Sunday, September 16, 2012

General Observations

We have received several emails regarding what some of you have incorrectly perceived as an editorial sabbatical.  Simply put, there is not much to comment on at this time.  Sure, the world seems like it could be on the verge of a severe and violent eructation but we have already covered the catalysts.  Feel free to Google search our extensive archive using the box in the right column of this page.

The US Election

We suggest you limit the amount of mental capital spent discussing or reviewing this issue to a maximum of 20 hours between now and Tuesday November 6th.  It is especially important not to broach this subject with Fox News disciples or deluded, old-guard republicans.  This subset could possibly be the most unaware faction in the US today and while we wish them the best, they can only knock us off the beam of objectivity.

The cold hard truth of the choice given to US voters is that it does not matter who is elected.  Both candidates will fight to market themselves as different in their own way but the path of the US will not change materially in either case.  While you may not like reading this statement, we urge you to consider it as only one opinion.  If it disturbs you too much, maybe we are not so off base.

During the past 12 years the executive branch of the US government has been occupied 66.6% by republicans and 33.3% by democrats.  Over this period, outstanding debt has risen from $5.67tril to over $16tril, or 183%.  Over the same period, US GDP grew from $10til to just over $14tril, or roughly 45%.

What many fail to grasp is that the freedoms available to tax paying US citizens have been under constant pressure during this period.  The US government now retains the same controls over citizens that you would expect when reading Orwellian fiction.  Consider the powers granted under the 2011 NDAA which deem statements critical of the US regime to be in line with its enemies and authorize detainment of those making such statements without trial or due process.

While the origin remains disputed, we credit Goldwater with saying, "Remember that a government big enough to give you everything you want is also big enough to take away everything you have."

Turn off the TV this election season and pick up a copy of The Creature From Jekyll Island by Griffin if you want to make more sense of what is happening.

M.E.N.A. (Middle East & North Africa)

Most casual discussions surrounding the events taking place in the Middle East lack substance or an understanding of history.  The US and the UK created regional stability during the first half of the 20th century in order to secure supplies of low cost energy.  Strong men were installed in each country and were provided sufficient intelligence and weaponry to defend their position as long as they kept operating conditions stable for select, connected western corporate interests.

The abusive currency debasement carried out by the US over the past decade drove several of these leaders to attempt a break from the historic Petro Dollar tradition where by all oil trades settle in USD.  The US responded by destabilizing the countries which it had not already occupied over the past decade.  The only exception to this has been Syria where US narcissism has been resisted by Russia overtly and the balance of the world covertly.

So what is happening now?  Don't be surprised to learn in the future that the embassy attacks of last week were funded and encouraged by US and Israeli intelligence interests.  The media will now assist in creating the public perception that more military action is required to avenge these attacks.  The public will be instructed as to who they should blame and hate.

The result will be more war, more death, more banking profits and more cash to fund the war machine.  The elite have a goal of perpetual war which keeps the public distracted as they reduce freedoms and loot the treasury.

Gold

Most readers know us for our economic commentary so now that we have covered the mainstream distractions we move back to familiar subject matter.  The market and media luckily still haven't the foggiest idea what gold is or why it is important.  This is good for savvy investors as by the time the Wall Street Journal sanctions your gold investment you better be selling.

Roughly one year ago we hit an all time nominal high in the spot price of gold.  Silver had reached its nominal peak 5 months earlier.  Over the past year we have been in a very healthy and normal consolidation.  The rise from summer lows was predictable and stable although we would not be surprised to see a pullback over the next 2-3 weeks before making a year end assault on the $2,000/oz level.

The same can be said for silver although the target year end level could be in the mid $40s as it eventually surpasses last year's high on the way to $60/oz.


While charts on the metals are interesting and encouraging if you have a long bias, the mining shares are far more exciting from a risk capital perspective.

As a reminder, US federal law requires that we suggest you speak with your knowledgeable and wise financial planner regarding any decisions.  We are not deemed competent by the US feds who ironically have created the bizarre set of economic circumstances you are attempting to traverse!

Best of luck always and we will post relevant comments when necessary.

3 comments:

Bullion Baby said...

On what dates did gold and silver charts breach the pennant formation?

Space Wrangler said...

Keep in mind charting is a subjective art form so we are only relaying our view....

Silver's breach occurred with the close on 8/16. On 8/17 a mere $0.33 daily range was supported by the breached pennant. Same on the 8/18 open before vaulting higher over the next 4 days as the critical 232dma (thick blue line) acted like a magnet.

Gold behaved similarly....breached on 8/16.....supported by the former pennant for 2 days then straight to the 232.

We suspect a slight pullback is in order for both metals. This would be normal and healthy before making a run at record highs.

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