Archives July10

Saturday July 31, 2010 - Inflation and Hyperinflation policy is only possible with Deflation propaganda...and this is exactly what is happening!

Each time more Quantitative Easing (money) is requested to lift the economy out of the recession. In the end the impact on the economy of the so created money out of thin air becomes 'Negative' and the forthcoming depression is a lot worse than had it be in the 1st place if no interference/manipulation of the economy would have happened. The remaining question is to find out whether at that point the Stock Markets will come down like they did during the Great Depression or whether they will hold/go up in nominal terms as a result of Quantitative Easing (Zimbabwe effect). In each case it will probably happen over night (like we saw in 1989 in the USSR) and investors will have no time to readjust their savings.

What the recession will not kill, the legal system will. Structured products (Tak 21, Tak 23), CDO's, Credit Default Swaps and a bunch of other unregulated and uncontrolled financial products were created by the Banksters with only one goal: not to serve the customer! Having said this, not only the Bank is at fault for selling crappy financial products but also the Investor which has been BELIEVING the fairy tales "The Bank" sold him: any investment where there is no or zero risk but nice rewards always is a dangerous investment.
Yesterday 3 banks were closed in the USA: Coastal Community Bank, Panama City, FL Bayside Savings Bank, Port Saint Joe, FL, Northwest Bank & Trust, Acworth, GA

Friday July 30, 2010 -

The Death of Paper Money is imminent. Hyperinflation will come like a thief in one night.! It is difficult to write a scenario of how it all will unfold, but there is no doubt it will happen!.. And off course...do you REALLY think the Authorities and the Bankers will confess and tell you the money they are printing will be worth ZERO in a couple of years from now!?...

Corruption became rampant. People were stripped of their coat and shoes at knife-point on the street. The winners were those who — by luck or design — had borrowed heavily from banks to buy hard assets, or industrial conglomerates that had issued debentures. There was a great transfer of wealth from saver to debtor, though the Reichstag later passed a law linking old contracts to the gold price. Creditors clawed back something...more
Corruption there also is with Financial Newsletters. There are indeed few good and honest ones (most newsletters are drowning in propaganda and marketing). Other newsletters and financial reports are printed by financial institutions and for this very reason they simply cannot be trusted. Most investors forget that Good wine takes years to age and free investment advise in the end often costs 'A LOT OF MONEY'.
The Dollar has fallen back into its secular down trend channel. Not only did we have a reversed Head and Shoulder pattern, but also has the Dollar eased back below its secular down trend line on the Point & Figure chart. When we look at the complete process it very much looks like a small edition of the 2008 deleveraging.
€-Gold has thanks to slightly weaker $-Gold and a weaker Dollar come back to an affordable price level...more about the €-Gold objectives and support level
The Bearish flag we indicated earlier on our PF charts of Gold expressed in different currencies [ British Pound (with stop loss July 1st), South African Rand, Yen, Swiss Franc, Aussie, CanDollar... ]did clearly indicate the spring bull run was over and a price correction was in. At this point it also indicates which potential size the present correction will have.
Only a week ago we clearly indicated the Bonds showed a HUGE TECHNICAL NEGATIVE DIVERGENCE and were a clear sell. Remarkable is the similarity between the 2008 deleveraging, the 2008 Dollar and Bond run and what we had (in a lesser degree) in 2010.
Investors who shift their savings to China will be in for a bad surprise once the Depression sets in. China is a High Order Capital producer country and these traditionally suffer more from a failing economy.
Deflation can just be ruled out...it is just impossible to see this now. Out of thin air, the U.S. government created 2.75 dollars for every dollar that existed in the entire country just one and a half years previous.

Thursday July 29, 2010 - Gold is the only form of honest money which has no counterparty which will survive the coming financial crash. Buy the dips!

We expect the volatility of Gold to increase but physical Gold must not be sold under any circumstances...Faze I of the actual Bull market started in 1999 and ended in 2008. We are now running the 2nd Faze which will be followed by a 3rd spectacular faze. During/at the end of this last faze nearly all paper money, bonds, treasury certificates, etc. will default. [during this 2nd faze it is possible to see $-Gold test the neckline of the Reversed Head and Shoulders pattern or $1000-$1050. This would mean a correction of 15% only].
If the Authorities keep doing exactly the opposite of what needs to be done, the Western Societies will slide into a 100 year (two lost generations) depression: Europe and the USA will fragment: the EU would fall apart and the American states would secess from the Federal Government. During this black years unemployment could easily rise to +35%. Social security, Medicare, private pensions and pension funds won't be able to support the collapsing background situation. It will be the dead of the Keynesian economics. Having said this, even today it is hard to understand how most pension funds (which are undercapitalized) will be able to grow enough provisions to cover their future mathematical risks when interest rates are being artificially kept at these low levels so that Government debt can be refinanced at lower interest rates.
Remember to BUY the DIPS and NOT to SELL any PHYSICAL Gold. And yes, as we expected a weaker dollar and a Gold price hovering around and slightly below the actual levels is pushing back €-Gold, CHF-Gold, Can$-Gold, £-Gold and ¥-Gold to the bottom of their uptrend channels.

Wednesday July 28, 2010

P = M x V

The general level of prices is function of the Total Money Supply and the Velocity of the Money Supply.

