Axstones notes technical and fundamental analysis on GOLD

[Godswill]

Are you in or out?

[Gcubed]

I think Ax teamed up with the CARTEL and is shortin' da snot outta us!!!

[Resande]

Just a bit dazed and confused here. Must have been knocked on the head when we were blown down by that passing squal. No matter, we have the Cabal flagship in sight and we have the weather guage. Hands to the Braces !

Yo Ho

[prophet]

i told ya so!

[Aussie]

http://kingworldnews.com/kingworldne...tals_Wrap.html

Dan Norcini explains what's happening starting about 5.30 in . . .

[Aussie]

[lunar]

[Aussie]

A Nasty Precedent

For the same reason that small children should not be allowed to play with matches - or loaded guns - small-minded governments should not be allowed to play with money creation. This is especially the case when the government in question is relying upon "guarantors" of the debt it creates (all money today is based on debt) who are not in control of its borrowing and spending policies. When small children get out of hand, the best result possible is that they will get burned. It is also possible that they will put a hole in themselves - or in somebody else - depending on what they are playing with. Such is also the case - with a matching degree of severity - when governments get hold of the financial cookie jar.

This week the world's eyes were on Europe and it "sovereign debt crisis". On October 27, a "fix" was duly announced and global paper markets breathed a huge sigh of relief. These markets did not look very closely at the fix that was announced, nor did they waste any time wondering whether the steps announced to "fix" the problem would actually do the job. They simply bought - especially in the global stock markets and with gleeful abandon in the financial (bank) sector of the global stock markets. As usual, the buying was most frenetic on Wall Street. By the end of the week, all three of the major US stock indexes were back comfortably in the black for the year.

Other people had a slightly different idea about what to buy. Over the week, Gold rose $111 or nearly 7 percent while silver was up $4.10 or just over 13 percent. Part of this was due to a renewed slide by the US Dollar, but most of it was due to the nature of the "fix" Europe put in to "solve" its debt crisis.

To paraphrase many financial commentators inside Europe - and many more across the English Channel and across the Atlantic - Europe has refused to use their central bank (the ECB) in the way that it is "supposed to be used". They are dragging their feet on using it as a lender of last resort - to the government. Worse still, they have had the temerity to impose a 50 percent "haircut" on the sovereign debt of a Euro-using European government. Whatever happened to the sanctity of the claim that the "FULL FAITH AND CREDIT" of a government stands behind the debt paper - AND THEREFORE THE MONEY - issued by that government? Well, in this case, nobody had any faith in the credit of the Greek government. Nor was there any likelihood that either could be reclaimed.

Everybody "knows" that a central bank has limitless resources, do they not? Remember Ben Bernanke's famous remark that the Fed has a printing press. So does the ECB. So does every other central bank in the world. Why are European governments outside Greece (and the other peripheral European nations) so reluctant to simply use it? Because they know that by doing so they put their taxpayers in potential hock to the policies of other governments. No govenment has any compunction about holding taxpayers to ransom for their own borrowing and debt creation. But they are not happy to stretch the point outside their own borders in most cases. The fatal flaw in the creation of the Euro is said to be the fact that a supra-national currency was created without creating the supra-national government necessary to "manage" it.

That IS the fatal flaw in the Euro. Without a monolithic government with sole control over the issuance of debt, a money which is based on debt (and nothing but debt) is vulnerable. The Euro is exactly like every other currency in the world. It is backed by the "full faith and credit" of the government's which create it - and NOTHING else. By forcing private holders of Greek debt (denominated in Euros, don't forget) to "accept" the fact that they will never get their capital back, the Europeans have set a dangerous precedent for themselves. They have also set a dangerous precedent for every other nation which operates with a money backed by the "full faith and credit" of the government. And that, unfortunately, is every other nation in the world.

In the avalanche of fatuous statements made in the wake of the announced European "fix" of October 27, one from Fitch (the US ratings agency) stands out. Fitch virtuously pointed out that the 50 percent "haircut" on Greek sovereign debt "may" create an event of default if investors accept it. Why? Because even if this haircut is accepted, the owners of this Greek debt paper are left with a "product" that is lower in value to what they originally agreed.

Is there a piece of sovereign debt paper issued anywhere in the world whose "value" (or purchasing power converted into cash) is NOT lower in value to what was originally agreed by its purchasers? Is there a fiat currency anywhere in the world which has NOT lost purchasing power on a continual basis ever since it became a fiat currency? Of course, there is not. Given Fitch's criteria, there is no such thing as an AAA rated bond (including a government bond) and no such thing as an AAA rated currency either.

