Axstones notes technical and fundamental analysis on GOLD

[FatesWarning]

must watch gold ta video tonight. Spectacular!


http://thechartpatterntrader.com/

[Aussie]

Todays Dows +150s
POG $1182

AND PM stks are generally down.......... wassup? c

Yeah, I was very surprised when I saw that overall HUI result this morning. It definitely sucks. I would have thought it was at least a 2% up day . . .

I'm lookin' to dump that Yamana pig if I can . . . they can't seem to increase their profits despite gold at $1,180 and cash costs of only $161 oz . . .

http://www.reuters.com/article/idAFN...0100503?rpc=44

[Goldies]

Yeah, I was very surprised when I saw that overall HUI result this morning. It definitely sucks. I would have thought it was at least a 2% up day . . .

I'm lookin' to dump that Yamana pig if I can . . . they can't seem to increase their profits despite gold at $1,180 and cash costs of only $161 oz . . .

http://www.reuters.com/article/idAFN...0100503?rpc=44

Why did you buy into the Yamana hype? They suck!!! They have a gazillion share float. They are diluted numero uno.

GSS in 2 days??? More bang for your bucks.

[jbilprophet123]

Why did you buy into the Yamana hype? They suck!!! They have a gazillion share float. They are diluted numero uno.

GSS in 2 days??? More bang for your bucks.

Pls dont hype GSS it is my 1 of 2 holdings. I dont want to see great results and selloff after that cause of result playas exiting.
I may trade hecla but i dont intend to sell GSS even for a trade out and in.

[Goldies]

Pls dont hype GSS it is my 1 of 2 holdings. I dont want to see great results and selloff after that cause of result playas exiting.
I may trade hecla but i dont intend to sell GSS even for a trade out and in.

You know in 2 days they will sell GSS off like crazy. It won't matter if they triple up the profits. They will sell!!!
You guys pretend this aint going to happen? Look what happened to screwball HL.

I just got my tax rebate money so I'm ready for a sell off. Read my post again and think about what I said. In 2 days GSS will get clobbered. I didn't say buy now.

[4dabopper]

As usual, it's not my fault!!
Striking public workers challenged the Greek government's bailout-for-austerity deal with the EU and IMF on Tuesday as investors fretted about Athens' ability to push through ambitious budget cuts. The main public sector union, ADEDY, began a 48-hour national strike that shut down ministries, tax offices, schools, hospitals and public services, with thousands of protesters converging on parliament in the center of the Greek capital. "We want an end to the freefall of our living standards," said Spyros Papaspyros, the head of ADEDY, which represents about half a million workers in the Aegean nation of 11 million. "These government measures are destroying my life," said Panagiota Katsagani, a 25-year-old part-time school teacher who was marching in Athens on Tuesday. "I was planning my future, now I have to go back and live with my parents."

Get a job with the state............yea right!...LOL
More than 80% of U.S. school districts are expected to eliminate jobs and more than half will likely freeze hiring during the upcoming school year, an education organization said Tuesday.


Somthing to watch for
Goldman, which took a hit on the announcement of the hearings two Fridays ago, snapped back only to sink precipitously this Friday. The same went for JP Morgan, which significantly is by far the largest derivative player, or more accurately, market manipulator in the world. Should they both break down simultaneously, as I suspect, it means that the jig might be up for their illegal shenanigans, and nothing good awaits the markets

<a href="http://s268.photobucket.com/albums/jj5/4dabopper/?action=view&current=ccohen050310g.gif" target="_blank"><img src="http://i268.photobucket.com/albums/jj5/4dabopper/ccohen050310g.gif" border="0" alt="Photobucket"></a>

[prophet]

WHATTA BASHING.....................

[Dizzy47]

JPM bastards wont stop at anything, poor silver

oh yeah we have CFTC thieves investigating silver manipulation for years now

what a joke, $1 drop in a day, CFTC no where to be seen, they are all probably watching porn too all day long

[Bullion only]

Looks like the S&P and price of gold are in lockstep.
RT

[Dizzy47]

this is a major USSA government operation in ag & au through JPM thieves

when news of JPM to be investigated surface the thieves chose the scare tactics again

like thief Paulson did with his first $700 billion bail out of fat banksters friends

[Tecumseh]

JPM bastards wont stop at anything, poor silver

oh yeah we have CFTC thieves investigating silver manipulation for years now

what a joke, $1 drop in a day, CFTC no where to be seen, they are all probably watching porn too all day long

Who cares Dizzy - they didn't get their hands on your stack did they? I've got the same number of ounces this afternoon that I had this morning and now have an opportunity to pick up a few more.

