1.In this super-crisis, central bank interest rate & quantitative
easing (QE) policies have been the main drivers of the gold price.Many gold
analysts and investors thought the bond market would crash, setting off a
1970s-style surge in gold stocks.
happened, because the US central bank is committed to maintaining low
interest rates (high bond prices), until 2015.The financial system would
close down if the bank stopped buying bonds now.If that happened, guns would
quickly replace silver, as the poor mans gold.
3.The bank has committed itself to continuing QE, until the
unemployment rate drops to 6.5%.The latest jobs report showed that the
unemployment rate just rose to 7.9%.That data is going to make the Fed even
more aggressive in its open market operations involving the T-bond.
4.I refer to gold bullion as Queen
and the US T-bond as her secret agent James T. Bond.At some point, Sir James
is going to outlive his usefulness to your queen, and a great bear market in
bonds will unfold.
5.Specifically, I believe that the pressure put on all fiat currencies
by the global tidal wave of QE, will make it appear that hyperinflation is a done deal.I dont think you are going to experience full
hyperinflation in this crisis, but youll get something very close to it.
6.As that happens, central banks around the world will likely begin
raising rates aggressively, to combat the severe institutional loss of
confidence in all fiat currencies.
7.So, should you hold & buy gold stocks now, or wait until
2015?The answer is that you should buy now.
8.Why buy now?The answer is now, because when gold first traded above
$1800, institutional money managers showed strong interest in buying gold
9.A lot has changed since 2011, when gold first went over $1800.Shinzo
Mr. Inflation Abe has been elected in Japan.Also, in April a new
Japanese super-dove is likely to take the helm of their central
bank.Institutional money managers are extremely concerned that Japans central bank may literally be on the cusp of a money
printing extravaganza.To see the view point of one very astute money
manager, please click
10.What kind of institutional buying would your gold stocks
experience, if gold were to surge, not just above $1800, but above $2000?I
submit that it would be very substantial.
11.With all due respect to the gold stock bears, I dont think they really understand the fundamentals of
this crisis. Most of them are pure chartists, obsessed with a head & shoulders
top shape that began forming on the HUI & GDX charts back in 2011.
12.The main driver of your gold stock prices is not the chart shapes
flaunted by gold stock haters.It is the ever-evolving action of central
bankers, in the gold bullion and T-bond markets!
13.Monday Feb 4, 2013 was a particularly painful day for gold stock
holders.Once again, bullion rallied, while junior resource stocks were hit
14.Regardless, I want you to ignore that pain, and take a close look
at the Sir
James T. Bond and
charts.As you shall see, central bank liquidity flows are the bullish theme
in play.Their actions will fuel institutional buying of your stocks as gold
15.Much more institutional buying will follow as gold rises over
$2000.Their buying between $1800 and $2000 will lift you, finally, out of the
gold stocks gulag!
the daily T-bond chart, and you can see that it peaked in the
October-November timeframe.The bond market has been under pressure since
then, while the Dow has rallied.
17.GDP growth has gone negative, and unemployment is suddenly
rising.These are not events that make Mr. Bernanke enthusiastic about
reducing his purchases of T-bonds in the open market.Hes more likely to increase his purchases than reduce
18.Note the 14,7,7 series of Stochastics on that bond chart, and the
4,8,9 MACD series.The bond has stopped falling, and these indicators are
turning up, nicely.
19.The action on the daily gold chart is very similar to that on the
bond chart.Please click
here now.The 4,8,9 MACD leader shows a crisp buy signal.The 14,7,7 Stochastics
series looks like a golden excavator bucket, ready to scoop up your gold, and
place it higher on the chart!
the hourly bars chart of the T-bond.Note the head & shoulders bottom that
may be forming now.The bond spiked sharply higher yesterday, and so did
gold.With each passing day, these two key assets are tracking each other more
price points are critical numbers, for gold stock investors.In particular,
14618 is arguably equivalent to $1700
gold.The T-bond seems set to spike higher, as does gold.A move over 14412 could take gold over the downtrend line on its
daily chart, sparking waves of technical buying!
22.On your own time, please take the time to note the growing synergy
of the T-bond and gold market turning points.
take a quick look at three MACD series on the weekly gold chart.Please click
here now.Note the crossover buy signal in play on my lead 4,8,9 series.I
expect the other two series to play follow
24.Please ignore the GDX and HUI charts until the T-bond and bullion
charts begin moving higher.Then re-visit them, and I think youll be pleasantly surprised.The bottom line is that
February is shaping up to be a very good month, for gold stock bulls!
Special Offer For Website Readers: Please send me
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and Ill send you my free Start The Insanity! gold stocks report.I cover the entire financial
crisis in a series of video reports, showing you the evolution of the crisis,
and why gold stocks are in a much stronger position than any chart shows you!
Written between 4am-7am. 5-6 issues per week. Emailed at
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Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario L6H 2M8
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only. Before taking any action on any investment, it is imperative that you
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on any investment in the world is: 100% loss of all your money. You may be
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