Tuesday July 27, 2010

The stress tests in Europe were nothing but one big masquerade. The decision to exclude sovereign debt renders the results as spin and not reality. What many readers and investors don't know, is that Banks but also (life) Insurance co's and pension funds are in the legal obligation to invest most of their Mathematical reserves into Gilded paper. By now many do know that Governments are heavily indebted and that they are or will not be in a position to repay their debt...if Governments repudiate on their debt, the legal reserves of the banks, insurance co's and pension funds (the latter are already in a precarious position) are/become worthless. Hence the only possible way for any modern government to try to survive as long as possible is to walk the path of Inflation and Hyperinflation.
Gold and Silver Juniors are A LOT BETTER and 1001 times safer than Turbo's, Warrants and Options (which are uncontrolled and unregulated instruments created by the Banks to rob the investors. Some of the Juniors we list allowed for a profit of 50% over a period of 3 months (such is 200% y/y...and this is only the beginning of a HUGE MOVE! At this time we have only one junior in our model portfolio...but it gave a DRAMATIC buy signal...Technical patterns range from double bottoms to bullish triangles/coils...there probably is a pattern for each investor...more
Our Regular Gold and Silver mines (you must check our investment table to find out how to structure your savings as each investment instrument will have a particular function during the coming Hyperinflationary Depression. Remember a lot can happen OVERNIGHT and that your savings can be mortally damaged if you have not positioned these properly!) will keep their secret if you only look at the Point and Figures charts. Therefore we have added candle charts...very interesting they are.

Monday July 26, 2010 - We'll keep updating the site over the next weeks but be informed part of our staff is attending a financial conference.

We told you to take physical delivery of your Gold and Silver! The LBMA (London Bullion Market Association) has taken the unusual step of blocking access to statistics regarding their member bullion banks' gold and silver trading activities. There are strong indications bullion banks are holding only one real ounce of Gold for every forty-five ounces of Gold that they have sold. The irony is that out there there is still a huge bunch of wise-nose-investors which don't even believe they need to have Gold to secure their savings.
We have a strong similarity between many of our charts: crude Oil, Oil and Gas shares, Gold & Silver shares, Gold and Silver juniors (US Gold is a topper and many others are wakening up), many commodities (i.e. coffee), natural gas and coal. All charts show the 2008 deleveraging crash, a subsequent correction and a large handle. The bigger the consolidation zone, the more power is accumulated and the stronger the coming UP LEG. I don't believe in Deflation. What we have now is the transition between the 2nd and the 3rd faze of the Hyperinflationary depression. Deflation we shall have AFTER Hyperinflation.
Platinum is building a consolidation zone which result will surprise many investors.

Friday July 23, 2010

We like what we see when looking at the charts of Gold expressed in Dollar,
I particularly like what happened to Silver yesterday...more
The PF chart of the 30 year Treasury bonds remains extremely interesting. Especially if one compares the 2008 dollar run with the earlier 2010 dollar run.
The candle chart of the Euro confirms there is no trend change against the US Dollar. As a matter of fact the 2008 Dollar correction and the one we had this year have bizarre similarities.
SEVEN US Banks had to close down. So far this year more than 100 US banks were closed....
SEVEN EU Banks fail stress tests. But the good news is that ALL IS WELL MADAME LA MARQUISE...The Authorities will not risk a Run on any Bank...and the requested amount of billions will be printed...more

Thursday July 22, 2010

The stress tests of the Banks both in the USA and Europe may well have been sold with lot's of glamour and music but the status of many banks are tricky. Many incorrectly still believe these still are (like the Titanic) non-sinkable but our financial system is leveraged to an unprecedented and unsustainable level. Therefore it is massively undercapitalized and the regulations (like the Finance act which was signed today) are nothing but plasters on wooden leg. It is possible that we shall see as many broken banks as we saw during the Great Depression. The financial industry has been allowed to publish false balance sheets and false income statements. So far the FDIC total losses for 2010 are $18 billion. Each time banks had to be closed it becomes clear they all have been misrepresenting their assets by an average of +50%!
When Capital leaves a country it always take employment with it. It is impossible to stop capital leaving a country once the level of Taxation gets too high as it is impossible to rule out Gresham's law once people start to mistrust paper money. Swiss endure safe-haven agony from euro flight...more.
By now everybody should be aware the interest rates in the West are artificially kept low and that from here they only can go up. Today it was Brazil's turn to raise rates to 10.75% (more than expected)...more
South African Commercial Property takes a tumble. Building activity in the commercial property sector registered a substantial drop as constructors are constrained by lower demand for space by tenants. The Real Estate problem is the result of fractional reserve banking and the creation of money out of thin air and is not an isolated problem. Real Estate ALL OVER THE WORLD sits in a secular bear trend which will last until 2033.

