Hello Readers,
I am happily nestled into my enclave 30 stories above one of the most beautiful bays in the world, Acapulco bay. I'm always in a good mood when I am here but gold and the precious metals stocks have me in a better mood than even is normal.
I want to get straight to talking about the relentless rise of gold but first I wanted to make a few observations on America's first family.
Obama's Looking Haggard
I came across this photo of Barack and Michelle Obama from recently and my reaction was simply: Wow, they are looking bad.
Many US presidents age very rapidly when they take office as this website shows. I am sure it is a combination of things. It probably starts on their first day in office as the most “powerful man in the world” when they get called in to meet their new bosses – the world's financial elites. They likely give the new president a brief rundown of what it is they will be doing. They likely also point out things like how John F. Kennedy was moving to nullify the Federal Reserve when he was assassinated. The first few grey hairs start to grow out right from that moment.
And I'm sure all the lying and killing of tens of thousands of innocent people worldwide weighs on them.
But this photo of the Obamas really shows the state of the Obamas.
Barack's hair looks like it has almost completely gone white. And that smarmy smirk of his looks noticably less confident. Perhaps after 2 years of trial and error he is awakening to the fact that all of his ideas about how the economy works may not be quite correct.
Even worse, take a look at Mrs. Obama. Her body looks like, as Ren was fond of saying in Ren & Stimpy, a bloated sack of protoplasm.
This is the woman trying to get restaurants to use “a little less cream and butter?”
If she's trying to lose weight she could try a few less 7 course meals on her million dollar European vacations rather than try to convince every restaurant in the US to cut out on a few toppings!
A picture really is worth a thousand words and this picture says to me, “What in the world are we doing?”
I don't know the Obamas personally, but if I did, my advice to them would be for Barack to submit his resignation tomorrow morning. If he gets out now he may not be considered too responsible for the official bankruptcy and collapse of the US empire.
I would then advise him and Michelle to buy a place somewhere in the tropics, eat some fresh fruit, veggies and lean, organically grown (which most food in places like Mexico is, grown on local farms) lean meats – no more 7 or even 2 course meals. Six light, small meals per day.
I'd then advise they start their day with power yoga and some green tea and later in the day do some crossfit style training. In the remainder of their time I'd suggest they just wander down to the local markets and meet some of the local people and chit chat and relax.
And this may be the most important: no community organizing! Try minding your own business, Barack. I know it's hard but give it a try. If you need some cash try offering a service in a private enterprise where you offer more value than the wage they pay you. I know you have no real skills that are desirable by private businesses but you're a pretty good talker. Maybe go into sales.
Think about it Barack. It's a pretty good plan. And just think, if you leave now, that idiot, Smilin' Joe Biden would take your place and possibly get his face in the history books as the President at the time of the collapse of the US government. That alone would be worth it, no?
Food for thought, Barack!
Technical Gold Perspectives
Gold is now 10 weeks into a rally since its first higher weekly low on August 6th. Uninterrupted rallies normally last 9-12 weeks.
As you can see it has now quite convincingly broken out from its very tight upward range.
I once again turned to a man who knows this gold market more than anyone I've ever known, Ed Bugos for his thoughts. Here was his response:
It was a good move for sure. We have gone parabolic the last two days, which is what that channel breakout signifies. Here’s another view based on the GLD (for a sense of volume trends).
You can see we started breaking out of the broadening formation early in September but now we’re breaking ‘away’ from it. The formation looks like it was a continuation pattern with a target objective that translates into $1385-$1400, which is the basis of my short term forecast.
Volumes seem a little light. My thinking is we get to around that target this week, and then we’re set for the post-thanksgiving (Canadian thanksgiving) correction, which could take gold back to the $1265-1300 level before the next advance to $1650 gets underway. This all assumes relatively normal not totally parabolic moves yet, but who really knows.
We know it’s right to be bullish and the charts are confirming the bullish hypothesis. Note we see a breakout in the HUI too (my intermediate target there is 675-700).
I would expect the HUI to make big gains this week then settle back after thanksgiving assuming relatively normal movements there too. However, ultimately, if we’re right and gold starts heading towards $1650, gold stocks will get valued for a $2000 gold price. But in the short term we could see a quick run up to 600 in the HUI before a buyable pull back.
I continue to worry about how widespread the expectation has become for the Fed to start expanding reserves again. The more everything goes up the less likely they will do it. So the bulls are perhaps a little hasty here in showing their hand so soon. We’ll see.
That just means that if you have cash don’t hurry to use it (unless you are trading and will be out in a week or two), but if you’re long precious metals related investments don’t sell them either. It’s also too early to start taking trading profits. Just ride it for now.
If you see something you want to buy sell something else that is less attractive…don’t use too much sideline cash at this juncture.
Thanks Ed.
Always insightful comments.
And so, with that, we will head for the exits.
As for Barack and Michelle, if you know them, let them know they can sleep on my couch down here in Acapulco until they can find a place of their own if they want to take me up on some of my advice.
Cheers,
Jeff Berwick
Chief Editor
