September Song
The time has come. Look to the skies. ~ The price of gold is on the rise. ~ In bullish years, on Labor Day ~ The price of gold becomes in play.
Autumn in New York
The two biggest headlines in the New York Times over the course of the 20 th century were Pearl Harbor and the landing of men on the moon. The “financial crisis” of 2008 was only slightly behind these two in size of headline and quantity of space. And it surpassed them in frequency of repetition. Both Pearl Harbor and the moon landing only happened once. But the “financial crisis” of 2008, not being a real event, could be strung out and reported over and over.
Buy Low
Here is the problem. The client has not come to appreciate just how ignorant and irrational today’s media is. You can count on it. The media will speak with one voice and with great confidence. They will be humiliatingly and embarrassingly wrong, over and over and over. And then they will refuse to acknowledge their horrific error.
Hyperinflation
The last part of “hyperinflation” is “inflation,” and this is perhaps the most important part (because it receives the least comment). If we examine the word “inflation” as it is used outside of economics, then it always means a going up. For example, one inflates a balloon or an inner tube. Always it refers to something which gets bigger.
Requiem For Barron’s
Strangely enough, some people in the gold bug community try to erect a wall between gold as an “investment” and gold as a political issue. “Investment” is in quotes because the abolition of the gold standard means that no investment is possible in the world anymore (with the possible exception of Switzerland).
The Coming Rise in Prices
Last week I argued that the theory of a coming decline in prices just around the corner was a balloon full of hot air, and like all such balloons it was bound to sail into the atmosphere. So far from this “deflation” theory being true, it is a deliberate falsehood and in fact is a very good indicator that the exact opposite will happen.
Bad Day for the WSJ
As with any misinformation, one must make a distinction between a deliberate lie and an honest mistake. As I have studied this, it is clear to me that, at the very top, it is deliberate.
The Chart is True
Today I wish to continue my theme that the theory of “deflation” propounded by the media in late 2008 is the main enemy of speculator profits at this time. I have argued that the theory is false a) because there is not the slightest evidence of declining prices and b) because there is enormous evidence of a massive rise in prices to come (perhaps the greatest rise since the depreciation of the American continental from 1776 to 1780).
What’s Next For Gold?
“All around him there is just one opinion. He never hears the contrary view. He does not know that there is a contrary view. Soon the vast majority of the country is of this one opinion.”
The Art of Speculation
The issue of investment versus speculation is much more important than you realize. Almost everyone, except for me, will tell you that you are an investor. But an investor is someone who wants to put his money to work (meaning either earning real interest or a return on capital such as dividends on stocks or rent on real estate). The speculator wants to make a profit by buying low and selling high.
Charting Gold
Of the various technical theories on the markets, my criteria for deciding which ones to use is based on what works. And I have found the best results with the chart patterns described in Technical Analysis of Stock Trends by Edwards and Magee. These are simple, geometric patterns with forecasting implications.
The Trend is Your Friend
Most market trends are caused by large-scale forces too big for most traders to comprehend. They wind up assuming that current prices are near the fair price, and they are reluctant to pay more. This reluctance slows down the bull trend, but the fundamental, large scale force keeps tilting the balance to the upside. In effect, the idea of a fair price keeps the market undervalued for a long, long time.
Gold and the Budget Deficit
The importance of this [budget deficit] for the price of gold lies in the fact that any deficit of any size in any democratic country is not financed by borrowing the money. It is financed by printing the money.
GREECE – WHAT JUST HAPPENED
Then what was this all about? Why were markets rushing up and down? Why were the newspaper headlines screaming? Why was there violence in the streets, with people being killed? Everybody wanted to borrow, and nobody had any money to lend. That, of course, is the way of the world. If you don’t like this fact, then I suggest you take it up with the Creator of the world.
NEW HIGH IN GOLD
The important technical accomplishment of this week is the break of the Dec. 3, 2009 high at $1,225. On a long term chart, this reaffirms the long term gold bull market. A bull market is defined by a pattern of higher highs and higher lows, and the new high is now in place.
HOW NOW DOW JONES?
Either Ben Bernanke will choose to follow Rome and destroy his society, or he will stop the currency debasement before it gets to that point. Here your guess is as good as mine. If he stops it, the stock market will probably return (in real terms) to its 1982 level.
READY TO EXPLODE
The coming short term market period should be very exciting. Gold should now mount its assault on its Dec. high. If this can be breached, then the pattern of higher highs and higher lows will be reaffirmed.
THE FALL OF THE EURO
Many a weekend since the beginning of the year has been occupied by a “crisis” in the euro. But this weekend’s “crisis” seems to be the mother of them all. As such, it will probably put an end to them, and the gold market will pull out of its funk and resume its bull trend.
SCAREDY CATS
Well, what is it? Is gold moving sideways, or is it moving up? And this is not just a matter of semantics. The question is being asked from the very practical viewpoint of how do I make the most money?
SPECULATE IN GOLD
The explosive move in gold which I have been predicting for some months is now under way. He who hesitates is not lost, but he does make smaller profits. You have undoubtedly heard of the death of a thousand cuts. You now face the death (of your profit) by a thousand decisions to do nothing.
