Gold: I smell a trap

[cypherdoc]

so guys, just give me a few hours to see if my theory proves correct.  if it doesn't work by all means buy the parabola.  personally i'm going to give it a few days from today to let it work but you can all call me a tinfoiler if gold doesn't start going down after the announcement.

A quote from your first post. It was now more than a month ago, gold closed at 1739$. For now, you have to admit you've been wrong.
Even if days like this one give you confidence, it's a small sample.
We'll see which hypothesis (manipulation vs bubble) will be proved true, there's still a long way to go. 1 month is nothing.

fine.  i admit i was off on the exact timing.  and i might be off on the whole concept.  i've always been open about that.  calling an end to an 11 yr bull mkt is outright difficult.  i thought it would be an interesting intellectual exercise if not a downright shorting opportunity.  it certainly has been the former thanks to miscreanity (but no thanks to you) and it may be the latter.

you, otoh, will have to give me credit if i end up being right on the price level for a major reversal.  i made the call at $1780.  pretty damn close.  so far, yes, i am confident with what i see.  time will tell.

Yep, we'll see. Whatever happens, it's interesting times.
And i thank you the intellectual exercise, i've learned from your opinion, even if i still don't share it.

+1

edit:  i just want everyone here to understand the deflationary view even if it doesn't prove correct.  if i'm right, then at least you'll understand why the price is going down and can make quick adjustments.

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[MatthewLM]

I just learned that Peter Schiff is trying to make a debit card using Visa or Mastercard which interfaces with the gold backed bank he is forming (outside US due to legal reasons). That would be awesome and I hope the same happens with bitcoin. Purchasing anything with bitcoin using a debit card; it would be perfect. It would need yo interface with an existing technology such as Visa so it is pre-compatible.

[netrin]

I just learned that Peter Schiff is trying to make a debit card using Visa or Mastercard which interfaces with the gold backed bank he is forming (outside US due to legal reasons). That would be awesome and I hope the same happens with bitcoin. Purchasing anything with bitcoin using a debit card; it would be perfect. It would need yo interface with an existing technology such as Visa so it is pre-compatible.

That sounds really neat. Can he guarantee 100% backing? Isn't that kinda like GoldMoney? Or an EFT? Has Peter Schiff ever mentioned bitcoins before? Visa/MC might be a mainstream bootstrap, but it'd be better eventually transmitted via bitcoin.

[MatthewLM]

It's like GoldMoney indeed. Peter Schiff is a friend with James Turk (apparently). His service will be the first to offer debit card payments which would clearly be a massive step forward. I'd like to know how it will work. Is it a deal with Visa or Mastercard (He mentioned Visa before but most recently Mastercard  ) where there systems can integrate with his banks? Is it using a fiat intermediary account where purchasing are made through that when the systems are notified and take the equivalent gold off the persons account matching the fiat amount on an exchange?

I don't know how it would work but I assumed it would need to be in cooperation with a debit card system or a bank that can connect the two payment systems together.

Fascinating stuff, for sure. I was imagining about this idea before and even looked into debit card technologies. Someone is trying to make a bitcoin debit card but I think it will use it's own payment system so card readers would need to be reprogrammed to support it.

Making use of an existing payment system is great for compatibility. You'd be able to use the card anywhere are see the payment measured in gold/bitcoins.

[miscreanity]

Thanks. I've given BIS a skim and it fills me with Rathenau's delirium of milliards. I'm looking for more long term ~200 year data.

Yes, our 'modern' economy is truly dizzying. Friends not long ago were more likely to believe we live among or are ruled by aliens than accept fractional reserve, much less swaps and other abstract derivatives But I think people are getting a hint that something is http://www.youtube.com/watch?v=31IYm0gQS_A&t=22s

Use scientific notation.

