By Howard S. Katz, GoldSeek
Things are looking good, dear gold bug. Characteristically gold hits its seasonal low in late summer, often in August, and then begins to rise as the month comes to an end. This late-August drift higher is a sign of the exhaustion of selling pressure and a precursor of the autumn rally (which in many years is quite powerful).
This year is better than normal. Gold hit its seasonal low in early July. Its August low was some 25 points above the July low, and the late August lift was quite evident. Tomorrow is September. Gone are those (few) sharp one-day scares that had us all so worried. They were merely the results of a few news items causing some of your weak sisters to panic and sell out. But if you follow the weak sisters (rather than regarding their fear as an opportunity to buy), then you become a weak sister yourself.
THE MAJOR TREND AND THE GRAND CYCLE TREND
The markets can be a challenge, but this appears to be a period when they are easy to predict. Both the stock and the commodity markets are in a bullish period, recovering from their decline of late 2008. The point you have to understand is that the stock market is in a bullish major trend but a bearish grand cycle trend. The commodity markets are in a bullish major trend and a bullish grand cycle trend. Here is the difference.
The major trend is a move in the markets caused by an action of the central bank (easing or tightening). It usually lasts about 2-4 years (for stocks). (These are the bull phases; the bear phases last half as long.) The grand cycle trend is much bigger and consists of many major cycle trends. It is caused by a large scale economic event which itself affects the behavior of the central bank and influences both the bull and bear (major term) cycles. An example is the Kennedy tax cut of 1963, which brought Keynesianism into America. It led to the creation of money through the late ‘60s, and this caused a rise in consumer prices. However, commodity prices did not (at first) rise and became very undervalued in real terms. By 1971, consumer prices were noticeably higher; commodity prices were the same; and real commodity prices were extremely undervalued.
By Frank Holmes, GoldSeek
We’re heading into September next week, so it’s a good time to revisit the historic seasonality of gold and gold stocks.
Over the past four decades, September has been the best time for gold in terms of its month-over-month price appreciation. You can see this on the chart below – in a typical year, the price of gold in September rises 2.5 percent above its August price.
The gold price has risen in 16 of the 20 Septembers since 1989, by far the best success ratio of any month of the year.
What accounts for this predictable trend?
September kicks off several of the planet’s most potent gold-demand drivers:
- The post-monsoon wedding season in India and Diwali, one of the country’s most important festivals;
- Restocking by jewelry makers in advance of the Christmas shopping season in the United States;
- The holy month of Ramadan in the Muslim world, whose end in late September is marked by a period of celebration and gift-giving;
- And in China, the week-long National Day celebration starting October 1 and the run-up to the Chinese New Year in early 2010.
This could be a challenging September in India, the world’s largest gold consumer. The economic slowdown and gold prices near record highs drove jewelry demand down 31 percent in the second quarter compared to the same period in 2008.
On the other hand, the World Gold Council says India’s bank deposits saw 22 percent year-over-year growth in the second quarter of 2009, so cash is available to be spent if the rupee price for gold weakens even slightly. The WGC also expects the wedding and Diwali season to “underpin a seasonal improvement over the remainder of 2009.”
China, the world’s #2 gold market, actually saw a year-over-year gold demand increase of 6 percent in the latest quarter, with buyers favoring 24-carat gold jewelry for its quality and as a store of value. The WGC says that trend toward the purer form of gold should continue, though the third quarter is usually the low season for this segment of the market.
By CAPTAINHOOK, GoldSeek
Many are now talking about how the markets appear to be managed these days, and these people are now taking conspiracy theories in this regard far more seriously. And without a doubt the Fed and Treasury are working overtime to keep the bubbles afloat, the bubbles in both equities and debt. The key in this regard for now is keeping interest rates low, however this will not be enough forever if revenues keep shrinking in the face of rising costs. Sooner or later, foreigners will see the US has no hope of honoring it’s debts short of hyperinflation and continued acceleration in monitization efforts (particularly in debt markets), and will begin pulling sufficient assets out of American markets to send market interest rates past the margin consumers can handle.
