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My apologies for the 2 day gap in posts, was attending some high-level economic conferences and was unable to make any posts. Well the rest of the retracement has occurred for the Stock Market so we are at a citical juncture here. Personally I think this is a huge Bear Trap. It is a pretty normal bull retracement in a bear market. everyone wants to believe the bottom is in and I better get in now while I can before I “miss” it. Everyone keeps forgetting what is about to happen. The dreaded “I” word. The hidden tax on all of our money, inflation. If you listen carefully the ones “in the know” are already preparing for it. Today’s first article shows the fact that inflation is coming and our biggest holder of U.S. debt is growing very concerned. On the gold and precious metals charts we are seeing a drop today which I think is mostly exuberance spilling over from the stock market with investors seeling some of their Gold to play the Stock Market. We may have a head and shoulders forming after a double top which would be bearish for Precious Metals and convince a lot of weak knees to give up and exit out of the markets. However I think this is going to be a reverse of the Stock Market and prices are consolidating while waiting for the buig Inflation shoe to drop. For my own portfolio I am hanging tight and using this as an opportunity to accumulate more shares in the Precious Metals Producers, and also slowing shifing some funds back into Oil related investments. One market that has some real potential soon will be Natural Gas as it has been lagging so far behind Crude and Gasoline. Be Patient and choose wisely! On that note I have recently found and became a member of INO.com. With their patented “triangle  technology” trend analysis has never become easier! INO TV offers free – yes that’s right Free trading courses, news and video delivered right to your computer screen. INO Market Club offers  brand new talking charts- charts that actually talk to you! Awesome! Good Investing! – jschulmansr

Now Check this Out… Talking Charts!

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Sneak Peek At Our New

MarketClub Charts

March 20, 2009 · By Adam · Filed Under MarketClub Tips & Talk 

This week we have something very special to show you. We are pulling back the curtains to give you a sneak peek at MarketClub’s new charting program.

There’s nothing to buy, so all you have to do is look and listen. Did I say listen? How can you listen to a chart? Well, these patent pending charts include our new “Talking Chart” feature.

Can you imagine a chart that actually talks to you and tells exactly what’s going on in any market you are looking at or following?  Well, now you don’t have to imagine anymore as this is valuable feature is available at no extra cost in the latest version of MarketClub.

In addition to our “Talking Chart” feature, we have also improved our “Trade Triangle” technology so that it is even more powerful than before.

I think you’ll be impressed. Please take a few minutes out of your day to see how our new charts are revolutionary in many ways.

Please feel free to contact us on our blog about these new charts. We expected to go live with them any day now and you’re going to love them.

All the best,

Adam Hewison

President, INO.com
Co-creator, MarketClub

 

 

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Claim a gram of FREE GOLD today, plus a special 18-page PDF report;

 Exposed! Five Myths of the Gold Market and find out:

·        Who’s been driving this record bull-run in gold?

·        What Happens When Inflation Kicks In?

·        Why most investors are WRONG about gold…

·        When and How to buy gold — at low cost with no hassle!

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Source: Financial Post

Drop U.S. dollar as reserve: China

IMF asset instead

Alan Wheatley, Reuters  Published: Tuesday, March 24, 2009

China proposed yesterday a sweeping overhaul of the global monetary system, outlining how the U. S. dollar could eventually be replaced as the world’s main reserve currency by the IMF’s Special Drawing Right.

The SDR is an international reserve asset created by the International Monetary Fund in 1969 that has the potential to act as a super-sovereign reserve currency, said Zhou Xiaochuan, governor of the People’s Bank of China.

“The role of the SDR has not been put into full play, due to limitations on its allocation and the scope of its uses. However, it serves as the light in the tunnel for the reform of the international monetary system,” he said.

Mr. Zhou diplomatically did not refer explicitly to the U. S. dollar. But his speech spells out Beijing’s dissatisfaction with the primacy of the U. S. currency, which Mr. Zhou says has led to increasingly frequent global financial crises since the collapse in 1971 of the Bretton Woods system of fixed but adjustable exchange rates.

“The price is becoming increasingly high, not only for the users, but also for the issuers of the reserve currencies. Although crisis may not necessarily be an intended result of the issuing authorities, it is an inevitable outcome of the institutional flaws,” Mr. Zhou said.

Jim O’Neill, chief economist at Goldman Sachs in London, said “over time, as the world is taken off the steroids of the over-leveraged U. S. consumer, you can’t have the same dollar dependence as we have had. But who can provide it? And the answer is, if it functioned properly, maybe the SDR could have a much bigger role,” he said.

A super-sovereign reserve currency would not only eliminate the risks inherent in fiat currencies such as the dollar — which are backed only by the credit of the issuing country, not by gold or silver — but would also make it possible to manage global liquidity, Mr. Zhou argued.

