Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
USDT is 9-11 for Central Banks the Bitcoin Black Swan - Tether Un-Stable Coin Ponzi Schemes! - 30th Jul 21
Behavior of Inflation and US Treasury Bond Yields Seems… Contradictory - 30th Jul 21
Gold and Silver Precious Metals Technical Analysis - 30th Jul 21
The Inadvertent Debt/Inflation Trap – Is It Time for the Stock Market To Face The Music? - 30th Jul 21
Fed Stocks Nothingburger, Dollar Lower, Focus on GDP, PCE - 30th Jul 21
Reverse REPO Market Brewing Financial Crisis Black Swan Danger - 29th Jul 21
Next Time You See "4 Times as Many Stock Market Bulls as There Are Bears," Remember This - 29th Jul 21
USDX: More Sideways Trading Ahead? - 29th Jul 21
Waiting On Silver - 29th Jul 21
Showdown: Paper vs. Physical Markets - 29th Jul 21
New set of Priorities needed for Unstoppable Global Warming - 29th Jul 21
The US Dollar is the Driver of the Gold & Silver Sectors - 28th Jul 21
Fed: Murderer of Markets and the Middle Class - 28th Jul 21
Gold And Silver – Which Will Have An Explosive Price Rally And Which Will Have A Sustained One? - 28th Jul 21
I Guess The Stock Market Does Not Fear Covid - So Should You? - 28th Jul 21
Eight Do’s and Don’ts For Options Traders - 28th Jul 21
Chasing Value in Unloved by Markets Small Cap Biotech Stocks for the Long-run - 27th Jul 21
Inflation Pressures Persist Despite Biden Propaganda - 27th Jul 21
Gold Investors Wavering - 27th Jul 21
Bogdance - How Binance Scams Futures Traders With Fake Bitcoin Prices to Run Limits and Margin Calls - 27th Jul 21
SPX Going for the Major Stock Market Top? - 27th Jul 21
What Is HND and How It Will Help Your Career Growth? - 27th Jul 21
5 Mobile Apps Day Traders Should Know About - 27th Jul 21
Global Stock Market Investing: Here's the Message of Consumer "Overconfidence" - 25th Jul 21
Gold’s Behavior in Various Parallel Inflation Universes - 25th Jul 21
Indian Delta Variant INFECTED! How infectious, Deadly, Do Vaccines Work? Avoid the PCR Test? - 25th Jul 21
Bitcoin Stock to Flow Model to Infinity and Beyond Price Forecasts - 25th Jul 21
Bitcoin Black Swan - GOOGLE! - 24th Jul 21
Stock Market Stalling Signs? Taking a Look Under the Hood of US Equities - 24th Jul 21
Biden’s Dangerous Inflation Denials - 24th Jul 21
How does CFD trading work - 24th Jul 21
Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? - 23rd Jul 21
Best Forex Strategy for Consistent Profits - 23rd Jul 21
Popular Forex Brokers That You Might Want to Check Out - 22nd Jul 21
Bitcoin Black Swan - Will Crypto Currencies Get Banned? - 22nd Jul 21
Bitcoin Price Enters Stage #4 Excess Phase Peak Breakdown – Where To Next? - 22nd Jul 21
Powell Gave Congress Dovish Signs. Will It Help Gold Price? - 22nd Jul 21
What’s Next For Gold Is Always About The US Dollar - 22nd Jul 21
URGENT! ALL Windows 10 Users Must Do this NOW! Windows Image Backup Before it is Too Late! - 22nd Jul 21
Bitcoin Price CRASH, How to SELL BTC at $40k! Real Analysis vs Shill Coin Pumper's and Clueless Newbs - 21st Jul 21
Emotional Stock Traders React To Recent Market Rotation – Are You Ready For What’s Next? - 21st Jul 21
Killing Driveway Weeds FAST with a Pressure Washer - 8 months Later - Did it work?- Block Paving Weeds - 21st Jul 21
Post-Covid Stimulus Payouts & The US Fed Push Global Investors Deeper Into US Value Bubble - 21st Jul 21
What is Social Trading - 21st Jul 21
Would Transparency Help Crypto? - 21st Jul 21
AI Predicts US Tech Stocks Price Valuations Three Years Ahead (ASVF) - 20th Jul 21
Gold Asks: Has Inflation Already Peaked? - 20th Jul 21
FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International - 20th Jul 21
Nissan to Create 1000s of jobs with electric vehicle investment in UK - 20th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Big Profits Still in Gold?

