-- Posted Thursday, 17 December 2009 | Digg This Article
| | Source: GoldSeek.com
Rick’s Picks
Thursday, December 17, 2009
“Phenomenally accurate forecasts”
With Time magazine’s momentous selection of Ben Bernanke as Person of the Year, there were reports of people dancing in the streets in, um, Oslo. Leave it to Time to figure out a way to make Henry Luce roll in his grave while outdoing rival Newsweek in the race to claim publishing’s trophy for irrelevancy. While the understandably isolated delirium over Bernanke’s selection subsides, we thought we’d update the prospectus on gold with a contribution from a Rick’s Picks subscriber who has requested anonymity. His thoughts run counter to the popular notion that investors can count on steady buying from China to lend buoyancy to bullion quotes. As the writer makes clear, China may have a mind of its own, and it will not always be perfectly aligned with the thinking of gold bulls. Here we go:
While many precious metals bulls have been insisting for months that China is gold and silver's greatest ally, we saw first-hand last week exactly how capable the Chinese are of pulling a rabbit out of a hat when need be. Much of the finger wagging for the recent decline in the price of gold - as usual - has been directed towards those dastardly Americans. This time around, the gold bull's disdain had to do with the recent US jobs report on December 4. Yes, the numbers - which are unquestionably fabricated - had an impact on the precious metal markets; nevertheless, those gold bulls who insist upon using the adage of "see no evil, hear no evil, speak no evil," where China is concerned are fooling themselves and living in a sugar-coated dream world.
A full two days ahead of the jobs report, Chinese officials called gold's recent surge a "speculative frenzy." Yet, it is the jobs data that bears the brunt of the blame for gold's pullback. China had nothing whatsoever to do with this? Since when did they become our friend? Furthermore, how do we know the U.S. and China didn't act in unison here? A little of the "I'll-scratch-your back, you-scratch-mine," thing between old friends.
Damned Lies, and Statistics
Phony jobs report or not, who in their right mind believes statistics coming out of the U.S. to begin with? Perhaps those who frequent tractor pulls and WWE wrestling events are so naive. Maybe even Middle America. But then, they're not typically the ones buying gold, are they?
Big government is big government, and while China and the U.S. clearly have their differences, they also have a responsibility to co-exist and cooperate wherever possible, even though what we read in the papers and see on television often appears to dispute that. Why would anyone think China is any less qualified than the U.S. for pulling off a performance in price suppression where gold is concerned? Now that is naïveté.
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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. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts. 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 © 2009, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Thursday, 17 December 2009 | Digg This Article | Source: GoldSeek.com
