Thursday, May 31, 2012

WHAT IS THAT?

I'm not sure but its making these guys terrified. Perhaps they are starting to understand just how absurd this entire process is. The following is an article out of ZH that I just thought was simple and straight forward enough that no further development from me was necessary ...you read it below and decide if you want to be in a paper market. gl


If Raoul Pal was some doomsday spouting windbag, writing in all caps, arbitrarily pasting together disparate charts to create 200 page slideshows, it would be easy to ignore him. He isn't. The founder of Global Macro Investor "previously co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul came to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe... Raoul Pal retired from managing client money in 2004 at the age of 36 and now lives on the Valencian coast of Spain, from where he writes." It is his writing we are concerned about, and specifically his latest presentation, which is, for lack of a better word, the most disturbing and scary forecast of the future of the world we have ever seen....
And we see a lot of those.
Consider this:
  • We are here...
  • We don’t know exactly what is to come, but we can all join the very few dots from where we are now, to the collapse of the first major bank…
  • With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves.
  • There are almost no brakes in the system to stop this, and almost no one realises the seriousness of the situation.
  • The problem is not Government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivatives…
  • Yes, that equates to 1200% of Global GDP and it rests on very, very weak foundations
  • From an EU crisis, we only have to join one dot for a UK crisis of equal magnitude.
  • And then do you think Japan and China would not be next?
  • And then do you think the US would survive unscathed?
  • That is the end of the fractional reserve banking system and of fiat money.
and then there is this...Stock market investors continue to hold on to their stocks in the hope that we will again see bull markets like in the 1980s and 1990s. But looking at the very long term Dow/Gold ratio chart this optimism seems unfounded.  The chart shows a major “megaphone” pattern that has a target of 1.  This would mean that gold and the Dow would be equal in value.  It would also mean another 90% fall of the Dow against gold.  In my view the pattern will probably overshoot and we will go well below a one to one ratio. 


 

Even if we “only” go to a Dow/Gold one for one ratio, at what level would that be?  For many years I have forecast gold at $10,000 dollars, and that would mean the Dow would be at the same level.  But remember this means that gold would go up 6 times from here and the Dow would be down 16%.  With hyperinflation gold could go considerably higher.  So investors who want to preserve their wealth in the next few years are likely to do much better by owning physical gold than stocks.

Egon von Greyerz
Matterhorn Asset Management AG
GoldSwitzerland
May 31, 2012



Now back to my charts...these are NOT for the faint of heart.....but very possible....if the charts with the descending wedges hit their targets then that is the bottom imo.......

82 comments:

  1. well now wasnt that a dramatic little turnaround in gold........Jobs numbers poof.....gold...BABOOM....better slap that down soon

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  2. forget all the debate about stagflation inflation deflation etc and how gold performs.....remember what historically gold does in True deflation when FEAR steps in.....remember OCTOBER 2008-March 6 2009......it was FEAR and the market went down and gold went UP

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  3. I think the Fed may have to act BEFORE the June FOMC meeting...most likely guarantees through the IMF for Europe

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  4. These guys work fast...already knocked it off 10 bucks from high! They need to move quick to keep it under 1580. Deflation is still on...Brent under 99, WTIC under 83 and keep falling....Cost for the miners have gotten 20% cheaper in the past 2 weeks. Its going to be crazy next week...

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    1. and the 10Y at 1.46...... WOW...the golden jackass might be right...

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    2. this is setting up for a major intervention this weekend......or....it just may be more back door QE until the June FOMC

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  5. Boy, certainly lots of fear out there today. Maybe that is their goal.

    Phil Davis today suggested bottom fishing, but do so by selling puts on the stocks that you are interested in buying.

    Keystone was just devastated with the jobs number and believes that the markets could sell off significantly. Keystone pointed out that there is 13 trading days until the FOMC meeting of 6/20. Can the markets make it til then??

