more articles by

Roger Wiegand

Click to enlarge Click to enlarge


Fundamentals Of Precious Metals Have Changed

By Roger Wiegand      Printer Friendly Version Bookmark and Share
Nov 12 2009 3:30PM

With solid technical breakouts of gold above $1,065-$1,085 and going to $1,123.40 on the December futures this morning, we suspect a correction low could be $1,007 and it might be something higher. Our many months old forecast of $1,250-$1,260 for December gold futures is more real as we keep trading. During the last two months we have noticed tiny technical moves in gold and silver shares signaling diversion from the primary shares markets. Metals as well as the shares are diverging from the U.S. Dollar influence as well. Gold and silver are beginning to renounce most all fiat currencies; especially the U.S. Dollar. This situation forecasts dire and deep economic problems ahead. Be forewarned and focus on protecting assets, family, and friends. Thinks can shift very quickly. Buy gold.

Old Advice-Good Advice

“Among the assistants he found waiting for him was a very intelligent young Italian. Once a month he took part of his pay, and bought gold coins for his wife. I remonstrated with him about it once and he said, ‘Look, don’t you Americans come over here to try to tell us how to live. I go home and I give that coin to my wife and I tell her if something happens to me and to the bank and all the governments, you can go into the countryside and give it to a farmer, and with that coin you can eat for a week.’ I came around to the opinion that he knew something I didn’t know.” -From Milton Gilbert, Chief Economist for the Bank of International Settlements, Basel, Switzerland we hear the preceding story as reprinted in Golden Insights, James U Blanchard III, 1997.

We heartily agree with that young Italian. Not only was he correct but during the last eight years with gold rising so steadily and so quickly, that one gold coin would now feed a family of four for three months.

More Reasons Why We Are Going Where We Are Going.

 Our wise guy and absolutely marvelous U.S. Treasury Secretary Timmy The G. told us this morning the economy needs more time to rebound. No Kidding. The last time we went through this mess it lasted from 1929 to 1954 for the stock market recovery. This time it’s infinitely worse times ten. We might all die of old age before the next recovery in mainstream shares. The stocks today (excluding precious metals and a few others) are just where they were in the year 2000. Consequently those holding from there to here had a wonderful exercise in brain damage and futility. So much for buy and hold forever.

Key Points To Ponder On Our Conclusions.

  1. Bond markets are overbought.

  2. Junk bonds and municipal bonds are going very scary.

  3. Japan’s bond pile is so enormous it simply cannot go on much longer.

  4. Since U.S. bond markets are 70 times larger than the shares, when this baby pops it could be financial Armageddon.

  5. Equities have gained nothing for a decade. They gave it all back.

  6. Gold has tripled in less than ten years and is rising even faster.

  7. Consumer confidence is at new lows.

  8. Real estate foreclosures were reported up 18% this morning. It’s getting worse.

  9. Billionaire Wilbur Ross posted an extreme warning on commercial real estate. We said the same thing many months ago. Insurance companies holding this paper are going down, too.

  10. Moody’s is going to report stuff ever faster; each month instead of intermittently. They do not intend to take more extreme criticisms on all of these bank and corporate failures.

  11. The stimulus in the U.S. has stopped having any effects. Now the political manipulation idiots want another one. More paper printing and dilution with inflation and hyper-inflation results.

  12. One of the last remaining sources of investment bank income, trading, is being capped by a federal dolt restricting pay. The good traders are going overseas. Adios bank income. All they need is Glass-Stegal and reasonable SEC enforcement. They won’t do it.

  13. China has five big bubbles in progress. Watch for them to pop individually or collectively-credit, shares, housing, banks and real estate.

  14. Financial stocks are headed south again after the bear market dead cat bounce and free taxpayer cash.

  15. Bank credit is as scarce as hen’s teeth. These guys are working the spread on free government cash and not lending. New loans are pure fiction.

  16. Borrowers qualified to borrow are cutting back credit lines and hunkering down with cash. Smart ones are shunning debt for liquidity. They know what’s coming.