This will collapse consumer credit demand further, and in doing so, pass along deflation in the demand for goods, services, revenues, and asset prices. Like dominos, one by one, all facets of the economy will contract / fall, which will bring about a funk that will make the Japanese experience of the last 20-years look like a walk in the park. This is because the entire globe will be caught in a period of readjustment and decentralization away from the American Empire, which will affect business models and living standards around the world. Historically, periods like this have caused war as economies crumble. Lets all hope this can be avoided in the here and now.
The first sign process is accelerating in this respect will be when the US Dollar ($) falls but asset prices do not respond favorably. Yesterday the $ (and Treasuries) rallied while equities fell hard, however it could not close above 80, suggestive the trend lower is still alive on an intermediate-term basis. A rising $ and falling asset prices would really hurt right now with the economy continuing to contract, so you can count on every effort to be made to keep it below 80. Correspondingly then, a multi-day close above the previous high at 79.66 and the 50-day moving average would be very telling, suggestive the second larger degree wave down in stocks (all equities) was underway, with the test and possible failures at the March lows in the making.
By Martin Armstrong, GoldSeek
Gold has been one of the most misportrayed mediums of wealth since the 1970′s. Usually it has been marketed as the hedge against inflation during the good old days of the 1970′s and 1980′s. However, this has been a great misconception of the role gold truly plays. It is coming into its own and is still poised to rally to at least test the $3000 level if not much higher. But this portentious view harbors within a lot of correlations on a global scale that truly needs some in-depth understanding. Gold is not about to make such a rally without critical developments in government. Gold is not the hedge against “inflation” but against the “collapse in the confidence of government”. Government holds power only for as long as the people allow it. People are complacent and will not tolerate much. During the 1970′s and the days of OPEC, I will never forget a riot in Philadelphia of white middle class workers overturning cars and setting them on fire because people could not even get to work. There is a thin line between civilized conduct and a mob. When people can no longer function in a basic way, holy hell breaks loose.
The US political government has just become the greatest threat to our way of life, it is hard to understand how we have degenerated with no sense of posterity. This recent incident going after UBS is a very serious departure in the entire rule of law. Switzerland has existed with its secrecy banking laws for a very long time. It was neutral during the world wars and its own rule of law has been respected by all nations until now. Why has the US now sought to destroy the civilization as we have known it? The refusal of government to live within its means is destroying every- thing. Instead of reforming, they are lashing out against our own people as well as the whole world. They justify their actions by their own self-interest. Whatever they decree the courts merely rubber stamp. We have no one left in our corner to prevent the economic suicide that is taking place.
By Julian Phillips and Peter Spina, GoldSeek
The bottom in gold has been seen between $905 & $930. Next we are looking for $960 then $990 then a $1,000+ breakout. However, at around $950 as we see now, the gold price still could fall to the lower $900’s area again before we see gold $1,000+ breakout. With the price continuing to push higher, it is just a matter of time in the coming months before the next major leg higher will send us to $1,200-$1,300 an ounce… and eventually a lot higher! Silver will outperform gold in this leg and could break much higher than $25 in the next year!
Gold entered the next and major leg of the long-term gold bull market after correcting down from $1,000 an ounce at the beginning of the year. Since then it has been battling in the lower $900’s, building a big base from which to move to the $1,000 and beyond in the rest of 2009.
The period of consolidation has lasted far longer than many believed [including ourselves] it would, but it has not fallen through the $900 area as others believed it would.
This Alert is to prepare you for the next upward leg of the gold market in the face of a short-term decline in the gold price. We continue to hold to our belief that the floor of $900 – $930 is now a solid base. The time to buy both gold and gold shares ‘on the dip’ is here, in the belief that these supports will not fall as they did in 2008. Holders should be able and willing to hold gold and gold shares for the next year!
We believe, too, that gold shares will benefit to a greater extent than gold itself, in the next moves up. In particular, we feel that soundly based gold “Junior” mining companies will benefit strongly (please see more on gold stocks below).
