Posted at 12:47 PM (CST) by & filed under Jim's Mailbox.

Greetings Jim,

The Gold Currency Index continues to test recent all-time highs and technical indicators remain slightly bullish overall on the daily chart, so a subsequent long-term breakout would likely result in substantial additional gains.

Best,

CIGA Erik
Prometheus Market Insight
http://www.prometheusmi.com

Dear Erik,

And so it will.

$1224 plus and the bullies are out of the picture.

Regards,
Jim

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Jim Sinclair’s Commentary

A crisis anywhere today is a crisis everywhere in the global economic world. It rises and implodes together and there is no way around that.

Krugerrand Output Jumps to 25-Year High on European Debt Crisis
CIGA Eric

There are two types of gold: One is held in the hand, the other is a paper proxy with a promise to delivery gold.

Krugerrands, Viennas, Eagles, and other gold in hand sources, continue to report record demand and shortages. These are the symptoms of a controlled market in which price is not cleared by supply and demand.

The marketers of paper proxies and infinite promises continue to tout their products’ liquidity and convenience despite growing distinctions between the physical (black market) and paper markets. While the mainstream continues to label those keen enough to observe this distinction as fringe, "gold bugs", they won’t be able to marginalize this group for long. Labels matter little in the world of money, right is right.

Rand Refinery Ltd., the world’s largest gold-smelting facility, raised production of Krugerrand coins to a 25-year high as Europe’s sovereign-debt crisis boosted investor demand for bullion.

Source: businessweek.com

More…

Jim,

I live in western NC and yesterday happened to pass by a "Feed the Children" organization site in a small town nearby. I counted 15-20 cars lined up waiting to pick up their baskets of donated food. Very kind; but still very sad and shocking. Unemployment is rampant.

CIGA Anonymous

 

CIGA Eric,

I wrote a book in the early 1980s on just this subject. It was predicted in this book that China and Russia would control the market on strategic materials.

I called on the West to stockpile these key elements.

The title was "The Strategic Metals War," available new and used on Amazon.

The result will not just be higher prices all down the line, but the inability to actually manufacture certain hi tech equipment more or less without permission via supply availability of both sovereign entities.

Regards,
Jim

China tightens stranglehold on rare earth minerals
CIGA Eric

Despite the fact that few are playing attention, China is beginning to play their hand as the economic transition approaches.

China is to further tighten its stranglehold on the mining of rare earth metals essential for the manufacture of high-tech products from iPods to wind turbines and military missiles

Source: telegraph.co.uk

More…

Investment Firms Grab Stock Data First, and Use It Seconds Before Others
CIGA Eric

The debate between legal and ethical, often hidden by legal jargon and semantics, is generally viewed as “unfair” by the public. As long as debates such as this one rages within public view, the end result will be deterioration of confidence in a system increasing viewed as a rigged game.

Here lies another example of how the pendulum of influence swings from the public to private sector within an important long-term cycle.

"It is a rigged game," Sal Arnuk, co-founder of brokerage firm Themis Trading, said Wednesday at a Securities and Exchange Commission roundtable discussion in Washington, D.C., referring to the trading activity, which some call "latency arbitrage."

While legal, the practice pushes the envelope of what is fair, critics say, and raises questions about the advantages some fast-moving traders are gaining in the market.

Source: finance.yahoo.com

More…

 

Economy adds 431K jobs but few in private sector
CIGA Eric

A wave of census hiring lifted payrolls by 431,000 in May, but job creation by private companies grew at the slowest pace since the start of the year. The unemployment rate dipped to 9.7 percent as people gave up searching for work.

What does consensus expect? Tight credit conditions and crippling debt level with a consumption-driven, increasingly service-based economy is unlikely job creation above and beyond the labor force expansion for years. While the stock market can continue to rise, it does not always suggest an improving economic backdrop.

The birth/death model chart illustrates early stages liquidity injection job creation cycle. That is, mediocre job creation without heavy reliance on the birth/death model during the early stages. This will change as time passes.

