GOLD

[Aussie]

I posted this is the "if the USD collapses" thread but thought it worth posting here as well for those who may be interested. Bill Buckler is one smart guy and sees things in a uniquely clear and insightful way . . . things are way more out of control than anyone in Washington or Wellington would dare let on . . . and the consequences for our local currency are very uncertain since I don't think the RBNZ has much gold and if the value of US Treasuries goes way south, what is underpinning out local Kiwi currency? Nothing else of value other than our future labour and taxes I guess.


A Future U-Turn In A One Way Street

The Federal Reserve has boxed itself into a corner. With official US rates at (effectively) zero, they have only one way to go in future - UP! As a direct consequence of this, US Treasuries are standing on a trap door. The mad stampede over the past two months into Treasuries for “safety” simply means that these holders of US official debt now stand on that trap door. US Treasuries are the main assets held by the rest of the world’s central banks as reserves behind their own national currencies. US yields are certain to climb as the US Treasury tries to borrow more than $US 2 TRILLION this year. When yields climb, bonds - ALL bonds including US Treasury bonds - fall in value.

US Treasuries are the last bubble, following after stocks, real estate and commodities which have already deflated. When the US Treasury bubble bursts, the carnage on the global bond markets will be awesome.

A Now Invalid US Benchmark

In the staircase of ascending risk, government debt paper - bonds, notes etc. - have long been deemed the safest. Only after government debt comes the debt issued by the private civil economy. It is deemed more risky because this debt is exposed to commercial risks which government debts are not. The problem is that government debt is exposed to political risks.

Today, the climbing political risk of US Treasuries is radiating all around the world. Most of the rest of the world’s other central banks hold in their vaults US Treasury and Agency paper “valued” at $US TRILLIONS. When US Treasuries start their fall, this will contract the valuation of the “reserves” of every global central bank. That will in turn contract their reserves, forcing all their own interest rates upwards. Were the US Dollar fall along with Treasuries (an almost certain event), then many foreign central banks would face a double jeopardy situation. As their holdings if US Treasuries fell in market value because of climbing US interest rates, a falling US Dollar would tear their holdings of official reserves apart. These foreign central banks would have to take desperate measures to replenish their reserves. They would have to do so in public in order to “reassure” the public. Any foreign central bank which failed to do this would risk losing their standing as the backstop for their commercial banking sector. At that point, the US political risk would spike up to a global crisis level since, clearly, US Treasures, Agencies or even the US Dollar itself could no longer be valid reserves. In outline, these are the already built-in monetary and financial features of the global situation which is arriving.

The Looming US Debt Default

As things stand economically, the Obama “stimulus” package is woefully too little and too late. It amounts to throwing money into a US deflationary hurricane. But that same “stimulus” package opens the door politically for the later claim that since the rest of the world refused to lend the money to save the US economy, we will no longer service our external debts to the world. From that comes debt default. But even that is only the start because it then becomes critically necessary to stop an immense outflow of foreign funds presently invested in the US. That means US currency controls. Under such controls, an American who wants to make payments offshore will have to justify their action. Foreigners will have to justify why they should be allowed to take some of the US Dollars they own out of the US. Foreigners outside the US who are today holders of US Dollars will have to explain why they want to send some of their US Dollars back inside the US and what they intend to buy there.

Historically, there is not an item in this which has not been done in the many instances of debt default.

The Likely US Triggers

The most likely global trigger event will be when a US Treasury debt issue is under-subscribed (i.e. an issue is left on the counter because it faces a global buyers’ strike) or when US interest rates start their climb, the US Treasury is forced to offer a higher rate because of international fears of a US debt default. An under-subscription or a higher US Treasury offer rate required to sell new US debt paper are really two sides of the same economic coin. Either or both will signal that the US Treasury has reached its global credit limit and can borrow no more. At that point, the Treasury will stand in the same position as any person receiving a letter in the mail that says their credit card has been totally maxed out.


Permission hereby given to quote short excerpts - provided full attribution is given:
© 2009 - The Privateer
http://www.the-privateer.com
capt@the-privateer.com
(reproduced with permission)

[Aussie]

Classic orchestrated move on the gold price right at the NY CRIMEX open . . .

Attachment 1168

[arco]

For day traders, there may be a bear Gartley forming on the H1 chart.

rgds -arco

Bear Gartley reached its target - reaching potential area for a turn as
there is an uptrend line just below.

[Dr_Who]

Bear Gartley reached its target - reaching potential area for a turn as
there is an uptrend line just below.

Please explain what you mean. I am not a chartist, so dont understand the lingo.

I am thinking of buying some gold futures for a trade.

[peat]

Dr This is what a gartley looks like - see investopedia.com





I identified a bearish one occuring recently on the daily
see post #125
http://www.sharetrader.co.nz/showpos...&postcount=125

targets are not defined in that picture but supposedly if you sell (or buy depending on bullish or bearish version) at the D point then target is approx back to C point
we have a thread here in this forum called Gartley/Butterfly (which is a bit difficult to follow ) probably best just to go to investopedia and read. They do require an understanding of fibonacci levels ie percentage retracements.


