The Return of The Comiskey
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Just a bit ago, I was able to track down our old pal, Jim Comiskey. Given the current state of affairs, I thought it might be fun to get his take on everything from the S&P, to the metals to the latest report of Mad Cow Disease in California.
Ole Jim didn't disappoint. To listen to the podcast in its entirety, just click the microphone icon to the left. While you're listening, here are some other items that I found relevant as we passed through the day.
First up, a story from late yesterday about China bypassing the dollar and using gold to purchase Iranian oil. Santa's pretty worked up about it and rightfully so. He discussed this situation and more during his latest with Eric King. http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/24_Sinclair_-_Shorts_Now_Trapped_%26_Gold_Could_Gap_Up_to_$3,000.html. The article that brought all of this to the fore can be found here: http://www.forbes.com/sites/gordonchang/2012/04/22/the-best-reason-in-the-world-to-buy-gold/. And here are my thoughts from last night:
"The question you need to ask is: If true, what will the Iranians do with the gold they receive in exchange for oil? They'll most likely convert it into some type of currency which they can then exchange for gasoline, food, etc. Which currency would they convert it to? Dollars? No. Euro? Doubtful. Pounds. Not a chance. Yen? Be serious. Maybe they trade the gold to Russia in exchange for wheat, fuel and weapons?
I dunno. Maybe this story has it all wrong and they don't take gold at all? Why not just take renminbi for your crude and begin building reserves in it instead of dollars? Much easier than shipping gold around and an account at the PBoC is a lot safer than storing your gold at home. Ask Gaddafi or Saddam about that one."
As a follow-up, you should also read this interesting note from Izabella Kaminska at the Financial Times:
Next, there were two items I found today from Charles Hugh Smith. This first piece is about the "disappearance" of money. You've likely heard me state before that gold provides protection for your wealth and the silver provides you protection to purchase basic necessities. This article is along those lines:
This second piece comes via Chris Martenson's blog and it follows on the theme of fudged and manipulated government data. As we barrel toward another BLSBS report next week, I thought this was timely:
Oh, and this is fun. Santa posted this link earlier. It's a map of every U.S. police department that has the authorization/capability to launch and use aerial drones. How nice. God Bless the U.S.A. Land of the Monitored and Home of the Surveilled.
Next, here's a video from Paul Coghlan. Paul is one of Andrew Maguire's business partners and he operates his own trading service. He publishes these updates daily for his subscribers and offered this one to all Turdites as an introduction to his services. Pretty good stuff!
I owe you some charts, too, so here they are. First up, let's look at gold. We are still being pressed lower by the downtrend line but we are getting close to what should be very strong support between 1600 and 1620. We might have bottomed yesterday but I don't think so. My gut tells me that there is at least one more thrust lower to test and confirm a double bottom. From there, a move higher that takes gold back UP through 1660 and then 1680 will confirm that this nasty episode is behind us.
In regards to silver, I thought we should start with a chart of crude. HUH? That's right, crude. Do you recall last week when I mentioned that the silver chart looked a lot like the crude chart from late March and that silver was subject to "getting its stops gunned"? Well, guess what happened? And now what? Note that immediately after the crude stops were gunned a few weeks ago, crude bounced back but failed at the old support line, which had now become resistance. It then sold off further to a deeper low before consolidating and turning higher.
Note that silver may be following this same, classic pattern. The stops got gunned yesterday and down she went. A rally today failed right near where the old support had been and now it has since turned back lower. Will we next see a lower low, perhaps near the $30 level that we've all been waiting for? Probably.
Lastly, silver open interest rose again yesterday to a new 2012 high of 122,727. Again, for reference, back on 2/24 with price $5 higher, total OI peaked at 118,204 before falling along with price to 106,723 on 3/15. Since that date, price has fallen another $1.50 yet OI has risen by over 15%. The spring is obviously being coiled for a dramatic move. Which direction will it be? I imagine you can guess what I think.
Have a great evening and overnight. Get ready for a volatile rest of the week. TF