Birth/Death Model (BDM) Contribution to Nonfarm Net Payrolls (NFP) Added/(Lost):
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Source: finance.yahoo.com

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Posted at 8:40 PM (CST) by & filed under In The News.

Dear CIGAs,

Euro intervention #5 is taking place at this moment.

There have been four taps on the critical $1.2150 level since we last talked. It is one thing to stand at $1.215 but it is infinitely more important to scare the shorts into covering.

So far the intervention on the first four taps at $1.215 has failed to run the euro shorts. If no follow through is accomplished this time, I am certain that the intervention will fall to the $1.205 level which will signal failure to the marketplace.

Failure on euro intervention #5 will make the hedgies and dirty tricksters very uncomfortable in their present short of gold position. That event should make them very nervous because in a global economy a crisis anywhere is a crisis everywhere.

This time the risk is greater for the Hedgie and dirty trickster short positions than for the insurance longs of gold.

 

Jim Sinclair’s Commentary

Exactly what is the difference between this and the euro debating society that costs so much time and put the euro meltdown in market motion?

The correct answer is absolutely nothing whatsoever.

Congress pulls back state aid package, leaving a $2-billion hole in California budget
House Democrats kill a $24-billion fund to help cash-strapped states cover costs. States are lobbying hard to have it restored, warning of further devastating cuts to healthcare and social services.
By Richard Simon and Evan Halper, Los Angeles Times
June 3, 2010

With the federal deficit a growing political liability, lawmakers in Congress are backing off plans to send more aid to financially strapped states, putting in jeopardy billions of dollars that California and others were counting on to balance their budgets.

The potential loss of funds is a significant setback for Gov. Arnold Schwarzenegger and state lawmakers, who may not see nearly $2 billion in federal assistance that they intended to use to help bring California out of the red.

The money was to be California’s share of $24 billion in proposed assistance, mostly to cover healthcare spending, spread among all states. Budget experts say that is enough to wipe out about one-fourth of the combined state budget shortfalls.

In California and elsewhere, officials thought the funds were a sure thing. The money was one of the few elements of Schwarzenegger’s budget plan on which there was bipartisan agreement. But House Democratic leaders last week stripped the money out of legislation amid election-season jitters.

"This is a serious problem," said Jean Ross, executive director of the California Budget Project, a Sacramento-based nonprofit. "The fear of deficits seems to be overtaking Washington. They are not realizing the bigger threat is the economy could slide back into recession as a result of state and local budget cuts."

More…

Jim Sinclair’s Commentary

CIGA Green Hornet says this should speed things along.

Congress pulls back state aid package, leaving a $2-billion hole in California budget
House Democrats kill a $24-billion fund to help cash-strapped states cover costs. States are lobbying hard to have it restored, warning of further devastating cuts to healthcare and social services.
By Richard Simon and Evan Halper, Los Angeles Times
June 3, 2010

With the federal deficit a growing political liability, lawmakers in Congress are backing off plans to send more aid to financially strapped states, putting in jeopardy billions of dollars that California and others were counting on to balance their budgets.

The potential loss of funds is a significant setback for Gov. Arnold Schwarzenegger and state lawmakers, who may not see nearly $2 billion in federal assistance that they intended to use to help bring California out of the red.

The money was to be California’s share of $24 billion in proposed assistance, mostly to cover healthcare spending, spread among all states. Budget experts say that is enough to wipe out about one-fourth of the combined state budget shortfalls.

In California and elsewhere, officials thought the funds were a sure thing. The money was one of the few elements of Schwarzenegger’s budget plan on which there was bipartisan agreement. But House Democratic leaders last week stripped the money out of legislation amid election-season jitters.

"This is a serious problem," said Jean Ross, executive director of the California Budget Project, a Sacramento-based nonprofit. "The fear of deficits seems to be overtaking Washington. They are not realizing the bigger threat is the economy could slide back into recession as a result of state and local budget cuts."

