Significant Technical Damage In The Dollar Going Unrecognized

Interview: Dr. Marc Faber on the Federal Reserve and Hyperinflation 

Permanent 0% On Road To Ruin

By: Jim Willie CB - 23 September, 2010 Japan has proved without confusion that 0% is a permanent stuck position. The United States will repeat the path, but with a vast mudslide. Japan has had the advantage of a strong industrial base, a sizeable trade surplus, and no war budget. Thus it has been capable of funding much of its own deficits. It does possess a big debt burden. But the US has $1 of new debt for every $1 in government revenue. Full Story

Rah rah rah!

By: Gary Tanashian - 23 September, 2010 Officialdom does not want its herds to panic full force into gold because that would mean confidence is lost in the system. The system only knows how to keep on trying to perpetuate itself, even as it slowly degrades over time. Expect some serious volatility to attend the gold gushing Don Luskin and an increasingly bullish herd. But that is just volatility in the price casino; you have invested in gold for value, which has been a good strategy all the way up. Full Story

Chinese Duality: Fast Economic Growth or Social Stability?

By: Richard Daughty, The Mogambo Guru - 23 September, 2010 I finally managed, for about two minutes, to stop worrying about the coming ascendancy of the Chinese to overwhelm the planet – a welcome respite! – after I read Rick Mills of Aheadoftheherd.com quoting some Chinese doofus named Xiang Songzuo, who unbelievably is deputy head of the International Monetary Institute at Beijing’s Renmin University, and who said, “Export industries employ so many people, and a drop in exports would mean a rise in unemployment which could cause very serious social unrest.” Full Story

Got Gold?

Is Gold In A Bubble? A Visual Aid

 

Significant Technical Damage In The Dollar Going Unrecognized

Has anyone noticed significant technical damage to the dollar amid all the election rhetoric and Administration reshuffling confusion? A weak currency is good for everyone, right? If there was a time for a "line in the sand" currency intervention, it would be now.

Gold is neither blind nor bubble-like to this technical reality.

U.S. Dollar Index ETF (UUP):

Gold Shares: Subtle Changes Within The Trend Suggest Outcome Few Expect

Yesterday Dan's commentary and charts on jsmineset.com illustrated the under performance and out performance of the mining shares relative to bullion and stock market, respectively.

I would also like to add this analysis by illustrating the building strength within the gold shares group not captured by the widely followed indices such as the XAU and HUI (Huey).

The Gold Miner's Index has decisively broken out of its cup-and-handle formation. This breakout brings a minimum measured move into play.

Gold Miners Index ETF (GDX):


The junior miners, a subset within the mining group, are displaying exceptional relative strength to majors (major producers). This relative strength is revealed by the surge in the juniors to majors gold share ratio illustrated below.

Juniors to Majors Gold Share Ratio:


All of this positive action is supported by the long-term secular breakout of the gold stocks from the 30-year consolidation. Money flows into the gold shares will only intensify as recognition of the significance of this breakout increases.

S&P Gold (Formerly Precious Metals Mining)*
*S&P Gold from 1945, Barron's Gold Stock Index from 1939-1945, 1922-1939 Homestake Mining


Watch long-term, relative money flows closely. The subtle changes within the trend already suggest a peformance outcome that few expect.

S&P Gold (Formerly Precious Metals Mining)* to Gold Ratio:
* S&P Gold from 1945, Barron's Gold Stock Index from 1939-1945, 1922-1939 Homestake Mining

Unusual worry for economy: Is inflation too low?

Classic headline designed to confuse the issue at hand. Inflation/deflation is a product of confidence of nation's debt and fiscal management. When gold is tied to the circulating currency and confidence wanes, deflation is the end result. When it's not, the end result is an increased velocity of money - i.e. get rid of the stuff before it devalues further. This is currency-driven or cost push inflation. As long as confidence in a nation's debt and fiscal management deteriorates under a fiat monetary system, something we are seeing right now across the globe, inflation is inevitable. To suggest that inflation is too low is an effective misdirection tactic.

It might seem like prices are rising wherever you look, from medical care to college tuition. Yet to the Federal Reserve, they might not be going up fast enough.

The Fed says a little more inflation might be just the thing to start a chain reaction that would ultimately create jobs -- and avoid a spiral of falling prices that could damage the economy.

Source: finance.yahoo.com

Mining Shares Lag Compared To Precious Metals, Perform Admirably Versus Broader Market

Posted: Sep 23 2010     By: Dan Norcini      Post Edited: September 23, 2010 at 12:59 am
Filed under: Trader Dan Norcini
Dear CIGAs,
Click either chart to enlarge today’s HUI-Gold Ratio and HUI/S&P 500 Ratio action in PDF format with commentary from Trader Dan Norcini