Wednesday July 21, 2010 - Belgian National day -

The Herd makes the market. Are you part of it? It is those who today (They will all of a sudden reverse course and initiate Hyperinflation) resist change because they cannot see what is happening and prefer to BELIEVE what their leaders tell them. This is not the time to believe but rather a time to understand.
We're in the 2nd Faze leading towards Hyperinflation. The Money supply is increasing at a slower rate than the increase of the prices of Low Order Capital Goods. Such happens because people experience a shortage of real spending power (money). This phenomenon is incorrectly called Deflation. We already see that the Authorities prepare for even more Money Printing (quantitative easing) which will lead us into the 3rd faze and Hyperinflation. Such can and will probably happen over night and one of the indictors will be a crashing Bond market. By then it will probably be too late to acquire physical Gold and Silver. Even worse is that at that time Store shelves will be empty in a couple of days only as the Herd decides to exchange the worthless money for any good they can buy.
If Goldman Sachs' profits plunge 83% how bad will it be for other Financials? An unique aspect of Banking systems is that they cannot be rebuilt once they turn insolvent. They rot in place and nothing can be resuscitated except for the balance sheets....more [I believe that banking institutions are more dangerous to our liberties than standing armies - Thomas Jefferson, 1802]
The correction of the Euro/Dollar has come to a halt. At this point some consolidation is needed. The Dollar index had a 38.2% Fibonacci retracement almost on the nose.
Before shouting that Capitalism isn't working one must analyze the world we're living in and compare it with a correct definition of Capitalism. Relevant is that today we are not living under true free market capitalism. What we have is a controlled economy where a group of arrogant men and women are trying to set interest rates and manipulate the economy and financial markets. [Ron Paul correctly calls what we have Corporatism]
The signal given by the Candle and PF charts of the HUI-index and the Gold and Silver shares was correct. The Gold and Silver market has probably made its Summer bottom.
People in Caracas, Venezuela have only 4 hours of electricity a day and the city has run out of water. Karl Marx doesn't work. It took until 1989 until the USSR and Chinese found out....At the end of the Roman Empire there was (almost) free bread for all. The result was that the farmers stopped working, left their farms behind and moved to Rome...to be able to eat this Free Bread.

Tuesday July 20, 2010

Not only is there a enormous lack of knowledge about what Inflation, Hyperinflation and Deflation is and how it is created but there is also a lot of resistance of the general public who simply refuses to accept reality. This is probably one of the main reasons why the Authorities can through Propaganda keep Fiat Money and Treasuries alive. After all most people are still convinced that what they read in newspapers and what the Authorities tell them is true. There are numerous examples of modern time Hyperinflations and yet most investors act like it won't happen again and it won't happen to them in particular. This is maybe one of the reasons why Hyperinflation sets is so quickly once it starts.
Each time Gold consolidates BS talks of Deflation is sent to the Media. But Quantitative Easing (the printing press) is alive more than ever. Today the IMF (International Monetary Funds) seeks "only" $ 250bn to boost resources...more
As usual Gold sails through the summer doldrums but before we realize the wind of Quantitative Easing will hit the sails again and Gold will sail to $ 1300 and $ 1450. Now is the time to buy the dips!
The Gold and Silver index has eased back and is in the process of building another bottom. There are more bottoms than predicted and the accumulation is a lot larger than we anticipated. The positive side of this is that once the Index breaks out the rewards will be even bigger. It earns to be patient on condition you're invested properly.
Readers who don't feel the need to go through the 150 pages of the site sometimes incorrectly call us Gold merchants. We have no particular interest in selling Gold and/or Silver. If we had we would - for marketing reasons only- link our site to sites like Kitco or the Bullion desk. The name Goldonomic comes from Gold and Economics and was chosen because we aimed at explaining what REAL BARBARIC MONEY was like. Today it happens to be Gold and Silver but this can and will change and at some time in the future the Intelligent Investor will exchange his accumulated Gold and Silver for another kind of decent money or he will invest it again in other investment instruments. By that time those who think they know better will be left empty handed. Since 2001 and still today it earns more than ever to be a Contrarian.
July 8 we had a bearish signal reversal on the Euro/dollar. The Euro has recovered against the Dollar and the news has been kept out of the Media. A bullish sign I would say.

Monday July 19, 2010

I'm from the Government, I'm here to help. As we move further into the depression the budget deficit of the Government will widen and it's debt will rise...as always the people will have to pay for it through inflation and taxation.
Now that the Dollar weakens, we've decided to let you know which 10 American states are most likely to default. These are 10 states out of the 40 which are in trouble...more
When Money dies: The Nightmare of the Weimar Collapse by Adam Fergusson has been added to our Literature list. Why is it for so many so difficult to understand the Fiat Paper Money never works? It never has and it never will.

Saturday July 17, 2010 - We all know what has to be done to cure the recession. Only we don't know how to get reelected once we've done what must be done. (Jean-Claude Juncker- president of Luxemburg)

The Europeans are shouting the "End of the Euro is near" but right now the voices of Americans "The End of the Dollar is near" are winning. What both camps have yet to find out, is that in time both will be right. As a matter of fact the club will be even larger when the British, the Swiss, the Canadians, the Australians and most Fiat Paper currencies join. Gold as over the last year UP expressed in ALL FIAT PAPER CURRENCIES!
As usual and as expected each time Gold comes down a bit, the Deflation criers are back in Town. Picking up a good book may not suffice for many to UNDERSTAND a rather short definition which has huge implications. I am not ashamed to confess that it took me years to properly understand it. Deflation propaganda plays a huge role and it seems extremely easy to mislead the Herd about a matter many business people and lots of professionals fail to understand properly. Inflation and Deflation are monetary phenomenon's and a Hyperinflationary Depression we shall have. For those who fail to understand, we advise to (re)read our story about Zimbabwe...and to stop thinking that it is impossible that such can be seen again in the Western world. There is absolutely no reason why we will not. Unless of course we stop having Wars, Revolutions, Boom and Busts and History becomes obsolete.... Especially as the Leaders are doing exactly what needs to have such a depression.
Be advised the Financials will be the leaders during weaker stock markets. Whatever is said and written, they are rotten to the core. A financial system based on Fractional Reserve banking and Fiat money created out of thin air have NEVER survived and it never will. Such simply isn't possible.
We have 6 Banks in this week's edition of Bank closures. Three in Florida, two in South Carolina and one in Mississippi.
The Commodity section has been updated and we have added the three fazes towards hyperinflation on our long term Commodity chart...more

Friday July 16, 2010 - Agricultural commodities make a scary move...but nobody seems to notice it!? [remember the fazes we discussed earlier?]

