-- Posted Monday, 10 November 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Monday, November 10, 2008
“Phenomenally accurate forecasts”
Over the weekend, we featured a gloomy, $400 projection in gold that was based on the Elliott Wave work of financial consultant Glenn Hermanson, a Rick’s Picks subscriber. However, applying Hidden Pivot analysis to the same long-term charts, 628.10 is about as bad as we could see. That would imply a further decline of about 8% from the October 24 low and a 15% selloff from current levels. Although that might sound punitive, we’d be inclined to back up the truck at $628, since it could be the last chance gold bugs will have to load up before the dollar sinks into oblivion. And we know this will occur because the dollar is already fundamentally worthless. As we keep emphasizing, it is irrefutably true that the $20 bills in one’s wallet are worth no more intrinsically than the one-dollar bills.
But just try telling that to the New York Times, or to the network news anchors. They’d never take our word for it, but you can bet they’ll turn into believers instantly someday, when America’s foreign creditors decide to pull the plug on the greenback. For now, though, the paradox of a worthless dollar made strong by short-covering is likely to persist. This is another story that pundits, reporters and economists have yet to stumble onto, since the concept behind it doesn’t exactly lend itself to sound-bites. But it is nonetheless true that the dollar has been acting strong because debtors who are used to rolling their loans are being pressed to settle up in cash.
A Tactical Problem
This poses a difficult tactical problem for gold bugs, since bullion quotes are apt to remain under pressure until the moment the dollar collapses in a global epiphany. On that day, our sovereign creditors will implicitly acknowledge what has been true since Nixon closed the gold window in 1971 – i.e., that there is nothing whatsoever behind the dollar.
More immediately, though, we shudder to imagine what will emerge from next weekend’s global economic summit in Washington. The U.S. dollar is unlikely to retain its status as the world’s sole reserve currency, and that implies we’re going to have to pay at least some of our debts with money that is “harder” than dollars. Moreover, by demoting the dollar in this way, our trading partners are creating an exit path whose very existence is bound to hasten its demise. This isn’t something we see playing out over many months, incidentally, but in the space of mere days. As to when it might it occur, like all panics, there will be no drum roll, spotlight or official announcement to prepare us. Would you be ready if it happened this afternoon?
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December Hidden Pivot Seminar
Because the November 5-6 Hidden Pivot Seminar was full, we will be offering the class again on December 3-4. For more information, click here.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Monday, 10 November 2008 | Digg This Article | Source: GoldSeek.com
