I have received a lot of criticism and the old “rolled eyes” from friends and relatives when I tell them that it doesn’t matter which candidate wins the upcoming Presidential Election. I maintain that the problems are beyond fixing. Backwoods Jack and his wife Judy are giddy over the prospects of Paul Ryan and his vast knowledge of things financial. They are convinced he can fix the economy. When I disagree, they can’t understand why.
On Wednesday, I came across an article in Newsmax written by economist and humorist Ben Stein and his views gave some credibility to mine, not that I need any.
Don’t Rely on Politicians to Fix This Mess
President Barack Obama and Governor Mitt Romney are not stupendous geniuses about economic policy and even if they were, even the stupendous geniuses do not know how to get out of this endless economic slowdown. We have an idea of how not to let it get to a disaster. Don’t let any more banks fail. Don’t let Europe collapse in a heap. Don’t dramatically raise taxes during a slowdown. But we don’t know hot to get the whole thing partying like it’s 1999 or 1998. Our knowledge of how to recover from a financial meltdown just is not yet that advanced.
Do not think you have a God-given right to live lavishly. Get a good education. But put not your trust in princes or presidents. No politician is Moses. Politicians are just men and women who put on their trousers one leg at a time. They cannot part the Red Sea.
It’s the same old, same old with me – always too early and people just don’t want to listen. Yes, I am early, but at least I see the trends and it’s better to be early than late.
The gold to silver ratio is coming down.
It’s currently 54.84, but was over 59 just one month ago and 58 just a few days ago. In the last five years, the ratio has been as high as 80 and as low as the low 30s. I expect the ratio to eventually fall back into the 40s or lower.
The market expects more quantitative easing and it reacted accordingly today. Silver rose $0.73 an ounce to $30.56, the first time it has been above $30 since May 3. Just eight days ago, silver was below $27 now it has gained 13.5% in the last two weeks. Gold continued its rise, closing up at $1,672 an ounce. Gold sits at a four-month high, and it now has moved above its 200-day moving average. This should signal the technical traders to go long and add fuel to the fire. Two more “up 1%” days and gold will top $1700.
LeMetropole Café on today’s gold and silver move:
8/23 Gold And Silver Continue Breakout/2% Rule Invoked
Both gold and silver stormed out of the box, continuing their stunning rallies of late yesterday. Gold make it all the way to $1675, while silver leaped to $30.85 (Kitco price) … and THEN, The Gold Cartel put their foot down, implementing their 2% Rule, as the manipulation farce rolls on. How ridiculous has this become? Take it away James Mc…
Looking to blast through $1,673.30
Bill, As you know the only numbers I look at for gold resistance are the 1% and 2% caps. All other alleged resistance levels are meaningless in the context of these daily percentage caps. Today’s cartel nut to crack is $1,673.30 basis Dec. That is +2%, and stopping there will once more show the cartel is still in managed retreat rather than a full-blown rout. So far the high tick today is $1,669.70, or +1.78%. Based on the early silver strength I wouldn’t be surprised to see a quick push up to +2% later in the day, with the usual resistance at that point. If as you think silver is getting ready to blow then the cartel might have their toughest time in recent memory keeping gold percentage management in place.
The best, and only reason I can think of for JPM to have kept up silver rigging for all these years is the fear of collateral damage in the gold market. Silver in of itself is relatively meaningless, and any losses could be quickly papered over. I don’t think anybody would really care much about $70 silver. If, however, the BIG dot gets connected that the GOLD market is also a fraud then all hell will break loose.
For me on any given day blasting through +2% is all I really care about. The GATA rockets will truly go into hyperspace when percentage controls no longer work. JMc
Damn I’m getting good…
“Today’s cartel nut to crack is $1,673.30 basis Dec. That is +2%, and stopping there will once more show the cartel is still in managed retreat rather than a full-blown rout. So far the high tick today is $1,669.70, or +1.78%. Based on the early silver strength I wouldn’t be surprised to see a quick push up to +2% later in the day, with the usual resistance at that point.”
…… Pretty damn close, eh? After slightly overshooting +2% here we are at 1:15 PM dead in the water at exactly +2.00%.
The correct answer is, A) still a managed retreat. Too bad the CFTC board can’t trade for their own accounts. Even if they refuse to act they could still be making a fortune off of a rig job that is on full, and public display. JMc
later in the charade…
One hour later…. dead at $1,673.30…. The cartel sell algos chewed up the buys so it’s now fine-tuned for the day.
Methinks they’ve got notions of a “down, hard” in the offing the way gold stocks got hit.
If so I’d be buying this down, hard like crazy. Silver still STRONG. JMc
Yep, gold closed up 2%. In the silver pit JPM put a lot of pressure on silver late in the day, taking the price way off its highs.
The gold open interest rose 6548 contracts to 405,295, which is still very low. The silver open interest fell 907 contracts to 126,869, which is still relatively high.
Retro a bit about the powerful gold and silver charts. It is almost too good to be true, but it is. BOTH the technicals are fundamentals are ragingly bullish…
Gold has broken out of a MASSIVE base … and out of a giant pennant formation and reverse head and shoulders bottom. Bases such as this one can support mega moves to the upside from a technician’s viewpoint…
Subscribe to LeMetropole Café to read the full article
Richard Russell presented his target for gold:
Gold may finally be on its way to higher levels.
Examining a “point-and-figure” chart a half-hour after the release of the minutes yesterday, he wrote, “Gold has risen to fill the $1,640 box, which is constructive. The next bullish action would be a rally to the $1,650 box.
This would take gold clear out and above its consolidation base, and would put it in line to try for $1,680.
Subscribe to the Dow Theory Letters for the full article.
Bill Gross is upping his gold exposure:
Pimco’s $20 billion Commodity Real Return Strategy Fund is upping its gold holdings from 10.5% of total assets to 11.5%.
Nic Johnson, fund manager, says, “We think gold is going to perform in a positive correlation to changes in inflation.” We see higher inflation because of rising commodity prices, unconventional monetary policies and increasing sovereign debt.”
Read the full article at AgoraFinancial.com
Frank Holmes says:
“The official sector continued its gold-buying spree this quarter.”
“The WGC [World Gold Council] reported that central bank purchases hit a record high since the official sector became gold buyers three years ago,”
Central banks made up 16% of total gold demand during the second quarter… [and are now a major factor in gold’s current move up.]
Continue reading at AgoraFinancial.com
Jim Sinclair released an important bulletin Thursday afternoon:
Huge Stimulus Fast And An End To The Fed/Legislative Standoff
August 23, 2012, at 1:45 pm
by Jim Sinclair
Stay the course! The current pressure on gold shares by hedgies is because Romney says, if elected, he will fire Bernanke and will not want to see QE 3.
Now what impact does that have to have on Bernanke? I would say he now really wants to see Obama elected. That speaks very well for huge stimulus fast and an end of the standoff between the Federal Reserve and the US legislative.
The hedgies hate gold so they interpret Romney’s statement bearishly. In truth it is the opposite, bullish for gold.
Bernanke has been considered good for the dollar up to now as much as that is mistaken.