I see. For that, you'd probably have to hit individual nation's records. Hopefully it'll be easier to find financial data than death records. I tried looking into census information regarding presumed causes of death during the Great Depression in the United States, and there was virtually no "clean" data available from any of the sources I was able to stir up. It was almost as though nobody died because of living conditions and starvation during the worst decade until WWII began, even though major cities around the rest of the world suffered horrible rates of indigent starving in the streets. Anecdotal evidence suggests it certainly happened in NYC and other metropolitan hubs.

Yes, cultural beliefs rooted in emotion seem to prevent any sense from invading most minds until it's bludgeoned into them. Bring on the machines!

... PM's are heading down. 

don't forget your original premise for buying gold and silver:  relentless Fed devaluation of the USD.  now what do you do when the USD is rising?  buy more or perhaps sell?

We did agree on the dollar rising, but there's too much brewing under the surface that's supportive of a launch in precious metals to position negatively with them. Instead, buying weakness is prudent. From a little longer perspective, the $1,680 gap still warrants watching.

The dollar rally is another issue and very suspicious. Without the Swiss and Norwegian moves, it's improbable that it would've closed above 77.

Positive money flows into gold and silver ETFs. Where is the flow coming from? Interests that are better informed than the retail investors being led around by their noses.

Gold mining stocks break out relative to S&P. Unbelievable strength in the face of unprecedented deflation: not something to stand against.

Gold positioning is at a critical mass. If any large interest (*cough* JP Morgan *cough*) begins short-covering now, it will make the QE1 and QE2-induced rises look like pimples on a gorilla's ass. Apologies in advance for the emesis-worthy imagery.

Gold to exceed $2,000 within 45 days. Key is the fact that gold is under-owned as an asset class. For that matter, Bitcoin is under-owned, but for different reasons. The only asset more powerful than one that functions as money is agriculture. Arable land is also a severely under-owned asset class by percentage of population.

Jean-Marie Eveillard estimates global ownership is at 0.4% when recent historical highs have been around 5% - so a 5-fold increase in ownership should equate to a minimum of 5-10 times the price, or about $9,000-18,000/oz. However, as demand rises and supply is insufficient to meet that demand, price will escalate more rapidly. That is where the real parabolic rise will come in; there's still some time left before that happens.

None of the above analyses are based on what the Fed will do. I'll have more tomorrow.

I just learned that Peter Schiff is trying to make a debit card using Visa or Mastercard which interfaces with the gold backed bank he is forming (outside US due to legal reasons).

Nice find - do you have a link?

It's like GoldMoney indeed.

Gold Bullion International also seems to be headed in that direction. GoldMoney already facilitates transactions between existing GM account holders. There are hurdles to introducing a gold-backed transactional account, but it will happen. Bitcoin is sort of a proof-of-concept for that. The combination of Bitcoin and gold is exactly what Open Transactions is suited for. Existing infrastructure already exists to make Visa & Mastercard pretty much irrelevant - mobile phones. Independent terminals at a business could simply scan a QR code off a person's phone to facilitate a transaction; a wholly software solution, as the physical hardware is in place.

[MatthewLM]

The issue is to make the transaction software as compatible with different backends (different monies) as possible.

He mentioned the card on here:

http://www.europac.net/media/tv_interviews/peter_schiff_september_1_2011_fox_business_%E2%80%93_americas_nightly_scoreboard

[Revalin]

... prices between $500 and $5000 are equally good. The current price seems within a wide band of prices way back to 1934. Does anyone have an interpretation that I don't see?

Don't forget that the gold supply is also expanding:



That's new production.  We'd have to integrate it or find another source to see the total supply over time.

It'd be interesting to see a long term plot of gold supply vs. dollar supply vs. $/oz.

Edit: And another thought.  The cost of production is around $330/oz.  That makes mining extremely profitable at these prices.  Is there any reason to doubt that, just like BitCoin, in the long run the high prices will bring in tons of mining capacity until the system reaches equilibrium again (probably with both a higher cost of production and a lower price of gold)?

[miscreanity]

The issue is to make the transaction software as compatible with different backends (different monies) as possible.