There is, however, an AAA rated MONEY. That's gold, which continues to languish outside the financial system altogether. We do not know how much longer that will be the case. We do know that the Europeans have hastened the day when Gold is once again used as money with their 50 percent "haircut" on Greek sovereign debt.

[DHAWK]

UT-OH!

[Gcubed]

Gunna love to hear Sinclair spin this one. I wonder how many bag holders have his certs filed away?

[Aussie]

This is a very interesting interview with Jim Rickards and Jim Grant together (two smart cookies) on Bloomberg talking about gold and future gold backed currencies . . .

http://www.bloomberg.com/video/79944740/

[StateofJefferson]

Richard Russell today:


November 14, 2011

Here I am, at the age of 87, in rehab after I broke a hip, and I ask myself, "Why am I here? And what do I look forward to?" I think the powers above have given me the answer. I am here to serve and lead my subscribers through the incredibly hard times that lie ahead. Since WWII, the markets and real estate have floated up with the expanding money supply. In the next year or so this is going to result in rapidly rising inflation. This will halt the feds creation of ever more money. The fed will not be able to bail the economy out in its usual way, and hard times will envelope the land; housing prices will sink again, and unemployment will rise above 25%. There will be ways to save ourselves, and when the time comes I will be talking about all this.

In the mean time, I will continue to serve my thousands of subscribers, and I thank you all for staying with Dow Theory and your bed ridden editor at this time. In the coming two or three years we will be going through unprecedented situations beyond the understanding of most analysts. In the past difficulties have always been followed by the sentiment, "We will get out of this, and everything will be fine." That's the psychology of today, but it's not going to happen this time.

Many thanks for all your encouraging emails.
Signing off, Richard Russell

[Gcubed]

Yo Ax!!!!!

Where is JSMineset????

[Aussie]

Gold Bonds To Save Europe??

The above headline was paraphrased in a story which appeared in the UK Guardian newspaper's business blog on November 18. It asserts that Eurozone member nations could use gold to back new bond issues and that the Euroepan Financial Stability Facility (EFSF) could do the same. After all, asserts the Guardian, the Euro Zone nations are sitting on 447 Billion Euros worth of Gold - at current market prices. That's more than the current capitalisation of the EFSF.

Please note that the "cure" is presented as Gold-backed bonds, not Gold-backed Euros or, what the heck, a return to Gold itself as money. Please note also that there is no suggestion that NON Euro nations - including the UK and the US of course - should or would ever be in a position to resort to any such measures.

Two quick asides before we go further with this. Both of them concern the US. First, on November 16, the official US Treasury "debt to the penny" passed the $US 15 TRILLION mark for the first time. This milestone was duly reported all over the internet, not least on ZeroHedge. But what we have not seen pointed out is that the Treasury's "debt to the penny" first exceeded the $US 10 TRILLION level on September 30, 2008 - the last day of that fiscal year. The fiscal year 2007-08 was the last fiscal year in which US funded debt did not increase by more than $US 1 TRILLION.

Two weeks BEFORE that Treasury debt milestone, Lehman had blown up in the face of the global financial and banking system. The rest is history and it is still unfolding. Suffice it to say that in the just over three years since the end of September 2008, total US Treasury debt to the penny is up FIFTY PERCENT! There are no noises about the US issuing Gold-backed bonds.

The second aside is the approaching deadline of the Congressional "super committee" and their absolute failure to date to come to ANY kind of an agreement. The committee is tasked with proposing (at least) $US 1.2 TRILLION worth of spending cuts in US government spending over the next decade. The Treasury has racked up an official increase in funded debt of $US 5 TRILLION in 37.5 months - four times what the "super committee" is trying to cut over the next 120 months. The absurdity of this situation is beyond any fiction, it couldn't be invented. But nobody is suggesting the US Treasury issue Gold-backed bonds.

One other item. Please note that when the US government reneged on its promises to service and repay its debt in Gold in 1933-34 - and incidentally made it illegal for Americans to own Gold - the Treasury's total debt was about $US 23 Billion. That was its TOTAL debt - there were no unfunded liabilities in 1933-34.

And now we have the suggestion that Europe bail itself out with "Gold-backed" bonds. Would this cover "new" debt or existing debt. Why "new" debt of course. What would happen if all of a sudden any European nation (or any other nation) announced that from now on, their new debt paper would be backed (to some percentage point) with Gold? The most likely result would be a gargantuan and global horse laugh. There are surely enough people left in the world who realise that perpetual deficits and Gold backing for the financial instruments "funding" those deficits is a complete non starter.

