Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Bitcoin, Bail Ins And Bullion
By: Mike Maloney

Tactics For The Gold Bull Era
By: Stewart Thomson

Dow Peaking? The Quick Guide to Diversifying Your Stock Profits
By: Jeff Clark

What History Says for Gold Stocks in 2018-2019
By: Jordan Roy-Byrne CMT, MFTA

Jack Chan's Weekly Precious Metals Market Update
By: Jack Chan

Synchronized Global Growth May Have Arrived
By: Frank Holmes

Gold Versus Bitcoin: The Pro-Gold Argument Takes Shape
By: GoldCore

Asian Metals Market Update: November-21-2017
By: Chintan Karnani, Insignia Consultants

Gold Seeker Closing Report: Gold and Silver Give Back Friday’s Gains
By: Chris Mullen, Gold Seeker Report

Operation Twist By Another Name and Method?
By: Gary Tanashian

 
Search

GoldSeek Web

 
Rate Hikes & Gold


 -- Published: Tuesday, 21 October 2014 | Print  | Disqus 

Graceland Updates

By Stewart Thomson

 

1.            While all “systems are go” for the precious metals sector, or at least appear that way, things are substantially more questionable for the world’s stock, bond, and real estate markets.

2.            India’s top central banker, Raghuram Rajan, is highly educated, in both engineering and economics.  He’s one of the smartest practical economists in the world, and the only central banker to have predicted the 2008 super-crisis.

3.            Ominously, he’s the only central banker now, issuing dire warnings about a new super-crisis, one that could become a 1930s-style depression.  My suggestion to the Western gold community is to take this man seriously.  Here’s why:

4.            The Fed often uses a rough eight year business cycle in its calculations.  The last two cycles peaked in the year 2000 and 2007.  The current cycle has been anemic, and it is likely to peak in 2015, using that eight year gauge as a rule of thumb.

5.            If Western gold community investors did not buy the US stock market into the 2002 and 2009 lows (I did), they should not be “chasing price” now, as this business cycle peaks.  Bank economists keep saying this recovery cycle can continue far beyond eight years, but that’s what they said in 1999 and 2007, right before the last two crashes.

6.            Wealth in the stock market that is “here to stay”, is generated by buying business cycle troughs, not peaks.   While most bank economists and gold community analysts predicted a Fed taper would crush the price of gold, I suggested it would cause gold to rally, and turn the Dow into a wet noodle, and that’s exactly what has transpired.

7.            Here’s what I see next:  I think bank economists and gold community analysts are seriously underestimating the Fed’s concerns about inflation, and risk-on market froth.  For 2015, I’m predicting substantial increases in interest rates, as the Fed works to support higher wages for low and middle income Americans. 

8.            Janet Yellen has categorically stated that she has serious concerns about the wage differential between the rich and the rest of America.  Higher wages are inflationary.  Higher wages are almost certainly coming in 2015, and that means the Fed must raise interest rates decisively, to halt the inflation generated by those higher wages.

9.            While a 1929-style stock market crash may seem unlikely in 2015, trading volume has steadily shrunk in the Dow, since the 2009 lows.  To view that decline, please click here now.  That’s the monthly chart for the Dow.  While the market typically rallies from October to the end of the year, I think rallies now need to be sold and shorted.  I can easily see the Dow at 14,200 after the first rate hike.  All global stock markets would join in the “downside fun”.  There are two ways to solve wage disparity.  The first is by raising the wages of the poor.  The second is by crushing risk-on markets, and crushing the wealth of the rich.  I think the Fed will engage in both actions.

10.         Higher rates could crush junk bonds, mortgage markets, and the Dow, while gold powers higher as inflation rises and the bond market loses its safe-haven status. 

11.         Richard Fisher is president of the Federal Reserve Bank of Dallas.  He stated yesterday that QE has encouraged indiscriminate investing by investors. "We've been floating this market with the Ritalin of easy monetary policy," – Richard Fisher, CNBC News, October 20, 2014.  When a Fed president compares QE and low rates to Ritalin, it’s time to seriously think about what happens to global stock markets when there is no more Ritalin.  To view recent statements from Mr. Fisher, please click here now.

12.         When Raghuram Rajan outlined the risks of the 2008 super-crisis before it happened, US government and central bank officials called him “misguided” and “lead-eyed”.  Perhaps his “lead-eyed” concerns about a 1929-style crash now should not be dismissed quite so quickly, this time? 