That's where Open Transactions comes in.

Thanks for the link!

Edit: And another thought.  The cost of production is around $330/oz.  That makes mining extremely profitable at these prices.  Is there any reason to doubt that, just like BitCoin, in the long run the high prices will bring in tons of mining capacity until the system reaches equilibrium again (probably with both a higher cost of production and a lower price of gold)?

Excellent chart, that's actually one I haven't seen before.

The average cost is significantly higher than $330/oz today. Rising input costs such as energy, fuel, labor and materials have increased the overall production cost. I'd have to verify what the numbers are, but it's still well below $1,000/oz. That's a massive profit margin for a physical product, especially when the margins used to be only a few percent or even negative at times, and only the largest and best-capitalized companies were able to survive.

Attraction to such high margins is exactly what's happening: old mines are being reopened while exploration companies are ramping up their efforts and the majors are looking to acquire juniors in order to capitalize on as much production as possible. That's precisely what occurs in Bitcoin mining, although the terms are different and movement of miners/pools is more flexible.

History rhymes.

[cypherdoc]

The dollar rally is another issue and very suspicious. Without the Swiss and Norwegian moves, it's improbable that it would've closed above 77.

perhaps you ought to consider quoting me as i am the only one i know that had predicted this manipulated central bank induced USD rally weeks ahead of it happening which is memorialized throughout this whole thread.  of course i had no insider knowledge that it would be the SNB that would spring the trap per se but it made perfect sense to me that a coordinated effort would be made to target gold to boost the USD and the general prediction was made.  the fact that Dan Norcini comes to this realization after it happens isn't really helpful to his followers.  in addition, on 9/6 at 9:24pm, in this thread, minutes after the selloff began i called attention to this as supportive of my theory.  Dan doesn't post on his blog until 10:44pm over an hour later.

Gold mining stocks break out relative to S&P. Unbelievable strength in the face of unprecedented deflation: not something to stand against.

this is old info and has been already invalidated.  a true technical trader can see this.  the GDX itself and individual gold miners like GG, ABX, NEM have already broken back below what was supposed to have become support from what was formerly resistance.  usually if the breakout is valid this new support level should have held before continuation of an upward move.  this was one huge head fake.  find that written by any of your punditry.

Gold positioning is at a critical mass. If any large interest (*cough* JP Morgan *cough*) begins short-covering now, it will make the QE1 and QE2-induced rises look like pimples on a gorilla's ass. Apologies in advance for the emesis-worthy imagery.

Eric Degroot is wrong.  Everything has changed with this USD breakout.  the whole fundamental basis of the gold trade has been to escape a falling USD.  now that its rising and looks to have broken out of its channel to the upside how can you justify recommending further gold buying? you are potentially putting ppl at great financial risk if we go down the toilet from here.

Gold to exceed $2,000 within 45 days. Key is the fact that gold is under-owned as an asset class. For that matter, Bitcoin is under-owned, but for different reasons. The only asset more powerful than one that functions as money is agriculture. Arable land is also a severely under-owned asset class by percentage of population.

putting up all these bullish posts from permabulls doesn't in the least intimidate me.  you will not find an analysis like mine in this thread anywhere in the world.  how do i know this?  its b/c these thoughts are truly none but my own as a result of years of experience trading and shorting stocks and clear, independent, unemotional, non linear thinking and the study of game theory.  i do read the pundits often but always with a discerning eye and none of what i write here is from anyone's newsletter.  they are to a man bullish.  there is so much more that has gone into my own analysis such as intuition and anticipation that i can't articulate via words.  and yes, i am humble enough to fully admit i could be wrong.