But let us draw the wire of credulity to the breaking point and assume that the new debt paper would be accepted by the markets. In the first place, all the EXISTING debt - the stuff that wasn't backed by Gold - would be sold in order to get hold of the new Gold backed stuff. No nation could "fund" itself on partially Gold backed and partially "full faith and credit" debt paper. It will always be one or the other. Of course, if the new debt was GENUINELY "Gold backed", both governments and central banks would be hamstrung. They cannot print the stuff.

The other point to ponder is how long sovereign debt can be claimed to be "Gold backed" before the money itself in question must become "Gold backed" too? Not very long. Here is the supreme irony. It is now getting VERY difficult for the Europeans to claim that there is ANY solution to the problem of government bankruptcy except to acknowledge it, clear it out of the way and junk the system which gave rise to it. The British can still do it. So can the US. But their day is inexorably coming. To imagine that one can introduce Gold back into a monetary system which is built on nothing but government promises to pay is to confess a complete ignorance of any sane monetary or fiscal theory.

This should not be surprising, this complete ignorance has been on show all over the world for decades and has now reached its version of "Waterloo". Just how close the whole thing is to blowing up is well illustrated by this "suggestion" that "Gold-backed" bonds will fix the problem.

[Zed]

Two, two, two, three, tap, tap, tap! Hey is this thing turned on? Where is a damn roadie when you want one?

Axstone is dead, long live Axstone!

[Aussie]

Zed, good buddy, you're back! Back from the dead . . !

Speaking of dead. This thread has been dead . . . maybe it's time to change that . . ? Where's the Kiwi . . ?

Gold is getting slaughtered - what's up?

[krugger3]

Maybe this is the final big sell-off before we push up. Gold used to be a safe haven.
I'm sure glad Zed is not deceased.

[Zed]

Zed, good buddy, you're back! Back from the dead . . !

Speaking of dead. This thread has been dead . . . maybe it's time to change that . . ? Where's the Kiwi . . ?

Gold is getting slaughtered - what's up?

I think we are into the final shakeout, I had middle 1500's as the likely lows, possible 1500 in a spike low. I would like to see the week close over 1600 and 1550 at an absolute minimum and the month close over 1600. If we push these levels on the downside then we are threatening to break the trend out of the GFC lows. I can't say I see that the fundamental background calls for that.

IMO the shop window is opening for a "buy weakness" sale. This is the second time since the 1900 top.

FWIW If/when this huge consolidation pattern breaks upward it should be BIG. It is the biggest consolidation pattern in gold history! Either that or it all ends here... and I can't make that case, can you?

Morning

I'm sick as a dog, what a chart to wake up too, just when you need all the contratian strength you can muster. Must be near a bottom just cause Murphy is a bastard!!!!

[Zed]

Maybe this is the final big sell-off before we push up.

I will pay that.

IMO this is driven more by the fundamental drivers of hedge fund bank accounts than by the fundamental drivers of gold. In theory that makes it a short term phenomena but WOW to the volatility we no take in our stride, just 12 months ago it would have been new undies all round... in fact we'd have needed a dispensing machine

My god that crude Aussie is back!

[anywoundedduck]

I think we are into the final shakeout, I had middle 1500's as the likely lows, possible 1500 in a spike low. I would like to see the week close over 1600 and 1550 at an absolute minimum and the month close over 1600. I we push these levels then we are threatening to break the trend out of the GFC lows. I can't say I see that the fundamental background calls for that.

IMO the shop window is opening for a "buy weakness" sale. This is the second time since the 1900 top.

FWIW If/when this huge consolidation pattern breaks upward it should be BIG. It is the biggest consolidation pattern in gold history! Either that or it all ends here... and I can't make that case, can you?

Yes, I told that to my brother who is in panic mold. I too believe this to be the final shakeout. You never know, but it sure feels like it.

Long time no see. I hope you stick around for the fireworks.

AWD

[Zed]

Yes, I told that to my brother who is in panic mold. I too believe this to be the final shakeout. You never know, but it sure feels like it.

Long time no see. I hope you stick around for the fireworks.

AWD

Do me a favour --> Tell your brother to sit down, consider what he really, really wants to do then..... SLAP HIM AND TELL HIM TO DO WHAT HURTS ---> THE OPPOSITE!

