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  • CCI Signalling Resumption Of Inflation And Doom To The Bond Markets

    The CCI (Continuous Commodity Index) is the benchmark for global commodity prices and below is its 4 Year Weekly Chart.

    Fed has been able to keep rates low on the basis that inflation has been controlled, and since the end of QE2 around July 2011, commodity prices have STOPPED increasing.

    (click to enlarge)H&S Bottom - CCI 4 Year Weekly Chart

    ECB-Draghi OMT and USA Drought provided some rally at point C.

    QE3 came in with a ''pinch of salt'' (Fear of Elections & Fiscal Cliff) which cappedthe hedge funds and smart money from initiating 'ALL OUT RISK ON'. And the Fear itself caused CCI to pullback a bit post QE3 as shown by line D.

    Its Making a Clear H&S Bottom (marked by GREEN), which it will take out once it advances above the Green Resistance Trend Line. This will be Once smart money senses that both Fiscal Cliff is about to be CAN-KICKED and Debt Ceiling about to be Raised/Removed.

    If inflation in commodities is clearly evident then global risk capital along with sovereign wealth (Chinese & Others) will scramble for inflation hedges, and will be very positive for Gold.

    At that point, Fed will loose complete control of the Bond markets because keeping rates at zero will bring a hyper-inflationary depression, and raising rates will killthe recovery and push the economy into a deflationary depression.

    Dec 11 4:27 PM | Link | Comment!
  • Recovery, Recovery, Recovery ? Kiss My A_ _ !

    This week many Investment Banks have come out with their views that the Economic Recovery will now accelerate and therefore monetary easing will subside in 2013 & 2014, thus Gold prices will fall.

    I would like to show the above Banksters the below picture, and kindly excuse me for this. I will explain below why....

    (click to enlarge)

    Foreigners are no longer buying US Treasuries and the Privately Held Federal Reserve is printing and lending the money to the US Government. Foreigners are dumping dollar reserves and buying-hoarding commodities and resources, creating a lot of inflation. (read my earlier post: if ben allows interest rates to rise).

    A recovery is not possible unless inflation reduces the burden on disposable incomes so that people consume and spend on other things.

    If Inflation keeps rising, then disposable income will fall further and the masses will not be able to support conspicuous consumption which can bring about economic recovery.

    Also people are now afraid to borrow and spend, as they very well remember the forecolosures and evictions and the joblessness post the 2008 Subprime debacle. Banks are also not lending as they have strict rules regarding creditworthiness!

    Once again, if RECOVERY is not occuring, FED cannot increase Interest Rates ! and if Fed does not increase interest rates, Inflation will SCREW THE RECOVERY !

    CATCH 22 !

    Also how about all those entitlement (Social Security, Medicare, etc) payments maturing in the coming few years ? How will USA finance them ? MORE MONEY PRINTING ?

    Dec 07 8:34 AM | Link | Comment!

    In my previous articles (at my blog) i have made it clear that qe is having very little effect to cure economic ills.

    The world's money managers (RATS) are now worried, as to when the Global Economy will start to recover. Thus 'RISK ON' is not gaining traction no matter how much money is being thrown at the problems.

    Commodities, Equities & Real Estate are unable to gather enough interest to propel them above previous highs. All are showing signs of a 'dead cat bounce'. Earnings are loosing luster and future earnings' guidance is barely acceptable. Thanks to the deflationary-stagflation.

    In this environment, Money is being safely parked in the US Treasury markets. Huge amounts. Pressure is building up at the dam.

    If none of their last resort economic policies (money printing) are going to work, then it will mean confidence in the issuer of fiat currency will soon fail. The only way they can keep this rocket from stalling and falling is via extreme money printing. And that too will never work !

    Either the global money managers have not realized this fact already,

    OR they are not being allowed to enter the true safe-haven shelter of 'GOLD'.

    OR They are scared of that thought, as they know that there are Quadrillions of RATS in the room eyeing the small exit door to the safe-haven of GOLD. If they OPENLY stampede towards that door, chances are that hardly 1% will be able to get out safely! So their only option is to secretly advance towards that door, before the others realize. (Remember there is about 170,000 MT of GOLD above ground valued today at around 10 Trillion US$, against Quadrillions of Fiat Dollars inside the real & derivatives system).

    Therefore US Treasuries/Bond markets will never signal this 'dam break' until the VERY LAST MOMENT. Thus it is futile to watch the bond markets for this signal. The Gold rocket will blast off within a few seconds of this event.

    The gold paper price manipulators are under heavy attack as the 'SMART RATS ' are secretly leeching away whatever physical gold can be obtained without attracting attention!

    These RATS know that GOLD IS SO DAMN CHEAP!

    Disclosure: I am long GLD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Dec 05 3:59 PM | Link | Comment!
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