-- Posted Monday, 6 February 2012 | | Disqus

As last week ended, one might have believed Wall Street investors had just about everything wrong.  Stocks were up sharply on bullish payroll news that flatly contradicted something every American knows – i.e., that the Great Recession is still very much with us; T-bonds were getting whacked on the flimsy assumption that the economy is picking up strength; and gold and silver were under attack because, well, because all was right with the world.  Even the hacks and scribblers who bring us the news did their bit to feed Friday’s feel-good binge.  For one, there was nary a discouraging word on the Web’s main news pages about Greece and its slow-motion bankruptcy – only a story about how Europeans were working diligently to protect the homeless from a cold snap.  And the left-tilting L.A. Times, thinking wishfully, weighed in with the most fatuous story of the day:  an analysis piece saying that the payroll numbers could prove to be a turning point in Obama’s reelection year — the day when he shifted from slight underdog to favorite.

All of which led us to post a link at Rick’s Picks to some sobering counterpoint in the form of an essay, Peak Money Arrives. Here’s an excerpt to ponder lest you grow giddy over Friday’s silly headlines: “The world is running out of money. If money is credit, and credit relies on confidence, there is not enough confidence in the financial system to supply the world with the money it needs. Since the initial credit crisis struck in 2008, credit and money have been withdrawn from the system in such staggering amounts that international trade can no longer grow. The world’s central banks are playing a rear guard action by acting as lender of last resort to banks that no longer trust each other and have stopped lending in the interbank market. As liquidity flows out from the system, the rottenness that has corrupted the foundations of global finance is now exposed for all to see.”

Bullion Selloff a Fake

Although these are not the sort of facts on which one should base short-term trading decisions, they are all but certain to affect the larger trends.  And that is why we would counsel bullion bulls to take Friday’s selloff in stride. Our forecast calls for a swing high in April Gold at 1799.50, nearly $34 above Friday’s peak, and we would be very surprised if gold futures did not get there this week. We should caution, however, that as bearish as we are on the U.S. and global economies, higher stock prices seem likely over the near term. If so, we would view it as an excellent opportunity to get short – especially the shares of bank stocks that have been manipulated higher in recent weeks by institutional sleazeballs eager to dump them onto widows and pensioners.  We singled out two stocks in particular – Bank of America and Goldman Sachs – during an impromptu online trading session that drew an unusually large crowd for a Friday afternoon. Our rally targets for these stocks lie, respectively — and precisely — at 8.09 and 120.03. If you’d like to find out how we plan to get short, and to receive alerts when our frequent impromptu analysis-and-trading sessions are about to take place, try a free subscription to Rick’s Picks by clicking 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 indication 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 © 2011, Rick Ackerman. All Rights Reserved.www.rickackerman.com

-- Posted Monday, 6 February 2012 | Digg This Article | Source: GoldSeek.com

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