Gold just loves masochists don't she? Sell when you are happy buy when you are losing bladder control

I guess he needs to do a few cycles before he gets it, a few years ago many of the gold guys here didn't seem to get it.

I think we need to setup a gold trading/investing boot camp for newbies, get them used to enjoying the punishment! I think that Madame Lash would be in it!

I'm always around somewhere, vatching, vaiting.... oih the vaiting is driving me nuts!

[Hystckndle]

Madame Lash ?!?!?!?!
Man, I gotta get out more often.
Google search forthcoming.

( maybe I should do that one from the home 'puter though )

[Zed]

She is a Sydney icon, werld famoose! She is knocking on a bit but I bet she is still bloody scary when fully armed

There was a gentleman's club around here somewhere, I hear that she used to enjoy surprising them!

[Hystckndle]

Heh,
OK, sounds like I will check it out from home then.
I am pushing my luck here at work anyways hanging out with you lot !

[Zed]

Whatever you do don't follow this link, what has been seen and all that!

[Hystckndle]

Whatever you do don't follow this link, what has been seen and all that!

[fat panther]

Zed, good buddy, you're back! Back from the dead . . !

Speaking of dead. This thread has been dead . . . maybe it's time to change that . . ? Where's the Kiwi . . ?

Gold is getting slaughtered - what's up?

Sorry, but I looooooove it! I'm now out of dry powder! It will be what it is.

[Zed]

Holy underpants!

Dats all I got after golds dump

[Zed]

The gold bugs are throwing in the towel

[GoldToHold]

The gold bugs are throwing in the towel

towel, kitchen sink, loose change - EveryThing!

[Zed]

towel, kitchen sink, loose change - EveryThing!

It is a good sign, no?

The end of the tunnel is quite probably very near!

but then I am a little

[Master_Ho]

The gold bugs are throwing in the towel

Actually - these are almost all paper trades.............

Most dealers will tell you that even at this price you are seeing
"practically no sellers" of physical!

[Zed]

Actually - these are almost all paper trades.............

Most dealers will tell you that even at this price you are seeing "practically no sellers" of physical!

The ones I talk too got some selling a while back and have been on the quiet side with a bit of an increase in buying lately. A bit of premature dip buying seemed to go on prior to the whack if what I am told holds true for the market.

[Zed]

[Aussie]

That guy is great. Very articulate and well spoken . . .

[Zed]

It is refreshing to listen to an articulate person with an opinion who is not PC!

Remember when we where allowed to have strong opinions without it being considered some sort of deep character flaw?

Go Pat!

LOL

[Zed]

...That Are Almost Too Crazy To Believe

#47: Amazingly, the U.S. government has now accumulated a total debt of 15 trillion dollars. When Barack Obama first took office the national debt was just 10.6 trillion dollars.

#49: The U.S. national debt has been increasing by an average of more than 4 billion dollars per day since the beginning of the Obama administration.

#50: During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

Z = Exponential debt blow off? A sure thing IMO! It would chart like the dotcom bubble!

#20: If you can believe it, the median price of a home in Detroit is now just $6000.

[Zed]

The Kitco chart has that bad look about it! Me paranoid?

Edit: Improving!

Edit: Hmmmmmmmm....

[<===Foolsgold]

I prefer Nigel Farage.

'Who the Hell You Think You Are?' Nigel Farage throws egg in Eurocrat faces

[fewferfev]

Anyone know what's going on with Jaguar Mining? Double volume trading today.

[Zed]

I prefer Nigel Farage.

'Who the Hell You Think You Are?' Nigel Farage throws egg in Eurocrat faces

Nigel is fun to listen to when he gets going! They must hate him.

[Zed]

... ratio ticking positive. A relative divergence is developing. Historically not such a bad thing from these levels.

[Zed]

I think we look OK here FWIW.

[Gcubed]

Merry Christmas Ax!

wherever ya are

[Nero]

Nigel is fun to listen to when he gets going! They must hate him.

I love that guy

[axstone]

Merry Christmas Ax!

wherever ya are

Thanks Guys.. Merry Christmas to you too

[Zed]

Merry KissMoose!

[Aussie]

Merry Christmas to you too Ax - don't be such a stranger . . .

[Weatherman]

Ax, I hope your Christmas is merry and festive. Since I don't see you here often, let me offer my wish now that your new year will be happy, healthy, and very prosperous! Cheers!

[Trader737]

Merry Christmas Mr Axstone