So, has Bernanke pulled the rabbit?

Some people think of Bernanke as a magician whose job is to pull a rabbit from a hat. The question is: HAS HE?

In order to try to answer this Q, I would like to examine two things: the financial and the economic picture.

THE FINANCIAL PICTURE.

Under this topic we need to examine what is happening to the US Dollar and other currencies and what is happening to gold.

The US Dollar made a few stabs at 83 then backed off to 81. Every time the Dollar moves Larry chortles that it is heading to 90 (like he told us), but the Dollar refuses to head to 90, even though the explanation that Europeans are turning Euros into US Dollars has credibility. Even though the FED is printing more and more, it can also manipulate it. When they accuse China of being a currency manipulator, I laugh.

Other major currencies are being cheapened as well. The Japanese Yen will double in monetary base. Consequently, the Japanese Stock Market is rallying. Even the Chinese Yuan is being printed more and more, but China is getting all the gold that it can, so in the future it will have a strong currency.

That brings us to gold. There is a very interesting article by Louise Yamada discussing recent events with gold:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/5/2_Yamada_-_3_Absolutely_Incredible_Gold_Charts_%26_Commentary.html

She notes the following:
1. Gold was dropped to 1,539, 30% down from the high, which more than meats the 20% down for a bear market.
2. The drop in gold was NOT related to Dollar strength.
3. The question of manipulation:
a) banks gave SELL signals to their customers;
b) the US and the EU continue to debase, but don't want the public to benefit from the gold price;
c)  the FED and other central banks want to force money into stocks.
4. COMEX gold (what they actually have) fell to record low.
5. It will take the US 7 years to return Germany's 300 tons of gold.
6. Current gold pattern has been damaged technically.

Q: has the gold bull market ended?
A: Concept vs Reality. You do the charting then look at the quotes.
Note: she does not know.
Added: The gold bull in the seventies corrected from 200 to 100 before it went to above 800.

The gold market is evolving (strangely enough) around the sale of gold. Only fools trade paper at the COMEX, where 90% of traders are losers. Yesterday's attempt to drop the price (Chinese markets were closed) failed and gold is heading to 1,500. Will it get there or will it be smashed again? Hard to tell.

THE ECONOMY.

The US economy is still shaky. Only the forcing of the Stock Market into new highs preserves the mirage of recovery. Yesterday's figure of 140,000 new jobs in April (revised now to 165,000) tells us that the employment picture is not improving, even though the number of newly unemployed fell.