1. The dollar and the US stock market may be starting their next major legs down today. Please click here now. Double-click to enlarge this ominous US dollar versus Japanese yen chart.
  2. Central banks around the world are ramping up their tightening.  Back in 2013-2014 when I predicted quantitative tightening and relentless rate hikes were imminent, almost nobody believed me.
  3. I promised that this tightening cycle would be like no other because of the enormous size of the QE money balls in Japan, Europe, and America. The tightening action is moving the money balls out of the deflationary government bonds asset class and into the inflationary fractional reserve banking system.
  4. Powell just raised rates again and is poised to launch another increase in quantitative tightening.  He’s also beginning to change the spread between the Fed funds rate and the excess reserves rate that banks get paid to keep money at the Fed.  Going forward, I expect him to put much more pressure on banks to move money out of the Fed.  This is highly inflationary action.
  5. Please click here now.  Double-click to enlarge.  The US stock market looks like a technical train wreck.
  6. For the stock market, one mainstream money manager just referred to the global tightening cycle in play as akin to a sports team losing their goalie!  
  7. It’s obvious that the stock market is doomed.  Powell appears determined to push through another rate hike in either August or September. Maybe the market staggers sideways or slightly higher until then, but the US stock market train is headed towards a global central bank tightening cliff.  It’s going to go right over that cliff and implode, and tariffs are just icing on the cake.
  8. Please click here now.  Double-click to enlarge this interesting T-bond chart.  Stock market money managers usually buy bonds when they panic, and that’s starting to happen now.
  9. This time they are jumping from the fire to the fry pan.  They believe the Fed will blink and stop hiking.  In contrast, I predict the hiking will be accelerated, with a possible half point hike coming in December as inflation continues to rise.
  10. Because of the widening spread between the Fed funds and excess reserve rates, banks will become more aggressive about moving money out of the Fed.  Ultimately, the money managers will panic-sell bonds and buy gold as they see the stock market melting but inflation getting even stronger.
  11. The bottom line is that Powell’s tightening actions to date have not done enough damage to the bond market to kill it as a safe haven for stock market investors.  That will change fairly soon.
  12. Please click here now.  Double-click to enlarge this GDX chart.  Gold stocks continue to meander sideways in my important $23 to $21 accumulation zone.
  13. Many individual miners have started to trade independently of the ETFs and mine stock indexes, and are staging fabulous rallies.  There are always some outperformers in a sideways market, but the large number of them staging these rallies now is quite impressive.
  14. Note the strong volume bar that occurred on Friday.  Gold stocks are in very strong hands now at a time where some possible “game changing” news is coming for bullion.
  15. On that note, please click here now.  India and China are the biggest markets for physical gold, and price discovery on the COMEX and LBMA ultimately relates to changes in demand there versus mine and scrap supply.
  16. When Narendra Modi got elected as India’s prime minister, he put Arun Jaitley in charge of the finance department.  This was disappointing, because Jaitley’s actions and words have been very negative for gold, and the finance ministry has the power to set the gold import duty.
  17. Jaitley has a long history of health issues, and he just had a kidney transplant.  Piyush Goyal has been appointed as “interim” finance minister. He’s pro-gold and fought against the import duty.  There are rumours that his appointment may become permanent.
  18. If that happens, I think gold investors around the world are going to watch the import duty tapered to zero just like American QE was tapered to zero.
  19. Please click here now.  Double-click to enlarge this spectacular long-term gold price chart.  The Indian finance ministry is the main driver of the global gold price doldrums that have been in play for the past seven years.
  20. It’s unknown if Goyal takes charge of the finance ministry on a permanent basis, but if he does, that is likely the catalyst that launches a massive and sustained rise in Indian gold demand.  That demand will be enough to drive gold in an Elliott C wave advance to at least $1650, and probably $2000!
  21. If “Royal Goyal” has charge of India’s finance ministry at the same time as Powell is joined by the ECB and then Japan in a giant effort to roll the QE money balls into the fractional reserve banking system, gold will likely surge to $3000 – $5000 very quickly.
  22. When gold began its “eight-bagger” advance from the $250 area in 1999, few people anticipated the upside potential.  The highest price targets coming from mainstream analysts were in the $400 area.  Most of them thought gold was going to stay in the doldrums for decades, while the stock market would never decline in a material way.  They had no clue what was coming!
  23. Please click here now. Double-click to enlarge. I believe the potential for another eight-bagger is much stronger now than it was in 1998.  This quarterly bar chart shows gold making an epic bull wedge breakout.
  24. All that’s technically in play right now is a pullback from the breakout zone and that’s very healthy.  Note the rise in volume from 1998-2002. That came ahead of the runaway action in the price.  The exact same thing is happening now.  Gold and silver investors should have absolute confidence in their holdings… and look to eagerly accumulate more!

