The Golden Truth: Three Charts That Scare the Crap Out of Bernanke, Summers and Geithner

Sunday, August 23, 2009

Three Charts That Scare the Crap Out of Bernanke, Summers and Geithner

The first two charts are the 1-yr. daily price of gold in U.S. dollars and in Indian rupees (hat tip to MontyHigh of www.worldofwallstreet.us for the second chart). These two charts point to a big move up for gold for several fundamental and technical reasons.

In addition to the ongoing financial deterioration of the U.S. Government and melt-down in the banking system - and the aggressive accumulation of gold by China and Russia to offset their U.S. dollar exposure - the primary seasonal buying by India is about to begin:

"Gold is becoming a major investment avenue for Indian investors. Despite high local prices, dollar volatility and fall in general demand for jewellery, retail investment demand for gold has taken a sharp upswing of 515.8 per cent to 109 tonnes in the second quarter (April-June) of calendar 2009 from 17.7 tonnes in the first quarter."

India Is Getting Hungry For Gold

And finally, have a look at the chart of the U.S. dollar:

A lot of market observors recently have been calling for a big bounce in the dollar. But as long as the Fed is inflating the money supply, which is reflating the stock market bubble, the dollar will continue its downward path and, conversely, gold will continue moving higher. The only issues in my mind with regard to this are the timing, duration and magnitude of the move.

2 comments:

EconomicDisconnectMonday, 24 August, 2009
It looks like German central bank gold is indeed "in play":
http://www.gata.org/node/7713

Again, why can we not get a Fort Knox independent inventory????
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Dave in DenverMonday, 24 August, 2009
email your two Senators and House Rep and ask them.

http://www.auditthefed.com/
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.