Wednesday, October 5, 2011
As we all ponder the pretty little FUBMs on the charts to the right, I thought I'd touch upon a few basic, fundamental questions this morning.
First of all, a chart. This is a 15-minute Dec11 gold. Say what you want about the helpfulness of short-term charts right now but I contend that they can still help you to see some patterns of resistance and support. In this case, note the almost perfect double-bottom. You should ask yourself, "why does that happen?". In this case, I suppose it indicates a significant buyer at 1600. Whether or not that buyer(s) is great enough to stem the overall tide lower is an important question but, for now, at least this buyer has given us a level to watch going forward.
OK, onto the fundamental questions. The first item I'd like you to consider is the article below by Charles Hugh Smith, made available on Chris Martenson's site. While we must always be willing to consider reasoned, contrarian views, the issue I have with the general thesis here is one of normalcy bias. Yes, IF the current economic system survives another 5 years and IF life and business continue on as usual, THEN perhaps the idea of a long-term dollar rally has merit. Anyway...presented without further commentary:
This next item is something that was emailed to me over the weekend. I was going to write an entire post about it but now I don't need to as the link below is an excellent summary. Understand this is a very important development in the fight over U.S. "states rights". This movement away from the Federal Reserve system will have enormous constitutional consequences. We must all watch these developments very closely.
Lastly, an item that went largely unnoticed by the regulars here at TFMR. Statusquotians see this story as no big deal. On its surface, it's simply the CME further legitimizing the value of gold. I contend that there is much more here than meets the eye. Never forget that the first "C" in "C/C/C" is for CME. The CME owns the Comex. Owns it. As in it is their property and they are liable for it. In this case, by raising the gold collateral maximum to $500MM, they are inviting (begging) the holders of physical, allocated gold to throw it back onto the unallocated pile. If you need another primer on the unallocated/allocated system, here's a link (http://gold.bullionvault.com/How/UnallocatedGold). Once the gold is back into an unallocated account, the bullion banks can lease it out for further price suppression and even use it to settle physical contracts. No one in their right mind should allow this but, as the adage goes, a fool and his money (gold) are soon separated.
That's all for now. I wish you a happy and pleasant day but keep an eye on those gold levels I mentioned. TF
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