More…

Posted at 6:18 PM (CST) by & filed under General Editorial.

Dear Jim,

Gold traded inversely to the dollar last week (directionally, but not tick for tick). Now the weak euro is a drag on the gold price.

Why are we now seeing this type of behavior and when can we expect gold to resume its appreciation?

Thanks,
CIGA Brian S.

Dear Brian,

Your question reflects, I am sure, what people are worrying about.

The cold hard fact is that the hedgies, driven by momentum algorithms, have reduced their position, continue to sell or have gone short gold. This week the hedgies made a pass at gold shares, from major to junior, increasing or re-establishing their short position.

The community still follows those that call tops. So far each top call has failed to do anything but take people out of their position.

There are three factors to think about right now:

The euro is seeking it lows again from which intervention has come, and from which intervention must continue to come right here and now.

The cash price of gold, which had fallen away from the delivery month future, is now moving back. This indicates the physical market is firming.

The Libor rate continues to rise which indicates that the euro zone rescue package has no shock and awe in it at all.

The hedgies, the new masters of the universe, feel certain that they can run any market, anywhere at any time. That assumption could come to a screeching halt now because a crisis anywhere is a crisis everywhere.

The hedgies are running the gold price based on algorithms and the community is having conniptions based on seasonality.

Gold will trade at $1650 and better. These reactions are normal to markets and we have seen them together a thousand times or more.

Your degree of concern is unfounded. The risk in this trade is to the hedgies, not to us.

The expectation of a sell off going into June is challenged by the fact that a crisis anywhere in a global market economy is a now crisis everywhere. This concept is backed by the firming cash physical to cash contract price of gold and the action of Libor. Let’s not forget four failed interventions now in the euro and the absolute necessity that right now, this minute, the euro intervention must occur again.

I do not believe those that understand gold’s insurance character should try to trade every wiggle in price. Please review my recent communication to you the day this started:

Return Of The Hedgies And Dirty Tricksters

Dear Comrades In Golden Arms,

The hedgies and dirty tricksters are back.

Frustration goes both ways. The price of gold has been a disappointment to the gold bears. The action in the HUI (AMEX Gold Bug Index) has posed a threat to the short on gold share hedgies and dirty tricksters.

This morning’s pop up on the euro was accepted by this mangy group as the forth entry of emergency money into the currency market in the form of intervention. That message was taken by this group as confirmation to hold the euro at $1.2150 Gold’s failure to hold the highs of this morning has been taken by the discouraged gold and gold share shorts as courage to try one more time.

Discouragement goes both ways. The gold share longs have felt it for a long time. The gold share shorts cannot be too happy either.

So in rolled the short of gold, gold share hedgies and dirty tricksters to re-establish closed short positions and add to old ones.

This time it will be different.

Different because the short of gold and gold share hedgies are fighting key dates of the long term cycle now.

Different because MOPE (Management of Perspective Economics) is not having the desired effect on business activity.

Different because every weak member of the euro will be lambasted by the rating agencies, the IMF and the CDS tool.

Different because California, larger than any of the weak euro members, is heading for bankruptcy.

Different because the US dollar claims strength by basking in the euro problems, not because it has fundamental value for price.

The wind is not at the back of the short of gold, gold shares hedgies and dirty tricksters. $1650 is certainly coming. About that there is no question in my mind. More so, the short of gold shares and dirty tricksters no longer live in the dark, but are rather public figures to management and major shareholders of their respective issues they have offended for the past few years.

Their jitney (trans-border false flag brokers) partners do not hide their identity.

There is a balance in all things and retribution will be dealt out by us, not them.

Respectfully,
Jim

Posted at 9:07 PM (CST) by & filed under In The News.

Dear CIGAs,

Just review the 13 reasons why OTC derivative are a criminal act in the " Pocketbook of Gold."

This is just like suggesting a review of naked shorting which is against both civil and criminal law.