13.         If the Fed suddenly raises rates, investors may find there are few buyers for their stock.  The correction that Mr. Fisher is outlining could quickly become a much more dangerous event, depending on how global markets react to a major change in central bank interest rate policy.

14.         Please click here now.  That’s the daily chart of JNK-NYSE, a junk bond ETF.  It’s become a “cauldron of volatility” as QE is tapered to zero.  What happens to junk bonds, if the Fed actually hikes interest rates?  What happens to the US real estate market, in that situation?  It could get ugly.  Richard Fisher is rumoured to own a lot of gold, so he’s likely fully prepared to manage this situation!

15.         Gold itself is racing higher this morning, and the hourly bars chart is beginning to look like “bullish artwork”, painted by an old master.  To view that chart, please click here now.  

16.         From the $1183 area lows, gold has now rallied about $71, and established a nice uptrend channel.  Importantly, the sell-side HSR (horizontal support and resistance) at $1240 has been penetrated this morning in a decisive manner.

17.         To view the daily chart for gold, please click here now.  Note the thick blue line I’ve drawn on this chart in the $1240 price area.  The rise to the $1254 area is turning the $1240 area into buy-side HSR, which is great news for gold bulls.

18.         The lead line of the price stoker (14,7,7 Stochastics series) at the bottom of the chart is now at about 90, which is very overbought, and so light profits can be booked on a small portion of positions, using my systematic risk capital allocator, the pyramid generator.

19.         The weekly chart is extremely impressive.  To view it, please click here now.

20.         If gold can rise above the gold coloured downtrend line on this chart, I think a further rise to about $1350 may be a realistic target.  Note the position of the price stoker.  It’s sitting at about 37, and is rising steadily.  In the intermediate term, that supports the bullish case for gold.

21.         Gold is generally frowned upon by governments, because it’s regarded as an “anti-debt” asset.  Nobody knows this better than the citizens of India, who must import gold through a literal gauntlet of punitive rules, regulations, and kickbacks to government officials. 

22.         One Indian banker recently told me, “Government corruption has always been a part of our culture, and it always will be.  Isn’t that great?”  I’m not sure how great it is, but it’s clear that Indian citizens are fully prepared to do whatever it takes, to import all the gold needed for their sacred religious ceremonies, regardless of the actions of any government entity. 

23.         That gold ultimately must come from gold dug out of the ground by Western mining companies.  On that note, please click here now.  That’s the weekly chart of GDXJ.  From a technical perspective, a rare quadruple bottom pattern has materialized, with bullish implications for price of junior gold stocks.

24.         Note the price stoker at the bottom of the chart.  The lead line is at about 15, and there’s now a crossover buy signal.  In the intermediate term, a rally towards the $45 area appears to be very likely!

 

Special Offer For Website Readers:  Please send me an Email to freereports4@gracelandupdates.com and I’ll send you my free “Die Bonds Die!” report.  I’m preparing to attack the global bond markets with short sales.  I’ll show you how to get richer, by betting on rates hikes as gold climbs higher! 

 

Thanks!  

 Cheers,

 st

 

Stewart Thomson 

Graceland Updates

 

Note: We are privacy oriented.  We accept cheques.  And credit cards thru PayPal only on our website.  For your protection.  We don’t see your credit card information.  Only PayPal does.  They pay us.  Minus their fee.  PayPal is a highly reputable company.  Owned by Ebay.  With about 160 million accounts worldwide.

 

Written between 4am-7am.  5-6 issues per week.  Emailed at aprox 9am daily.

 

www.gracelandupdates.com   

www.gracelandjuniors.com  

www.gutrader.com   

 

Email: stewart@gracelandupdates.com  

Or: stewart@gutrader.com  

 

 

Rate Sheet (us funds):

Lifetime: $799

2yr:  $269  (over 500 issues)

1yr:  $169    (over 250 issues)

6 mths: $99 (over 125 issues)

 

To pay by cheque, make cheque payable to “Stewart Thomson”

Mail to:

Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario L6H 2M8 Canada

 

Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form.  Giving clarity of each point and saving valuable reading time.

 

Risks, Disclaimers, Legal

Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:  

Are You Prepared?

 


| Digg This Article
 -- Published: Tuesday, 21 October 2014 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.