Posts tagged Gold

Thoughts on the Gold Chart and Economics

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Gold has made some significant progress in the battle to top the historic $1,000 USD mark.  In the chart below, which covers the past two years, we see the following:
  • Bounded by the gray trend lines: an Expanding Corrective Wave which was broken to the up-side, the upper bound of this formation was then re-tested confirming the breakout.
  • Bounded by the red trend lines: a Wedge formation which was broken to the upside last week.
  • Denoted by the purple trend line: an Inverse Head & Shoulders formation with the current price hovering close to the neck-line.
  • Denoted by the red trend lines in the MACD indicator (below): a Wedge formation which was broken to the up-side.
  • Last week gold had a historic close.  In fact it was the highest weekly close ever for gold; leaving it above the psychologically significant $1,000 mark after a weekly close for the first time in history.
As of September 25, gold has broken through two long-term formations and sits at the neckline of an inverse head & shoulders formation.

As of September 25, gold has broken through two long-term formations and sits at the neckline of an inverse head & shoulders formation.

Given that gold closed the week at the neckline of such a long-term Head & Shoulders formation, after having shown such resilience over the past few weeks, it is time we prepare ourselves for a significant move, further into unknown territory. The chart above indicates that gold is acting like a coiled spring, ready for the slightest trigger, to send it into launch mode; bringing the price into the $1200-1300 USD range.

When I look at this chart, I am reminded of the 2002-2003 period, when gold was hovering around the $375 range in a large wedge formation. At the time everyone was thinking, “this must be it for gold, it’s already had such a run from $250, the bull run surely must be over by now.”

I remember seeing the wedges, similar to the current chart, though less volatile than the current price fluctuations. I remember seeing a good-sized wedge in the MACD which had broken to the upside. In fact, it was at this time that Jim Sinclair, the CEO of Tanzanian Royalty Exploration and the author of Jim Sinclair’s Mine Set had a contest for gold community members to draw the relevant trend lines on an Investors Business Daily gold chart that he provided. The prize for this contest was a one ounce gold coin.

Well, I took Jim up on his offer and drew formations similar to those on the attached chart. Including a MACD breakout precisely like the one on the current chart. I made the chart simple yet elegant and intuitive and fortunately for me; out of all of the hundreds of charts sent in to his fax, he chose mine as the winner. What a great feeling that was and what an appreciation I gained for the power that each of us has to understand what is going on in the economic world with elegant simplicity not endless complexity.

It was even more rewarding to see gold advance to $450 by late 2004 and then $700 by 2006. What you have to realize, when you are studying these charts, is the fact that the underlying forces which propel gold skyward have not changed. The governments and central banks of the world continue to employ their disastrously flawed Keynesian economic models which create welfare, warfare and ultimately massive inflation.

Politicians love having all of the “free” money, hot off the printing press, to buy votes, line the pockets of their associates and bail out their friends. That is why these leftist notions of a nanny state taking care of us from cradle to grave, often embraced by Republicans and Democrats alike, is not going to solve the problems it was intended to solve.

This is because everything has a cost, yes even the nanny state, corporate welfare and the like. As the price of the yellow metal rises the buying power of the savings of billions of individuals decreases; so they are in effect robbed in broad daylight by the Keynesian inflationary policies. Is it any wonder that the standard of living continues to decline all over the western world.

“We can’t solve problems by using the same kind of thinking we used when we created them.” –Einstein

One of these days, it may dawn upon people, en mass; that in general the government doesn’t solve problems, it only creates problems. So the only way to truly solve problems is by strictly limiting the role of government to that of a referee and letting the free market bring about the solutions we need.

Had the free market been allowed to act upon zombie banks years ago, when the problems first arose; these banks would have never become “too big to fail.” Had the free markets been allowed to act, unhindered, in the health care field, we would have more choices and less people unable to get the help they need.

Unfortunately, with the public school educated populace; the first place they turn whenever their is a problem is the government. So we have the Hegelian dialectic, “(problem) oh goodness, what a dreadful problem! — (reaction) what are they going to do about it? — (solution) the policies that were originally sought, but did not find the political support are now widely supported and then implemented without much opposition.”

It really saddens me to see my countrymen repeating this cycle over and over again, unaware and uncaring of the fact that it makes their lives much more difficult and constrained. I often wonder when it will become apparent to them that all of this nonsense isn’t working. Will it be when gold is at 3,000? 5,000? 10,000?

I can’t say for sure when decisive action will be taken; but if history is any indicator, inevitably there will come a point at which the pull of the massively centralized state on people’s lives distorts the culture of these people to such an extent that they decide they’ve had enough of it. This would be the point where they realize that it costs so much more to live in a massive welfare state than the benefits that are derived from it and the productive individuals either demand real change, or they pull up anchor and head for some place which will suit their needs.

Gold is Poised for Liftoff

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It looks the yellow metal is preparing for another increase. Tonight it is moving above the key $1000 level to $1008 USD. Based upon the inverted Head & Shoulders formation on the medium-term chart, the target on this move is approximately $1379. If this indeed occurs, it means a tremendous selloff in the US Dollar; because gold almost always acts in inverse of the US dollar.

The extent to which the dollar falls relative to the other currencies depends on how much gold increases relative to those currencies. As has been predicted for years, we are moving from a confidence based economy into a hard asset based economy.

Over then coming weeks, I expect we will see some shocking dollar corrections in the currency markets; which will begin to wreak havoc over the daily lives of billions of people. We are likely to see civil unrest, rapid increases in prices for everyday items and shortages.

