Blog

The US dollar is still on the path to hyperinflation. Here are the criteria that I am watching to confirm that the US dollar continues to head for the fiat currency graveyard. 1) Yields on long-term US government paper have been rising ever since the aftermath of the Lehman collapse. As a currency moves towardRead more

August 8, 2009 – Nothing has changed over the past few weeks.  The XAU Index is still testing overhead resistance around the 152-154 area, which is the same area of resistance discussed many times recently.   One of these days – probably by early or mid-September – the XAU will hurdle this resistance level.  InRead more

August 7, 2009 – In Economics 101 college professors teach that prices are determined by supply and demand. Not usually taught, however, is that the ‘price’ – i.e., the purchasing power – of money is also established by these same two economic determinants. Economists focus quite extensively on the supply of money, which in theRead more

July 27, 2009 – The red horizontal line on the accompanying chart of the gold/silver ratio marks what had been resistance at 69. That resistance line eventually gave way, leading to a deeper correction, which took the ratio all the way up to its 200-day moving average. Fortunately, resistance at its 200-day moving average held,Read more

July 27, 2009 – Over the past couple of months there have been several particularly bearish articles on MineWeb.com about gold mining in South Africa. One entitled “South African gold output in downward spiral” appeared on May 26th and notes that South Africa’s gold output “continues to fall as mines get older and grades decline.”Read more

July 27, 2009 – On July 13th traders sold short the Sep’09 T-note at 118-21. The yield on the 10-year T-note that day was 3.38%. Stop out this T-note short-sale if its yield closes below 3.32%. For convenience, I am going to begin tracking interest rate trades on the basis of the T-note’s yield atRead more

July 27, 2009 – Since March 23, 2001, we have been holding goldgrams as our Core Currency Position. On May 4th traders sold the US dollar by shorting the Dollar Index at 83.97. Stop out this trade if the Dollar Index closes above 81.10. It appears that the Dollar Index is beginning to accelerate toRead more

July 27, 2009 – I have updated the same chart of the Dow Jones Industrials Average presented in recent letters, but also made an important change by re-drawing the red line that had been marking overhead resistance. Please take a close look at the following chart. It is clear that the red line has becomeRead more

July 27, 2009 – In my previous commentary, I advised that “the worst is over and further, it looks like both precious metals will bounce from here.” We did indeed get that bounce, but it was from an extremely oversold condition. Consequently, we need to give the market more time to prove itself. Even thoughRead more

July 27, 2009 – Silver has also bounced over the past couple of weeks since the last letter. In fact, silver has outperformed, rising 8.5% during this period compared to gold’s 3.3% climb. Turning to the page-3 silver chart, there are a couple of important observations. As noted in the last letter, silver did slightlyRead more