[stefanmo]

Today's action doesn't mean a thing!
Update 04 05 2010

[Strawboss]

Today's action doesn't mean a thing!
Update 04 05 2010

Stefanmo,

I wonder if you can construct a similar model for silver/USD?

[Goldies]

GG saw mr manipulator coming to get me, but nobody listened.

[Aussie]

Hourly Action In Gold From Trader Dan
Posted: May 04 2010 By: Dan Norcini Post Edited: May 4, 2010 at 2:18 pm
Filed under: Trader Dan Norcini

Dear CIGAs,

Gold priced in Euro terms, or Euro Gold as I prefer to call it, notched a brand new all time high at today’s PM fix finally clearing the 900 level as it was fixed at €907.281. Yen gold also made another high at the PM Fix as did Sterling gold. This was prior to the selling barrage that swamped the commodity world in New York as the hedge funds were busily disengorging themselves of anything that was remotely tangible and rushing wildly into the safety of, (drum roll here), paper bonds. Yessiree Bob, that is what I call a nice, “let me sleep comfortably� trade. Uncle Sam is issuing these scraps of paper by the trillions and investors can’t get enough of them throwing away gold in the process. Exchanging gold for paper scraps whose yields are dropping off a cliff – excuse me while I shake my head as I marvel at this display of mental acumen by the boy wonders of the hedge fund world. One computer algorithm to rule them all.

Don’t let today’s blind selling panic shake your settled conviction concerning gold. Any setback in price is not going to last long as the causes behind the continued strength in gold are intensifying, not lessening. Investors rightly fear a contagion effect from Greece towards other weaker members of the Euro zone such as Spain and Portugal. Then there is Italy and perhaps some of the Eastern European nations bordering on the Euro zone.

This pales in comparison to what is occurring in the states here in the US but the financial press will have nothing to do with that – for now. German banks are stuck holding gobs of Greek debt but how would you feel holding gobs of California’s, or Illinois’s, or New York’s debt. What got the ball rolling downhill for Greece, even though everyone and their mother knew about it for a while, is the ratings downgrade by the rating agencies. Eventually those “way behind the curve� folks will get around to training their guns on the various US States. That is when things will get nasty.
With all this commodity related selling, copper is getting beaten with an ugly stick having lost .40 over the last month and has now surrendered all of its gains for the year. The weekly chart still shows a market in an uptrend however so this indicator has not completely rolled over as of yet. It would have to drop below $3.00 to have me concerned about a double top although price is approaching both the 40 week and 50 week moving averages. If it is going to hold, it will hold at either one of those two levels. That means copper bulls need to come up with some sort of convincing argument to justify a resumption of the uptrend sooner rather than later.
Weakness in the base metals as well as platinum and palladium helped pull silver lower today.

Crude oil, another key commodity and forward looking indicator, is not escaping the selling wave today either but at this point is still trading higher than where it began this year. It too has a weekly chart which shows a market in an uptrend. I would have to see crude oil trading below $70 to say definitively that a longer term top is in. Crude could very well work in a broader trading range with a higher bias as it is entering a seasonally strong period. It spent the better part of February and March working between 83 and 78 before moving up to its current range between 87 and 80.

The equity markets have not been very kind to would-be shorts ( I should know) but today’s cascade into the abyss has created some serious technical chart damage. The S&P has been a one way trip north for three months now and it finally appears that the “nothing but blue skies� crowd has had a dose of reality. Soaring profits for the financial stocks has led many to conclude that the banking system is back on solid ground and given rise to hopes that lending would be picking up as the economy supposedly garnered strength on the willingness to borrow once again. The problem is that the banks are making money not by lending but more so by trading. Why take on risk when you can trade virtually risk free has been their motto. The higher the long bond moves in price, the tougher it is for them to play the interest rate differential game.

The S&P is now sitting squarely on its 50 day moving average on the daily chart. A breach of this level which cannot be recovered before the closing bell or additional downside action tomorrow that cannot recapture this level, is going to turn many technical indicators that the funds use to the sell side. The onus is now on the bulls to perform and see whether or not they can avoid handing control over the market to the shorts. They have proved quite adept at snatching victory out of the jaws of defeat this entire year. One thing working in the favor of the bulls is that the longer-term oriented weekly chart still shows the S&P in an uptrend with price well above the rising 40 week and 50 week moving average although a poor close by the end of this week will tend to confirm the bearish engulfing pattern shown on this same weekly chart. How this market closes Friday of this week is going to set the tone for some time.

The long bond took to the heavens today as it surged past my initial target near the 119 ^20 level moving al the way to 120 ^01 before setting back a tad. A strong finish to the week would set the bulls up for a decent shot at 121 ^10. About those higher yields on your bank savings accounts – forget about those for now.

Based solely on the price charts as of today, one would be hard pressed to find the “V� shaped recovery chatter having any credibility.

