Saturday, December 05, 2009

Gold Big Picture, Rob McEwen, Jim Puplava and Inflation. MAI.v, TNR.v, RMK.v,, GBN.v, ASM.v, KTN.v, MAX.v, EPZ.v, OK.v, BVG.v,,,

C.S. We do not worry about the Gold and direction of the Bull market in Gold and Silver., but you should not expect it to go in a parabolic rise if the end of this bull market is not in the next six months. Consolidation in Gold and Majors is due now and next wave will be in still undervalued Juniors. As Jim Puplava has put it this weekend you can change the Bull fundamentals for Gold market in three cases:
With a Dead Government walking you can save the day with:
1. J.P. "Change the system." S. Will Goldman Sachs pay to put Goldman Sachs in jail? We do not think so. Have you noticed that after this largest Wealth Destruction in the history nobody is really to blame and nobody goes to jail? Everybody will protect status quo. We will not think about it.
2. J.P. "Default on obligations" S. It will be the End of the World as we know it and it will put Elite at risk of losing its influence once and for all very fast. We will not bet on it.
3. J.P. Inflate, print money and dilute the vast financial obligations - this is our take and we can see it is happening all this year. Expansion of monetary base means inflation and Do Not Be Fooled with the official inflation index with Excluded everything You really Need to Survive. Life is not about another DVD player, which you can buy dirt cheap now. It is about how can you drive to work, feed your family, stay healthy and give your kids the education.
Once politicians are in front of the imminent collapse of monetary system holding the fabric of society together and they have a chance to postpone Day of Reckoning by printing money - they will do so , and it is not a theory any more. Quantitative Easing is all over the place.

We promised to give you an update on Gold Big Picture. First of all we will refer to the Chart above and will tell you that we see a Sell signal short term in the making. Weekly candle does look very nasty. Maybe it will go another 10-15% straight up in the next two weeks - we think it will go down and consolidate healthy below recent high of 1224 USD/oz area of resistance predicted by Jim Sinclair. If we wrong on timing - it could be a sense of Real Trouble in the making: Gold will go parabolic to Rob McEwen's 5000 USD/oz Target on a monthly basis, but not overnight. If it is Not the End of the World. It is time to rotate from Majors and into Juniors - we are talking our book here for sure. They will be next year Big Play in gold market. Even with gold consolidating and Majors under pressure with taking profit you can get a very good value in Junior miners, who will provide resources for growth for Majors just to keep up with their production rate.

Recently Jim Puplava had a very good session on Financial Sense on a Gold round table with Rob McEwen, we will recommend to listen to it for everybody involved in the market.
You will find out about fundamentals in Gold bull market, why Investment banks are not always your friends and why management thinks differently from shareholders.
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