Blowout possible in gold, force majeure in silver, Rule tells King

 

Printing Enough Money to Buy the World’s Silver

 

Jim’s Mailbox

Posted: Mar 01 2011     By: Jim Sinclair      Post Edited: March 1, 2011 at 6:51 pm
Filed under: Jim's Mailbox


Vicious Downward Cycle Intensifying
CIGA Eric
The vicious downward cycle (see Jim’s formula) that started that started in 2001 and rematerialized in 2008 is beginning to intensify in 2011. This suggests an acceleration in the trend toward a lower standard of living for Americans as the shockwaves of public spending cuts negatively impact local, state, and eventually federal coffers. The public sector, contracting under the weight of a massive debt burden, has few options without the bankruptcy protection or ability to devalue. The message from national municipal bond market reflects this “damned if you do, damned if you don’t policy quandary. Expectations calling for an end of quantitative easing will once again be proven premature.
US Federal Budget (Surplus or Deficit As A % of GDP, 12 Month Moving Average) and Gold London P.M. Fixed:

Headline: Wis. governor proposes deep cuts for schools
Even though Walker isn’t ordering immediate layoffs, his budget will put tremendous pressure on schools and local governments, which will be asked to shoulder huge cuts without raising property taxes to make up the difference.
Walker’s budget includes a nearly 9 percent cut in aid to schools, which would amount to a reduction of nearly $900 million. The governor also proposed requiring school districts to reduce their property tax authority by an average of $550 per pupil.
Source: news.yahoo.com
More…




Greetings Jim,

Gold closed sharply higher today, breaking out to a new all-time high for the secular bull market. Technical indicators are bullish overall on the daily chart, strongly supporting a continuation of the rally.


The Gold Currency Index (GCI) closed sharply higher as well, moving up toward its recent all-time high. Although the GCI is lagging gold slightly in terms of price action, technical indicators are bullish overall on the daily chart, confirming the underlying strength of the advance.



With respect to cycle analysis, today’s strong move higher indicates that the current short-term cycle has moved into the beta phase and reconfirms the extreme right translation exhibited by the last two cycles.



As expected, the latest Intermediate-Term Cycle Low (ITCL) in late January has been followed by a strong move higher during the past 5 weeks.



A weekly close at current levels or higher on Friday would constitute a long-term breakout, reconfirming the secular bull market and forecasting additional gains during the next 2 to 3 months.


Best,
Erik McCurdy
Prometheus Market Insight
http://www.prometheusmi.com