How far can you trust Larry's calls?

Larry is at it again. This time he is setting the new low for gold at 1050 to 1070 but claims that the rally in gold can not resume until gold hits that low. He admits that the miners are now in rally mode, but has ten stocks to avoid, including FSM and GPL.

Let's review his recs.

1. He predicted that the Stock Market  would fall to 9,000. It did not and his followers incurred heavy losses from buying the bearish ETF.

2. He now says that he got his clients out of the gold stocks at the top. That is not how it happened. He told us that he became bearish on gold in the short term, but not in long term and mid term. He told his followers to stay with their positions, but buy the bearish gold ETFs as a hedge, which did not do so well and hit the sell point. Yes, he did tell us to sell all gold stocks, but by then those stocks were plummeting.

3. He has called for gold to hit a low at 1050, then at 1210 then at 1050 now. He says he is getting hate mail, but I think it is only criticism of him making calls that turn out to be wrong.

4. How about his admonition to avoid GPL and FSM?

Here is the course of the GDX. Larry admits that the miners started rallying.

We see the double bottom beginning about June 26 or so.

Here is GPL and FSM:

We can see that GPL is doing somewhat better than the miners. FSM had a double bottom in April with a retest of the low in May and is on a tear now.

 

 

The problem I have with Larry is that he is erratic and denies his mis calls, acting as if they never happened.

 

A Tale of two Cities

is the title of Dickens' novel of the French Revolution, as well as the title of FitzWilson's interview for KWN. Dickens was a critic of "conspicuous consumption," as contrasted to the plight of the French peasantry before the Revolution. FitzWilson's contrast has to do with the plight of Detroit as compared to Palo Alto and Facebook.

In fact, California itself offers a contrast of the haves and have nots: the conspicuous consumption of Hollywood and Silicon Valley  and the poverty of the inner regions of California, away from the Coast.

Drudge quotes an AP story that 4 out of 5 US adults face near poverty and no work. Even the surface wealth of the California Coast is shaky: 1) box office revenues for Hollywood are down by 19% and 2), Silicon Valley is propped up by the Stock Market bubble created by the FED.

The contrast between Detroit (Obamaville) and Palo Alto grows deeper, as ever larger parts of the Country fall victim to the chickens of Obama's economic policies coming home to roost.

1. Why do we have a "jobless recovery?" Because ObamaCare is forcing business to get rid of as many workers as possible and convert full timers to part timers.

2. Thus, the desire to look good in the profit column drives an unusual number of workers into unemployment.

3. Insurance premiums are driven sky high because of the mandates of ObamaCare.

4. The cost of an ever enlarging government shrinks the ability of private business to expand and hire more workers.

The French Revolution exacted a heavy price from the French aristocracy. Let us hope that our revolution takes place at the ballot box and exacts a heavy price from the ruling class.

Weiss sees war coming.

Here is how it is put:

"The good news: Iran won't nuke Israel.
The bad news: The war to stop it will be ugly.

Here is how [they] think events will unfold ...

• An Israeli strike on Iran nuclear facilities and missile development infrastructure will lead to ...

• Vicious air war over Syrian, Lebanese and Iraqi airspace, followed by ...

• An Israeli land invasion of Lebanon to neutralize Hezbollah’s rocket capacity, while  ...

• Iran tries to choke off oil exports through the Strait of Hormuz!

Then it will get even worse ...

• Egypt’s paramilitary Muslim Brotherhood will obstruct the flow of oil through the Suez Canal.

• The final blow: an Iranian missile strike on Saudi oil fields.

When all this happens — and it will — world markets will suffer the worst one-day loss since 9/11. Crude oil could skyrocket to as high as $200. I expect to see gold make daily jumps of $100 or more.

If U.S. carrier groups in the Arabian Sea come under fire, we could see $300 oil and $2,000 gold — or even more!"

Larry's contradictory calls.

Larry's newsletter for July reiterated his old call of 1050 to 1100 as the bottom of the gold price.  Furthermore, he predicts this to occur in September. Both of these calls contradict his recent calls for nibbling at the SPDR gold fund and some gold miners. Tomorrow Larry is to present a session on gold miners. Why do that unless he recommends a buy?

What is going on? I think he wrote the newsletter earlier and failed to make the proper corrections. An alternative explanation, that he plans to punish the $49/yr subscribers for not having upgraded to the $2,600/yr subscription is too sinister to contemplate.

What about the gold and silver miners? The GWS (an ETF that tracks the miners) has now had three up waves. Check out also THM, NAK, ISVLF (or IPT.V), GPL and FSM and they all show 20-50% gains.

Big banks rig electricity prices.

