Easy Money, Hard Truths
CIGA Eric
How many times have you read the word consequences on this blog or jsmineset.com? A lot. The consequences of the action taken to preserve a failing fiat system will not be postponed much longer.
Before this recession it appeared that absent action, the government’s long-term commitments would become a problem in a few decades. I believe the government response to the recession has created budgetary stress sufficient to bring about the crisis much sooner. Our generation — not our grandchildren’s — will have to deal with the consequences.
Source: nytimes.com
Jim Sinclair’s Commentary
CIGA Ken, with certificates in hand, reminds us of the following:
"A breakout to the upside will follow a monthly close above 1195. Turning points are May and September with December/January thereafter."
–Martin A. Armstrong, 04/07/10
A Consolidation & Breakout Study of Gold Updated
CIGA Eric
Back on December 19th 2009, consolidation breakout study of gold, I presented the following observations about the breakout of gold from consolidation patterns:
Force of the breakout is a function of time and range (or volatility) within the consolidation. The longer the time of consolidation and greater the volatility within the consolidation, the greater the force of the breakout.
The latest gold breakout occurred after an extremely volatile and long consolidation. To suggest that it has topped out after 3-months and 9% rally from the breakout ignores the massive energy stored within the previous consolidation.
Has gold peaked as so many have suggested on F-TV?
Today’s conclusion remains the same. One of the longest and most volatile (violent) gold corrections will produce the biggest breakout move of this bull move. Remember, TA is a function of time and pressure. As each increases, the greater the resulting price move. In other words, this move is not done.
Investors must stand strong with gold because shallow arguments and traders talking their book are design to confuse and misdirect the message from a consolidation and breakout study of gold.
A Consolidation & Breakout Study of Gold: ![clip_image001[2]](http://1.bp.blogspot.com/_m5i6pLhlNWU/S__K0u7Vk0I/AAAAAAAACKg/DekrnJylD0c/s1600/GOLD+BREAKOUTS.JPG "clip_image001[2]")
Consumer spending posts weak April reading
CIGA Eric
The personal consumption to income ratio remains above 85%. A society based on excessive consumption with little investment is not sustainable. When wealth created from previous productive endeavors is consumed or transferred, society is left with obligations that it cannot pay.
Personal consumption to income ratio: 
Consumer spending was stagnant in April while incomes posted a tiny advance, signs that the economic recovery could slow.
Source: finance.yahoo.com
Gold
CIGA Eric
Paper gold, GLD, sits above 12/4/09 gap resistance shown as by the dark cyan line on quiet trading. This zone represents major resistance from the previous C-wave high. The clustering of gaps, 5/11, 5/19, and 5/26, reflects the importance of this zone. The longer price sits above this zone, the stronger the pull of the 5/12 high exerts on price. $1350 range gold remains a reason projection on this move.
Gold ETF (GLD): 
Dear Jim,
The commentator makes light of it in this interview but she notes the markets that have "bucked the trend" in this global May equity decline. Tanzania happens to be one of them!
Regards,
CIGA Marc in the Trenches
Bloomberg Television Alert
With a little bit of volatility mixed in there just for fun. if you take a look at the world index, it is pretty clear that the spelling — selling expand across the globe. i just took a look to see which markets defied the drop. You have the big markets like Tanzania, she long ago, Venezuela.
If you went to the frontier, you’re protected.
It has been a pretty bad month. No real relief there. Hopefully, things will get better.
The other theme of the month was that things were more technical in terms of the trading pattern. We talk so much about what was happening in the currency markets, leading the way for equities.
I was interesting to find out that the euro was not the worst performer against the dollar for the month of May. You had the Aussie dollar falling more than the euro. That shows how the bureau was the catalyst for people to take a lot of money off the table from these risk currencies. The euro started out at the month of May at $1.32.
Where are we now?
Against the yen, it has lost 10% value. it is a good gauge for what is happening in the global capital markets. That is not a good sign there.
