Filthy Fed and Ugly Housing Data; Range Bound Gold and the Range Bound Fed
Eco Scribbles Not so Good
The Philly Fed Survey Collapses… http://www.businessinsider.com/june-philly-fed-2012-6?utm_source=twbutton&utm_medium=social&utm_campaign=moneygame via @themoneygame
My pronouncements on housing have been on the money. It’s not rocket science. There is a lot of delusion out there about housing coming back. I deal with numbers and facts. Existing Home Sales MISS EXPECTATIONS, Fall 1.5% To 4.55M (Exp. -1.1% To 4.57M) http://www.businessinsider.com/home-sales-may-2012-6?utm_source=twbutton&utm_medium=social&utm_campaign=moneygame
Gold is Range Bound
The gold struggle that I have talked about for much of the year continues. I am surprised that so many have been directionally bullish both near and longer term. Long term I see a rise for gold as a crumbling of the fiat system is 99-44/100% inevitable. However, I remind again, that so long as the dollar retains its favored status as the reserve currency of the world and a means to escape the euro, gold will remain in a trading range near term – a time-out mode, if you will.
Better (really dubious future events) catalysts for gold are on the horizon – perhaps as soon as the end of the year and in early 2013 as the passing of time will only enable further deterioration to the present fiat Ponzi system and it associated fiscal debacles. They, The Powers That Be, think they are clever in their ability to “kick the can down the road”, but this only delays a future day of reckoning, and increases the odds that could ignite a full blown black swan market event with little warning.
The Fed demonstrated yesterday that even it realizes that “printing” is futile at least from an announced policy position under a label like QE3. Rest assured that under the radar printing continues as international swap lines remain wide open and available to the tune of trillions of dollars. The Fed has built itself a well deserved reputation for conducting various operations behind the curtain, which we eventually find out about years later. If the FED has sit idly by and not assisted Europe in recent weeks, I would be shocked. This Fed is the ring master of an international con game where so much money is passing back and forth, at such a rapid rate, one cannot definitively come to a conclusion that Fed does not have its fingers in the European financial goo, or what exatly is going on. But something is going on, and when it’s a con game, what’s going on is not so good. To boil it down, the QE that really matters to our Central Bank is whatever it has to do to keep the debt laden system going. People who expected more full fledged pedal to the medal bond buying QE in order to help the economy (including Goldman Sachs which got its pre Fed meeting forecast wrong) are talking out of their you-know-whats.
The Fed has opted to Twist again, by extending operation Twist to the end of the year which means the Fed will be renewing Twist at the December meeting. Wash, spin, repeat. Operation Twist will keep rates low, but the swapping of shorter term debt for medium to long term debt is an exercise that keeps the banking system lubed, but has obviously not translated into anything very meaningfully positive for Main Street, except to bring back memories of people like Hoover, the Great Depression et al.
For this week, I will adjust the low end of my expected gold trading range up from 1400 to $1490. The high end of the range? I am adjusting it from $1900 to $1800 a potential black swan game changing event not withstanding.
I am not bearish on gold, but short term realities are what they are. If you can, now is the time to pick up gold as insurance for the coming future unraveling of the paper ponzi system. Even extremely hobbled silver is a good thing to consider at this point – NOT for dreams of $100+ silver, but as insurance. Believe me, $100+ silver will mean the most perilous of times. Oh, don’t forget backup food storage since you cannot eat metals and supplies might end up being non existant for a period of time regardless of how much metal you possess.
On that note, have a day!
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Author Jim Kingsland
Market commentator with focus on Gold and Silver after long broadcast career at FNN, Bloomberg, and Fox. #RandomHouse published author on PMs. Jim has also been involved in projects for CAC and Coinplex.
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