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Super Force Signals
A Leading Market Timing Service
We Take Every Trade Ourselves!
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Weekly Market Update Excerpt
Sept 14, 2012
Morris Hubbartt
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Nick Barisheff comments on QE3 & confirms his $10,000 gold price outlook
“Gold’s sharp price increase in response to QE3 announcement, compared to a smaller increase in equity prices, indicates the futility of more fiat currency expansion”.
That’s Nick Barisheff his view about Thursday’s announcement from the US Fed. Nick Barisheff is the CEO of Bullion Management Group Inc and author of the book $10,000 Gold; Why Gold’s Inevitable Rise is the Investor’s Safe Haven which will be released later this year. The statement of the Fed and the effect it had on the prices of precious metals, confirms Nick’s expectations of gold priced at $10,000 an ounce.
The Fed is desperately trying to stimulate job growth in the US. Their belief is that monetary easing could serve that objective. The point however is that all large economic regions worldwide are involved in the same kind of monetary easing practices. So the end result in reality is that central planners are destroying the value of currencies. What that means for everyone of us? The answer is simple says Nick Barisheff: massive wealth destruction. The solution to protect yourself against all of this? The answer is even more obvious: buy and hold gold!
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QE3 – An overview of the markets
On Thursday, the Federal Reserve initiated QE3 and this prompted a big rally in risky assets. As you know, we were expecting Mr. Bernanke to unleash ‘stimulus’ but even we were taken aback by the extent of the easing.
During his press conference, Mr. Bernanke stated that the Federal Reserve will buy US$40 billion worth of agency mortgage-backed securities every month until the US job market improves. Furthermore, he confirmed that the Federal Reserve will continue with its Operation Twist 2 program, keep interest rates at near zero until mid-2015 and maintain an accommodative monetary policy well into the economic recovery! When a reporter asked Mr. Bernanke whether he could elaborate until when the Federal Reserve will continue to create US$40 billion every month ‘out of thin air’, he evaded the question.
There can be no doubt that the Federal Reserve’s move is unprecedented and it is astonishing that the American central bank is openly debasing its currency! More importantly, if the US job market does not improve soon, it is probable that QE3 will continue for several months or even years! In terms of morality, the Federal Reserve’s latest policy initiative is questionable at best because an open ended QE will diminish the purchasing power of money and penalise savers. Nonetheless, from an investment perspective, QE3 will probably trigger a massive rally in global stocks and commodities.
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announcement from the Fed, which was viewed as wildly bullish by Wall
Street. The Federal Reserve launched another aggressive stimulus program
on Thursday, promising it would buy $40 billion worth of mortgage debt
per month and continue to purchase assets “until the outlook for jobs
improves substantially.”
Gold was up 2% on Thursday’s announcement of the third quantitative
easing initiative (QE3). Silver was up over 4%, while gold stocks
advanced an average of 5% based on the XAU index. As was the case with
the previous two quantitative easing programs, gold and the gold stocks
love the idea of loose money.
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Gold & Silver Prices Today On Fire
What a day for gold and silver … September 13th 2012 could become a historic day for the precious metals.
At the center of the stage today was the US Fed meeting and the announcement of their decisions by Mr Bernanke at 14h15 EST. Here is what came out of it in a nuthsell:
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Why Are The Silver Miners Outperforming?
We have seen major developments in the silver mining sector (SIL) which shows that the majors are hungry for the juniors. Coeur D’Alene (CDE) has made some strategic investments in some juniors silver explorers in British Columbia and Mexico, Hecla (HL) made a bid for U.S. Silver and Silver Wheaton (SLW) has signed its first major royalty deal in years. This signals that the smart money believes we are near a bottom and we may just be at the beginning of a major move in the junior silver miners. The majors are hungry for new deposits in mining friendly jurisdictions.
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Why globally coordinated QE and higher gold prices are unavoidable
This article is part of the series “Question for the Expert” on GoldSilverWorlds. We have the honour today to get the view of Grant Williams, author of the respected newsletter Things That Make You Go Hmm.
Question: You described in a recent newsletter article, that the next round of Quantitative Easing will be massive and that it will be globally coordinated. Why are you so convinced? What to expect from the gold price in the light of all of this?
Answer from Grant Williams: We have reached the point now where the Europeans (in particular Mario Draghi, head of the ECB) have realized that the only solution to the problem facing Europe, is to print a lot more money. They simply cannot solve this debt problem. They have been trying to treat a solvency problem like if it was a liquidity problem. That’s not going to work.
You only have a couple of options when you have so much debt:
- Either you default …
- Or you pay it back …
- But you can inflate it away as well.
The easiest solution, with the least amount of political pain in the short term for the politicians, is to inflate the debt away. That’s undoubtedly what they are planning to do.
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Last week was pivotal for equities as well as a reminder that the 3 ½
year-old recovery is still alive. Many stocks broke out to new recovery
highs as the result of the European Central Bank’s (ECB) announcement
that it would commence a bond-buying program to stimulate the troubled
euro zone economy. The S&P 500 (SPX) made its highest close in four
years as stock prices across many sectors rallied on the prospect of
increased liquidity, the lifeblood of any bull market.
Before we get into the equity market outlook in light of the upcoming
4-year cycle peak, let’s take a minute to discuss a subject of vast
importance. Normally our focus is on the internal momentum of the NYSE
broad market as well as the various stock market industry groups, such
as gold stocks. Internal momentum is arguably the best measure of the
incremental demand for stocks and is based on the new highs-new lows.
Internal momentum is important because it tends to precede the direction
of stock prices, i.e. if internal momentum starts rising while stock
prices are falling, it’s usually only a matter of time before stock
prices turn around and follow the lead of internal momentum. Conversely,
when internal momentum is declining while stock prices are rising, this
divergence usually results in stock prices plunging at some point since
internal momentum almost always leads stock prices.
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Super Force Signals
A Leading Market Timing Service
We Take Every Trade Ourselves!
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it.
This e-mail address is being protected from spambots. You need JavaScript enabled to view it.
Weekly Market Update Excerpt
Sept 7, 2012
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Gold-Stock Breakout
After weathering a long consolidation followed by a major correction, gold stocks remain deeply out of favor today. But this bearish sentiment is slowly yielding as gold powers higher in its usual autumn rally. Gold stocks are starting to show signs of life again. And after their strong advance since late July, they are now on the verge of a major upside breakout. Odds are this event will herald a major new upleg.
Despite the gold-stock sector commanding some of the biggest gains of the past decade, gold stocks have become a four-letter word. The flagship gold-stock index, the HUI, essentially stalled out way back in late 2010. Then it more or less ground sideways for an entire year despite gold continuing to surge. While the HUI did achieve a marginal new record high last September, it corrected sharply in early 2012.
Over an 8-month span ending in mid-May, the HUI plunged a gut-wrenching 40.8% in a massive correction. The tail end of this selling was so extreme that it mushroomed into a full-blown capitulation, a panic-like selling climax. Gold stocks had become the pariah of the stock-market world, ignored or scorned by virtually everyone. And much of that hyper-bearish sentiment lingered through the summer.