Thanks and Cheers,

Stewart Thomson

Graceland Updates

https://gracelandjuniors.com

Email:

stewart@gracelandupdates.com

Risks, Disclaimers, Legal

Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

Are You Prepared?

  1. The appointment of Jerome Powell as new Fed chair is likely the catalyst that ushers in a multi-decade era of rising inflation and soaring gold stocks.
  2. I’ve announced a long term target for GDX of $15,000. That really  isn’t very high… given the strong inflation numbers that I am projecting for America in the years ahead.
  3. Having said that, Powell has only been on the job for one day.  Investors need to show patience.  Wait to see what he actually does before taking “back up the truck” market actions.
  4. Powell’s first significant actions are likely to be announced at the March 21 Fed meeting.  I expect a firm commitment to more rate hikes and more quantitative tightening.
  5. That’s inflationary because it boosts bank profit margins and they become more willing to take lending risk.  That produces a rise in the velocity of money.
  6. As the cost of borrowing rises, companies will raise prices and workers will demand higher wages.  If Powell also makes a firm commitment to deregulating America’s thousands of small banks on or before March 21, inflation would accelerate even more rapidly.
  7. Please click here now. It’s my contention that wage inflation of 20%+ is not just theoretically possibly, but morally justified.  Here’s why:
  8. For many years, global governments have colluded with central banks to run socialist/fascist QE programs.  These programs moved money from workers and savers to government bonds and stock markets.  Additional money was simply printed and taken.
  9. QT, higher rates, and small bank deregulation are beginning to re-empower Main Street.  This is happening while “Government Street” (the bond market and the dollar) and Wall Street risk disintegrating.
  10. Please click here now. Double-click to enlarge this exciting bond market chart.  A head and shoulders top pattern is in play.  The neckline has been crushed.
  11. Please click here now. Around the world, governments are announcing import duties.  That’s inflationary.  If India’s government had cut the gold import duty, it would have increased demand, but the duty itself is also inflationary.
  12. Please click here now. Institutional money managers are starting to focus on the inflationary implications of Trump’s tax cuts that I highlighted when he first proposed them.  In the context of QT, rate hikes, and deregulation, these cuts can increase inflation quite significantly.
  13. Please click here now. Double-click to enlarge.  The bond market is building what I have dubbed a “super top” pattern.  The target of the super top is about 80.
  14. The Fed has projected that rates will take many years to reach “normal” levels.  This chart suggests the normalization process will take about seven more years.
  15. This “normalization” sounds great in theory.  In the real world, it involves a decline to 80 for the T-bond price.  That would drive borrowing costs for the US government to incredibly painful levels.
  16. In addition, rates could rise much more quickly than this chart suggests if Trump ordered T-bond creditors to take a haircut on what they are owed.  That’s one of his campaign promises.
  17. As inflation surges, Trump may be forced to devalue the dollar and revalue gold to prevent the US government from imploding or becoming a full dictatorship.  Inflate, default, or die.  In the near -immediate future, these are the only choices President Trump will have to manage the US government’s horrific size, power, and debt.
  18. On that note, click here now.  Double-click to enlarge.  The dollar could go into free fall if it breaks cleanly under 108 against the yen, and the bear flag chart action suggests that is going to happen very soon.
  19. A breakdown would almost certainly correlate with a gold price surge to about $1370.  Please click here now.  Double-click to enlarge this daily gold chart.
  20. There is a small head and shoulders top pattern in play that could push gold modestly lower to the $1310 – $1290 area.  The good news is that a bull flag-like pattern is also forming that could negate the top pattern.
  21. Given the fast-growing inflationary fundamentals, gold investors should now be walking the price gridlines with maximum confidence.  Fresh buying for eager gamblers and investors should be done at key levels that I’ve noted on the chart.
  22. Gold has been rising as the T-bond has fallen hard, and rising as the T-bond has rallied.  That’s because gold price discovery for the fear trade is not about rates per se, but about risk.  As stock and bond market investors get rocked hard, gold looks like the ultimate asset iron lady!
  23. Please click here now. A major gold stocks versus gold bull era will occur as the T-bond super top ushers in extraordinarily high inflation for the long term.
  24. Gold stock enthusiasts need to watch Powell’s actions, because they are the catalysts that will push GDX above $26 and officially begin that fabulous era.  Gamblers can buy call options on a two-day close over $26.  I’ve urged long term investors to be aggressive buyers in my $23 – $18 tactical accumulation zone.  The bottom line is that it’s the cusp of a new era for gold stock investors, and Powell officially launches it on March 21!

Thanks and Cheers,

Stewart Thomson

Graceland Updates

https://www.gracelandupdates.com

Email:

stewart@gracelandupdates.com

Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form.  Giving clarity of each point and saving valuable reading time.

Risks, Disclaimers, Legal

Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

Are You Prepared?

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