One is paper and the other is physical. Wall Street is all about the paper reality and the mainstream press reports on the minute-by-minute price variation. Most people are influenced by the daily up and down moves, but they really have nothing to do with the big picture. For example, if you follow the charts, gold would retrace back to the $1367 level, a typical 38% Fibonacci support level. Is there any magic in this number? No, but a lot of the traders and hedge funds think there is, so it becomes a self-fulfilling prophecy. There is no guaranty that you will hit the number, penetrate it or bounce off of it, and you can’t time it. Let’s just say it’s a number of “interests.” Where did gold finish today? At $1367.70. As of 11:00 PM, gold is up $5.50 in the aftermarket. Let’s see where gold finishes the week. Above $1367 would be comforting and above $1400 would be better yet.
Another “target” for the funds is the 50-day moving average. No guaranty we get there, but it is closely watched by the hedge funds.
To me, the more important number now is the 200-day moving average at $1500.
But it doesn’t make a difference. The endgame has already been decided and you really should fight your urge to give the daily price any particular meaning.
Gold is not about a Fibonacci number. It is not about Syria. It is not about whom the next Fed head will be. It is not about whether the Fed gently tapers or not. Gold is about very different things.
Gold is about the US dollar’s reserve currency and petro dollar status. Gold is about the physical demand from China.
For the last five months, China has imported, on average, a bit more than 100 tonnes of gold.
Gold is about interest rates, which are now starting to rise. The reason they are rising is because foreigners are no longer interested in buying our Treasuries. The Federal Reserve is the Treasury’s biggest customer and they create money out of thin air to make the purchases. Take a look at the following chart from Pimco…
And here is another beauty from Zero Hedge…
The dollar cannot survive this level of monetization! And should the Fed step aside? Interest rates will rise rapidly and sink the bond market, the stock market, the housing market and the economy.
You all know this. It not only makes sense, it is absolutely a fact, a guaranty of what is to come. So what is the big deal about 38% or $1367? It is a big deal only if you trade gold. If you are a day trader in gold, you are foolish. Pick another commodity to trade, one that is not as heavily manipulated. If you understand gold’s role as MONEY, and buy it and hold it, this is all nonsense. Still, it makes many of our readers nervous. Don’t be. Look at the big picture and have a good night’s sleep.
Let’s take a less-conventional view of why we are pushing for another war with Syria. Be sure and watch the following Zero Hedge video.
Not everyone will agree with this, but you should think it through for yourself. As Judge Judy says, “If it makes sense it’s probably true!”
What’s really going on in Syria? Let’s look at the evidence from a non-mainstream media perspective…
President Barack Obama appears to be dangerously close to what would be an historic rebuke at the hands of Congress, if the current whip-count projections on the authorization to attack Syria continue to hold. Pundits on both sides of the aisle say losing the high-stakes bid for congressional authorization would make Obama an instant lame duck, and might well endanger his entire second-term agenda. The resolution authorizing an attack on Syrian strongman Bashar Assad, as punishment for his use of chemical weapons against his own people, is still expected to pass the Democratic-controlled Senate. But the real question mark all along has been whether the administration could muster enough support to get the attack resolution through the House. And there, the situation for the administration appears to be growing dimmer by the hour.
The likelihood of escalation is becoming more dangerous by the day. Below is an article from Newsmax:
Iran has ordered militants in Iraq to attack the U.S. Embassy and other American sites in Baghdad should a military strike take place in Syria, according to an order intercepted and disclosed on Thursday by U.S. officials. [Full Story]
In closing, here are a few words of wisdom from Richard Russell:
A fatal problem for Democracy — When the politicians (who want votes) give the voters everything the voters demand, things get out of hand, as you can understand after reading the paragraph below.
The following amazing statistics from The Week magazine:
In America, seven out of 10 people are on the dole, said Michael Tanner. That’s the percentage of people who receive more in government benefits than they pay in taxes, according to a new Tax Foundation study. Some of these beneficiaries of Uncle Sam’s largesse are the poor; another new study, by the Cato Foundation, found that families collecting various welfare benefits, including food stamps, “temporary” cash assistance, and Medicaid, could bring in the equivalent of $35,000 a year — more than someone would earn in a $20-an-hour job. But it’s not just the poor who feed at the trough of our vast welfare state. Most seniors get far more from Social Security and Medicare than they contribute in payroll taxes. Giant corporations get $100 billion in direct payments and subsidies from the government, in the form of farm and “green” energy subsidies, and Export-Import bank loan guarantees. The military squanders billions on weapons systems it doesn’t need, to fund jobs in key lawmakers’ districts.
–Dow Theory Letters, September 4, 2013