By Julian D. W. Phillips, GoldSeek
We previously stated that gold ownership was made illegal on 1st May 1933. What we did not tell you and we correct now, was that U.S. citizens, under Order 6102, were to own up to $100 in gold coin [+5 ounces]. Today that would be worth under $5,000 a mere token gesture to real gold owners. It acted as a tiny ‘escape valve’ to the general body of citizens and did not detract from the fact that effective gold ownership was abolished. So that we fully understand the attitude of governments to gold [which remains real money in times of crisis] we add this paragraph: -
Congress could easily revoke the privilege again. In fact, at no time during this century has the U.S. government recognized the right of private gold ownership. The Trading with the Enemy Act, which President Roosevelt invoked in 1933 to restrict private gold transactions, remains law. Although private ownership of gold in the United States was legalized on August 15, 1974, the power to confiscate gold remains in the hands of the President. The President still retains the right, under the Emergency Banking Relief Act, to “investigate, regulate or prohibit… the importing, exporting, hoarding, melting or earmarking of gold” in times of a declared national emergency. It is highly unlikely that either the Courts or Congress would successfully argue that confiscatory powers are not implicit in the Emergency Banking Relief Act if a currency crisis or other fiscal emergency prompted the President to, once again, nationalize gold.
The ‘privilege’ not right, to own gold was restored to U.S. citizens on the 15thAugust 1974 [not 1971, when Nixon ‘floated the $ against gold and stopped foreign central banks from converting U.S. dollars to gold]. It is pertinent to the thinking behind this series, to understand why these moves were made.
The entire exercise was to move gold away from the core of the monetary system for it could not be controlled by governments and particularly the most powerful of them on this earth, the United States. For government to have control of money they had to control its issue away from the measuring line of gold. In the opinion of the U.S., then the I.M.F. and then accepted by all governments money had to be simply an un-backed I.O.U. drawn on governments. Gold had to be discredited and sidelined to make this happen convincingly. It worked!
Floy Lilley at the Mises Institute, in her essay at LewRockwell.com, notes that the gold-standard dollar “provided us with nothing less than relative peace and prosperity over a span of 136 years” until that fateful year, 1913.
So how does she quantify “relative peace and security”? Well, one good way is to look at the value of the dollar, which would be strong if the country was a good investment, which it was, and in fact, “It had not only retained one hundred percent of its value, it had gained eleven percent. That’s right. The dollar we started with in 1776 bought us eleven percent more after almost seven generations.”
Then, on the “quiet 23rd of December in 1913”, J.P. Morgan and buddies got Congressional quislings to pass legislation authorizing the creation of the Federal Reserve, and to which I add that the jerk Woodrow Wilson then signed it, thus going down in history as the disastrous guy who set in motion the destruction of the dollar by the Federal Reserve creating excess money and credit.
She doesn’t make a point of it, but back then, the dollar was still gold, and thanks to the loathsome Federal Reserve creating the money to finance the bubbles of The Roaring Twenties that resulted in the Great Depression, the despicable Supreme Court infamously ruled in 1933 (and upheld by every traitorous Supreme Court case since then) that, contrary to what the Constitution said, the dollar did not have to be made of silver or gold, and that a paper “fiat” currency could be created, without limit, for any reason, even at a mere whim, anytime, day or night, 24/7, including holidays, not realizing that they were the idiots that REALLY destroyed the dollar! Gaahhh!
With this kind of disastrous stupidity, I dryly and humorlessly ask that you don’t talk to me about any “wisdom” emanating from the Supreme Court.
I was hoping that Ms. Lilley would spontaneously pick up on the theme of “heap scorn on the Federal Reserve for creating too much money and credit out of thin air and the despicable Supreme Court for letting them.”
I was going to suggest that she could, you know, maybe even put in an endorsement for the Mogambo Mindless Mob (MMM) brand of products, like the popular Mogambo Pitchfork (very effective when brandished threateningly) and the classic Mogambo Flaming Torches that will be so hard to get when the proletariat bozos start forming mindless mobs bent on revenge after so much hurting from the horrifying inflation in consumer prices, the pervasive, lingering economic depression, ruination, bankruptcy and the embarrassment of realizing that it was caused by the people we elected to Congress, who picked the people to run the Federal Reserve, which is the biggest failure one can imagine and should be immediately abolished, how Ben Bernanke, its chairman, should be turned over to me for some sessions at my new Mogambo Re-Education Center, where our muscular, trained technicians will slap the hell out of his stupid face, and the stupid faces of Congresspersons (except Ron Paul), and the stupid faces of anyone who still believes in getting, or giving, a free lunch to, or from, anyone, especially the government, which is so corrupt that it once gave smallpox-infected blankets to the American Indians, which is only marginally worse than destroying the currency of the country and makes you reflexively scream in horror every time you see the money supply go up.