Jean-Marie Eveillard estimates global ownership is at 0.4% when recent historical highs have been around 5% - so a 5-fold increase in ownership should equate to a minimum of 5-10 times the price, or about $9,000-18,000/oz. However, as demand rises and supply is insufficient to meet that demand, price will escalate more rapidly. That is where the real parabolic rise will come in; there's still some time left before that happens.

i disagree that this bull has to end in a further parabolic move.  there's already enough game changers that have occurred in the financial markets in stocks, oil, commodities and other currencies to cause a dramatic reversal in gold right here, right now.  not to mention that you all now realize that CB's have drawn a big red bullseye on all your foreheads.  do you have any idea what this means?

Dan Norcini's article to me is a game changer.  the creeping realization that CB's are acting in a coordinated fashion to kill gold should not result in permabulls thinking that just b/c they are aware of the manipulation, then a gold selloff won't happen.  the better response is to sit up, understand the implications of this, and get out of the way now.  they will throw the economy under the bus in the name of self preservation and to "save the dollar". permabull suspicion will turn to arrogance will turn to denial will turn to realization will turn to doubt will turn to fear will turn to capitulation.  this is the psychology of the situation.

Gold Bullion International also seems to be headed in that direction. GoldMoney already facilitates transactions between existing GM account holders. There are hurdles to introducing a gold-backed transactional account, but it will happen. Bitcoin is sort of a proof-of-concept for that. The combination of Bitcoin and gold is exactly what Open Transactions is suited for. Existing infrastructure already exists to make Visa & Mastercard pretty much irrelevant - mobile phones. Independent terminals at a business could simply scan a QR code off a person's phone to facilitate a transaction; a wholly software solution, as the physical hardware is in place.

could the end of the bull in pm's partially result from a new technology staring us directly in the face; Bitcoin?

[MatthewLM]

The issue is to make the transaction software as compatible with different backends (different monies) as possible.

That's where Open Transactions comes in.

I don't see what it's used for and how it works. A debit card system will work using particular currencies. If you want to plug in different currencies you'd need to exchange the currency to that which is required by the debit system before or after the transaction.

[netrin]

Does anyone know a web resource when I can see historical gold prices on a log scale? Ideally as a dynamic image rather than a Java applet.

[cypherdoc]

watch out.  looks to me like the resumption of the $DXY ramp and USD crosses starts tonite and thru tomorrow.

[miscreanity]

perhaps you ought to consider quoting me as i am the only one i know that had predicted this manipulated central bank induced USD rally weeks ahead of it happening

The only one?

We did agree on the dollar rising...

Along the same lines, I could predict an earthquake in California and claim that I knew it was coming when it finally happens. Predicting the timing is exceedingly difficult, so I prefer preparation instead. That way, the trap can be sprung when the conditions are right; the reward reaped when there's little to no fight left in the move.

Our disagreement lies with gold anyway, not the USD. I've added a few quotes, but it's often easier to find precise instances of one's own posts - I'd recommending finding the exact points from your own quotes as well as the ones I dig up. That promotes a less biased view and it means I won't have to spend hours going through the thread.

as long as the USD stays in its consolidation pattern and doesn't breakdown i don't see gold going much higher.  if the USD starts to ramp like i think it will, gold should go down.

the straight down drop in the indices says to me the PPT has stepped back b/c they have an objective; get the USD back up and smash PM's.  tinfoil i know.

FOMC should not say anything more about QE.  gold should tank and USD do a moonshot.

if i'm wrong i'll admit it.  no guts, no glory.

From August 9th, gold went up about $100/oz. Nothing was said directly; everything was deferred to this month. The USD rise was delayed by a few days.

@cypherdoc:

You are soooo right.

Gold will surprise almost everyone when it goes down hard against the USD. We have have seen already the top today (went short at 1766 $ today) . But even if not, it will start from a bit higher levels and still has huge downside.
Based on my chart analysis, 1300-1400 is the first target, but will fall soon to lead then to 1000-1100. And then we will see. If this does not hold, 600-800 are next.

ah, S3052 my favorite tech analyst!

yes, i think this will be the short of a lifetime.

Had to include this one - a priceless piece from S3052. Is the idea to wait longer for the fall to happen? Another California 'quake prediction.

