Bottoms Up - Gan bei to whom?

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Anonymous (not verified)
Bottoms Up - Gan bei to whom?

PMs have likely put in a bottom for 2012.

Although returns are not great in bullion, a steady interest is still being generated from the lack-luster metals. The infamous Wednesday put in the other week has done the damage and the correction seems to have consolidated into a solid trading range for PMs. I called 31.50 and 1620 levels as being the strong supporting range for consolidation, which luckily seems correct. There was a marginal breach at those levels, which was expected, but since then the end of the first quarter has stabilized within view. It seems many analysts have been quiet on the western front lately, preferring instead to be absent from commentary, although a few calls of downside have put pressure on markets. This has left me to my own devices to weigh up the pros and cons but the above links somewhat confirm my own view.

My call is still that a 'mass shock' is needed to project gold beyond a record setting 2012. However, this market has had about all the shocks it can expect except a king-size natural disaster. That is certainly not out of the picture with March 21-23 seeing increasing seismic action along the Pacific-Ring. Just like the US economic recovery, the Ring of Fire sits precariously on the edge of reality. Trumped up hopes but shifting baselines still undermine surety on both the economic and natural structure fronts. It seems not a matter of 'if' but a matter of 'when' the foundations will shake. There are even projections of a possible collapse in the USD as it falls from grace.

If the bond market collapses analysts have called a reversal in gold but before that occurs is the hope that the Feds will pump up the volume to extend the deceit. Bernanke was talking it up just recently. I think volatility will still be the order in PMs and average volumes will persist but that current levels will hold strong with 31.50 and 1620 still steadying the ship.

The new player to add support to a potential waning interest in PMs is the growing small investor market across China. The precious metals trading accounts are steadily gaining popularity and are gaining ground across the SOBs. We can see a new and rapid fire small investor pattern kicking in daily. The LBMA and the World Gold Council are both players to support this market and ICBC for one are recruiting bi-lingual experts to further bolster the performance and support the move. As confidence grows it will only be a matter of time before more small investors take note of the opportunities and every man and his bank manager gets on-board a PM rally. It seems distant that a new paradigm can be reached in PMs so a steady interest without the hype should see relief to prevent the bottom falling out.

Deutsche Bank is settling as the innovator and quiet achiever in global banking circles as Ackerman steps down. A 31% increase since Dec 21 lows has seen the global player consolidate its future role within a global reserve network.

China-Australia Agree on Bilateral Currency Swap Agreement
Posted on March 23, 2012 by China Briefing

Mar. 23 – The central banks of China and Australia signed a currency swap agreement yesterday that will allow RMB200 billion (A$30 billion) worth of local currencies to be exchanged between the two countries over three years.

AS we can see the global presence of the CNY is making headway to swing across to Europe with Germany at the centre of a global reserve network. William Rhodes, former Citibank Vice Chairman & CFR stalwart, was on the US-China Business report last week stating that it is a certainty that the CNY will become a reserve currency in the future. That seems like a 'plan' not a 'view' - coming from someone high enough to know.

China Supports London’s Development as Offshore RMB Market
Posted on September 16, 2011 by China Briefing

Sept. 16 – The United Kingdom and Chinese governments recently agreed to jointly work on developing products and services denominated in the Chinese local currency RMB, in a bid to develop the City of London into another major offshore RMB market.

Concerns Grow over China’s Presence in Europe
Posted on September 15, 2011 by China Briefing
By Vivian Ni

Debt-ridden European countries are longing for China’s purchase of their public debt despite fears that the country has motivations of a “reverse colonization” of Europe. Nowadays the message “the Chinese are coming” can often help governments trapped in financial crisis press public refinancing needs and shore up creditworthiness.

Greenfield investments, mergers and acquisitions, and trade as well as cooperation agreements relying on Chinese financing have become major contributors to the surge of Chinese direct investments. Interestingly, in Europeans’ eyes, the myriad Chinese investments often flow to areas that serve China’s geopolitical interest or need for natural resources and technological development.

In general, European countries still welcome Chinese investments, especially when the sizable exports bring people cheaper goods and massive capital injections provide indebted governments with a lifeline. However, many Europeans – who do not want to see their dependence on China grow – are now asking for a level playing field on which both sides can develop a greater degree of interdependence.

As I stated recently, Europe is on sale and 'big money' is acquiring valued assets. With the Euro zone being the chief trading partner with China the US will further need to focus on their domestic economy of scale and abandon the global perspective of dominance. China is the 'great leveller' in economic circles today and global socialism looks to be far from dead to me. Communist China was reportedly chosen by the oligarchy to be the hammer to reduce the 'independent' to 'co-dependence' and to shake the tree until a global interdependent regime can settle on the ashes of a re-birthed Phoenix of global rule.

