Monday, June 13, 2005

US Dollar and US Treasury Notes and Bonds

The US dollar gapped up today, in what could be an exhaustion gap, as it made a fourth up day in a row in a 13 week up trend. This is topping action. So it makes sense that gold again today did the unusual and went up today with the US dollar.

US Treasury notes and bonds are acting toppy here. Two Fridays ago they had large outside reversal days. Today, Monday, both completed 4 down days in a row end of upward trend signals. At the same time they were working on these signals they made 2-b end of upward trend signals completed last Friday. They have been in 10 week uptrends.

The US bonds and notes look like they have already put in tops, while the dollar looks like it is in the process of topping right now.

** Yen gold made a new high today. **

Where is this "money" coming out of USD and US Treasury debt going to go? I can't see real estate almost anywhere in the world. I can't see government debt or corporate debt in most places in the world. I can't see stocks in most places in the world as the US economy is heading for a crash and will seriously and negatively effect many other economies in the world. That basically leaves other non-US "money", natural resources, and gold and silver related safe havens. No wonder gold and silver stocks started going up about 2 weeks before gold bottomed.

Jim Sinclair today:

Trader Dan gave you an important insight on gold earlier today. North American investors are ignorant of the true currency role of gold which Europe and - to a high degree Asia - know as being axiomatic.

I have outlined to you how gold will be a very important ingredient of the end game of this generational bull market experience. I am prepared to answer your questions on this key element.

A modernized and revitalized Federal Reserve Gold Certificate Ratio will return no later than 2012 but not in the way it existed before. The situation taking place is of a balance sheet form with US debts and financial obligations internationally so far outstripping US Treasury assets. Gold convertibility is a trade fix that is wholly outdated by the growth and fluidity of international trade as to be a relic of the past.

The modernized and revitalized gold cover clause (Federal Reserve Gold Certificate Ratio) is going to take gold back into the monetary system. In my view, this is a certainty and a critical part of the end game of 2012.

It is total nonsense to feel that jewelry is the critical element of gold’s value. The major mining companies’ creation, the Gold Council, should be flogged for pushing the jewelry view.

Gold is headed first to $518-$529 for monetary reasons not only as a currency of choice but also as the key element to the formation of the new economic world system of Authoritarian Free Enterprise.

A close 3% above $529 will take gold back into the monetary system as it moves to balance the US Treasury’s International balance sheet with the published amount of gold held by it. Then it will be secured to that balance in a manner that will automatically keep the balance. The US Treasury will have nothing to do then to accomplish this. The reason will be that instruments to speculate on this cover will act in the marketplace to accomplish it.

This will not be created by open-minded, fair and caring financial stars but rather to guarantee the dollars held by the giants of Authoritarian Free Enterprise who influence most of the world’s wealth and want to place that wealth in something that will hold its buying power.

The good and maybe bad news is that Authoritarian Free Enterprise works for the authoritarians. It is a merger between modern economics and the 18th Century where hourly workers are concerned.

I do not report on what I would like to see but rather what I see. The answer to protecting yourself is simple. Get rich or richer by knowing what the game is all about and positioning yourself to benefit from that knowledge.

To assume the leaders of today are stupid is to be stupid. Yes, the kingmakers pick a certain kind of front man, but remember the popular photo-op personality is simply a front man.

What is behind them and in the crowd both publicly and covertly are the finest minds on the planet. They will win and we need to know how to use that victory as our lifeboat to safety on a highly disturbed economic sea. One thing for sure is that trading for insurance is an oxymoron of world class proportions.

You see what I am doing to win. It is not writing which is a service. I do not sell a subscription, having absolutely no desire to manage your money in any way. You cannot hire me but I serve you to the best of my ability.

Through this page I am making a transfer to you of everything I know. I have taught you how to trade by keeping it simple so no matter what happens you know what a trend and trend change look like. Trading everything all the timer will prove Murphy’s Law. Murphy will get you because no one knows the time and place - even the braggarts.

Gold is a key player in the end game so I play the game not for peanuts but for the elephants. This is my last great play so that when I have succeeded I will have transferred all that I know to you free of charge and benefited those to whom I have a fiduciary duty. Then I will say “goodbye” and “call me next time you need me.” I plan to live a long time.

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