One last comment about the HUI – the mining shares continue to be on the receiving end of the hedge fund ratio trades. They got hit with a double whammy – talk of a 40% Australian tax yesterday plus today’s severe broad equity market sell off was too much for mining share bulls to handle. We will be watching to see when buying support emerges in this sector. The shares are no longer the indicator for gold as they once were, not with the advent of the gold ETF’s which have siphoned off a considerable amount of investment money that would otherwise be finding its way into the miners. Those who designed those infernal creations, knew what they were doing.

[fat panther]

I was just dusting off my shopping list of miners when I read Norcini's last paragraph. What a slap in the face that was. Could it be true, no repeat of '79-'80 due to GLD/SLV?

[Goldies]

The dollar has reached 83 and above, so the rocket boosters is going to kick in. 85 in the short term.

[Sampson]

Thanks to everyone who posts here and continues keeping one of the greatest threads i have ever read alive. I don't have much to add but i sure enjoy reading and thinking.

Stefanmo, Is it possible for you to post the scatter chart of your USD/POG model? I think your unique charting gives an extremely valuable insight to every gold investor and i wish to give you an extra thanks for your continuing updates.


Sampson

[Anakin]

I was just dusting off my shopping list of miners when I read Norcini's last paragraph. What a slap in the face that was. Could it be true, no repeat of '79-'80 due to GLD/SLV?

I guess that's another reason to trade the miners and not buy-and-hold, waiting for the big one.

[Goldies]

Write off GSS rally..After today nothing will change the fate. It doesn't matter what they report in the morning.
I lost $500 on GSS today.

[jbilprophet123]

Write off GSS rally..After today nothing will change the fate. It doesn't matter what they report in the morning.
I lost $500 on GSS today.

Roflmao

[Aussie]

Interesting sub channel on the HUI. I guess we could be headed to that lower rail at about 425 - what do you think Zed . . ?

[Goldies]

This topic has lost its way.

Let Goldie illuminate the road. I'm shocked that the majority of this topic is unreadable.

[4dabopper]

Gold is at 1170

and silver is at 17.86





If I was in paper/stocks THEN I would be worried, but da PHYSICAL

Yawn............

Village Idiot indeed........LOL

[prophet]

R Russell - The Death Knell

http://www.321gold.com/editorials/ru...ell050410.html

[prophet]

Courtesy of The Gold Report (http://www.theaureport.com)

ShadowStats’ John Williams has done his math and believes his numbers tell the truth. He explains why the U.S. is in a depression and why a "Hyper-Inflationary Great Depression" is now unavoidable. John also shares why he selects gold as a metal for asset conversion in this exclusive interview with The Gold Report.

The Gold Report: John, last December you stated, "The U.S. economic and systemic crisis of the past of the past two years are just precursors to a great collapse," or what you call a "hyper-inflationary great depression." Is this prediction unique to the U.S., or do you feel that other economies face the same fate?

John Williams: The hyper-inflationary portion largely will be unique to the U.S. If the U.S. falls into a great depression, there’s no way the rest of the world cannot have some negative economic impact.

TGR: How will the United States’ decreased economic power impact global economies? Will the rest of the world survive?

JW: People will find to their happy surprise that they’ll be able to survive. Most businesses are pretty creative. The thing is, the U.S. economic activity accounts for roughly half that of the globe. There’s no way that the U.S. economy can turn down severely without there being an equivalent, at least a parallel downturn outside the U.S. with its major trading partners.

When I talk about a great depression in the United States, it is coincident with a hyper-inflation. We’re already in the deepest and longest economic contraction seen since the Great Depression. If you look at the timing as set by the National Bureau of Economic Research, which is the arbiter of U.S. recessions, as to whether or not we have one, they’ve refused to call an end to this one, so far. But assuming you called an end to it back in the middle of 2009, it would still be the longest recession seen since the first down-leg of the Great Depression.

In terms of depth, year-to-year decline in the gross domestic product, or GDP, as reported in the third quarter of 2009, was the steepest annual decline ever reported in that series, which goes back to the late ’40s on a quarterly basis. Other than for the shutdown of war production at the end of World War II, which usually is not counted as a normal business cycle, the full annual decline in 2009 GDP was the deepest since the Great Depression. There’s strong evidence that we’re going to see an intensified downturn ahead, but it won’t become a great depression until a hyper-inflation kicks in. That is because hyper-inflation will be very disruptive to the normal flow of commerce and will take you to really low levels of activity that we haven’t seen probably in the history of the Republic.