“When a country’s currency is no longer used as the yardstick for global trade and as the benchmark for other currencies, the exchange-rate policy of the country would be far more effective in adjusting economic imbalances. This will significantly reduce the risks of a future crisis.”

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My Note: If you read between the lines, this does not bode well for the Treasury and Fed Debt offerings which will have to be issued to pay for all of the bailout, Tarp, and economic stimulus packages. This also doesn’t bode well for the U.S. Dollar in particular, but the other currencies also. As the largest holder of our debt, China is not happy about their investments losing value as the dollar depreciates. Next, China along with Russia are both buying and adding to their respective gold reserves! They are expecting massive inflation, why are we not hearing any talk about that in the nightly news?-jschulmansr

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Real-time Inflation Indicator (per annum): 8.6%
In a recent column (“Gold Traders Whipsawed” at), we said we’d let you know when the gold/mining stock ratio tipped in favor of the miners. Well, we’re telling you now. The GLD/GDX ratio decisively broke through its 200-day moving average late last week.
The SPDR Gold Shares Trust (NYSE Arca: GLD) is a grantor trust affording its holders an undivided interest in vault bullion. The Market Vectors Gold Miners Index ETF (NYSE Arca: GDX) is a portfolio comprising nearly three dozen mining issues. With GLD’s price in the numerator, a decline in the quotient represents appreciation in gold stocks relative to gold itself.
 

 

Gold (GLD)/Gold Stocks (GDX) Ratio

Gold (<a href=

Both bullion and mining shares are higher for the year – GLD’s up 8.2% and GDX has risen 10.8% – but the momentum, for now at least, is with equities. Buoyancy in the broader equity market is providing lift for the miners, but it’s good to keep in mind that there’s a 75% correlation between GDX and GLD. Gold is, for the most part, gold.

Gold’s rising price has a leveraged effect on the stocks, as every dollar above a miner’s production cost flows to its bottom line.

Back in February, we highlighted one GDX component with very low production costs (“A Particularly Healthy Gold Stock“).

Is this the time to buy miners? Well, if you believe there’s more upside in gold (keep that correlation in mind) and want to ride the draft of the current equity market rally, perhaps. Taking a whack at GDX removes some of the stock-picking risk.

Reflation Update: The Real-time Inflation Indicator spiked 1.3% higher last week, reaching a level not seen since January.

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Gold Holders – Be Patient – Seeking Alpha

By: Jordan Roy-Byrne of Trendsman Research

In the wake of the Fed’s announced record monetization, some gold bugs remarked about the significance of the date and decision. Moreover, the airwaves were littered with commodity bulls (not the familiar faces). There were a few non-gold bug analysts on live television showing currency from Zimbabwe and relating the Fed decision to what has transpired in Zimbabwe. Hyperbole aside, Fed policy of currency debasement and inflation of the money supply is hardly anything new. News is important in that it highlights and reinforces trends. It doesn’t create them.
Keen market watchers and seasoned Fed observers were hardly surprised at the Fed action. We all knew it was coming. The question was when. Remember, news highlights trends. Commodities had been forming a bottom for five months. Just two weeks prior we wrote about our positive near term view on commodities. How about Gold? It rose from trough to peak over 40% in just four months. It seems that only the shorts were surprised.
Now to expound upon last week’s missive, reflation isn’t always so advantageous for the precious metals, especially gold. That holds true for both the economy and markets. With stocks and commodities now recovering, money is to be put to work in those markets and also potentially diverted away from gold. We aren’t expecting a full-blown correction in Gold but rather a consolidation that, for a matter of time diverts attention (like an idling engine) away from itself as it prepares for major liftoff.
This is a temporary respite in a bear market and in an economy stuck in deflation. The first period of deflation (and strengthening dollar) in the Great Depression lasted three years. The Yen increased nearly 100% from early 1990 to early 1995. This bout of deflation isn’t even one year old yet. In other words, don’t expect commodities to enter a cyclical bull market anytime soon. There isn’t enough demand on the horizon. The recession and accompanying deflation should last into 2010. It may be a while before both run their course, thereby allowing an inflationary recovery to begin in earnest.

In conclusion, be aware that the current rebound in stocks and commodities, though large, is just a temporary recovery. A single news event won’t change that nor alleviate the current deflationary pressures on the economy. Finally, holders of gold and gold shares should be patient. The major breakout will occur this year, though not within the time expectations of the gold bugs.

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My Note: When Gold and Precious Metals prices do take off and they will, it will be faster than anyone has anticipated. Use this time to buy now, increase your holdings. -Good Investing – Jschulmansr

·        Who’s been driving this record bull-run in gold?

·        What Happens When Inflation Kicks In?

·        Why most investors are WRONG about gold…

·        When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault

========================================================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

 

 

 

 

 

 

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