I am going to draw speculation here that global shifts within the tides of fortune could bolster support for wealth moving across into the assumed security of gold and silver as the USD wanes from the position of power. I think this could be a pure sentiment issue with US cash fast disappearing as the prime means of exchange. I read this morning that cash has almost disappeared from some European countries and even in the US cash is running at 7% with electronic purchases taking more than center stage. If any hint of a cashless society begins to creep into the minds of citizens, the 'land of the free' and its constituent nations of 'free peoples' will no doubt go into a parabolic move of shoring up the secret stash. The old days of burying the loot under the oak tree, stitching a gold sovereign into a hem, or cementing a safe in the wall will no doubt become a treasure trove of possibilities.

There is not too much talk of a 'cashless society' these days but with the likes of Bernanke setting the stage against a 'gold weighted reserve' - the rush to glitter may again take stage as it did at the abandonment by Nixon way back in '71.

Julian Philips has an interesting article which stimulates my view.

Is the US Dollar Headed for a Major Fall?

One of the facts of life over the last 40 years has been that the U.S. dollar is the world’s sole global reserve currency. ... The use of the international monetary system as a war machine has surprised and angered the BRICS nations who are meeting next week to discuss this and, no doubt, to work out ways to prevent the U.S. from exercising such power. If they succeed, they will have formulated a way to bypass the U.S. dollar as the dominant currency with which to pay for oil. Once this hold has been broken, we may see a steady move away from the U.S. dollar as the sole global reserve currency.

Well with all the 'movers and shakers' that are rattling the sabres and moving the foundations across the planet - PMs still look fundamentally sound to me. Fortunately China has no chance of a cashless society so I guess cash in developing countries will be around for a long time yet.

In the meantime - 'Happy Days'

kaibo888 (not verified)
The Silver Switch

I have been squiggling on a 6 month chart of silver for several weeks now using a declining wedge pattern taken from the support line at 27.79 low of Jan 2nd to the 31.54 reached on March 22 following the recent infamous 'FOMC Wednesday.' On the top-line of the wedge, taken from the Feb 37.93 high to the 32.73 reached on the 26th, we find our parameters. I have been looking for a break to either side of the wedge to support my view that silver has put in the 2012 low. This wedge has been progressively getting tighter and tonight the switch has occurred - silver has defied the odds and broken the top-line. With markets breaking down, with silver copping the blow from multiple statements from Bernanke, with oil and gold declining, with the dollar up - silver has performed its own 'switch' in a twist of fate. It is showing that as a monetary metal it is not forgotten. There is no other reason but to say that investors have not forgotten the potential store of wealth, the potential for fast growth, the potential for an alternative to high risk and the potential to a reversal of form and faith that leverage may deliver, in a switch in silver sentiment.

A grand fellow mentioned recently his mistrust in silver; but I am putting a reverse spin on that one and stating that when all else fails, turn to silver in trust. This is a new paradigm in the making without the hype. A steady trustworthy potential can still carve a niche in investors minds. There are a lot of things about the fundamentals of this metal that one can like. Aside from all the hype of the metallic value of a multipurpose industrial metal, we have this: Monetary Value on the increase! Make no mistake about it - history is not easily forgotten and erased by a Bernanke 'twist.' Whilst we still have the development of a new 'global reserve' - silver is going to feature very prominently across the Americas. Let us not forget that for 300yrs silver was the medium of exchange on the Asian front and the Americas was the source. Then settle this in your eagle-eye view of the future as well: take a trek up into Yunnan or Tibet and you can still find the value of silver in cottage industry focus as a means of cultural wealth cognition. The brides are still adorned in the tradition of lavish family fortunes of silver. Trek over the Andes or venture into Mexico, Ecuador or Peru and you will find the same culture thriving. Venture down into Sth East Asia - Indonesia, Bali, Malaysia, the Philipines - and silver is the medium of glitter that adorns the commoners preference.

This is a highly treasured and much loved metal that will soon take centre stage again. In fact I am predicting a surprise rally coming to a stock market near you sooner than we expect. I am predicting a rush in the Americas as the dust begins to settle on the changing fortunes of the global dollar. I am predicting that the USA with its years of faith being shattered as the American dream turns to stark conflict will ensure resurgence of the silver switch. Lest we forget, the Manila fleet and its' flotilla from the Americas lugging heavily laden cargoes of silver bullion to China as a means of exchange. Lest we forget the Spanish fleet conquering the silver shores across the central and southern shores of the Americas. It wasn't the coconuts that attracted the sailors but those shiny silver beads the natives had hanging on their cultural embellishments. Lest we forget that from 1791 to 1857 Spanish silver coins were legal tender in the US, adding further value that this metal is a global currency of exchange.

We have a historical fact and incidence that cannot be erased from the memories of those who cling to reality and freedom - and that my friends is something that the American dream will not let go of - freedom!

