that would leave the world without viable currencies. But then once I saw Goldman in the news I knew the markets would 180. This week is not unlike then.
It is too good. Bernanke closes out around $60 billion in POMO (top of my head guess) after QE Light, and declares on public broadcasting he is considering more (which is Blackhawk speak for 'Oh Hell Yes We Print Dollars!'). Isn't his rally going as planned? Is he not happy with the results so far? We know he does not care about employment; if he had he may have considered the economy has structural problems, those advocating sustainable jobs programs. Instead this is a cyclical recession and rates needed to be on 0. Or is it? Do economists know? The answer is they have no idea, and guess what that means? Anything can happen.
With all this talk about swans I looked up what to call a group; it is a 'whiteness' and a 'wedge', depending on if they were flying in a 'V' or not. The whiteness is blinding, and people will not look away. This is important to remember for a few reasons, the most important one is, 'What do they want you to think (MSM)?' What is it about Wikileaks that is so earth shattering? First of all, they say they have bank data that could take down a Major. As you may well know, the Majors run the world; without banks there is no military industrial complex. Without banks, the economy is not pillaged. If you think these extreme examples, well, you may have some homework to do.
Without further adieu, gold this week, but remember, this is based on current technical analysis, and if the swans make a special landing, we may want to take a picnic by the lake; it will be quiet the spectacle.
Gold looks to test resistence Monday. There is no news to say otherwise. Come Tuesday I think Europe will be back in the news. Side note: As far as news goes, America will be on the back burner until the soup is burned. The US oilgarchs are horrible cooks, they have told the people they will serve the soup warm, and they are not lying. But the soup will be overcooked, well, unless people demand their soup. So with a little apprehension mid week, gold will test support, around $1395-$1400. Then by the end of the week, market participants should realize this is the same mumbo jumbo that has been going on all along, and monie should pour back to gold. By Friday the price action could break $1440.