BAC is going to be the next Lehman.

Winner! This one was a solid call.

we are now entering phase 2 of the crisis and you're going to see demand for USD increase significantly from here as Europe starts to implode.  

The distinction here is that gold is not included in the equation. The USD appreciates against the Euro, and both are depreciating against gold.

It isn't the fact that this dollar rally happened that's interesting, but the extent to which it has risen in such a short time.

in addition, on 9/6 at 9:24pm, in this thread, minutes after the selloff began i called attention to this as supportive of my theory.  Dan doesn't post on his blog until 10:44pm over an hour later.

Being first to scream "FIRE!" doesn't mean there is one.

this is old info and has been already invalidated.  any technical trader knows this.

Can a technician explain why there are so many conflicting technical signals and so much confusion? Is support the result of a line on a chart or real-world supply & demand? Can that distinction be made from price alone?

the whole fundamental basis of the gold trade has been to escape a falling USD.  now that its rising and looks to have broken out to the upside how can you justify further gold buying?

Then why would Europeans be buying gold as the dollar rose against the Euro? Is the entire world buying gold just because of a falling USD? Correlation is not causation. Beware of such linear thinking.

There was no US dollar in ancient Rome. Gold protects against instability, especially debasement and fraud.

putting up all these bullish posts from permabulls doesn't in the least impress me.  you will not find an analysis like mine in this thread anywhere in the world.  how do i know this?  its b/c these thoughts are truly none but my own as a result of years of experience trading and shorting stocks and clear, independent, non linear thinking and game theory.  i do read the pundits at times but always with a discerning eye.  they are to a man bullish.  there is so much more that has gone into my analysis such as intuition and anticipation that i can't articulate via words.  and yes, i am humble enough to fully admit i could be wrong.

This thread has more readers than the two of us, but I'll be sure to try harder in another lifetime where impressing you matters to me.

Acknowledging those whom we've learned from keeps us from making outrageous claims. Also, I do not have the time to produce every chart and study on my own, so I find those who excel at what they do. It takes time to sift through the chaff to find the wheat. Ah, the magic of specialization and outsourcing!

I could be wrong as well, mostly in the short-term... but I doubt it.

i disagree that this bull has to end in a further parabolic move.

... you all now realize that CB's have drawn a big red bullseye on all your foreheads.

That's reasonable to assume; it doesn't have to end in a parabolic rise. It's the probability of that happening which is very high.

The banks have been targeting gold for centuries because it clearly shows when they've buggered things up. What else is new?

Dan Norcini's article to me is a game changer.  the creeping realization that CB's are acting to kill gold should not result in permabulls thinking that just b/c they are aware of the manipulation, then it won't happen.  the better response is to sit up, understand the implications of this, and get out of the way now.  they will throw the economy under the bus in the name of self preservation.  suspicion will turn to realization will turn to doubt will turn to fear will turn to capitulation.  this is the psychology of the situation.

See my last statement about gold being targeted. Understand that central banks are net buyers of gold. The manipulations are to keep the power of gold out of the hands of too many whom the banks can't easily control, assuming a powers-that-be conspiracy hat. On the other hand, the banks are also struggling to survive and thus will attack what they see as a threat to their existence: gold.

Look at the psychology outside of the US. It is not as you describe.

could the end of the bull in pm's partially result from a new technology staring us directly in the face; Bitcoin?

Yes.

watch out.  looks to me like the resumption of the $DXY ramp and USD crosses starts tonite and thru tomorrow.

Very likely. The fraud will continue to the bitter end. Of course, that's still all paper games.

I really don't think it's a good idea to be trading at all right now except to maintain hedges, especially with the FOMC meeting coming up so soon. If you haven't prepared by now, batten down the hatches and ignore the markets for a bit.

Because it's ofter easier to link an article and it can be better said by another: Richard Russell at King World News on the anti-gold sentiment.

[Revalin]

Gold protects against instability, especially debasement and fraud.