Ever played chess against a computer? If you did, you know how hard it is. Playing the financial market against artificially initiated moves is even harder. This is exactly what is happening to the financial markets and why they are - in the short run - being destroyed as an indicator of value. The Financial markets used to be there TO SERVE the economy and not to steal from it like it is the case today. The influx of hedge fund money under the control of black box algorithms instead of providing liquidity as they falsely claim is actually working to undermine the integrity of our financial markets. Computers push prices in attempts to generate price movement so that they can create profits out of that movement based on their ability to fire off a series of rapid fire Buy or Sell orders. This has absolutely nothing to do with balancing the forces of supply and demand and everything to do with separating the investing or trading public from their capital who are the minnows swimming in this sea of unethical and unprincipled sharks (Trader Dan).
Those Guys who actually were responsible for the collapse of Fannie and Freddie and the last Financial crisis in the 1st place wrote the 440 pages of the Financial bill which will in due time sent what is left of the American economy to hell. Once the bill is signed the President doesn't even has to go through Congress in order to know who's too big to fail and who's not. He simply decides himself!?
Best case scenario we expect is a new test of the 2003 bottom. We still don't like what we see when looking at the charts of the World indexes, especially when looking at the charts expressed in Real Barbaric Money or Gold. Use better markets to offload Common Stocks and use the dips to buy those investment instruments which will actually protect your savings...Hyperinflation only will stop the crash of the Stock Markets expressed in Nominal terms.
We have updated all our long term charts of the World indexes. Those who still think the Chinese stock market is safe will be surprised. Especially if you check the index expressed in Gold. If you decide to stay into common Stocks, the German DAX (stock market) may well be your best option. After all, they haven't forgotten the Weimar Hyperinflation. On the charts we have added the relationship of each index with Gold...more This section is a school example for Head and Shoulder formations and Bearish wedges.
We don't like what goes down too fast and too much....like we don't like what goes up too fast and too much...and this is exactly what is happening to the Dollar and the Euro. I feel sorry for all the business people trying to conduct business under these conditions! Today a good Airline company CEO is a good commodity analyst/broken and a good Import/Export CEO must be able to forecast the short term fluctuations of the Dollar against those countries he's doing business with.

Thursday July 15, 2010 - Important updates in the subscriber's section.

As usual the Forex sections give us more clues about what to expect for the Dollar and Gold. Today more than ever it is important to look at the whole picture before making any investment decisions. At this point we do have some important changes! Also check the South African rand , Yen , Swiss Franc , Australian Dollar and Canadian Dollar sections. The Canadian Dollar point and figure chart is providing a clear hint as to what to expect for the American Dollar. Having said this, holders of Australian, Canadian Dollars and South African Rand better follow the Forex markets closely and remember the ultimate barbaric money is PHYSICAL GOLD and SILVER.
The section €-Gold objectives has been updated. €-Gold and £-Gold offer a similar picture. Worst case scenario, Gold can ease back another 5%.
The charts of Stock Market indexes expressed in barbaric Gold are also part of the global picture. When an index like the Dow Jones Industrial expressed in Gold is bumping against its secular down trend something is brewing. Those investors who since the year 2001 stayed invested in the British Stock market not only lost 83% of their savings because of the bearish real trend of British Stocks but also 30% because of the weak British pound...more
The Authorities, the FED, the ECB, the BIS, they all know This is a lost cause. Only 'They' cannot tell as this would probably result in social unrest. They will continue to try to stimulate the economy until Hyperinflation explodes, all trust in the financial sector and authorities disappear and we fall into Deflation. Extra stimulus simply doesn't work!. What it will do however, is sent Gold and Silver to the Moon...got some?
The Real Estate sector in Spain and the USA are in a dramatic shape. In the USA 20% tot +40% of the Mortgages are under water. It is not hard to understand this will have a dramatic impact on the Financial sector and the economy. What many don't realize is that banks cannot follow up the bad loans and also that they are not in a hurry to declare a foreclosure as this would flood the market with Real Estate which could not be sold. Click on the picture to find out which states has most Mortgages which are under water.

Wednesday July 14, 2010 - Today is the French national holiday . It remembers us of the abolition of Dictatorship (decapitation of Louis XVI and Marie-Antoinette) and the end of the Assignats (the worthless fiat paper money of the 1770's).[it was Marie-Antoinette who said the people should eat cake if they had no bread - it was Spanish Prime Minister Zapatero who said the people should eat Rabbit if there is no Pork. Louis XV used to say that it would only last for his generation and: après moi le dèluge. So it happened]