Commodities / Gold & Silver 2009 Nov 09, 2009 - 12:55 AM GMT

By: Howard_Katz


Best Financial Markets Analysis ArticleOn November 4, gold pulled back to $1025, and that was the turn.  It gained 75 points over the next 6 days, including a 30 day whopper when India bought 200 tonnes of gold from the IMF.  On Friday, $1100 was breached (interday on the Comex, Dec. future).

Is it too late to become a gold bug?  Are you one of those who did not listen to the one-handed economist?  Worse, did you fly to “safety” in the U.S. dollar?  Are you thinking, “Is it too late to buy?”  The answer is in the chart above.

This is the gold bull market going back to its beginning in 1999.  Even a novice can see one thing: it is going up.  I am not a big fan of uptrend lines, although I have drawn the uptrend above.  But you don’t even have to look at the uptrend line.  All you have to notice is that each time gold goes up, it breaks to a new high, and each time gold goes down, it holds at a higher low.  This is a concept that Charles Dow formalized in the Dow Theory a hundred years ago, and it is as valid today as it was then.

It is not difficult, but in this way of doing things is a very important idea.  One must always keep in mind the big picture.  The big money is made in the big move.  The vast majority of traders are up too close to the market.  They cannot see the forest for the trees.  So they lose sight of the big picture.  And it is the big picture which is going to bring you the big profit.

These are the technicals arguing for a big rise in gold.  What are the fundamentals?  The important fundamental is an event which happened on March 9, 1933.  F.D.R. rammed a bill through the obedient Democratic Congress giving the privilege to counterfeit money to the commercial banks.

I know that you have been taught that F.D.R. and the Democrats were against the bankers.  That is a lie, pure and simple.  Through the 1920s F.D.R. had been a Wall Streeter working at 120 Broadway, the manager of a vulture fund (so called because it would swoop down on dying companies like a vulture and gobble them up.).  His very first act allowed his Wall Street buddies to steal from the working people of America and use this privilege to get rich.  A traitor to his class he was definitely not.  The bill was rammed through Congress in one day, with no hearings, and the House of Representatives did not even have copies to read before they were required to vote.  It was a travesty of the democratic process.  Ever since that day, the Democrats have pretended to be the party of the working man while they robbed the working man to give to the bankers.  Now how does this affect you?

With this in their pocket, the big Wall Street banks went to work.  They found a group of “economists” who would advance the theory that letting the bankers print money makes the country rich.  It is true that these “economists” were regarded as crackpots by the real economists of the day.  No matter, the bankers’ money talked.  They bribed a number of the top schools in the country to hire these crackpot economists.  Crackpotism was defined as a new theory of economics.  A good example is John Kenneth Galbraith, whose chair of economics at Harvard is named after a former head of the Manhattan Bank (today merged into J.P. Morgan).  You probably know these crackpots by the name Keynesian.  Perhaps you sent your son off to Harvard to earn a degree in crackpot economics.

I went to Harvard, but I was smarter than you or your son.  I spotted the professors there as crackpots by my sophomore year.  I skipped the Harvard economics courses and learned real economics by self study.  This is why my record of economic prediction over the past half century is brilliant, and the record of the crackpot economists with the long titles is a joke.

But here we are in the 21st century, and you have to make a decision.  Buy gold, as we gold bugs are telling you.  Or buy stocks, bonds or T-bills, as the establishment is telling you.  Well, here is the situation.  Through the course of the 20th century the bankers were more and more successful.  With the Kennedy tax cut of 1963, Nixon’s abandonment of gold in 1971 and Reaganomics in the 1980s, the issues of paper money got bigger and bigger.  America had became the richest country in the world while she was on the gold standard (1788-1933).  Now America is getting poorer and slipping backward toward the level of the other nations.  The U.S. dollar is in full scale collapse, and there is speculation about the day that it will no longer be used as the world currency.  (This happened to the British pound in 1947-48 and coincided with the collapse of the British Empire and with the fall of Britain as a world economic power.)