Well, it does me, anyway.
Instead, she goes on that the result was that since then, “the purchasing power of a dollar has plummeted over 95%”, which means that “We now pay twenty times more than J.P. Morgan did for any item.” Yikes!
Suddenly, my ears pricked up as she said, “Few have written on the mechanics of getting back to sound money”, which I immediately noticed makes me a genius, meaning that people should worship my gigantic brain, my wife and kids should stop calling me “idiot” and saying how much they hate me and maybe I should get a Nobel Prize.
The reason I am suddenly so enamored of my intellect is that achieving a “sound money” is the easiest thing in the world! Just stop creating more of it! That’s all you need! It’s simple! It is my Profound Mogambo Genius (PMG) that has solved the puzzle!
Okay, I am embarrassed that I got carried away there, and I admit that I am not very smart, and that is why I stole the whole idea from the fact that this is all the gold standard did; it prevented increases in the money supply, and the only thing that Congress had to worry about was doing smart things so that gold came into the country (increasing our money supply) and not doing something so stupid that it went someplace else better (decreasing our money supply).
But those days are all over now, and the only people who are buying gold, along with silver and oil, are the people who know what happens to an unsound, fiat currency (like the dollar) in the hands of a government composed of a bunch of socialist, commie-think yahoos (like the US Congress) that willingly deficit-spends insane amounts of money thanks to a central bank (like the Federal Reserve) creating it and a population sitting around saying, “Duh! Okay with us!” Hahaha!
We’re freaking doomed!
Until next time,
The Mogambo Guru
for The Daily Reckoning
This article originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a “uniquely refreshing” perspective on the global economy, investing, and today’s markets. Follow the Daily Reckoning on Twitter.
Available in four different sizes, the Perth Mint released today its extremely popular Australian Koala Bullion Silver Coins for 2010. This series of silver coins was first introduced to the world in 2007 and has been gaining an international following ever since.
Read the rest of 2010 Australian Koala Bullion Silver Coins (397 words)
The Perth Mint today launched the 2010 Australian Kangaroo Gold Coin Series, continuing its tradition of producing gold bullion coins with an image of Australia’s famous marsupial. This basic kangaroo concept started in 1990, with design variations changing yearly on most of the coins.
Considered legal tender under the Australian Currency Act of 1965, these coins are all 99.99% pure gold, guaranteed by the Australian government for weight and purity.
The Kangaroo series is available in five different sizes: a $15 face value 1/10 oz coin, a $25 1/4 oz coin, a $50 1/2 oz, a $100 1 oz and a $3000 face value 1 kilogram coin. The four smallest sizes feature a new design of two kangaroos ‘boxing’ in the outback with the inscription ‘Australian Kangaroo’ across the top and ‘2010,’ the size and ‘9999 Gold’ across the bottom.
Read the rest of 2010 Australian Kangaroo Gold Coins Feature Boxing Design (375 words)
© Darrin Lee Unser for Coin News, 2009. |
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Armen R. Vartian, the attorney for Steven L. Contursi and Donald H. Kagin, has filed a Motion to Dismiss a lawsuit filed against them by William Swoger who seeks damages in the amount of $465,000 over a Brasher Doubloon.
Swoger’s lawsuit claims he is owed money for information he provided Contursi and Kagin that would increase the value of the legendary American gold coin owned by the pair.
Struck in 1787 by Ephraim Brasher, a New York City silversmith and goldsmith, the Brasher Doubloons are "among the rarest and most desirable of all United States coins," according to CoinFacts.com. Seven are known to exist. One is most unique, featuring the "EB" countermark punched over the shield on the eagle’s breast instead of atop the eagle’s wings as in the other six coins.
It is this exceptionally rare coin and its pedigree that is a focal point for the lawsuit. The coin had a value of some $15 at the time of issue. Contursi and Kagin purchased it for $2.99 million during the Heritage Auction Galleries Gold Rush Collection auction on Jan. 12, 2005. In today’s market, its value is likely much, much more.
Read the rest of Motions to Dismiss Filed in Brasher Doubloon Lawsuit (502 words)