Gold Daily and Weekly Chart; Bond Crash; Currency Wars
Courtesy of JESSE’S CAFÉ AMÉRICAIN
If there is a stock crash, all asset classes will suffer liquidation for a period of time, except perhaps for treasuries, and chart formations will get tossed out the window. But at some time after the primary crash, the currency is devalued, and bonds are taken out and beaten.
Crashes are low probability events, but need to be accounted for in your planning. I do that by hedging my positions with some shorts, and relying more on bullion than stocks during riskier periods.
On every pullback, the permabears come out of their caves and do their dance.
That is how it goes in a bull market.
If there is a crash, gold would find significant support around the 1000 mark, as buyers who missed the last leg up will rush in at this chance to buy. However, most of the permabears will NOT buy, since they are now stuck in a cycle of always waiting for THE bottom and bragging rights to a low. If they did not buy in the last plunge, they will never buy.
Things are changing. The world has lost confidence in the dollar reserve currency regime thanks to the serial abuses of Greenspan and Bernanke, and the abusive use of power by the current and previous Administrations. Things that have been in place on a global scale for fifty years change slowly. But that change is happening, and that is what you are seeing in the chart below.
As I noted last year, the SDR recalibration would be a focal point for the BRIC’s to attempt to dislodge the dollar hegemony. The US and UK are fighting it with their bag of financial tricks. This is why Obama refused to touch the gangs of NY in his so called reforms. The big banks and hedge funds are as much an instrument of US foreign policy as is its military. Europe is learning this lesson, and it is taking measures to protect itself. This is part of the long range forecast, and is known as the ‘currency wars.’
I will not be surprised at all if in the next ten years certain US officials and those who claim to have been acting on its behalf, merely following orders, become fugitives from justice.
The oligarchs have ruined the US. They will now seek to starve the middle and lower classes to pay for their bonuses, and will resist every effort to repeal the absolutely irresponsible tax cuts enacted during the administration of their man W Bush, now judged to have been among the worst of all presidents by 238 US scholars.
The US cannot obtain a sustained recovery without serious financial reform and restructuring, and the legal repatriation of the wealth stolen by the financiers through fraud. What complicates this is that the politicians have allowed themselves to be tainted by the same brush of corruption, so in the short term everything is illusion, deception, and cover up. Slowly but surely, the truth will out.
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort" Anthony P. Sutton