    If I may quote Todd Hoffman from the TV show Gold Rush,..."suck it up and put on your big boy panties..." Hmmm,..big boy panties. Can you buy those at your local drug store??

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    1. I'm probably wrong Doc but if they lose control of gold price today then they will intervene this weekend

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  6. Euro bank runs will be the straw that breaks the camels back on this......Fear cannot be allowed to get out of control and it is in the range now......you just cant lose that little word.....CONfidence.....its everything

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  7. gold just blew up...1603....this is wild stuff

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  8. thats not retail buying....those are massive orders....

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  9. Amazing movements this morning, looks very good for our case. The 10 year... just wow haha I know I keep saying that but man. This is EXACTLY the action we want to see in gold in my opinion. I agree Kli, the Fed will make a move sooner than expected. Buckle up ;)

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  10. 1620 should cap gold today......my guess is they take it up then try and close it below 1600 at the fix

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  11. I am truly loving today....yesterday was a big shakeout..... I bought a small GPL yesterday to add to my core. Good move...well over 1600 now..now silver needs to break 28.50...

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  12. From a selfish perspective I'll take the action......... but looks like de sha vu all over again! 1610 Wow!!!! Things be unraveling.....

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  13. theres the take up....now up 50.....gotta love that volatility....no resistance until 1620 once it crossed 1600

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  14. keep your eye on the descending wedge chart above on gold......they can take it to 1640sh....and keep it in the wedge...just sayin......

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  16. Yeah I did, both charts took the wind out of my sails this morning........ Would love to lighten the boat a bit at a profit before that happens! Looks like Sis's post last week that gold could hit 1340 might be a real possibility based on your charts.....

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  17. Tom I have to throw those out there......when they form you have to pay attention....not saying they will hold true but its there and I have been looking at it for several weeks now......we are nearing the point of recognition now with a well formed descending wedge so I have to post it......I WILL NOT SELL but accept my fate if it breaks to the bottom....today's action makes this very suspect however so my advice is to just watch.....The overall bull market IS and WILL remain intact

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    1. Keep posting U'm, Reality is what it is, what ever that is nowaday's and as always totally appreciate your work. Just a tad frustrated and bored........ I'm in for the duration but it sure would be nice if da charts were wrong so we all could pull some chips off the table but if so, then we might have other fish to fry, just so long as their not Pacific Blue Fin!

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    2. think of the energy efficient sushi bars with glowing toro...

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    3. yes chuck that takes on new meaning

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    4. anyone...an article Kli posted had J Rodgers as big owner

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  18. Report: Obama ordered wave of cyberattacks on Iran

    we are painting ourselves into a corner....then add our failed drug policy to help instigate more trouble with our southern borders..

    great move in gold, congrats all...

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    1. What ever happend to the old cloak and dagger dark stuff we peeps are not supposed to hear about? This guy's grasping at straws here! He be in lots o trouble in the poll's........ Not that his replacement is going to be any better but might buy some time or maybe not.....

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  19. Man it's agonizing watching miners. They are up but feel so weak!

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  20. BTW all......i know several of you can post your own charts so please put them in comments whenever you wish......they can directly refute me ....i love two sides to the coin to be shown

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  21. Hubz, Silver is so close to a big break out. If Romney talks stimulusin any way....I am holding here. Maybe for a long time like months.

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    1. I hope so, got a small lot of Aug $35 SLV Calls. Will reload if those expire worthless for another bet further out. I agree silver is going to hit $50 at least again and quickly but timing it correctly is the trick. Out of the money calls are a cheap way for a big payout with little risk currently imo.

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  22. Ive got silver to 39.20 on Aug 7. Based on trends, Andrews and time FIB's....

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    1. Wow. That would be a nice move. GPL and SSRI would fly high!! Just curious Sheeps what your target on gold is using Fib's.

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  23. I just got in to work... What caused this?!!?