It is incorrect for the leaders of the Western World (Geithner, Trichet,...) to blame the Chinese for their problems. If Europe and the USA were competitive economies and their leaders promoted and protected Business properly, there would be no reason for Entrepreneurs to take a risk to manufacture in China. For a risk it is! If taxation and regulation were decent, not a single Entrepreneur would even dream of moving his manufacturing plant out of the country. Is it not amazing Unemployment is lowest in those countries which have the lowest taxation?
Gold and Silver remain very strong and it more and more seems we're not going to get much lower prices during the summer doldrums. Euro-Gold and British Pound-Gold however can still come down a little. Potential buyers MUST check our €-Gold objectives...more
The biggest advantage the Euro has, is that it is also backed by Germany. And that Germans experienced the Weimar Hyperinflation. The biggest disadvantage however is that it is just like the Dollar, Fiat Paper Money.
Eurozone crisis fund expects top rating. This puts a bottom under the Euro and opens again the trap under the Dollar. The facility is ready to act....more
The manipulation of the free markets by the Authorities goes on. The longer they keep it going, the more dramatic the outcome will be. And disastrous it will be. Just for a minute, imagine what will happen once the retiring Baby boomers find out there is no funds available for their pension, that the Authorities spent all of the money they actually paid them for their pension...At that point the least we will see, is a revolt. Historically speaking we most of the time have a WAR. Once all players are in place (and aren't they all in the Middle East) such can happen over night. It is amazing to see many people still believe there is a solution for the problem we're in and that nothing serious will happen. If only a fraction of people would realize what where we heading for, the Global Markets would not be what they are today.
Take advantage of higher Stock markets to offload common stocks NOW! Once the Hyperinflation starts, things will look different when expressed in Nominal terms only.
In the USA each Friday about 3 to 4 banks have to close down. In Florida the situation has become so bad that the Florida banks - already weakened by the real estate bust are asking regulators for a reprieve from government-ordered capital raising as they struggle to stay alive.
The British Pound keeps on building a technical pattern which we call a COIL. This is done well inside the downward trend channel. At the same time fundamentals are worsening. The true scale of UK debt is twice as much as "they" thought (£ 2 trillion or £ 78,000 for every household in the country. These figures however don't take into account some 'off balance items' like the cost of civil service and town hall pensions. Putting these liabilities into the official figure would add £ 1.13 trillion to the red figure and debt would jump from 62% to 138% of Britain's income.

Tuesday July 13, 2010

A currency which is not market generated has no means of being and will never survive. The latest example of such a currency is the Euro. Nothing more than a Frankenstein it is and it will not survive. An example of market generated money is Gold and Silver which have been barbaric money ever since there was some kind of economy and trading on Planet Earth...more
Oh yes, things are so much better in the USA. At least this is what 'They' want you to think. The positive reverse side of the medal however is that in the USA there is a lot less regulation. This means that there are less instruments to damper a crisis, that a crisis will be deeper than in Europe...but also that the recovery will come much faster...more
Following chart comes for those who still believe they are doing better by chasing common stocks than paying attention to Gold and Silver mines.

Monday July 12, 2010 - A Good Financial advisor/analyst is an (experienced) old financial analyst.

LISTEN to the music of the Financial Markets and think out of the Box. The more experience one has, the easier to understand what is happening the better one sees through the smoke curtains and static sold by the Officials (a lot of times it is clear even they don't understand what is happening...unless it's too late!). Harry Schultz was a veteran when I was a Junior. He was an excellent and also a funny speaker. The Authorities are again (like happened to the Gold pool) losing control of Gold. Just like in the days of the Burning Roman Empire they cheat, lie, maneuver...but Gold will beat them and is already doing so, in stages...more

Buy the dips ! Subscribers know what our short and medium term objectives for Gold are. We adjust these each time we have more clues. If we have a Hyperinflation, $-Gold could hit billions, and even trillions...At a time where the Talking Heads are calling Gold a bubble (Gold climbs a wall of worry) we have following individual projections: Maloney, Katz, Rickards and Watson see $-Gold higher than $ 11,000 . The bunch of advisors sees Gold between $ 5,000 and $ 10,000 and about 8 aim for $ 5,000 [remember that it is NOT the price of Gold which is rising but rather the value of paper money and Bonds sliding to ZERO and that Treasuries because they are nothing more than an option to buy fiat paper money are extremely dangerous!] Having said this, it really doesn't matter how high Gold is going....what matters is that it will preserve your savings!

Saturday July 10, 2010 - What sense does it make to Short if your counterparty becomes insolvent?

Why are Tons of paper, words and energy spended each day to try to explain to you how to invest? Once the turning points are defined it basically becomes so straight foreward and the only negative forces you have to overcome are your "Ego", "The Emotional Static sold by ignorants" and the "Lies of the Authorities".
We told you not to be too greedy when bottom fishing for Gold, Silver, Gold and Silver mines! How many times did we write that we have a paradigm shift, that we're heading for an Hyperinflationary Depression and that most Investment vehicles will strand between now and the end of the crisis! Go on with day trading, scalping, buying ETF's, Options, Warrants, Bank-manufactured-investment-products, Structures Products, Life Insurances, Treasuries, Bonds,...following Hot Advices. If you're not properly invested, you can loose it all overnight. Things are so bad your pension is probably already gone by now....So what sense does it make to know that Gold is expected to pullback slightly to complete patterns if you know it will be soaring above $ 1300 before the end of 2010!
A policy towards Hyperinflation is only possible with a Deflation propaganda. Today's DEFLATIONARY talks are partly correct and a reflection of Faze 2 leading to Hyperinflation. The danger is that if you start to protect your savings for deflation now [this would mean the value of Fiat paper money increases and the Authorities have become God] you will probably be forced to sleep in the cold once Hyperinflation starts. The problem is that most Financial advisors and Economists fail to follow the red wire during a reasoning process. Such makes it extremely difficult for the average investors to understand. This can be compared to -for example- the fact that many believe we cannot have a Hyperinflation because during a Depression Demand fails...Hyperinflation however is a Monetary phenomenon! Off course, for most such is very hard, if possible to understand. We have explained everything in the 150 pages of Goldonomic...and if you think your hard work and savings are worth it, the least you can do is read these and ask questions if you don't understand something. That's why we are here for! It is exactly because of the complexity of the matter that we consciously don't want to change the content of each subsection of the site over night. The Economic cycle we are in also doesn't change over night.