Maybe murder should be reviewed and accepted only when dirty tricksters are identified.

Goldman Suit Makes Wall Street Question Derivatives Sales
By Christine Harper – Jun 1, 2010

Wall Street’s biggest firms are considering the suitability of selling opaque financial products to governments, endowments and not-for-profit institutions after the contracts magnified credit-market losses that plunged the U.S. into a recession.

“There is no distinction among very different groups of investors, and this is where things might change,” said Dino Kos, a managing director at Portales Partners LLC in New York and former head of the Federal Reserve Bank of New York’s open market operations. “Wall Street cannot pretend anymore that the treasurer of a small town in the Midwest on a civil service salary and no analytical support has the same level of sophistication as a specialized hedge fund.”

Any restrictions on the sale of derivatives, which are contracts whose value is derived from stocks, bonds, loans, currencies and commodities, or linked to specific events such as changes in interest rates or the weather, would “at least initially” reduce earnings because “it would be harder to sell higher-margin products to some customers,” said Kos, who worked at the New York Fed for 22 years beginning in 1985 before a nine-month stint at Morgan Stanley.

While securities laws differentiate between the financial transactions companies can sell to individuals and to institutions, there’s growing recognition that local governments and endowments shouldn’t be equated with hedge funds, according to four Wall Street executives who spoke on the condition of anonymity because their firms haven’t made any decisions.

Goldman Lawsuit

The soul-searching was triggered in part by a Securities and Exchange Commission lawsuit against Goldman Sachs Group Inc. for allegedly failing to inform a German state bank and New York-based collateral manager ACA Management LLC about the role of hedge fund Paulson & Co. in a mortgage-linked security.

More…

 

Jim Sinclair’s Commentary

Without a tie to gold, as I have suggested, all this is is a giant index to average out disasters. Mr. Freddie could have come up with this purely academic waste of time and print.

World currency unit intended to rival U.S. dollar for supremacy
Jameson Berkow, Financial Post · Friday, May 28, 2010

A new currency is intended to challenge the U.S. dollar as the world’s foremost reserve currency. The WOCU, short for world currency unit, was actually launched by London-based WDX Organization in September 2009, but only seems to be gaining recognition now. Its value is determined as a derivative of the exchange rates of the world’s top 20 currencies, as measured by GDP, in order to reduce the risk associated with exchange rate fluctuations. The new currency is similar to the International Monetary Fund’s special drawing rights (SDR), which the IMF uses as a reserve asset to supplement the currency reserves of its member states. Both Russia and China have been pushing for the world to switch to a new currency.

More…

Jim Sinclair’s Commentary

China will do only what China wishes to do when China wishes to do it.

China rebuffs plans for Gates to visit Beijing
By Dan De Luce (AFP) – 3 hours ago

WASHINGTON — US Defense Secretary Robert Gates has called off plans to visit China next week after Beijing told the Pentagon the timing was "inconvenient," officials said on Wednesday.

The snub came despite an invitation last year from China’s second-ranking officer, General Xu Caihou, for Gates to visit the country in 2010, and after repeated appeals from Washington to bolster military dialogue.

"The Chinese have told us this is not a convenient time for them," a senior defense official, who spoke on condition of anonymity, told reporters.

Gates had tentatively planned to travel to China after attending an annual Asia security conference in Singapore this week, press secretary Geoff Morrell said.

The defense secretary still hoped to visit China another time and would continue to argue for the benefits of forging stronger relations between the countries’ military leaders, Morrell said.

The Chinese were sending a general to the Singapore conference but Gates did not plan on meeting the delegation, which the Pentagon viewed as too low level, he said.

More…

Jim Sinclair’s Commentary

Do you think the Seer reads us?

Buffett: Derivatives Still a Time Bomb
By Tiernan Ray

Warren Buffett is testifying this afternoon before former CFTC chair Brooksley Born and other members of the Financial Crisis Inquiry Commission, which has been holding hearings today at the New School for Social Research in New York about the conduct of the ratings agencies. (Live feed is here.)

