Gold and Elections in France: "I Am The Socialist" - The European FIAT QE Party Begins Now. "The Dictator" Congratulates Francois Hollandaise.

    It is a very good Joke, but what is happening in Europe is NOT. Austery is under Attack - QE will follow in many forms. Now watch the Gold - will the Call of Charles Nenner materialise this time? Our own Call on Apple is moving into the right direction so far. We are out of politics, but when today is pronounced "the new day not only for France, but for the whole Europe" - we do become more pessimistic. In UK Labor is dusting off Tony Blair now - the whole world is apparently obsessed with Mayan Calendar. Now the printing press will be really working "Like There Is No Tomorrow".

Charles Nenner Calls For Silver and Gold Bottom - We Call For Apple To Cool Down AAPL, GLD, SLV

CS. If you are long Apple, please, do not worry - we have been right only a few times. Charles Nenner Call is a much stronger proposition for the market - he wasn't right all the time as well, but some of his longer term calls are worth studying at least. 

  We decided to make our Call on Apple, because we are totally in love with its products, were calling for Steve Jobs to make an Electric iCar for years, but do not follow the company or holding any position in its stock now - we are totally disconnected with its market. And still, we can hear about Apple every day everywhere, everyone and his grandmother have invested in it and it is the newly found "sure thing". Life has taught us a very expensive lesson - that once everybody has invested in a "sure thing" the universe will switch the deck. Now, when everybody is in love with it and indexes are moving everyday with Apple's market the company can not allow to make anything wrong. Margin for any investors' tolerance is so thin now - any step back will bring the realisation that Steve Jobs is not there any more. Once it happen, selling will ignite further selling and commentators will be crying on Bubble TV "we have told you so" - then it will be time to buy again.

"Where is the connection between the Apple, Oil and Junior Miners? Apple's Top will signify the important turn in the market place - we do not expect economy to be allowed to go bust again in the election year - but if even Apple is not immune to the gravity, the Oil prices will start to be felt more and more. We expect the talk about the QE coming back with the first signs of weakness, the usual remedy against even potential Deflation will be the lower US Dollar via running printing press - more QE.
  Catalyst for the Juniors with solid projects in Gold, Silver, Copper, Lithium, Graphite and Rare Earths will be the simple fact that you can not print any of these commodities. M&A activity in the sectors must confirm our observations - industry insiders know better where the real value is.
  Canadian Venture Exchange Index daily chart below is one to watch now - we are close to the October's and December's Lows. Change in leadership in the market place and sector rotation can even beat the juniors' weak summer market seasonality this year."

Germany to Euro Shorts: “If you want to drain a swamp, you don’t ask the frogs for an objective assessment.” TNR.v, CZX.v, GBN.v, ASM.v, GRC.to,

Nothing is for certain, but our reversal in USD is well under way. With US Debt close to 13 Trillion all Euro situation is just an aberration in the History of US Dollar Collapse. US budget deficit is projected for years ahead to stay above 1 Trillion dollars with Gross Federal Debt well over 70% of GDP assuming it at 14 trillion, can you even imaging in U.S. German rules:

"Mr Schäuble also wants the other 15 members of the common currency to adopt a similar national law to the German debt guillotine, a law enshrined in the German constitution committing the government to a balanced budget, with a maximum structural budget deficit of just 0.35 per cent of GDP by 2016."

On a weekly chart US Dollar is very close to finish this week with a very strong Bearish reversal candle.

Do not burn your Euros yet, US Dollar was appreciating on Europe worries, but the weaker Euro is exactly what Europe needs in Competition for Export to Emerging markets and China first of all.

After pictures from Greece we do not think that anybody will go there in U.S. Corp. Deflation will be prevented by any means, it is easy and price to pay is not so obvious. Newly printed US Dollars are "free", but price to drop them is not: you need Oil to keep you helicopters flying and here will be our first conundrum: At what point price of Oil becomes prohibitive to use Helicopters by Ben Bernanke in his open market operations?
Here is time to move to practical implications of the new Inflation round to fight Deflation Scare this time created by sovereign default. How Lithium, Gold and price of Oil are connected and what it means to be grounded? We will start with Gold and will give you few observations:

FT:

Bundestag backs eurozone rescue

By Quentin Peel in Berlin
Published: May 20 2010 12:52 Last updated: May 21 2010 11:37
Germany’s lower house of parliament on Friday approved Berlin’s contribution to a €750bn stabilisation package for the eurozone.
After fraught talks with parties in the Bundestag on Thursday, it became clear that Angela Merkel, chancellor, would win a majority in favour of German credit guarantees of up to €150bn ($187bn, £130bn) from her centre-right coalition but fail to win cross-party support from the opposition Social Democrats and Greens.
The Bundestag passed the bill with 319 votes in favour, 73 against and 195 abstentions. The Bundesrat upper house is expected to pass the bill later on Friday.
Ms Merkel’s promises of tougher rules for the eurozone and action to curb speculation in the financial markets have been part of the price to win parliamentary support for the loan guarantees. A move to ban naked short-selling of eurozone debt was also seen in Berlin as a clear political gesture to win the parliamentary majority
On Thursday Ms Merkel stepped up pressure for a global agreement on tighter financial regulation, a banking tax or levy and a financial transaction tax, while spelling out the rules it wants members of the eurozone to adopt to curb their public debts and deficit spending.
George Osborne, UK chancellor, was separately expected to tell EU finance ministers in Brussels on Friday that Britain would resist attempts to improve economic governance that require a change to the European Union treaty.
The new UK government is committed to a referendum on any treaty that transfers new powers to Brussels. Mr Osborne has said he will oppose suggestions that he should show his Budget to the European Commission before presenting it to parliament.
Thomas De Maizière, Germany’s interior minister, said Berlin would increasingly seek to defend its own interest in the EU while shedding its role as passive paymaster. “Germany is going to act just as other European countries do in Brussels and this will not make it automatically anti-European,” he said.
Wolfgang Schäuble, finance minister, published a nine-point programme of proposals for more rigorous policing of the budgetary policies of eurozone members, including a proposal to draw up a procedure for “orderly state insolvencies” for countries that cannot service their debts.
Other points in his plan, to be presented on Friday at the first meeting of a task force in Brussels charged with rewriting the rules of the common currency area, include stripping countries of their votes if they persistently break stability and growth pact limits on deficit spending, and cutting them off from regional investment funds.
Mr Schäuble also wants the other 15 members of the common currency to adopt a similar national law to the German debt guillotine, a law enshrined in the German constitution committing the government to a balanced budget, with a maximum structural budget deficit of just 0.35 per cent of GDP by 2016.
Ms Merkel and Mr Schäuble are adamant that more action must be taken at the level of both the EU and the Group of 20 economies to regulate financial markets, in addition to adopting much more rigorous budget controls within the EU.
Ms Merkel called on financial institutions to give “honest advice” about how their activities should be regulated, warning they would face political measures to regulate the markets whatever happened.
Mr Schäuble appeared more sceptical. Challenged to defend Germany’s ban on naked short selling in light of the hostile reaction in the markets, the minister said: “If you want to drain a swamp, you don’t ask the frogs for an objective assessment.”
Additional reporting by Joshua Chaffin in Berlin and George Parker in London