Banks Caught Manipulating Electricity Trading Now Face Billions in Fines
By Shah Gilani, Capital Wave Strategist

What haven't the Big Banks manipulated for trading profits, with taxpayers picking up any losses? First it was toxic derivatives, CDOs, CLOs and all that junk that led to government bailouts.

Now it's electricity trading. Shah Gilani shows that it's become the new Enron. The Big Banks manipulated the bids in the market, just like Enron. They got caught, paid big fines, but their profits still soared in the second quarter, with trading gains making up a big part of that.

Big Banks sure do know how to make big trading profits by rigging the game...

WHY? Greed of the Bankers.

http://pro.moneymappress.com/EDIGOLD1199MML/EEDIP736/?email=bszepesi%40peoplescom.net&a=8&o=3713&s=4377&u=2043775&l=104696&r=MC&g=0

Mike Ward of Money Morning has analyzed the takedown of the gold price in Money Morning. The reference to his article appears above.

This is NOT a CONSPIRACY theory. It is a description of criminal activity, just like the fixing of the LIBOR was. The financial media and regulators have failed to notice it yet, but $1.2T was pocketed by the criminals and an industry was damaged. When the litigation begins, there will be all sorts of them.

Is this the new BUY SIGNAL?

Larry Edelson in fact did give a buy signal. He recommended cautious buying of three gold miners. Which ones? Well, only those who pay the 2,600/yr to be part of the Traders group get to be told which ones.

Lt's see though what we can deduce from the data.

Gold has executed a double bottom, with the second bottom being higher than the first one. Couple this with the reported shortage of gold and silver metal and a case can be made that the bottom og the gold correction is IN.

The gold miner index (GDX) confirms: we had three up moves, each ending highere than the previous. Down moves in the upmoves are 1/3 or 2/3 of the upmove as you expect for the classical Fibonacci pattern.

The correction seems to be over.

How about the long term. Here we have to consult the amount of metal allegedly in US possession, vs the debt.

We see that reported gold in US vaults is down to 8,000 tons, while debt continues to accumulate.

WHY - the first answer.

A few posts ago, I have asked the question as to why a couple of big banks (FED, BIS(?)) with very deep pockets are trying to knock down the price of gold. This is my first answer to the question.

First off, let me rebut Larry Edelson's take on the Gold Market. Larry claims that the takedowns in the Gold Market were not orchestrated, but normal reactions to market mechanisms. I do want to approach this statement and rebut it, not because I do not respect Larry, but because I DO RESPECT him, his expertise and his opinions. There have been several takedowns in the Gold Market and a couple of the last three or four were clearly INTENTIONAL TAKEDOWNS. No self respecting trader will phone in a SALE  order to the Asian Markets of 500 tons of gold during the lightest trading, unless he WANTED THE PRICE OF GOLD TO DROP. And obviously, he would have very deep pockets. No one but the FED (and possibly the BIS) would have the motive and the deep pockets to conduct such suicidal trade.

So, what is the motive?

The FED is struggling to keep an arrogant and increasingly desperate Empire (run by a bunch of Socialists) afloat. This Empire is unable to pay its bills, or even keep its manufacturing base. To maintain themselves in power, the Leaders of the Empire buy off the electorate by federal handouts. These programs are escalating and are the source of deficits. In order to pay for the handouts, the FED (the Empire's banker) prints money to the tune of a trillion Dollars a year.

What is the consequence of the money printing?

The consequence of money printing is always the loss of value in the currency and eventually, the repudiation of that currency. So, the FED is acting to preserve the value of the US Dollar. If gold were allowed to rise in response to the money printing, the Dollar would be repudiated. The FED, therefore is acting to maintain the value of the Dollar by knocking down the price of gold and selling Dollars to keep it from increasing in value beyond a certain point. This seems contradictory, but the Empire's partner (the EU) is in even worse shape than the US and people are fleeing its currency: the Euro.

Some of the details of this is presented by Dr Paul Craig Roberts (a former Treasury official) on KWN:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/12_Former_US_Treasury_Official_-_The_Fed_Is_Facing_Collapse.html

Ben Bernanke's about face.

Last month FMOC meeting was reported by Ben Bernanke as raising the issue of "tapering." By which Bernanke told us to expect QE to be reduced and eventually phased out next year - the economy permitting. Other members of the FOMC began to backpedal immediately. The Market responded very negatively: bonds lost value, interest rates began to move up and the Stock Market went into a swoon.

We heard a very different report from Bernanke following the July meeting. Ben said that the 7.6% reported unemployment overstates the ability of the economy to add jobs (otherwise it is a contrived and unreliable number -surprise, surprise) and that “highly accommodative monetary policy” will probably be needed “for the foreseeable future.”

In other words, forget what he said in June, he was not really serious. Stocks went up and interest rates moderated. The economy did not really recover.