The Real Consumer Price inflation has over the past years been a lot different to what is sold by the Authorities! In some countries (i.e. Belgium) they went so far to develop alternative Inflation (Health) indexes so they could continue to window dress the reality...

Friday July 9, 2010 - Gold is money and not a commodity!

The USSR and China went bankrupt because of Karl Marx. 1989 his books were burned. Today Putin wants to abolish the Capital Gain tax. Russian and Chinese leaders understand that if another Iron curtain has to be built, it will be to ensure the citizens and the Capital of the West doesn't escape to Eastern Europe. As expected German leaders are the only ones in Europe understanding that we need to cut government expenses without increasing taxes.
The growing propaganda about this Double dip recession makes me feel sick. Once the effect of Quantitative Easing is wearing off, the bottom will fall out of this artificial recovery and a Hyperinflationary Depression we shall have as soon as Governments start to monetize their debt and Velocity picks up. The fact that Money supply is down to 1930 levels confirms that this [see Goldonomic of last Saturday] statement is correct.
Is VAT (value added tax) coming to America? If 'they' effectively DO this, the USA will in the end be no better than the USSR. A pity it would be...more
We checked the charts in the World Stock Indexes section & Financials and still don't like what we see. Markets are oversold and each correction MUST be used to offload stocks. Once the hyperinflation unfolds, we think the instruments listed in our Investment table will offer a better protection than common stocks.
Yesterday we had a symphony of key reversals on the candle charts of Gold and Silver mines.
Only Gold and Silver seem to survive. Commodities could take a hit as China and other HOCG producers start to feel the consequences of the Depression. Hard to understand for many is that there is a leverage effect between the LOCG countries and the HOCG countries.
The Euro is back at $ 1,27. Compared to the static sold during the slide only weeks ago this has almost been a silent climb.
Only part of our Portfolio is invested in Oil Shares...and the performance over the last days has been excellent...more . As we expected BP has risen from the dead.
You have to be completely blind to continue to believe you can beat Real Barbaric Money or Gold by investing in Common Stocks or the Standard and Poors 500!

Thursday July 8, 2010 - All Forex sections and Gold in different currencies were updated!

It's absolutely irresponsible to let the Bush tax cuts expire! You don't have to be an Einstein to understand that tightening fiscal policy at this point is the same Roosevelt did in the 1930's and that it will have similar dramatic consequences. More taxation and more regulation NEVER stimulates the economy, it kills it! History is full of examples...so why don't the political leaders don't get it? or maybe they don't want to? Having said this, there is no reason why YOU would make the same mistakes the investors made in those years: after a crash on the stock markets those who were invested in Bonds (Treasuries) lost all of their savings as Governments started to engage massively in Debt Moratoriums.
The Euro came down too fast and too much. It finally reversed course and is now sitting on the 200 day Moving Average...more
Civil service pensions run like 'unstable Ponzi scheme'. It's absolutely not sure the 'real' money will still be available when you're about to retire...more
Western Politicians read and apply Karl Marx. What right do 'they' have to limit somebody's income? By doing so they chase away the best entrepreneurs. Controlling Capital and controlling the income of labor was done for decades and up to 1989 by the USSR and China. They finally realized Marx's advice destroyed their economies and burned his books. Ever since, their economies have been booming...more
The Authorities failed to address the cause of the crisis. The only thing they do, is (try to) mop up the consequences. By doing this they are staging the 2nd down leg of the Hyperinflationary depression...more
Beware of correlations. Many analysts like them because it enhances them with an intelligent Aura. Most of the time, they only work for so long and they certainly don't apply to Gold and Silver...except off course for the negative correlation.
Don't be greedy when bottom fishing for Gold. Looking at the charts of Gold and Silver is different Fiat currencies, these can't really come down a lot more.
We've updated the charts of Corporate bonds and don't like what we see...more