Elliott Wave Formation in Gold as it Reacts off of its all-time high at $1037

Elliott Wave Formation in Gold as it Reacts off of its all-time high at $1037.

Gold broke out of the recent consolidation wedge, confirming some recent bullish activity.

Gold broke out of the recent consolidation wedge, confirming some recent bullish activity.

Be Very Careful During The Next Year or Two

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I want to take a moment to relate some information that has come to my attention recently, which has the potential to affect everyone on this planet; but particularly those in the united States of America, since they will first be affected by this.

Over the course of the last couple of decades, the financial managers have been allowed to regulate themselves. There was an implicit mandate to create a boom in the housing market in order to bolster the economy.

In order to create this housing boom, a variety of “exotic” financial instruments were employed, which enable them to leverage their assets, and give more loans than they would have generally been able to give. Most of the troubled financial institutions of today were using “off-balance sheet” entities to hold these financial instruments, many of which were very risky.

Well, it looks as if the widely abused loop-hole that allowed them to keep things off of their balance sheet back-fired in an awesome way. Now the new financial accounting standard regulations FAS 140 are forcing them to move these entities back onto their balance sheet and realize any gains or losses.
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If you know the mind of a killer, you can stop the killing.

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This is an interesting discussion by Anthony J. Hilder, he discusses the deteriorating economic situation, and how the elite use manipulate gold to keep the vast majority of the people from being on the right side of the market.

Anthony really has a way with words. He has quite an ability to be blunt about the reality of things, yet never fails to have a sense of humor.

Anthony, along with Myron C. Fagan, released the original expose on the Illuminati and the Council on Foreign Relations back in the 1960’s.

This was long before much of anyone was talking about something smelling rotten in Denmark. Its time we incite a revelation, to avoid a revolution. It’s your choice: live or die as a slave.

Its no joke. They really do plan to kill, enslave or incarcerate you.

Just take a sober look around. Do you see the thousands of people getting kicked out of their homes? Do you see the banks collapsing and the customers demanding their money?

These are the final hours, the last chances you have to prepare for severe hyper-inflation, the likes of which we have yet to see.

Lindsey Williams at Q2 Conference (2006)

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Back in 2006, Lindsey Williams addressed the Q2 conference in Cancun, Mexico, regarding a variety of important matters. He discussed the so-called “energy crisis”, the coming hyper-inflation, and the methods by-which the wealthy control the financial system.

He started by discussing his book The Energy Non-Crisis, a book that he wrote, based upon his experiences as chaplain on the trans-Alaska oil pipeline.

During his time in Alaska, Lindsey Williams learned that there is a massive supply of oil at Prudhoe Bay, on the North Slope of Alaska. Enough oil to drop the price of gasoline at the gas pump significantly.

Williams also learned that the Government of the United States refused to allow this oil to enter the markets, when it learned of the Prudhoe Bay find.

Pumping the oil out of the North Slope was banned because, if the USA had cheap and plentiful oil, the oil producing nations would no-longer have a reason to purchase US treasury securities. Also it would lower the profit margin for the oil cartels.

Cheap oil would cause the US Dollar to quickly collapse, since the ties between the united States of America and these nations would effectively be severed. This will happen anyways, however, since wall-street has effectively lost its strangle-hold on the oil market, with the waning of the petro-dollar and the rise of the petro-euro.

During his speech, back in 2006, he predicted oil at over $130/bbl and gold at $1000, both of which we are seeing today. Indeed, Lindsey Williams has demonstrated, time and again, that his information is valid and credible.

A great deal can be learned from this man’s books and lectures. Here is the Q2 lecture for your own enlightenment. See the Lindsey Williams tag for more of the information posted on this site.

Lyndon LaRouche: FIREWALL – In Defense of Nation State

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My friends, we are past the point of no-return, from which we could salvage the current monetary system. The present system is experiencing systemic world-wide hyper-inflation, which will only be stopped when a new monetary system is introduced.

Lyndon LaRouche believes that there is no more future for this monetary system. He says that we are at a cross-roads, where we can choose between two paths.

On the one hand, we could choose to use warfare and welfare to prolong the life-span of the current system. Such an approach would drag our world into another dark-age.

On the other hand, we could choose a new system, in which we have a stable monetary system, which rewards productivity and stability; a system which increases food production instead of fighting over the few scraps that are available.

Like Weimar Germany, the productive capacity of our real economy has been destroyed. However, we have done this to ourselves, through our adherence to the belief in globalization.

The Role of Gold in the Future of the Global Economy

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The bear market in the U.S. Dollar is obviously accelerating with each passing day, prices are moving up across the board as the freshly created money increasingly pours into the market for hard assets such as commodities.

Indeed, at the extreme end of possibilities, most of today’s prognosticators believe in one of two potential outcomes:

  1. The dollar collapses into complete oblivion, the United States dis-integrates, anarchy takes hold and society as we know it ceases, bringing about a dark age of chaos and upheaval.
  2. Everything stays about the same, the markets recover in the near future, the economy begins recovery by 2009, and people continue to go further and further into debt; all remains well in the Goldilocks economy, where consequences never befall those who are irresponsible.

My research into these matters indicates that neither of these scenarios are likely, though it wouldn’t hurt to be prepared, at all times, for the first scenario, in case the system does end up coming apart.

During the course of my studies I have come across a brilliant solution, which, after another 30% slide in the dollar, the U.S. Dollar resumes its role as the reserve currency for the planet Earth, but with a modernized and revitalized Gold Certificate Ratio to regulate it, instead of edict-driven interest rate fluctuations. (more…)

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