    Gold
    1,611.40
    48.80
    +3.12%

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    Replies
    1. kli called up his old buddy Palmer...he bought in big...

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    2. Ahh, found it... "The Gold ‘QE’ Trade: Alive And Well"

      http://blogs.barrons.com/focusonfunds/2012/06/01/the-gold-qe-trade-alive-and-well/

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  24. Check out the weekly hammer forming with KGC.

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  25. Equities getting mauled:

    DJIA $DJI
    12,188.01
    -205.44
    (-1.66%)
    NASDAQ $COMP
    2,766.34
    -61.00
    (-2.16%)
    S&P 500 $SPX
    1,286.13
    -24.20
    (-1.85%)

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  26. A close above 29 in silver will be monster technically. A close above 1610 would be awesome in Gold as well.....we are so close....but I guess that is all part of the game....

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  27. Ryan, cause I am a poor man I trade the poor mans metal. I do have some physical but not enough. Over the weekend I will look at gold closely.

    As far as silver goes at the bottom of a long 3 wave near as I can tell.

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    1. sheeps, where's the guac? soon it will be where's your glock...

      Hey, please give me your take on AUMN?

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    2. silver will be the real mover in this game....it will be more of a medium of exchange when the SHTF....gold may see 10K but silver will see 500......do the math

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    3. thanks Sheeps. Always enjoy reading your comments. Good luck to you!!

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  28. gold bumping 1620.....that should be all for the day....

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  29. Reply not working...

    Yeah i worry about that Chuck. Can I really defend my place...no. Not all day and all night. I get avocados poached from time to time which is why I do not kill rattle snakes or clear tall brush by the road.

    There is only one road in and on the corner lives a cop...

    the guac is plentyful..avo-egg salad good too. I will check out AUMN and get back...

    gotta go...adult day out.

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    1. I wouldn't worry that much, they'll hit the lawrence welk resort first...take care sheep and enjoy the day...I was in Mt. Hood area last weekend and put in some killer hikes, ate great food and the local breweries treated me well..

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    2. correct chuck.....they will avoid the crazy guy with a dog or two an a gun that's not easy to scope out.....grandma next to a blacktop where they can snatch and grab is too easy.......the scary scenario is if they feel you are isolated and vulnerable enough that they can go in and spend some time getting to know you and where you might have something

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  30. gold over 1620......my excitement number is a break above 1640 WITH confirmation...............

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  31. The London gold fixing or gold fix is the procedure by which the price of gold is determined twice each business day on the London market by the five members of The London Gold Market Fixing Ltd, on the premises of N M Rothschild & Sons. It is designed to fix a price for settling contracts between members of the London bullion market, but informally the gold fixing provides a recognized rate that is used as a benchmark for pricing the majority of gold products and derivatives throughout the world's markets. The gold fix is conducted in United States dollars (US$), Pound sterling (GBP), and the euro (€) daily at 10.30am and 3pm, London time, via a dedicated telephone conference facility.

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  32. Markets unraveling and scared money pouring into gold......don't know how much is paper vs bullion but even sharpies on WS do not know that they will never see their bullion if they don't have it on hand.....I know this for a fact

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  33. I meant to say I know this from first hand conversations with them

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  34. Gold 1,617.70 Up 55.10(3.53%)

    Direxion Daily Financial Bear 3X Shares (FAZ)
    29.61 Up 2.60(9.63%) 1:52PM EDT - Nasdaq Real Time Price

    I wonder if Ben is drawing up plans for QE4 :)

    PS. I really wish I bought some physical from Gainesville last week. KLI kept saying 1400, 1400 and I thought I should wait. Now I missed the boat.

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    1. snooze ya looze.......1400 is still possible but that is why I said have your load and buy more if it gets down there.....i have my load and then some......hehhehehe......its never too late

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    2. I should have done what you said. I could have at least established a core around 1550, then added more if they took it to 1400.