Keep your eye on this space and your finger on the 'buy' trigger because there may well be a breakout and a decent rally to be expected in 2012 for the penultimate global treasure - silver! When all else fails - you still have silver!

Happy days.

kaibo888 (not verified)

Fractal Analysis: 2012 Silver to $70++
By Guest Contributor, on March 29th, 2012 in Opinion & Commentary

This is an excerpt from the article at the link:

Around this point in the fractal cycle in the late 70’s, Gold busted out of its channel to rise sharply higher, along with Silver. Silver’s channel top will lie up around $68 to $70 over the coming months which we believe will be reached in 2012.

We have noted for years that the Fed “owns” the psychology of the markets.

The Fed “shows inflation when it wants” and it “shows deflation when it wants.”It does so by suggesting that it will, or will not be printing Dollars, the liquidity that drives the markets.

It is the devaluation of the US Dollar that ultimately creates the price rise in Gold, in Silver, and in the PM Stocks. The only true read on the Dollar Devaluation is through the rise of $Gold so the true devaluation of the Dollar can be hidden from the market at key times. In reality, it is the market that creates the devaluation of the Dollar against Gold creating the Gold Parabola so the psychological whims of the Fed can muddle the psychology of the markets. The Gold parabola rises in fits and momentum runs as the market devaluation of the US Dollar ebbs and flows around the psychological effects of what the Fed says; accompanied by the help the Fed receives from entities trading with the Fed’s words.

(sounds feasible)

(The article goes on to highlight the 2011 run to 1900 dollars for gold following a 600billion QE loan from the Feds. The more recent 1.3 trillion borrowed to bailout Europe has not yet been factored.)

Mr. Sinclair has discussing how the US Dollar’s days as the World Reserve Currency are numbered.This begs the question of what effect this will have in terms of the Dollar’s “value.”Personally, I think that new Dollar Supply is most important, but freeing up huge numbers of Dollars with its loss of reserve status could be a reason for a sharp rise in US inflation if all of those Dollars head home – and a large number of those Dollars coming home to roost might find themselves “chasing Gold and Silver” which could add to the process of the markets re-valuing Gold and Silver much higher.

We are seeing a “price expansion” in the charts of Gold and Silver in the current period with little evidence of a “cycle time expansion” to go with it, other than the general increase in fractal time warranted at one higher Elliott Wave Degree.

We are still in a short-term period of potential cycle weakness until options expire for Silver and Gold futures into the end of this week – but the Fractal Cycle suggests that things will heat up soon to see Silver on its way to $70+ in the next up-leg. We have previously laid out our fractal expectations for Gold in 2012 via our article, Goldrunner: Fractal Gold Analysis Says Gold On Way to $3,500 Mid-year.

For the moment,

Goldrunner, THURSDAY, 03-29-12

NOTE: A link to the Goldrunner subscription service can be found here. If you would like to be added to Goldrunner’s mailing list to receive his new and Free newsletter, Goldrunner’s Fractal Corner, send an e-mail to GOLDRUNNERBLOG44@AOL.COM.

kaibo888 (not verified)

I think that much of what is really occurring in markets is so manipulative that it is only a matter of time before gold and silver rise to the fundamental position of true wealth again. BRICS met and have discussed an alternative to the IMF and the World Bank - Yes, yes and yes - sink you imperialist royal bastards!

I'll reserve my other expletives so as not to upset the natives who treasure their system of exclusivity.

Happy Easter next week - say a prayer for the poor having been exploited by a capitalist oligarchy.

kaibo888 (not verified)

Just reading some of the ailments of the crew this week ... let's close out on a roll ... a positive note ... no slippery slide tonight but a sweet Friday fortune as we anticipate the rise. Positional authority is knowing you have the goods for the long run. I'm looking at 32.50 closeout tonight and thankful at that. I ain't budging and only wishing I could add to the position.

kaibo888 (not verified)

We have well and truly broken out of the declining wedge pattern now. Opening this week has seen positive rises in silver bullion with possibly more to come. Interest in silver bullion was steady in the first quarter with a more substantial performance than gold. I am projecting a possible move towards 35USD this week prior to the Easter holiday but that is purely speculative. There certainly seems enough validity and support to suggest a rally of sorts. There are of course dependency factors such as co-support from gold, weaker USD, increasing crude prices. I might add I took profits at the current level above 33 but still have substantial volume. I am looking for any dip or swing up before I add to the current volume. I am confident silver has the goods for the next move up without the hype of 2011. When it starts to rally, it will surprise many who had thrown the towel in and may yet face another parabolic move before years end. At this current level silver is an extremely attractive option when the next rally kicks off. Several analysts are starting to signify the possible move in the making.

kaibo888 (not verified)

Well, when it comes to hype, I am a known quantity. We are at critical holding levels, 1620 Au and 31.50 Ag. I hope we can hold form and settle the difference here on the split.

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