It only protects to the degree of its intrinsic value.  Is there really $10 trillion of intrinsic value in gold?  If not then what's supporting it other than speculation and CBs manipulating their currencies?

[miscreanity]

I don't see what it's used for and how it works. A debit card system will work using particular currencies. If you want to plug in different currencies you'd need to exchange the currency to that which is required by the debit system before or after the transaction.

OT provides exactly the kind of framework necessary to allow transparent transactions among different types of instruments. The overall structure it promotes is basically a flexible market for everything.

If you wanted, you could trade umlaut posters for Swaziland textiles almost as easily as you can exchange EUR for USD today. The same mechanism would make BTC payment feasible for anything else.

Complete abstraction of financial associations is the result, or securitization of everything.

Does anyone know a web resource when I can see historical gold prices on a log scale? Ideally as a dynamic image rather than a Java applet.

What kind of range? Only Gold has annual closing prices since 1792, but you'd have to produce the chart yourself. That shouldn't be too difficult with current spreadsheet software, even for online versions. I did it myself with Kitco London PM fix data going back to the late 90s. That gold chart is a Google Docs Spreadsheet with numerous limitations, including lack of log scale. I really should add 2011 data as well.

The Privateer has some good charts as well. Stockcharts also offers an extensive amount of data and charting analysis on a subscription basis. An alternative would be to open a Think or Swim paper trading account and use their charting software, but that might be limited to a few years as well. There are others that I've come across, but I'm not sure of any other dynamic gold charts offhand that offer more than a few years to a decade of data.

It only protects to the degree of its intrinsic value.  Is there really $10 trillion of intrinsic value in gold?  If not then what's supporting it other than speculation and CBs manipulating their currencies?

What intrinsic value? As the saying goes, "you can't eat gold". Its value is derived from its relation to everything else, primarily because of physical properties and the fact that it exists in such a steady and limited quantity.

A better question might be: how much is society worth? While the same can apply to paper currency, the difference is that gold does not require management to act as a representative of work effort or wealth. No physical asset functions as well as gold for the purpose of a currency, and no abstract representation has been able to avoid the pitfalls of centralized control and management until Bitcoin came along. With every other currency in a state of violent flux, gold is resuming its currency status.

An even more appropriate question now is: how much gold is necessary to stabilize the global monetary system? If it's 20% of all money currently in the world, USD denomination based on base money and debt obligations outstanding, the flow will result in a major revaluation of gold in relation to all other assets. The figure of $10 trillion seems a very low estimate.

[ghyze]

Sorry if this has been said before, I didn't read the entire thread.

@cypherdoc:
I think you're wrong, gold still is a good buy. I'm still buying metals. Here's just a few reasons why:
- Just over a month ago, GS said the price of gold is going to $2500 by the end of this year.
- Everywhere I look I see small companies popping up that buy your old jewelry. That means these people think gold is still an extremely good buy.
- The FED and the ECB are printing lots of money, meaning the euro and the dollar are going down in value.
The book "The Creature from Jekyll Island" explains a lot about the global money system. It's an excellent read, I suggest you pick up a copy...

[cypherdoc]

Sorry if this has been said before, I didn't read the entire thread.

@cypherdoc:
I think you're wrong, gold still is a good buy. I'm still buying metals. Here's just a few reasons why:
- Just over a month ago, GS said the price of gold is going to $2500 by the end of this year.

since when have they been trustworthy?  they don't even make good calls anymore.

- Everywhere I look I see small companies popping up that buy your old jewelry. That means these people think gold is still an extremely good buy.

its amazing how diff ppl see the same things but interpret them differently.

- The FED and the ECB are printing lots of money, meaning the euro and the dollar are going down in value.
The book "The Creature from Jekyll Island" explains a lot about the global money system. It's an excellent read, I suggest you pick up a copy...

i've read it twice.  and it IS a fantastic book.  i just don't agree about the one world currency thing though.  nor the gold part at this pt in history.