Buffett’s Berkshire Hathaway(BRKB) owns stock of Moody’s, though it pared away its position in the shares to less than 20% in the third quarter of last year.

Born, who famously called for greater transparency in derivatives trading over a decade ago, asked Buffett, “Is the derivatives market still a time bomb ticking away?”

Buffett: “I would say so.”

Born just before that asked Buffett about the large amounts of highly speculative derivatives in markets overall. Buffett reiterated remarks he’d made in the past, namely, that when speculation tends to unnecessarily create risk, it turns markets into casinos. He contrasted seed-planting for crops, a form of speculation, with less urgent forms of speculation.

The inquiry is looking into whether the ratings agencies, including Moody’s Investor Services (MCO), were adequately pricing the risk of derivatives contracts. Commission members pondered whether problems with the ratings agencies were “systemic,” or just a phenomenon of the housing crisis.

More…

Jim Sinclair’s Commentary

Military spending is not economic stimulus as this type of spending is the ultimate economic dead end. You build it and you launch it and the economic process ends with the boom.

Global arms spending hits record despite downturn
Wednesday, June 2, 2010
(Reuters) – Worldwide military spending surged to a record $1.5 trillion last year, defying an economic downturn caused by the global financial crisis, a leading think tank said on Wednesday.

Military spending last year rose 5.9 percent in real terms compared to 2008 with the United States accounting for more than half of that increase, the Stockholm International Peace Research Institute said in its annual report on arms spending.

"The far-reaching effects of the global financial crisis and economic recession appear to have had little impact on world military expenditure," the think tank said.

"Although the USA led the rise, it was not alone. Of those countries for which data was available, 65 percent increased their military spending in real terms in 2009."

Global gross domestic product (GDP) suffered a rare contraction last year, shrinking 0.9 percent according to the Organization for Economic Co-operation and Development, as the financial crisis sent economies across the world into recession.

More…

Jim Sinclair’s Commentary

It is coming to North America soon.

The problem with states of the USA exceeds the problems with states of the euro by orders of magnitude.

NY Nearly Goes Broke Again, Delays Paying Bills
Published: Wednesday, 2 Jun 2010 | 9:43 AM ET

New York state delayed paying $2.5 billion of bills as a short-term way of staying solvent but its cash crunch could get even worse in August and September, Budget Director Robert Megna said on Tuesday.

"Had we not done that, I think we would have been close to broke," Megna told reporters in Albany. This is the third time since December the cash-poor state has withheld funds.

This time, the state’s general fund, which counts everything but federal aid and some specific revenues, ran in the red by about $500 million to $600 million, Megna told reporters.

The state was able, however, to borrow from other funds, including the short-term investment fund. About $1.5 billion of the withheld funds must be paid to schools in June. The rest of the total could be paid in July.

"The next big bottleneck is in August and September," Megna said, adding that tax revenues have recently improved slightly, which is a slight bright spot.

Democratic Governor David Paterson’s $135 billion budget has not been enacted by the legislature though it was due on April 1.

More…

Jim Sinclair’s Commentary

Fiat currencies are history. This is not going to be a double dip recovery. This is going to be a new low.

Buffett Expects ‘Terrible Problem’ for Municipal Debt (Update1)
By Andrew Frye and William Selway

June 2 (Bloomberg) — Warren Buffett, whose Berkshire Hathaway Inc. has been trimming its investment in municipal debt, predicted a “terrible problem” for the bonds in coming years.

“There will be a terrible problem and then the question becomes will the federal government help,” Buffett, 79, said today at a hearing of the U.S. Financial Crisis Inquiry Commission in New York. “I don’t know how I would rate them myself. It’s a bet on how the federal government will act over time.”

Berkshire’s investment portfolio included municipal bonds valued at less than $3.9 billion as of March 31, down from more than $4.7 billion at the end of 2008. The company had a maximum of $16 billion at risk in derivatives tied to such debt, according to the company’s annual report for 2009.