      On the plus side... I've still got my cash. I'll be more than ready to pull the trigger on the next dip. I looked at your charts. Those two "descending triangles" point to one or two more dips.

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    3. i put the those wedges out there for a reason......caution AND TO NOT BE SHOCKED if it goes there.....just dont shake out of these trades

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  35. chuck AUMN......wow good one....low float too nice big short interesttoo

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  36. WOW...I leave my desk for lunch and Gold approaching 1630. Silver is still lagging though....Markets are getting crushed....

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  37. funny how they are going to land gold around 1620......its so manipulated that who cares......strong hands are in control of it now for the longer term so that any beatdown will just get bot........can they still get it to the wedge break? YUP.........will they ???? not a clue.......so sit back and watch ......I mentioned that volatility and rough sledding was ahead.....was today volatile enough for you???? an $80 dollar swing WITH equities crashing.....you should all like this action no matter what lies ahead......and it is not pretty

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  38. I really am liking todays action from a selfish perspective, a few more days like this and I'm all green but like you said it's what lies ahead that scares the snot out of me. Considering that the average peep doesn't have a clue, it's really sad to realize just how many peeps are going to get hurt and this time it looks like it's for keeps........

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    1. they don't want to have a clue......its called "Ostrich Economics"

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  39. Is the move in gold a flight to safety or the anticipation of QE?

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    1. Probably a little of both Ryan. Note how the Euro went up a just a tiny bit today. The Euro would have went up a lot more if it was just QE.

      I posted this link earlier today that covers the move well:

      http://blogs.barrons.com/focusonfunds/2012/06/01/the-gold-qe-trade-alive-and-well/

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  40. Interesting from Turd -

    "In silver, the Cartel net short fell to 1.31:1 and a total, aggregate number of just 14,334. This likely means that JPM is now under 10,000 in net short. By far, the lowest I've ever seen. For the sake of comparison, the 4/5/11 ratio was 2.69:1 and the 2/28/12 ratio was 2.32:1. This means that the net short ratio of The Silver Cartel has been trimmed by 75% since 2/28/12. Additionally, the total long position of The Cartel is 45,817 contracts. On 4/5/11, it was 33,413 and on 2/28/12 it was 33,802. So, the total Cartel long position is up almost 36% in just 3 months. Large specs went short silver, too. Spec longs shed 1519 and spec shorts added 720. Ooops. Dummies."

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    1. also hub......as more bullion is accumulated by strong hands a reset will have to be made and an area chosen to defend.....my belief is that ultimately the next battleground for gold will be north of 2000.....watch CNBS for clues.......when everyone is on board for the trade then get ready for the next beatdown....margin raises and OPEX.....it will be bloody....hehehhehehehe but its only another speed bump for the ride to hell......and make no mistake it will be hell

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  41. blacky's slv chart.....

    http://www.freestockcharts.com/?emailChartID=cc110803-ca4f-4ac8-ab02-61c2d8a52b27

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  42. From ZH, a very good read........


    http://www.scribd.com/fullscreen/95616173?access_key=key-c47v8djek10b7231s3y


    Enjoy the weekend all

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  43. Like to see thses guys attack JPM's silver short....bound to happen

    http://www.zerohedge.com/news/about-boaz-weinstein-london-whale-bulls-eye

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    1. if not them........someone will but they have to be very big and it has to be backed imo by the chinese

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    2. JPM has covered a lot of their short though supposedly correct? I like that Rollover clip Kli "By tonight that will be cheap" heheh.

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    3. I watched it back when it was released....and what's funny is that now is SOOOO much worse fundamentally than then....

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  44. http://www.dailymail.co.uk/news/article-2153324/Markets-facing-rerun-Great-Panic-2008-Head-World-Bank-warns-Europe-heading-danger-zone-bleakest-day-global-economy-year.html

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  45. http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/6/2_Don_Coxe_-_Emergency_Fed_Meeting_%26_Gold_Backed_Bonds.html

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