What Next For Gold And Silver?
“There are days when it takes all you’ve got just to keep up with losers.” –Robert Orben
In a remarkable flash of brilliance New York banksters and their Washington henchmen grasped the last straw; some called it the financial nuclear option, of nationalizing America’s biggest banks. The Boyz in New York who designed our destructive, derivative mayhem were hauled kicking and screaming to the Federale’s woodshed over at Treasury and were told our marvelous government now owns preferred shares in their revered lending institutions. Here are the reparative billions and now we own you! Go clean-up your mess.
They were not given a choice. Washington had almost run out of creative ideas when lo and behold Europe led the way with this one. Not to be outdone, Paulson and his financial militia jumped into the crash and burn breech copying socialist Europe, grabbing USA lenders by their manipulative throats. We shed no tears for these silk-suited money-grubbing cretins but now worry out loud about freedom, liberty and America’s future. What does this mean for international bank-lending- balance? Small business is the bigger business in the US. Where do they get credit and some help to continue to flourish?
Detroit’s Big Three have their collective noses in the pig trough having wasted billions on years of manufacturing crappy automobiles and trucks, while lacking the nerve to actually plan, budget and balance their money. They are not alone as now our national treasure chest is wide-open for any dingbat operation falling into the “Too big to fail” category. Hey where’s my check? Did you get one? As one market analyst said long ago, “We’ll all survive taking in each other’s laundry.”
Right. The game is over. The kindness of credit-offering from foreigners now turns mean as its every man and woman for themselves. If you think the 1930’s were import-export smothering you ain’t seen nothing yet. The Resurrection of Smoot-Hawley X 100 is raising its selfish, ugly, vindictive head. Me first-You last. I want all your stuff AND my stuff. I could care less about you and your problems. International trade is frozen.
Get ready for super inflation and be strongly prepared to have your standard of living not only reduced but maybe cut in half. Meanwhile the guilty parties have taken-stolen billions and written books having the gall to tut-tut the public at large for their foibles and mistakes. What Greenspan and his ilk have done is best expressed by Billy Wilder’s comment, “France is a country where the money falls apart and you can’t tear the toilet paper.” How appropriate for today.
It’s probably a good thing the western world doesn’t execute those producing massive financial failures on a global scale as in China. If this unfortunate rule existed in America there would be lots of empty luxury condos and mansions in New York and Washington, D.C. Wall Street would have to find several empty city blocks for a new stock broker-hedge fund manager graveyard.
Despite all of this financial dust-up and gnashing of currency-bond teeth, these fools can still blunder through in our view if they can support and circulate cash throughout the commercial paper market. For consumers, based upon presently sad circumstances, the quickest fix would be for FHA-VA to staff-up and produce, normal, standard 30-40 year mortgages giving free credit for 3-5% down and the unpaid balance at 6% interest for all.
Those hurting the most with gross unfairness are those paying mortgages on time owning homes devalued far below original cost. It’s very tempting for these folks who can move or even rent elsewhere to return keys to the bank (jingle mail) and just walk out. Millions of these cases exist today with older loans at $250,000 plus their down payments, now discovering their $300,000 home is worth $150,000. Further, it might be another 20 years before old values return. Talk about paying on a dead horse!
Consumers holding ARMS loans demanding refinance should be helped right now. Other kinds of cases could get similar assistance. Hundreds of thousands of trained real estate professionals, now out of work, could get busy, earn a living and make this happen.
Our guiding light bureaurat fools can neither think the problems through nor execute the solution. Rather, in all of their misguided mayhem they have executed the international economy along with that of America. And worst of all, they are stealing the freedom and liberty from our society at large. These idiots had better be reading history lest they travel the wrong road to a longer view revolution.
Commodities Were Smashed. What About Gold And Silver?
“They dug up an ancient Chinese emperor awhile back who was encased in jade. I prefer gold.” –Ed Koch, Former Mayor of New York City
“We have lowered price forecasts across (all) commodities, except gold.” -Goldman Sachs, Global Investment Research, 9-30-08
As we continually re-evaluate our favorite markets and the others affecting our best trading ideas, we see, at least for the time being, more power in gold than in silver. Do not misunderstand. Silver is among our favorites but is temporarily dragging behind gold investing and trading for now as it’s mostly perceived to be a commercial metal.