Buffett, Berkshire’s chairman and chief executive, has previously warned about the risks of insuring municipal bonds. In his annual letter to shareholders in 2009, he said public officials may be tempted to default on bonds whose payments are guaranteed by insurance companies rather than push through needed tax increases. He said guaranteeing municipal bonds against default “has the look today of a dangerous business.”

Local governments rely on the $2.8 trillion municipal bond market to raise money for construction projects and fund other budget items. The financial crisis and recession battered governments across the U.S. by cutting into tax collections and causing pension-fund losses. Some governments failed to set aside enough money to cover retirement benefits promised to employees, which may place increasing strain on public finance.

More…

Jim Sinclair’s Commentary

Globalism has produced a situation whereby events or problems in any country are transferred to all countries.

Gold in India Reaches Record on Currency, World Price (Update1)
By Madelene Pearson

June 2 (Bloomberg) — Gold futures in India, the largest consumer of the precious metal, advanced for a second day to a record, spurred by a weaker domestic currency and gains in global prices of bullion.

August-delivery futures rose as much as 0.7 percent to an all-time high of 18,850 rupees ($400) per 10 grams on the Multi Commodity Exchange of India Ltd. The contract traded at 18,808 rupees at 12:02 p.m. in Mumbai.

Gold for immediate delivery, heading for a tenth annual gain, reached a record last month as investors seek a hedge against currencies amid European debt concerns. Prices in India, which have risen 27 percent in the past year, may reach 20,000 rupees in the next couple of weeks, according to Rajesh Exports Ltd., the nation’s largest producer and exporter of jewelry.

“Surprisingly, even at these record prices we are not seeing too much of a destruction in jewelry demand,” Rajesh Mehta, chairman of Rajesh Exports, said in a phone interview. Consumers “are getting used to the record high prices, and maybe they are expecting prices to go still higher,” he said.

India’s rupee fell for a third day after sliding the most in more than 15 months yesterday. A weaker local currency makes imports of gold denominated in dollars expensive.

More…

Posted at 5:05 PM (CST) by & filed under Jim's Mailbox.

Jim,

Credit card fees are totally out of control with the current volatility in currencies.

I urge CIGAs to check their credit card fees (including exchange rates used versus interbank rate). You can get the interbank rate of any date using the following website:

http://www.oanda.com/currency/historical-rates

Fees from my Visa credit card went from 2.35% in 2005-2007 to 4-8% in 2010 depending on the country I am. Basically, credit card companies are charging whatever they want.

Choosing another means of payment other than credit cards results in much lower fees.

Based on my experience, I found the cheapest means to pay while I am abroad has been to withdraw money from ATM machines using a debit card and pay cash. In my case, the Maestro system for example charged between 1.50% – 2.5% depending on the bank I withdrew from. People need to do their own due diligence.

Best regards,
CIGA Christopher

Dear Friends,

Eric’s comment answers the many similar questions coming in from the community in the last two days.

Respectfully,

Jim

Quick Discussion on Seasonality & Cycles

Eric,

Just have a question relating to Gold and the coming seasonal period. My understanding in following Jim’s comments is an indication that the seasonal woes won’t affect gold this year as greatly as they have in the past.

I’m surprised by some comments from long-term gold bugs, to expect a serious down reaction as the stock market continues to correct/crash. One’s even saying that if silver gets up to around $19 on a stock market relief rally, bail out.

Jim refers to long-term time points coming up – if gold is to go parabolic, the time should be close as Jim’s $1650 prediction must be based on the time factors, and there’s only 6 months or so left?

Adrian

Few comments on Adrian’s observations.

Seasonality, while important, is far more complex than presented on F-TV. Seasonality, gold, equities, bonds, (i.e. capital market flows), must be framed or studied with the content of other more dominant cycles.