  17. GE is having a fire sale to off-load as many divisions and assets as possible to raise cash. Being a big bank (not in name but as GE Capital) they are in deep you know what. We think they could potentially fail and we give it one out of three. That would really dump ALL the markets.

  18. CIT, the premier lender for medium and small businesses went bankrupt. Yes, they will reorganize but with what tiny previous percentage of loans being originated? Small business is credit dry as CIT funded receivables.

  19. Dollars are oversold and will bounce a little. For the longer pull they get cut in half again.

  20. The Canadian Dollar is rising on commodities and a government with a much better balance sheet. For the shorter term it could correct mildly but then should rise in value beyond the US dollar. Canada is best situated to weather the storm in our view.

  21. The Swiss Franc is another fiat currency. However, it is sounder than the others and is still perceived as being a “safe and secure currency”…a place to park some cash for a rainy day.

  22. The Euro is overbought and should be selling back to some place lower. Recently it’s been an inverse dollar trade in rallies.

  23. Barter has begun in earnest with crude oil. Producers are finally skipping the interim paper cash or bond route as currency. China can buy oil with trade goods and so can others. Look for barter to spread rapidly.

In summary

Since USA consumers are 70% of the American economy and this  economy is the world’s fiscal driver with our failing dollar covering  80% of the world’s reserves; think about this nasty combo.

  1. U.S. consumers are saving not spending.
  2. Consumers are unemployed to the tune of 20% in USA. It’s going to 30-35%.
  3. Since credit is terribly expensive (29.99% on credit cards) and not available for the most part, the American economy is stalled and frozen.
  4. Stocks are flat to down and have earned nothing for a decade.
  5. Where is the engine of growth? Who has credit? Who has money to spend?
  6. U.S. Dollars are sliding in value as shares are peaking and selling-off.
  7. We are toast and the worse hits in 2010-2012; then comes World War III.

U.S. Dollar index supports at 75.00. After a return to 78.50 selling resumes.

We are expecting a mild markets’ move on technical signals at this date. Could it become more extreme? Yes, it could but it increasingly appears we get a mild correction followed by a new shares rally in precious metals and mainstream shares. We would be PM shares buyers on our technical confirmation.

Financials crashed in fall, 2008 with Lehman. Recovery began with TARP in May, 2009: During November, 2009, we’re ending a dead cat bounce with mild toppy selling this month. Precious metals and their shares are still peaking on this November 11, 2009; for the shorter term. This week most trends are in reverse and then later move to rallies. Between now and then some selling and corrections should appear. We are at a turning point in most markets with lots of choppy, sideways trading.

Keep in mind, if you own paid for stuff it will most likely remain in your hands; not in somebody else’s. That includes gold and silver. Do not get tangled-up in daily noise. Keep studying the larger view and buy precious metals after each profit-taking correction. Headwinds are building into an economic hurricane. Take care of business right now.

My dire prediction might surprise us and arrive at any time. Selling is mild now. But next summer could be the large crash. In the coming middle, look for more buying on most everything. Our personal trading year to date is up nearly 100%. Markets are giving.

Personally, I can see unbelievable opportunities to trade that we would never see again for many years. Turn these problems into opportunities. Those on the right side of the trade might get rich. Those on the other side are just victims. Stay Alert. –Traderrog.

Roger Wiegand
Editor Trader Tracks Newsletter
The Jay & Rog Blog at



Roger Wiegand is Editor of Trader Tracks Newsletter for gold, silver and energy traders. Roger provides recommendations for short and longer term traditional stock shares, futures and commodities trading with specifics for individual trades. See for more information.

Contact Claudio Bassi, at Trader Tracks New York City publishing offices for an introductory 30-day trial subscription for only US$49.00.  This is half the monthly rate our subscribers pay. Call us at 718-457-1426 Monday through Friday, 9:00am to 4:30pm (EST). You can also e-mail Claudio at for more information.