Head In The Sand
In the past 24 hours, there's been lots of talk about a "return the the gold standard". Not surprisingly, the majority opinion comes from those who still have their heads buried deep in the sand or up their...
First, there's this from LIESman himself. What a jackass this guy is. The 1:30 minute "presentation" not only dumbs-down the discussion (I mean, seriously, explain the wisdom and economics of sound money in 90 seconds?) but note the carnival/ice-cream-man music the deltabravoes at CNBS chose to put in the background.
And CNBS also chose to run this companion piece in text form. It's made up almost entirely from bullshit and misinformation. I especially like how they quote as a source some clown from Royal Bank of Scotland who, later in the article, clearly (but unintentionally) lays his cards on the table as a died-in-the-wool progressive Keynesian. Here's some advice for you, Moorad: Forget about defending the current system and instead focus upon fixing the insolvency and "glitches" in your system that caused your bank holiday/disaster last month.
On the bright side, here is at least a partially-helpful discussion of the reports from yesterday. But I despise this CNBS(E) anchor as he has an annoying habit of putting an "e" on everyone's name. My experience with people that do this is that they are attempting to show their intellectual superiority. What a jerk. I wonder, though, if I was a guest, would he call me "Turdy"?
Anyway, the point of all this is: It matters little what CNBS thinks. The opinion of some douchebag chief economist at RBS is insignificant. Whether or not the Republican platform states a desire to audit the Fed or study the gold standard is irrelevant. One day soon, with little or no warning, either China alone or acting in consortium will offer the world a new, asset-backed medium of foreign exchange. All of this nonsense political grandstanding cannot stop it from happening. The U.S. and the rest of the world will be forced to devalue and return to a gold standard. Period. End of story.
http://www.tfmetalsreport.com/podcast/3835/tfmr-podcast-22-john-butler-author-golden-revolution (Please listen to this again over the weekend and BUY THIS BOOK!!)
Are you surprised that the metals are hanging in there today? Are you amazed at silver? You shouldn't be. The game has changed and prices are not looking back. Again, there will, of course, be brief pauses for profit-taking. There will not be, though, another drop toward 26 and new lows. If you're thinking that, purge the thought from your head or head back over to Kitco. I'm sure that you and Nadler could make beautiful music together.
While I'm confident that the root causes of this rally will soon be apparent for all to see, anyone who considers him/herself a "Turdite" should be looking to buy all dips and continue to stack. Next week may bring some volatility in both directions as Sep12 option expiration is on Tuesday. This is not a big month of liquidity, though, so I don't expect it to be too crazy.
Gold is banging around 1665-1675 again. Hmmmm. Does that area ring a bell with you? If it doesn't, then you must be relatively new around here. The area around 1670 has consistently been significant because it is there that gold gapped open back on Sunday 8/7/11, following the late Friday 8/5/11 downgrade of the U.S. by S&P. Recall that this move set off a Great Panic amongst The Gold Cartel and price rose from 1650 to 1920 (16%) in just four weeks. Here's a chart from that fateful evening:
And here are your up-to-date charts.
And here's a chart I "borrowed" from Trader Dan showing gold priced in euro on the verge of a breakout to new all-time highs:
OK, that's all for now. I've got a new podcast for you which I will be posting later today. I'll also be posting my impressions of the latest CoT, once it's out. As mentioned, I expect it to be very interesting so please be sure to check back either later today or over the weekend.
Now go. Get some rest. Relax and be happy. The fun is just starting.
p.s. Here's a little more Hoodoo Gurus for you to start your weekend.