[ribuck]

As the saying goes, "you can't eat gold".

Yes you can eat gold.

[hugolp]

As the saying goes, "you can't eat gold".

Yes you can eat gold.

Whats with this obsesion of eating gold a lot of paperbugs have? You can not eat paper neither (well, you can but you get me) and they defend it as money. If you want to eat get food, money is not for eating, money is a mean of exchange. Why would you want to eat money?!?

[cypherdoc]

perhaps you ought to consider quoting me as i am the only one i know that had predicted this manipulated central bank induced USD rally weeks ahead of it happening

The only one?

yes, absolutely.  in the sense of:  "perhaps you ought to consider quoting me as i am the only one i know that had predicted this manipulated central bank induced USD rally weeks ahead of it happening".  there is a huge distinction btwn what that lame article you referenced was saying and what i predicted.  just saying "i think it might rise now b/c its time" is way diff than saying "why or when" it might rise.  the fact that its CB intervention means everything and is precisely why it has ramped so viciously.

Along the same lines, I could predict an earthquake in California and claim that I knew it was coming when it finally happens. Predicting the timing is exceedingly difficult, so I prefer preparation instead. That way, the trap can be sprung when the conditions are right; the reward reaped when there's little to no fight left in the move.

look.  i made this call on 8/9/11.  IF i happen to be right on this top but happen to be off by only a month and $100 i'd bet most ppl here on this thread would call me "A Legend" looking back at this years from now as opposed to someone just yelling "fire".  not that thats my motivation though.

and you know what?  i DO smell a trap.  or i should say fire.  i'm at the back door of the theatre looking back at everyone in their seats fixated on the screen eating popcorn with the curtains on fire.  remind me to make a post on pundits and trees when i get the chance.

The distinction here is that gold is not included in the equation. The USD appreciates against the Euro, and both are depreciating against gold.

funny you should mention that.  this last weekend when i was debating this with hugolp, i came to the realization that my viewpoints are clearly US centric and based on the USD being the worlds reserve currency.  if i were European, i would be more neutral on buying gold as their currencies are going to be hurt thru this next Phase 2 decline. you would then argue that means gold is still a great buy b/c the ROW demand will surely send gold skyrocketing.

however.  if you'll recall my inverse pyramid example of how money is created where foreign currencies are inflated via leverage off an inflated USD reserve in good times.  in a worldwide deleveraging cycle such as we're going thru now and with an imminent Greek default, foreigners and esp. emerging mkts are going to be hurt even more than us.  i could very well see that foreigners will be forced to sell their gold to eat or pay taxes.  THIS is what i think the CB's are gunning for and is the clearest example of USD hegemony.  a worldwide collapse in the gold markets.  obviously i'm betting they'll be successful via brutal liquidity drains and no more QE.  they need to save the system that has made them Masters of the Universe.

It isn't the fact that this dollar rally happened that's interesting, but the extent to which it has risen in such a short time.

this came as no surprise to me.  not when you predict that the USD rally will come from CB intervention as i have.  i have said several times the USD will "skyrocket".  this is how markets are manipulated.  in the middle of the night interventions when most investors are asleep at the wheel to create maximum psychological impact at the open via a huge GLD gap down; extreme ramps to force margined gold players out of their positions; small descending triangle formations to "tempt" bulls in gold into buying and leveraging up before "the trap" is snapped shut; extreme ramps in the USD to force USD shorts to cover overextended positions; waiting until sentiment reaches extremes before initiating an attack; all the while to create huge profits for insider bank traders that have been notified ahead of time.  this is where technical analysis combined with intuition and a thorough understanding of fundamentals, criminality, and sentiment come in handy.  i can "see" the setups.

in addition, on 9/6 at 9:24pm, in this thread, minutes after the selloff began i called attention to this as supportive of my theory.  Dan doesn't post on his blog until 10:44pm over an hour later.