Let me define what I mean by depression and great depression, because there’s no formal definition out there that matches the common expectation. Before World War II, economic downturns commonly were referred to as depressions. If you drew a graph of the level of activity in a depression over time, it would show a dip in the economy, and you’d go down and then up. The down part was referred to as recession and the up part as recovery. The Great Depression was one that was so severe that in the post-World War II era, those looking at economic cycles tried to come up with a euphemism for "depression." They didn’t want to create the image of or remind people of the 1930s. Basically, they called economic downturns recessions, and most people think of a depression now as a severe recession.

I’ve talked with people in the Bureau of Economic Analysis and the National Bureau of Economic Research in terms of developing a formal depression definition. The traditional definition of recession—that of two consecutive quarters of inflation-adjusted contraction in GDP—still is a solid one, despite recent refinements. Although there’s no official consensus on this, generally, a depression would be considered a recession where peak-to-trough contraction in the economy was more than 10%; a great depression would be a recession where the peak-to-trough contraction was more than 25%.

We’re borderline depression in terms of where we’re going to be here before I think the hyper-inflation kicks in. You’ve certainly seen depression-like numbers in things such as retail sales, industrial production and new orders for durable goods, where you’re down more than 10% from peak-to-trough. In terms of housing, you’re down more than 75%, and that certainly would be in the great depression category. With hyper-inflation, you have disruption to the normal flow of commerce and that will slow things down very remarkably from where we are now.

TGR: After a period of recession, isn’t inflation considered a good sign?

JW: There are a couple of things that drive inflation. The one that you’re describing is the relatively happy event where strong economic demand is exceeding production, and that’s pushing prices higher, as well as interest rates. That’s a relatively healthy circumstance. You can also have inflation, which is driven by factors other than strong economic activity. That’s what we’ve been seeing in the last couple of years. It’s been largely dominated by swings in oil prices. That hasn’t been due really to oil demand, as much as it has been due to the value of the U.S. dollar. Oil is denominated in U.S. dollars. Big swings in the U.S. dollar get reflected in oil pricing. If the dollar weakens, oil rises. That’s what you saw if you go back to the 1973-1975 recession, for example. That was an inflationary recession.

Indeed, the counterpart to what you were suggesting earlier about the strong demand and higher inflation is that usually in a recession you see low inflation. The ‘73 to ‘75 experience, however, was an inflationary recession because of the problem with oil prices. That’s what we were seeing early in this cycle, where a weakening dollar rallied oil prices, and then the dollar reversed sharply and oil prices collapsed. We have passed through a brief period of shallow year-to-year deflation in the consumer price index, but, as oil prices bottomed out and headed higher since the end of 2009, we’re now seeing higher inflation, again.

I’m looking at hyper-inflation, which is a rather drastic forecast. This has been in place as an ultimate fate for the system for a number of years. Back in the ’70s, the then Big 10 accounting firms got together and approached the government and said, "Hey guys, you know you need to keep your books the way a big corporation does. You’re the largest financial operator on earth." The government then, as well as today, operates on a cash basis with no accrual accounting and such. Yet, over a period of 30 years, the accountants and government put together generally accepted accounting principles, or GAAP, accounting for the federal government and introduced formal financial statements on that basis in 2002, which supplement the annual cash-based accounting.

If you look at those GAAP-based statements and include in the deficit the year-to-year change in the net present value of the unfunded liabilities for Social Security and Medicare, what you’ll find is that the annual operating shortfall is running between $4 and $5 trillion; not $500 billion as we saw before the crisis or the $1.4 trillion that they announced for fiscal 2009. Now to put that into perspective, if the government wanted to balance its deficit on a GAAP basis for a year, and it seized all personal income and corporate profits, taxing everything 100%, it would still be in deficit. It can’t raise taxes enough to contain this. On the other side, if it cut all government spending except for Social Security and Medicare, it still would be in deficit. With no political will to contain the spending, eventually the government meets its obligations by revving up the currency printing press.

TGR: With all this new paper money coming into the system, wouldn’t we see a bigger bubble than we’ve ever seen prior to a hyper-inflationary great depression?

JW: No, in fact, it’s a very unusual circumstance that we have now. Put yourself in Mr. Bernanke’s situation—he had to prevent a collapse of the banking system. He was afraid of a severe deflation as was seen in the Great Depression, when a lot of banks went out of business. The depositors lost funds and the money supply just collapsed. He wanted to prevent a collapse of the money supply and keep the depository institutions afloat. Generally, that has happened. The FDIC expanded its coverage and everything that had to be done to keep the system from imploding was done. The effects eventually will be inflationary.