Wednesday July 7, 2010

If you THINK about it, Gold will go up if we have a (Hyper)Inflation but ALSO if we have a Deflation scenario. In other words, by buying Physical Gold one cannot make a mistake. Therefore, make sure you follow our Investment advice and buy Gold each time it dips! SO far, if you 'listen' to the market only an extremely small amount of Investors have Gold. For this reason it is not difficult to imagine what Gold will do the day the HERD realizes that Gold is the only barbaric money and that even the ETF', warrants etc...are NOT GOLD. Hyperinflation will start when the Bond markets start to crash!
Gold is easing back towards the bottom part of its bullish trend channel. Buy the dips! $-Gold is going to $ 1300, $ 1460 and higher. Silver has almost reached its support level. Once Silver has it will be an indication Gold has seen its very own short term bottom. Interesting will be whether either the Dollar will continue to weaken over the coming days or either $-Silver will continue to ease so that €-Silver ends up back in the bottom of its uptrend channel...or maybe they both will continue to correct!?
IMF-BIS engaged in Gold swaps to about 380 Tonnes; Organized looting of Sovereign Wealth. Just as Gordon Brown sold England's Gold at the lowest of the market to bail out the bullion banks in New York and the City, so the IMF and its constituent members are selling the public stores of Gold, to support what is essentially appears to be a crony capitalist banking fraud...more This action will - off course - be explained in a different way by the Authorities and the Herd will - as usual - buy it. Those in charge are so intelligent and they won't even dream of cheating on the people. A Gold swap or Gold lease is never a threat to the gold price!
Any investor who holds no stocks and may also be short will certainly be bearish, otherwise he would be schizophrenic.
The Dollar continues to correct and as the Mother of All necklines hasn't been decisively broken, we could see a remake of the 2008 post-deleveraging scenario...I don't like what I see when I look at the Weekly and Monthly candle charts of the US dollar index. The Dollar is today's biggest bubble. Remember what happened in 2008?..more
Are you still holding on to Bank shares and Bonds issued by Banks & Financials??? What we indicated May 20 for Bank and Financial shares was accurate. The technical signal which was given earlier was - as we expected - a BULL TRAP...more . We continue to advice to stay away (except for those prepared to commit financial suicide). Important is to check on these charts as they are also a good indicator for what can happen for the Stock Markets in general.
Property prices are even falling in China. Standard Chartered expects a drop in property prices of 30% in Beijng, Shanghai, Shenzen and other large cities in China as the delayed effects of monetary tightening begin to bite. Interest rates in the US and Europe are artificially maintained at extremely low levels. Such is only possible for so long and the day is close these will also start to rise...more
Yesterday the FTSE index made a bullish key reversal. This could be expected as technical indicators were/are strongly oversold. We've seen similar reversals/corrections in the past. This however does not indicate the Footsie is out of the woods...more Similar (key) reversals were seen for other Stock Market indexes...but have learned to pay attention to these but won't act until out PF charts say so. Markets are way to volatile to rely on Key Reversals!

Tuesday July 6, 2010 - Yesterday we went out fishing

Monday July 5, 2010 - Bank Holiday is the USA - 4th of July was yesterday -

California's debt is a bigger risk than Kazakstan's and a bigger worry than Greece...more
Illinois stops paying its bills, but can't stop digging hole. After Greece and Spain the USA stands in the spotlight. Illinois is not paying bills for absolutely essential services...more
Six months to go until the largest American tax hike in history: there is the expiration of the 2001 and 2003 Tax Relief, there is Obamacare and the alternative minimum tax and employer tax hikes...more
Trichet (ECB) and Nouriel Roubini don't expect a new recession in the Eurozone. It is this kind of stupid public statements which make it so hard to see the trees. Everybody sees it coming but some Financial Movie Star says it's not...!? Having said this, Trichet must either be a perfect liar/propagandist or extremely stupid and there is no doubt he will end up in history books in a way he will not like it.
Our PF chart for the €-Gold objectives, support and resistance levels seems to be extremely accurate and interesting...check out our 3 scenario's...more
We have updated our Investment table...more
Only 250 years age - 1770, 1789, 1830,..: Taxation without representation leads to the Boston Tea party, the French revolution, the Belgian independence, ...Economic factors included widespread famine and malnutrition due to rising bread prices, the French national debt amounting to 2 billion livres, huge war debt, the exacerbated national debts,...

Saturday July 3, 2010 - M3 and hyperinflation - hyperinflationary depression. [What is published below has been published by us years and months ago. For some reason either people don't want to take the time to read it (do they prefer to risk their savings?). For the clever ones who do decide to read the correct information it is extremely difficult to understand what is really happening. Propaganda/static makes it sometimes harder to understand this than it is to select a Cell-phone provider!

There is a great deal of debate about the root causes of hyperinflation. But Hyperinflation is often associated with economic depressions, wars (or aftermath) and political or social upheavals. Those who advocate Deflation because of a decreasing M3 don't understand what inflation and deflation is all about. The money supply (M3) is only one of three factors that determine whether we have inflation or deflation. The other two are the velocity of money and the real output of the economy. Due to its effects on the velocity of money, the ebb and flow of confidence have a much greater impact on the short-term trend of prices then changes in the money supply (M1-M2-M3-MZM)
We have entered the 2nd Phase towards hyperinflation: a lack of money becomes evident in the second phase of the crisis - the financial crisis is replaced by an economic crisis, triggering massive bankruptcies that would spread globally in a chain reaction. During the second stage of the crisis, another large sum of capital will "evaporate" from the market...click here for more
Authorities cannot maintain an (hyper) inflationary policy unless it is sugared with Deflation propaganda...like...why would we have hyperinflation when M3 is contracting? M3 is contracting because we have a economic depression! [By definition M3 must contract during the 2nd phase!]
During a cycle of (Hyper)-inflationary (re)depression the price of High Order Capital Goods keeps falling whilst those of Low Order Consumer Goods rise strongly.
But Hyperinflation is a monetary phenomenon and not an economic one...and M3 is contracting because of the depression. This is something normal and is happening each time as the economy moves towards hyperinflation.
Hyperinflation starts when the public is unwilling to hold the money for more than the time it is needed to trade it for something tangible to avoid further loss. A good indicator that Hyperinflation has started will be a sudden increase in the Velocity of Money. [ P = M x V ]. This alone can increase the general level of prices. Even with a falling M3!
Hyperinflation is a psychological phenomenon. It happens overnight and it is extremely difficult to forecast when it will start.
The main cause of Hyperinflation is a massive and rapid increase in the amount of money that is not supported by a corresponding growth in the output of Goods and services. Assuming there is a decrease in the output of Goods and services (like we have now) it is still possible to see Hyperinflation when the Output is falling faster than M3 is contracting.
We have a recession/depression (output of goods and services is falling) and Public debt is soaring towards 100% of GDP (gross domestic product) and has in some cases even become larger.
We are about to enter the 3rd Phase towards Hyperinflation: hyperinflation mostly starts when the Bond (Treasuries) market breaks down. It does when Authorities start to monetize their debt like they are doing now UNDERCOVER (The ECB and the FED are already buying Treasuries/Bonds - Is it not weird that Spain sold all Bonds in about a day's time after a downgrade warning?) and the public is unwilling to absorb it (the confidence is eroding). Who would be so stupid to buy 30 year Treasuries yielding a nominal 4% when real inflation takes both the Interest and Capital away?
We all know M3 is down over the past months but few realize the Quantity of Money is still dramatically up in the long run...click here for more [charts for the Euro and the British Pound money supply are similar]. Looking at the chart below one can clearly understand there is NO WAY to mop up this excess of Money supply. It is simply to large. Having said this, the Authorities have absolutely no intention nor the will to mop it up. Inflation and Hyperinflation will simply erase the excess of Government debt and this is exactly what there are going for.

