Thursday, September 13, 2007

Gold Below 685 will Drop Lower, but as Long as It Holds Above 700 'Twill Keep Trending Higher

GOLD below 685 will drop lower, but as long as it holds above 700 'twill keep trending higher. SILVER held on above 1250, but the real mark to make remains 1300.

Alan "Greasy" Greenspan, who has learned to speak English since he left the Federal Reserve, admitted in an interview today that he "didn't really get it" that the sub-prime lending trend was significant enough to hurt the economy until very late 2005, but still defends his lowering interest rates from 2004, which, of course, caused the crisis in the first place.

If you have a sense of humour & a stomach that can digest three day old Chinese food, Greenspan's confession will bring tears of laughter to your eyes. If you're a normal human, it just brings tears. As my friend Catherine Fitts says, "These are not serious people." Either he's too dumb to be taken seriously, not knowing that puffing up the money supply with billions of bingo bucks would create a bubble somewhere, as every one who has ever studied monetary history knows (except of course, Federal Reserve & government economists), or he's too much a cynical, lying, time-serving, yellow-dog egg-sucking hypocrite to be taken seriously. Either way, Greenspan's not a serious person. Pitiable. Laughable. Ridiculous. Cruel. Lickspittle. All those, perhaps, but not serious, because serious persons question the consequences of their acts, & avoid acts that damage or kill innocent persons.

The US Dollar Index bounced up today, as I was expecting after a six day slide. Whether it's more than a bounce we will know after a few day's follow through. I don't think the dollar will drop through 78 on this trip, & am still looking for a rally, although it could well start from a lower springboard.

In stocks Dow 13,125 and 12,800 are the numbers to watch. Drop below the first brings a terrific rear-guard action at the second. Deny it as the gurus will, stocks are locked in a downtrend. Only a close above 13,700, followed closely by close above 14,000 would change the outlook, which is down, down, down. Swap stocks for silver & gold.

I was gazing at the chart of the US Dollar's value in Gold ounces today. Very instructive, & as much fun as writing these daily commentaries is, that chart shows how important it is to keep focussed on the long term. From 0.00394 troy ounce 3 September 1999 the buck has dropped to 0.00141 today. Wow. Aren't you glad you held on to US Dollars, & to stocks? And bonds? Don't you want to hold them longer?

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.