Being first to scream "FIRE!" doesn't mean there is one.

now you're just being defiant.  give me a little credit here.  the fact that Dan Norcini and other gold bulls are just now coming to this realization of CB intervention that i had a month ago is significant.  there IS a fire.  i've listened to Dan every Friday for as long as KWN started after Eric King broke off from FSO.  he is an example of a linear thinker.  not to mention that he owns a bullion business if i recall correctly which severely biases his views.  this is a high stakes game of tactical chess.  i'm not just one or two moves ahead of him, i'm twelve moves ahead.

this is old info and has been already invalidated.  any technical trader knows this.

Can a technician explain why there are so many conflicting technical signals and so much confusion? Is support the result of a line on a chart or real-world supply & demand? Can that distinction be made from price alone?

you would be wise to not ignore this failed breakout.  i've already told you the confusion and diverging signals is b/c we're at a fundamental transition btwn bull and bear markets.  as we get in gear to the downside then the picture suddenly clarifies to everyones horror.

the whole fundamental basis of the gold trade has been to escape a falling USD.  now that its rising and looks to have broken out to the upside how can you justify further gold buying?

Then why would Europeans be buying gold as the dollar rose against the Euro? Is the entire world buying gold just because of a falling USD? Correlation is not causation. Beware of such linear thinking.

as i said above, i'm neutral about foreigners and gold.  i still think its dangerous for them b/c of the severe drain in liquidity they will experience as the CB's drain liquidity out of the system to kill gold.

There was no US dollar in ancient Rome. Gold protects against instability, especially debasement and fraud.

i used to think that gold would go up in deflation or inflation too.  until 2008. i learned.  it won't protect in a CB coordinated effort to kill it via a severe drain in liquidity.

Acknowledging those whom we've learned from keeps us from making outrageous claims. Also, I do not have the time to produce every chart and study on my own, so I find those who excel at what they do. It takes time to sift through the chaff to find the wheat. Ah, the magic of specialization and outsourcing!

I could be wrong as well, mostly in the short-term... but I doubt it.

of course you have to learn from these guys which is why i read and listen to all the same guys you do.  but heres the thing:  you have to learn NOT to stand on the shoulders of giants but learn to stand on your own 2 feet.  much of what they're saying is herd mentality and based on linear thinking.  YOU are smarter than them.  thats one thing i know for sure  

i disagree that this bull has to end in a further parabolic move.

... you all now realize that CB's have drawn a big red bullseye on all your foreheads.

That's reasonable to assume; it doesn't have to end in a parabolic rise. It's the probability of that happening which is very high.

The banks have been targeting gold for centuries because it clearly shows when they've buggered things up. What else is new?

Dan Norcini's article to me is a game changer.  the creeping realization that CB's are acting to kill gold should not result in permabulls thinking that just b/c they are aware of the manipulation, then it won't happen.  the better response is to sit up, understand the implications of this, and get out of the way now.  they will throw the economy under the bus in the name of self preservation.  suspicion will turn to realization will turn to doubt will turn to fear will turn to capitulation.  this is the psychology of the situation.

See my last statement about gold being targeted. Understand that central banks are net buyers of gold. The manipulations are to keep the power of gold out of the hands of too many whom the banks can't easily control, assuming a powers-that-be conspiracy hat. On the other hand, the banks are also struggling to survive and thus will attack what they see as a threat to their existence: gold.

ok, everyone listen up, i'll go out on a limb and make my next non linear prediction:  somewhere along the line here you'll get an announcement from some CB that they are going to sell some of their gold.  i wish i could give you an exact time but i'd guess somewhere in the range of 6 months.  this will further accelerate the panic out of gold and will help serve the interests of the CB's to save their precious monetary system.  i KNOW you haven't read this anywhere.  who knows?  maybe they'll trade gold in for Bitcoin

Because it's ofter easier to link an article and it can be better said by another: Richard Russell at King World News on the anti-gold sentiment.

i like Richard Russell.  just not right now.