Friday July 2, 2010 - This is a storm and it will get worse. Make sure you are positioning your savings according to our investment plan and sit tight. Don't let anybody scare you out of fundamentally good investment vehicles: Fool me once, shame on you. Fool me twice, shame on me. Fool me eight times, am I a F**king idiot? - Jon Steward

A weak fiat currency is a blessing for Gold and Silver mines. Operating expenses decrease and more is paid for the finished product. As a result the profits go up.
Gold and Silver shares are more or less as volatile as the Barbaric metals are. But the uptrend is intact!
And yes the Dollar is just like the Euro, the British Pound a worthless Fiat paper currency and Treasuries nothing more but an option to buy these worthless "Assignats". This is where our PF charts come in handy...
No - it is not the price of Gold and Silver which is going up but rather the value of Fiat paper money crashing towards it real value = ZERO.
The BIS (Bank for International Settlements) Britain's mountain of debt could leave the country powerless to launch another rescue bid in the wake of a fresh financial crisis, the world's central bankers warned yesterday. Remember Britain is the Canary in the mine shaft for the rest of the World...more
$-Gold can actually come down to $ .... and the short term Bull trend will still be intact...The key reversal on the Candle charts was disregarded but the bearish wedge was not!...more .Expect the Elliot Wave technicians and Deflationist to try to sell their theories - which we cannot buy because they are neither practical nor logical.
Yesterday saw a violent reversal of the Euro against the dollar [1.22 to 1.25]. Here the Bullish flag has been activated and is also doing its job...click here to see these important charts.
American National Debt soars to highest level since WWII. The spotlight starts to focus on the American problems...more The Los Angeles Times claims a market shift and advises to dump the Dollar and buy the Euro. This is how fast sentiment changes!...more
Is Pelosi being trained by the Europeans? Unemployment checks can never create jobs. They will only window dress unemployment...more
We don't buy the Double Dip Propaganda. There is absolutely NO WAY we can at this point see a recovery would even be possible and in due time we shall have a Second down leg which will take economic activity a lot lower...more
There is an important pattern on the make for the Dow Jones Industrials and it is all happening right on a major trendline...more Add to this a Cross of Death (bearish cross-over as the 50 day Moving Average breaks down the 200 day moving average on the S&P) which is not a very good signal for markets...but readers knew for some time that we did not like what our charts were telling us.
Fixed income investment and cash are extremely vulnerable to to currency debasement and high inflation. As the value of fiat paper money deteriorates year after year, Bonds are not going a star performer. One does not need to be a brain surgeon to figure this one out.

Thursday July 1, 2010 - The time has come to put your eggs in few baskets and watch the baskets closely. Today "Diversification has become an excuse for Bankers and Fund Managers to explain how they loose your savings"

The U.N. wants to scrap the Dollar as sole reserve currency. The dollar has proved not to be able to be a stable store of value, which is a requisite for a stable reserve currency...more
The Dollar looses strongly during today's trading session. We updated the Dollar and Euro sections this week and our technical indicators showed this kind of action was very plausible. The Dollar ran into the Mother of all Necklines, and the weekly and monthly indicators are turning down.
Gold ETF swells to pass $ 05 billion milestone. The Gold ETF is a good indicator for fractional Gold. If GLD would be a bank it would rank 5th - just below France and above China...more
And yes, we don't like Bonds, Treasuries, Municipal Bonds. Best case scenario we will have a debt moratorium but normal case scenario is that they will loose their full value during the coming hyperinflation. As of May, Florida had 125 districts in default on more than $3 billion in bonds, the single biggest muni bond default wave in at least 30 years...more
The level of public debt in many industrial countries is on a unsustainable path. Expenditures related to ageing populations are set to increase considerably over the next years...and this is the catalyzer of Jim's formula.
And YES, there is absolutely NO DOUBT we're heading for another HYPERINFLATIONARY depression...Zimbabwe fashion. As explained before it is extremely difficult to forecast WHEN it will start because a Hyperinflation also is a psychological/social phenomenon. For this reason one must be prepared BEFORE it actually starts.
Taking into account the 5 year accumulation pattern of €-Silver we are able to calculate the long term objective. Mind blowing....more

Goldonomic, Florida, USA - +1 (772)-905-2491