At the present time, both political parties follow the banker line of more paper money.  Last year, the Fed created a trillion dollars out of nothing.  To avoid alarming people, the Fed lied about this, reclassifying a portion of the money supply as time deposits (although the owners of these deposits were told that they were demand deposits).

The bottom line of all this is that the bankers are hungry for the Fed to create more paper money.  (They are always hungry for the Fed to create more paper money.)  So they have their crackpot economists writing articles in every “respectable” newspaper and magazine and locking down all the financial advisory positions in both parties.  Obama is projecting trillion dollar deficits for the next 3 years.  The Government does not intend to borrow these trillions of dollars from the American people. (thus putting the burden on  our children).  It intends to counterfeit the money (putting the burden on the people of today).  (In America, paper money is illegal under the Constitution.  That doesn’t seem to stop anybody, but it certainly does make their actions illegal.)

Since the crackpot theory that printing money is the road to plenty is not true, this will cause the collapse of the U.S. dollar.  The vast majority of the American people will wind up poor, and the bankers will get rich.  Think, we now have a Government which believes that destroying cars (Cash for Clunkers) will “stimulate the economy.”  F.D.R. had a similar theory in the 1930s.  Plow under crops, and kill pigs.  This was considered to be the way to get us out of the “depression.”

The way to protect yourself is to get out of dollars.  This means no savings accounts, T-bills, commercial paper or longer term notes and bonds.  GET YOUR ASSETS INTO REAL GOODS..  As the dollar goes down, the price of real goods in dollars has to go up.  And anyone who tells you different is an ignoramus, a crackpot or a fraud.

Leaving aside collectables, which can be tricky, you have 3 choices: stocks, real estate and commodities.  Over the (very) long term, all three of these will go up (in dollar terms) as the dollar goes down.  But one of my important discoveries is the commodity pendulum.  This says that commodities and stocks take turns.  Commodities move down and up in waves which used to take a decade and now take two (examples 1971-80 and 2001-?).  As their rise feeds through into consumer prices, the Fed is forced to tighten, and this causes a collapse in both bonds and stocks.  That is what you are going to see over the next several years.  The Obama price explosion is already beginning in commodities and will later feed through to consumer prices.  Then the Fed will tighten, and all the establishment types who are in the stock market will feel a great deal of pain.  Have you heard the advice, “Stocks go up for the long pull.  They always have?”  I was told this when I started trading stocks in the 1960s.  From 1966 to 1982, the real value of the DJI declined by 70% in real terms.  From 1970 to 1980, gold multiplied by 25 times in nominal terms and 12 times in real terms.  How stupid do you have to be to get taken by the same lie twice?  (When the young Jim Dines first became a gold bug in 1963, he was fired by his establishment broker.  They later went bankrupt, but they never apologized.)

My contribution to this crazy world in which we live is to publish a small economic letter, The One-handed Economist, which analyses the economic world: stocks, bonds, commodities, with special attention (at this time) to gold.  With the long term trend upwards in commodities, gold is the commodity which is easiest to trade.  It falls into a steady uptrend.  It follows technical patterns in a classic manner.  It has few surprises.  You can subscribe ($300 per year) by visiting my web site,  Or you can send $300 to The One-handed Economist, 614 Nashua St. #122, Milford, N.H. 03055.

You can also visit my blog at  This week’s blog is entitled, “Election 2009,” and is an analysis of the by-elections of Nov. 3.  I pay special attention to the issue of whether you should vote your conscience or whether you should vote in a more “practical” manner which requires a compromise of your political principles.  Featured is a study of America’s number one winning politician and his secret for victory.  (no charge)

© 2009 Copyright Howard S. Katz - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.  

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in