In the process, what Mr. Bernanke did was to expand the monetary base extraordinarily, more than doubling it over a period of a year. The monetary base is money currently in circulation plus bank reserves. If you go back to before September 2008, the bank reserves were in the $50 to $60 billion range. Where the currency was maybe $800 billion, we’ve gone over $2 trillion in total reserves. Most of that is in excess reserves and not required reserves that banks have to keep to support their deposits. Normally banks would take their excess reserves and lend them out into the regular stream of commerce, and in doing so, that would create money supply. Instead they’re leaving the excess reserves on deposit with the Fed. Money supply and credit are now generally contracting. We’re going to see an intensified downturn in the near future. I specialize in looking at leading indicators that have very successful track records in terms of predicting economic or financial turns. One such indicator is the broad money supply.

Whenever the broad money supply–adjusted for inflation–has turned negative year over year, the economy has gone into recession, or if it already was in a recession, the downturn intensified. It’s happened four times before now, in modern reporting. You saw it in the terrible downturn of ‘73 to ‘75, the early ’80s and again in the early ’90s. In December of 2009, annual growth in real M3 turned negative. It’s now at a record low in terms of decline, down more than 6% year over year. What that suggests is that in the immediate future you’re going to see renewed downturn in economic activity.

In all the prior instances that I mentioned, this event led recessions, except for ‘73 to ‘75. That’s when you had the oil spike and a recession that came from that. When the money supply turned down in that recession, the economy accelerated in its decline. We’re going to see something along those lines, now, with about a six-month lead time. You’re going to have negative economic growth this year. The implications for that are extraordinary, because the projections on the federal budget deficit, a number of the state deficits, and the solvency and stress tests for the banking system all were structured assuming positive economic growth in the 2% to 3% range for 2010. Instead it’s going to be negative. Many states are going to be in greater difficulty than they thought. Most likely, you’re going to have federal bailouts there. The banks are going to have more troubles. All this means more government support, more government spending, greater deficits and greater funding needs for the U.S. Treasury. We have a global market that already is increasingly reluctant to hold the dollars and U.S. Treasuries.

TGR: The U.S. dollar is still the reserve currency, and it’s holding its value while the euro struggles. Wouldn’t decoupling precede hyper-inflation?

JW: I don’t know if it will decouple from being the reserve currency formally, but it will de facto. The reserve status is the reason the dollar didn’t collapse per se a year and a half ago during the September ‘08 panic. The movement is already afoot, however, to try to relegate the dollar to some status other than a reserve currency. For example, OPEC purportedly is looking to price oil in something other than U.S. dollars. The pressure is there to change the status.

Again, if you start to see a great depreciation of the U.S. currency or a tremendous increase in lack of confidence in the soundness of the government’s fiscal condition, there is a problem. You mentioned Greece, for example. The sovereign solvency issues there are minuscule compared to what we have with the United States, which is the elephant in the bathtub. The markets know it’s there. The central bankers know it’s there. Again, with the downturn in the economy, all the issues are going to be brought to a head. As they come to a head, there will be that effort to dump the dollar. I would expect that, indeed, it will be decoupled from its reserve status, although it could follow after the fact as opposed to before the fact.

TGR: Major economic indicators suggest significant improvement; even the IMF has stated that we’ve averted a global depression. What are you seeing that these governing bodies are not?

JW: What I’m using is a leading indicator of economic activity: year-to-year change in inflation-adjusted broad money supply. We’re now seeing a very sharp year-over-year decline, which has not been seen since the 1990 recession. This indicator does not work always in the upside; it doesn’t necessarily give you a signal for a rising economy. It is, however, basic. If you strangle liquidity you can always contract an economy. Deliberately or not, liquidity’s being strangled. You’re seeing very sharp declines in consumer credit, commercial and industrial loans and commercial paper outstanding.

You are getting happy news from governments, central banks, financial markets, Wall Street analysts and the popular media, which does tend to cater to Wall Street. Such is standard practice. Happy news is what sells and you don’t want to discourage people. The Obama administration, interestingly, started talking-down the economy when it wanted to get its stimulus package in place. As soon as that was done, it started talking-up the economy. Everything was just fine and dandy again. This is the most extraordinary downturn most people living today have ever seen. In terms of modern economic reporting, which basically started after World War II, we’ve never had a downturn as long or as severe. Perversely, the extreme nature of the downturn actually has warped recent reporting of seasonally-adjusted data to the upside.

TGR: Earlier you mentioned that business around the world will survive in the event of a depression. Aren’t there sustainable businesses in the U.S. as well? Won’t an influx of printed currency and green-tech job creation offer some value? At some point, doesn’t stimulus money become real cash producing real goods? Surely the economy would be viable at some level?

JW: Not without income growth. There’s nothing there that you’ve described to me that is growing, aside from inflation. To have sustainable growth in the economy, you have to income growth, net of inflation. That is not happening, and there is nothing in existing government stimulus that will cause real income growth.

