Sometimes I give the money makers a little credit, and I will today. I think gold will test support at $1407. I think the world is still brainwashed enough to not do their homework and figure out gold is monie before peak oil production is priced into the supply side of the equilibrium equation. People will most likely not buy in on these low prices, because it will only be a few weeks before gold spikes above $1440 for the last time.
Silver will pull back one dollar or so by Friday, before lurching forward and breaking off $36. Platinum will likely touch $1800 one last time, presumably during an Asian trading session, as it has been then when the Trinity corrects best. Oil is likely to stay above $100, as the House of Saud jockeys for position heading into the final turn.
Sunday, March 6, 2011
Friday, March 4, 2011
Bank on Gold
Today gold and its sisters Trinity are up big. The reason for this is simple: The banking industry had to leverage gold up to support their balance sheet. To stay solvent, while the rest of the world's assets were plunging, banks must loan their gold out, and this increases its value. Gold became worth more to keep the clock moving, and people want to play this game all night. The can is gold, and it will be kicked down the road as long as it has to.
Banks hold gold as an asset and subsequently loan it away. It is the first loan of recourse; the chief investment. Then the money earned from this is used again on loans. This improves the asset side, and expands growth. If gold is not loaned away, then it is used as a liability.
Banks spin this how they need to. When they need leverage, they loan gold, and earn revenue used to make more loans. If they choose, they can also sit on their gold. This is how a lot of the supply and demand has been created, until recently.
The movement into gold as a store of wealth instead of investing in paper assets is only just getting started. The market is small, and the increases into it will expand somewhat exponentially. The big question is, 'When will demand be greater than supply?' For gold this could happen quite quickly. In fact, it may have already happened.
Banks hold gold as an asset and subsequently loan it away. It is the first loan of recourse; the chief investment. Then the money earned from this is used again on loans. This improves the asset side, and expands growth. If gold is not loaned away, then it is used as a liability.
Banks spin this how they need to. When they need leverage, they loan gold, and earn revenue used to make more loans. If they choose, they can also sit on their gold. This is how a lot of the supply and demand has been created, until recently.
The movement into gold as a store of wealth instead of investing in paper assets is only just getting started. The market is small, and the increases into it will expand somewhat exponentially. The big question is, 'When will demand be greater than supply?' For gold this could happen quite quickly. In fact, it may have already happened.
Thursday, March 3, 2011
Next crisis, Please
So now that Team America, lead by an ignorant man named Barry, thinks they can solve the world's perceived problems by rolling out guns, what will the next State to fall be? Pakistan? The House of Saud? Will the US be able to police the world?
Egypt seems to have figured out how to topple a dictator. The world, especially the US- where the Federal Reserve is above the law, should take note. Peaceful protests can change a regime. Believe that.
Gold gets sold off on the news the US will invade. Was this Libya saying 'Uncle' and selling some gold contracts to the IMF/World Bank? I think that gold is consolidating right between $1400 and $1440 nicely, most likely in part of panicked selling by dictators on the run.
It should not be more than a few more days before gold breaks $1440 and never looks back. Platinum, silver and oil will all go along for the ride. The situation will begin anew on any oil production problems. With the producing states in turmoil, I would say that it is most likely that oil will continue to rise higher.
All this and the MBS and Muni crises have not begun in earnest. This and the dollar as an instrument and tool of finance is fading into history. Fiat sure looks to get made out to be a scapegoat after this is all done. Each state of the world has a problem, or two, and none of them are being resolved correctly. Hedge accordingly.
Egypt seems to have figured out how to topple a dictator. The world, especially the US- where the Federal Reserve is above the law, should take note. Peaceful protests can change a regime. Believe that.
Gold gets sold off on the news the US will invade. Was this Libya saying 'Uncle' and selling some gold contracts to the IMF/World Bank? I think that gold is consolidating right between $1400 and $1440 nicely, most likely in part of panicked selling by dictators on the run.
It should not be more than a few more days before gold breaks $1440 and never looks back. Platinum, silver and oil will all go along for the ride. The situation will begin anew on any oil production problems. With the producing states in turmoil, I would say that it is most likely that oil will continue to rise higher.
All this and the MBS and Muni crises have not begun in earnest. This and the dollar as an instrument and tool of finance is fading into history. Fiat sure looks to get made out to be a scapegoat after this is all done. Each state of the world has a problem, or two, and none of them are being resolved correctly. Hedge accordingly.
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