In further news ABNAmro today report :

Gold trading

enjoyed a bumper year in 2008 as investors
sought a safer place to put their cash as the credit crunch
hit home. The value of gold trading rose 58% to a record
US$20.2 trillion, according to trade body International
Financial Services London. The growth in turnover was
partly due to the rise in gold prices in the early part of the
year. Investors have also been attracted by its appeal as a
relatively safe asset. Gold hit an all-time high of $1,011 per
ounce in March before falling back to end the year at $870.
Silver also fared well as investors warmed to other precious

metals. Trading increased 39% to a record $2.6 trillion

[Aussie]

Fearing the "Ghost of Gold".

We read today that Robert Rubin, the famous architect of the "strong dollar policy" under Clinton, the self-same billionaire from Goldman Sachs and latterly CitiGroup, has decided to join the new President’s Administration. Now that his fortune (thanks to the U.S. taxpayers, read "the system") is safely tucked away, and now that the realization has hit him that he has been exposed and "found out", he is suddenly contrite saying "My great regret is that I and so many of us who have been involved in this industry for so long did not recognize the serious possibility of the extreme circumstances that the financial system faces today". This man, who has been instrumental in the organized US led Fed/Central Bank/Treasury suppression and fraudulent manipulation of gold and silver for well over ten years, along with a cast of powerful and familiar characters such as Greenspan, Summers, Clinton, Bushes, Bernanke, and Wall St. Brokers, hedge Funds, media, major gold producers, and many others, rest my Lord, is suddenly contrite. The genie has been out of the bottle for too long and the guilty are circling the wagons. But what if "the people" discover they have no gold? That the Gov. vaults, ETFs, COMEX, Treasury, Fed., Banks and other depositories are mostly depleted of gold (the gold that belonged to US populace) due to criminal activities against the taxpayers; against the constitution of the USA?

Robert Rubin has suddenly found "religion" and has seen the errors of his ways. You don’t suppose he smells the fear of retribution in the air do you? Perhaps he has become paranoid and has nightmares of lynch mobs running wild through the halls of power. Does this admission of guilt pardon him suddenly of his myriad sins? Will he be protected behind the veil of the Presidency yet again? I guess there’s nothing like a good offence. Is Obama recognizing Rubin’s culpability and attempting to offer a pardon as an olive branch to the powerful Cartel culprits in order to "bring them onside"? After all, most of the "new gang" aren’t new at all. (Obama has some tough choices to make and he is in a position of serious compromise.) If so, Zebras will soon be changing/painting over their stripes. The people who have ruined the entire economy of the once great USA, to the extent of threatening the total global economy are being offered a chance to save the day. This is beyond bizarre.

The "ghost" of the gold standard is howling louder every day, threatening to destroy the criminals with whipping blue integrity. It threatens to righteously return the power back to the people. It threatens to make the banks honest again. It threatens to protect the savings of individuals from confiscation by way of currency debasement and inflation. It threatens to make banks and governments honest, restore economic health, protection of property rights, and bring balance to capitalism and freedom to mankind. The roars of the golden "ghost" can no longer be denied as they echo into and from every corner of the earth. They reverberate from the street vendors of Mumbai to the Chinese factory worker, from the mini miners in Africa to the artisans of Asia, from the hushed cocktail parties of the wealthy to the surreptitious operations of money launderers, from the hidden crevices of bureaucracy to the highest office in the land, from palaces of the Mid East to the mandarins of the markets, from the paper printers to the conjurers of derivatives, but always and initially from the silence of the deceitful to the honesty of the protagonists (GATA, LeMetropole Cafe). There will be no denial. Indexes can be "rebalanced", derivatives/leverage can stretched, spin can be spun, Gold Bugs can be anointed with more tinfoil hats, naked shorting can be extended, margins can be raised, some miners can continue complicity, and so on. It is all wearing very thin. Gold can not be printed and the purported death of the law of supply has indeed been highly exaggerated. As the spot price of gold becomes higher than the futures price, mints are overwhelmed, Swiss vaults are full to capacity, coin dealers are depleted and public pronouncements of gold buying blast in to the mainstream media….and even the reluctant, gold bug/GATA nemesis Dennis Gartman increases gold holdings in his portfolio, the dye is cast.

With the newly appointed mastermind of dollar hegemony, Robert Rubin, what will be the plan of the old cadre of crooks? Do they dare to step it up a notch and attempt to continue to hide their sins, grabbing ultimate power by the total subjugation of the electorate? Are they desperate and arrogant enough to attempt to win "at all costs" by "whatever it takes"? Will they ignore the ominous warnings of the howling ghost of gold? Or will they save themselves and all of us by giving rebirth to a new global, gold backed currency system? If not, can gold confiscation be far away, along with hyperinflation, protectionism, depression, homeland militia, marshal law, travel restrictions, food rationing and civil unrest?

Only time will tell. We have no way of knowing the inner thoughts of the above self proclaimed, nefarious masters of the dollar universe, especially since the President Obama has just pronounced that torture will no longer be tolerated the by United States of America.

Regards,
Dennis Oliver

[Dr_Who]

Any chartist on Gold?

Is it time to go long for a trade?

[arco]

Gold is still in a Broadening Wedge formation

You can read more about that pattern here
http://www.thepatternsite.com/dbw.html

I'd be waiting for a break and test of the DT line.

rgds - arco



..

[Aussie]

Thanks Arco, some nice upward price action in Asian trading this arvo . . . US dollar down almost a full point on the USDX today, EURO up almost 1% , Kiwi up almost 2%. Tonight's session will be important.

[airedale]

Right, Aussie, will be interesting to see if the Nymex can stifle POG when it opens in about 6 hours.