What is happeningin the PM Markets.

KWN reports that the Gold Market is reporting a backwardation. This is an almost unheard-of phenomenon. What does it mean? It means that the supply of deliverable gold is getting short. The COT report (Commitment of Trade) discloses a tremendous change in the PM Market. The "Commercials" (banks that trade PMs) have decreased their silver shorts from 259M ounces in February to 20M ounces at the end of June. Gold shorts are down to 35,200, which is the lowest in 10 years. Big traders are expecting the Market to turn.

There is another indication (nay, proof) that gold is flowing fro West to East. Look at the graph:

China's deliveries are almost as large as the world production. Demand for gold is increasing. Perhaps that is the reason for the big bump today in gold prices.

Banking changes in the EU.
The EU has inaugurated a new Agency today to deal with failing banks. So, they finally did it, right? Well, no. The Agency won't have any money to spend and some safety regs have been discontinued at the insistence of Germany.

Greece and Portugal have gotten what is supposedly their last bailout. What next? These countries are economic basket cases and their default is not far off.

An (humorous) explanation of life.

On the first day, God created the dog and said, "Sit all day by the
door of your house and bark at anyone who comes in or walks past. For
this, I will give you a life span of twenty years."

The dog said, "That's a long time to be barking. How about only ten
years and I'll give you back the other ten?"

And God saw it was good.

On the second day, God created the monkey and said, "Entertain people,
do tricks, and make them laugh. For this, I'll give you a twenty-year
life span."

The monkey said, "Monkey tricks for twenty years? That's a pretty long
time to perform. How about I give you back ten like the dog did?"

And God, again saw it was good.

On the third day, God created the cow and said, "You must go into the
field with the farmer all day long and suffer under the sun, have
calves and give milk to support the farmer's family. For this, I will
give you a life span of sixty years."

The cow said, "That's kind of a tough life you want me to live for
sixty years. How about twenty and I'll give back the other forty?"

And God agreed it was good.

On the fourth day, God created humans and said, "Eat, sleep, play,
marry and enjoy your life. For this, I'll give you twenty years."

But the human said, "Only twenty years? Could you possibly give me my
twenty, the forty the cow gave back, the ten the monkey gave back, and
the ten the dog gave back; that makes eighty, okay?"

"Okay," said God, "You asked for it."

So that is why for our first twenty years, we eat, sleep, play and
enjoy ourselves. For the next forty years, we slave in the sun to
support our family. For the next ten years, we do monkey tricks to
entertain the grandchildren. And for the last ten years, we sit on the
front porch and bark at everyone.

Life has now been explained to you.

There is no need to thank me for this valuable information. I'm doing
it as a public service. If you are looking for me I will be on the
front porch.

WHY?

As we see Larry's predictions coming true (rising dollar, rising oil and turmoil in Europe and the Middle East), we can only wonder: why is gold falling? Actually, we should be asking an altogether different question, since we know why gold is falling - Western financial institutions are acting in concert to suppress the gold price. Why are Western financial institutions suppressing the price of gold? That is the question we need to ask and answer.

Stephen Leeb speculates in a KWN interview:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/5_Gold_%26_A_Global_Financial_System_In_Complete_Turmoil.html

Leeb speculates that the BIS and other central banks are afraid that if gold is recognized as Tier One currency then we will have a five digit gold price (in US Dollars) and the Dollar will lose its status as a reserve currency. Should that happen, we will have hyperinflation, because no one will buy worthless US paper.

That may be the answer.

Portugal joins chaos - Italy simmers.

Portugal is another arrow in the quiver of European instability. Al Reuters describes the situation thus: http://www.reuters.com/article/2013/07/03/us-portugal-crisis-idUSBRE96208E20130703

Portugal's commitment to austerity is question.

Italians are fretting that increasing interest rates once again threaten.

Dangerous signs multiplying.

The carefully crafted façade of Social Democracy is coming apart. According to Larry Edelson, we are moving into a cycle of war and sure enough: There is a war in Syria and perhaps another starting in Egypt. This is not affecting gold prices yet, but the price of oil is ratcheted toward $100/BBl.

The second thread is the accelerating pace of transferring gold from West to East. The size of tis drain is estimated at 500 tons/month. This is the consequence of the two or three takedowns orchestrated by Central Banks such as the FED. Someday we will find out why. Hopefully, as Bernanke is being tried.

The third thread is Greece (again). The Greeks are negotiating for the last installment of bailout money: E8B. The Troika complains that the Greeks are not living up to the privatization schemes they had agreed to and the Greeks are desperate to once again fool the troika. What happens if there is no agreement? Or the Greeks are no longer willing to live frugally? In any case, the E8B is the last installment so the Greeks can roll over some bonds. Then what?