Beyond income issues, the problem with the hyper-inflation is that very quickly the use of cash will cease. Let me contrast our circumstance here with a very popularly followed hyper-inflation case that’s now run its course in Zimbabwe. There you had probably the worst hyper-inflation that anyone’s ever seen. After devaluation upon devaluation, they successively lopped the zeros off the bills. If you took a $2 bill that they first issued back in the ’80s and then tried to come up with the equivalent of a $2 bill in the last form of the currency, it would be very difficult to do because it was so worthless. If you put a pile of those together to equal the original $2 bill, it would actually stretch from the earth to the Andromeda Galaxy. We’re talking light years. There are not enough trees on earth to print them. Yet the Zimbabwe economy survived and functioned. They had a lot of problems, but they operated. The reason they functioned was because they had a back-up system, which was a black market in U.S. dollars. People switched out of the Zimbabwe dollar to U.S. dollars. They could live with that. In the U.S., we don’t have a back-up system.

TGR: You mentioned in a recent interview with CNN that you’re recommending individuals move into both cash and gold. With the euro and the dollar in jeopardy, where does that leave us?

JW: I don’t like the euro. I don’t think that’s going to hold together, and I’ve thought so for some time. If it should break up and you have a new German currency, a new mark or something like that might be a strong one option. At the moment I like the Canadian dollar, the Australian dollar and the Swiss franc. For anyone living in the United States, rather than looking at the short-term volatility in the markets and trying to make money off of that, this is the time to batten down the hatches and to look to preserve your wealth and assets.

In terms of preserving the purchasing power of your assets, the best thing I can think of is physical gold. That’s worked over the millennia. I’m not per se a gold bug. It just happens to be a circumstance in which it’s the cleanest asset around for that. You don’t need to put all your assets into gold, but hold some. Hold some silver. I’d look to get some assets out of the U.S. dollar and look to get some assets out of the U.S. When I say outside of the U.S. dollar, again, I look at the Canadian dollar, Australian dollar, Swiss franc in particular. I think they will tend to do particularly well, whereas the U.S. dollar is going to become effectively worthless.

As the dollar breaks down, you’ll also likely see disruptions in supply chains, including shipments of food to grocery stores. People should consider maintaining stockpiles of basic goods needed for living, much as they would for a natural disaster. I sit on the Hayward fault in California. I have a supply of goods and basic necessities in case something terrible happens—natural or man-made—that will carry me for a couple of months. It may take that long for a barter system to evolve, which I think is what you’re going to end up with; at least until a new currency system is reorganized and you get a government that’s able to bring its fiscal house into order. No currency system in the U.S. is going to work unless the fiscal conditions that drove it into oblivion are also addressed.

On a global basis, where the dollar is the world’s reserve currency, 80% of currency transactions involve the U.S. dollar. There’s going to have to be an overhaul of the global currency system. To gain credibility with the public, the powers that be likely will design a system that has some kind of a tie to gold, but that’s purely speculative.

TGR: From a personal investment point of view, you emphasized that this is a time to conserve assets, including gold and other currencies. How else can investors protect themselves?

JW: I like physical gold and silver. I look to gold as a primary hedge. If you can come out of this holding gold, you’ll be in a position where you’ll be able to take advantage of some extraordinary investment opportunities that will follow. With inflation, real estate is usually a pretty good bet. It tends to hold its value over time. There may be periods of illiquidity, though, and it’s not portable. Neither of those limitations is an issue with gold. Maybe gold will become the black market to support U.S. economic activity. It certainly would be the area that people will try to transfer their assets to as time goes along.

You see people now as gold gets to a new high saying, "Oh my goodness, I bought at $200, and I can sell out at $1,100 making a good profit." What people don’t realize is that they haven’t made a real profit. What they’ve done is retained the purchasing power of the dollars that they invested in gold, and they’ve lost proportionately the purchasing power of the amounts left in dollar-denominated paper assets over the same time. Gold is a long-term wealth preserver. Again, where many people are used to an investment environment where they can buy a stock, make a quick profit and then sell, with gold you need to hold on for the long haul as an insurance policy, not as a quick investment.

TGR: Thank you very much for your time.

Walter J. "John" Williams was born in 1949. He received an A.B. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth’s Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies. For more than 25 years he has been a private consulting economist and a specialist in government economic reporting. His analysis and commentary have been featured widely in the popular media both in the U.S. and globally. Mr. Williams provides insight and analysis on his website, www.shadowstats.com.