When gold really gets to moving, silver will play catch-up with perhaps a few weeks of lag-time. Catch-up time is when we see a consumer belief silver is a precious metal and a currency; not just something used to make DVD circuits operate or fill teeth.
We must see a solid recovery period with markets’ stabilization not only in metals but in the primary shares’ index trading group. For now, volatility remains too high accompanied with too much drama and fear. Analysts, observers, traders and the man and woman on the street remain apprehensive while some are scared silly.
This negative effect can only be removed with a quiet, soothing reassurance from banks and other lenders, seconded by small business that frozen credit has begun to thaw. We’re not suggesting PR talky-talk but actual news that real loans and cash are on the move.
Gold trading, including futures, shares, options and coins tell us gold is leading the way toward our objectives. Silver is not dormant but has based and tried to rally with a whimper. On the other hand, gold is jumping up and down on a real time day chart for the December, 2008 most active futures.
Our chart shows gold futures in a sideways channel based at $826 with a top at $920. On close examination, this channel, covering most of September and October to date, has a tiny inverse head and shoulders (bullish) and three rising, higher highs. This data is stretched out over 20 trading days. Most would miss these patterns unless you spend a lot of time and study looking at this stuff.
The primary read on these patterns tells us price is neutral and hunting for a trend. However, we know the PPT has been selling gold short and hurting it further by avoiding the bid-ask process. Buyers can offer to buy but if there are no market-maker sellers we are basically stagnant. This will change when that passel of fools completes the phony election process. Thankfully, there are only about three weeks’ left of this nonsense and then perhaps market reality can return if and when volatility subsides somewhat.
We are not going to offer any new price forecasts today. Our ideas and predictions are well known to our readers and from other news sources. Rather, I would prefer to hold my forecasting powder dry, watch new chart and news developments and then state our fresh views. We still think $985 gold is possible with $1040 probably ruled out unless things change dramatically. However, with all the worldly upset in play, anything can happen. The one sure thing is stability is now totally unstable.
Jesse Livermore’s book told us he made more money waiting and watching than trading. We agree. Let the dust settle before becoming too overly-active in your trading. Some of the most successful traders wait a lot and trade very little. How ever, they get real busy when the time is right. With all of these new and wild trillions-billions in cash being thrown around over the world, we know inflation is building. We also know, people are prone to making drastic, irrational moves in this environment. Please be careful and no trading without stops.
The dollar is stable for now but soon it resumes the fundamental selling drama. Major trends have not changed in years. We went from over-bought to over-sold in all commodities including gold and silver. In previous precious metal rallies, there have been other -50% haircuts followed by larger rallies making the prelude look puny by comparison.
We think this happens again. No whining. Just wait and stay on the gold and silver course. Those folks at Goldman Sachs are acknowledged to be among the best traders in the world. When they like gold so do we. From our view, their new, positive gold statements reinforce our old forecasts. They are almost always trading winners.
We think with October market dangers the PPT will continue to prop their little hearts out not permitting the Dow and S&P 500 to get out of control. Volatility remains wild, but the very short term trend for big index shares is bullish until November 5th. In our newsletter, Trader Tracks, we provide weekly guidance and extra e-mail alerts to report our best new trades and offer suggestions for trade management. Visit our website at (webeatthestreet.com) for more information on our spectacular futures and commodities trading record.
Whatever you do, make a concerted effort to stay with the trend and hang onto your core holdings of preferred shares, cash, and coins. Physical gold should never be sold or, traded but rather accumulated steadily on a monthly savings plan and squirreled away.
Recent news says you cannot find any coins or others. We see delays and back-orders but some dealers have the goods in hand right now. Go shopping. Should you be having difficulty buying physical metals, we suggest placing an order and being patient. Big traders are always ready to buy on the dips and normally never sell their gold and silver. You would be amazed how quickly your physical gold and silver will accumulate using this strategy.
In our conversations at conferences, several readers and others have shown interest in attending a futures and commodities trading-training seminar. Please contact our offices with this request as we plan a private conference for our traders to help them.
Editor Trader Tracks Newsletter
& The Rog Blog at webeatthestreet.com
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 webeatthestreet.com for more information
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