For example, seasonal performance changes or shifts when studied within the 4.3 and 8.6 cycle

Here’s a simple illustration of how seasonality, a minor cycle, shifts relative to more dominant factors.

Risk Free Total Returns* 1926-2009:
clip_image001

Year Two

4-Year Cycle Risk Free Total Returns* 1926-2009:
clip_image002

Basic seasonality suggests weakness in May, June, July. Seasonality within the second year of the four year cycle clearly changes. June and July, traditionally weak months in basic seasonality analysis, turn from bearish to bullish.

This is but one example of how seasonality is shifted by more dominant cycles.

Jim "sees" what few are willing to acknowledge that capital flows are beginning to shift to protect against an increasingly unstable monetary system. Jim calls the transition IT, as – This is IT. I call money, inherently defeat from MOPE and SPIN, moving to protect itself from the inevitable deterioration in confidence.

Approaching cycles dates are June and August. I expect the market(s) will do things few expect right now.

Regards,
Eric

More…

Hi Jim,

As I was getting ready this am, I decided to watch our local news channel here in Columbus. Our city is the largest and most "profitable" city in the state. Did I fail to mention we are broke too? Anyways, in a cost cutting measure, the city has decided to cut the public school buses routes for 9th grade and up from 1451 routes to 166! That is a reduction of 1335 routes daily or 92%!! They said the inner city kids will have to find alternate ways to get to school. They said kindergarten kids were exempt!? Nothing like the trickle down of the Formula hitting even the children.

God help us all when the greed of the powerful impact the innocent. NOBODY is immune to the fallout. When they speak of our "grandchildren paying back the deficit" how the hell are they going to pay back anything when they can’t even get to school to get an education to get a job?

Frustrated Father of 2 small girls,
CIGA Craig

 

Dear Jim,

How in the world did you come up with the three major players today, Turkey, Pakistan and Israel, with what appears to be the content of the events today, years ago?

Regards,
CIGA Dr. Bob

Dear Dr. Bob,

After being around markets since 1958 I have made the best of contacts at many levels. That is all I can say about that.

If you believe that I know something of value read Eric’s answer on my behalf posted today on why the hedgies and dirty tricksters will not win this time.

Regards,
Jim

Posted at 10:10 PM (CST) by & filed under General Editorial.

Dear CIGAs,

The hedgies and dirty tricksters are back.

Frustration goes both ways. The price of gold has been a disappointment to the gold bears. The action in the HUI (AMEX Gold Bug Index) has posed a threat to the short on gold share hedgies and dirty tricksters.

This morning’s pop up on the euro was accepted by this mangy group as the forth entry of emergency money into the currency market in the form of intervention. That message was taken by this group as confirmation to hold the euro at $1.2150 Gold’s failure to hold the highs of this morning has been taken by the discouraged gold and gold share shorts as courage to try one more time.

Discouragement goes both ways. The gold share longs have felt it for a long time. The gold share shorts cannot be too happy either.

So in rolled the short of gold, gold share hedgies and dirty tricksters to re-establish closed short positions and add to old ones.

This time it will be different.

Different because the short of gold and gold share hedgies are fighting key dates of the long term cycle now.

Different because MOPE (Management of Perspective Economics) is not having the desired effect on business activity.

Different because every weak member of the euro will be lambasted by the rating agencies, the IMF and the CDS tool.

Different because California, larger than any of the weak euro members, is heading for bankruptcy.

Different because the US dollar claims strength by basking in the euro problems, not because it has fundamental value for price.

The wind is not at the back of the short of gold, gold shares hedgies and dirty tricksters. $1650 is certainly coming. About that there is no question in my mind. More so, the short of gold shares and dirty tricksters no longer live in the dark, but are rather public figures to management and major shareholders of their respective issues they have offended for the past few years.

Their jitney (trans-border false flag brokers) partners do not hide their identity.

There is a balance in all things and retribution will be dealt out by us, not them.

Respectfully,
Jim