[prophet]

Kinross Gold profit jumps, buys Red Back stake

* Q1 adj EPS $0.14 vs est $0.14

* Revenue rises 23 pct on strong gold prices

* Takes 9.4 pct stake in Red Back Mining (Adds details; in U.S. dollars unless noted)

TORONTO, May 4 (Reuters) - Kinross Gold's (K.TO) net profit jumped 45 percent in the first quarter on stronger gold prices, the miner said on Tuesday, as it announced it was taking a 9.4 percent stake in Africa-focused Red Back Mining (RBI.TO).

Kinross, which operates in the Americas and Russia, said it has subscribed for 24 million shares of gold miner Red Back in a private placement, at a total cost of C$600 million ($588 million).

At C$25 a share, the price is just above Red Back's closing price of C$24.46 on the Toronto Stock Exchange.

The Red Back investment "enhances our leverage to the gold price and gives us a strategic stake in a fast-growing producer with great exploration potential, a first-class management team, and assets in one of the world's most prolific gold regions," Kinross Chief Executive Tye Burt said in a statement.

The move follows Kinross's takeover during the quarter of explorer Underworld Resources for about C$140 million, and its purchase of the Dvoinoye project in Russia for $368 million.

Kinross also sold half of its 50 percent stake in the massive Cerro Casale gold project in Chile to Barrick Gold (ABX.TO).

The miner earned $110.6 million, or 16 cents a share, in the three months ended March 31. That compares with a profit of $76.5 million, or 11 cents a share, in the year-before period.

Adjusted earnings were 14 cents a share.

Analysts polled by Thomson Reuters I/B/E/S had expected, on average, a profit of 14 cents a share, before exceptional items.

Revenue rose 23 percent to $657.6 million, as realized gold prices climbed to $1,065 an ounce from $897, while gold production rose 3 percent to 544,134 ounces.

Cash costs per ounce rose about 10 percent year-over-year to $461.

Kinross maintained its 2010 production guidance of about 2.2 million ounces at costs of $460 to $490 an ounce.

Shares of the company closed up 0.9 percent at C$19.05 on the Toronto Stock Exchange. The results were released after markets closed.

($1=$1.02 Canadian) (Reporting by Cameron French, additional reporting by Abhiram Nandakumar in Bangalore; editing by Rob Wilson)

[Aussie]

A closer look.

If we get a good day tomorrow and top 465 - that's pretty bullish, if not then it may be back down to test that rail. I guess a lot depends on how unglued the major indexes get. If this dollar rally continues we could see a lot more pounding.

What do others see besides my amateur charting abilities . . ?

[prophet]

Methinks USD still has some upside on momentum.

[Aussie]

Methinks USD still has some upside on momentum.

It's certainly looking that way . . .

[prota]

Go Euro, Go Down!
I like days like today was. Why? Because we need 2 more days for breakout in POG, when we reach 1.23 Euro level vs. Dollar, just as 2008 low. There is no way that we’ll go under or much under than that. And then, probably the new cycle starting, euro rise, USD down. Gold as usual UP.

[4dabopper]

<a href="http://s268.photobucket.com/albums/jj5/4dabopper/?action=view&current=luckovich-1.gif" target="_blank"><img src="http://i268.photobucket.com/albums/jj5/4dabopper/luckovich-1.gif" border="0" alt="Photobucket"></a>






<a href="http://s268.photobucket.com/albums/jj5/4dabopper/?action=view&current=arial-1.gif" target="_blank"><img src="http://i268.photobucket.com/albums/jj5/4dabopper/arial-1.gif" border="0" alt="Photobucket"></a>

[Aussie]

Go Euro, Go Down!
I like days like today was. Why? Because we need 2 more days for breakout in POG, when we reach 1.23 Euro level vs. Dollar, just as 2008 low. There is no way that we’ll go under or much under than that. And then, probably the new cycle starting, euro rise, USD down. Gold as usual UP.

Prota, don't forget what happened in 2008 when there is a panic . . . could it happen again? Hard to say, but remember what Trader Dan said of the move last night " . . .the selling barrage that swamped the commodity world in New York as the hedge funds were busily disengorging themselves of anything that was remotely tangible and rushing wildly into the safety of, (drum roll here), paper bonds."

Markets are not logical - otherwise the DOW would never have gotten to 10K. I don't think gold will ever get dumped like if did before, there are a LOT more buyers to step in now than there were then, but that doesn't mean we won't get a COMEX elevator ride to some major resistance points.

[prophet]

Prota, don't forget what happened in 2008 when there is a panic . . . could it happen again? Hard to say, but remember what Trader Dan said of the move last night " . . .the selling barrage that swamped the commodity world in New York as the hedge funds were busily disengorging themselves of anything that was remotely tangible and rushing wildly into the safety of, (drum roll here), paper bonds."

Markets are not logical - otherwise the DOW would never have gotten to 10K. I don't think gold will ever get dumped like if did before, there are a LOT more buyers to step in now than there were then, but that doesn't mean we won't get a COMEX elevator ride to some major resistance points.

Methinks the late comers are learning since the 2008 debacle that Gold's the place to be with all the economical dross unwinding ..........wonder if we will ever get to the US states debt risks?

[StateofJefferson]

Hey Aussie

Whats with the 40% tax on miners? Sounds like you are living in a socialist country.

[Aussie]

Hey Aussie

Whats with the 40% tax on miners? Sounds like you are living in a socialist country.

It sucks . . . no doubt populist politics prior to a looming election. The whole world is going Socialist . . .

[fat panther]

Hey, Jeff. Where you livin these days? Thought it was US and you would recognize socialism when you saw it coming. LOL

[Goldies]

We did good today guys. We made our money and locked in a profit. This is so easy!!!!! Its like Alvin York said.... "shoot the line turkey's from behind."
http://www.youtube.com/watch?v=JyF9KKUeds8

Get the turkey!
http://www.youtube.com/watch?v=JButK...eature=related
Best turkey shoot in TN!

[Gold Sox]

Tuesday's action for a small player:

Heard Silver was getting crushed so ran down to my local coin dealer. "Got any Eagles?", I asked hopefully. "Just these five, he told me. "What about the 2009 on the desk?" I added. "Oh yeah, forgot about that one, that's six." "How much?" Getting down to brass tacks. (Silver staples perhaps) $19.00 he said without hesitation. "Well, I liked the $18.50 I paid last week so at $19 I guess I'll just take two." I put $37 on the counter and contented myself with a done transaction. Besides, I figured if Silver fell for the rest of the afternoon I might be able to get the other four at $18.50 on Wednesday. He placed the remaining four on the counter and said, "$18.50 for all six is okay. I counted out an additional $74, put it on the counter, and went outside.

Yep, I get all distraught when Silver falls.

[Gold Sox]

Off Topic (Sort of)

http://cgi.ebay.ca/BRITISH-VIRGIN-25...-/400115732199
This is being sold for $333 although there are more around and the price will vary. Each Proof coin is $20 face value as the British Virgin Islands use the US dollar. Since there are 25 coins why isn't this an instant win? Is it that difficult to find who has to recognize its face value? Wouldn't the Franklin mint have to take them in payment for something else since they produced these? My coin dealer has a set I could get for less than $300? What do you think?

[Goldies]

I hope today is May 5th. Today my miner reports. I hope I get lucky. I need some luck. Today my funds are cleared for rebate.
I love these first time buyer credits. Obama is the best! I feel spoiled. The point is he is taking care of us. The fortunate ones.
People like us did not abuse the credit. We were savers. He rewarded us. We shall inherit America.

[FatesWarning]

I took this market plunge opportunity to dump my AUY. I swapped it for SVM when SVM was down 15% today. Feels good to be AUY free again.

[prophet]

I took this market plunge opportunity to dump my AUY. I swapped it for SVM when SVM was down 15% today. Feels good to be AUY free again.

Same here..........sold AUY Yesterday......hows SVM? Down lots lately

[prophet]

GOSH* Just saw SVM went down to $6.63 before bouncing!

[FatesWarning]

Adam Hamilton at Zeal recommends SVM and AXU and lists on the spec recs page. I heard from SOJ he issued a strong sell on AUY in the May newsletter.

[prota]

Prota, don't forget what happened in 2008 when there is a panic . . . could it happen again? Hard to say, but remember what Trader Dan said of the move last night " . . .the selling barrage that swamped the commodity world in New York as the hedge funds were busily disengorging themselves of anything that was remotely tangible and rushing wildly into the safety of, (drum roll here), paper bonds."

Markets are not logical - otherwise the DOW would never have gotten to 10K. I don't think gold will ever get dumped like if did before, there are a LOT more buyers to step in now than there were then, but that doesn't mean we won't get a COMEX elevator ride to some major resistance points.

Go Euro, Go Down!
Sooner you reach the bottom, it’s better for us.

Don’t worry Aussie. Where will Euro go? 1.0 : 1.0 or below with USD? With Zillion Dollars printed? No way man. USD is in much worst position, everyone knows that. Only because Dollar is reserve currency now is doing well. But gold will rules. 1.2 is euro floor.

[Goldies]

So today we have GSS and, next week have CDE to report.

Crossing my fingers. I wish you guys luck.

[FatesWarning]

CDE got a UBS upgrade today, still holding my 7000 shares

[Goldies]

Dang dude. I could ONLY buy 200 shares with tax rebate. 200 is suppose to be X 10 if take away reverse splits.

[Goldies]

CDE is doing me good finally. Wait for a drop like spider on a web.

Fates warning, you are telling tall tales. I wouldn't believe that for one second.