Watch the video:Ukraine and Peter Schiff: Recovery Fantasy, Dollar Crash Below 80.00 And Gold "Wall of Worry". TNR.v MUX GDX
Peter Schiff is discussing the very weak economic data released this week, Gold market's "Wall of Worry" in mass media and Gold stocks potential. We will add to the discussion the main development for us this week. It is the situation in Ukraine, which came almost out of nowhere for a lot of investors and now threatens the stability in Europe at least and has caused the major decline in US Dollar below the very important level of 80.00.
Obama can have his own war finally after the few unsuccessful attempts with YouTube evidence in Syria. We do hope that it will be only Financial War and we can see the first rounds of it this week. Initially US Dollar went up on the escalation of the situation in Ukraine - as any potential military action in the world is supposed to be positive for the U.S. Military Complex, but on Friday with major headlines from Moscow about Ukraine Dollar has dived decisively below 80.00 to the 79.78 close.After these U.S. actions in Ukraine considered as an insult by the Kremlinthe least you can expect is selling of the US Treasuries by Russia and, maybe, already accelerating of selling by China as well . They have been already smelling the rat about the USTs Game Of Musical Chairs for a long time. It is just too personal. None of these two countries - or it will be better say leaders - would like to be liberated next in any circumstances. Dr. Paul Craig Roberts - former US Treasury official - has made the best comments on the situation in Ukraine.
The big difference with Iraq, Afghanistan, Libya and Syria is that all those countries can not be compared to Russia and China even close. These two countries have means to make life very messy for everybody involved and U.S. has managed to be involved with both. It is getting very hot very fast in Ukraine with Russia and you can imaging who is orchestrating China - Japan confrontation as well. It is not the way to make friends and find the new buyers for U.S. Debt or even retain the old ones. Are those people who write the teleprompter for Obama just went totally crazy? We do not think so. Unfortunately the friends are lost long time along the way with ongoing US Treasury sales by Russia and China and diversification out of US Dollar. Now we are witnessing the very dangerous play with the last asset left in U.S. from Super Power stage - its Military Complex. There is nothing to match it in the open confrontation, but if we will be all lucky to exclude mutual nuclear distraction, we can expect a lot of asymmetrical steps from the Rising Powers. Ongoing Financial War can now be considered to be escalating to the dramatically new levels.
Gold was managed to the downside to hide the ongoing disaster at least for the weekend. The opening of Gold market in Asia on Sunday evening will be very interesting with the ongoing escalation in Ukraine and reported authorisation by the Russian Upper House of Parliament the use of military force in Crimea to insure "stability in the region".
"We have quite a morning today. In the early trading hours US Dollar was crashed below the all-important 80.00 level to 79.84 and Euro has broken $1.38 level. With all the ongoing Currency Wars and China pushing Yuan down Gold Demand is going strongly up. Now recent increase in demand for Gold to the record numbers in China can be put in another perspective.
Somebody has read James Rickards' new book "The Death Of Money" and playing along with it. As we have noted before, Ukraine is another battle to be lost by the US dollar as The Reserve Currency of Choice. Who is selling US Treasuries today? Is it only angry Russia or is it China raising cash to Buy Barrick Gold's vault in the ground at Pascua Lama?
Now with Yuan pushed down and US Dollar going down after the highest number on record of Chinese selling US Treasuries, Gold has no other way but to go much higher. Short squeeze will help, as some banks were encouraging to sell gold again after this very initial advance, after bottoming in 2013. We have seen nothing here yet. The Mother of Short Squeeze in Gold and, particular, in Silver is still to come."
"Gold is sending its Happy Valentines to all Gold Bugs today and breaks $1320 on the massive short squeeze. Gold shorts will have their Blood Friday now. The real reason for this move is the realisation of the groundbreaking shift in the structure of the Gold market with the unprecedented demand of 2,181 tons of Gold from China in 2013. Janet Yellen testimony has opened the possibility To Taper The Taper and James Rickards is calling for the Taper Pause in June. US dollar is going down very close to 80.00 level again. This level will be protected, but should the US Dollar break down below 80.00 Gold and Silver will go vertical towards $1,500 and $25 respectively.
Our short Squeeze watch includes McEwen Mining and TNR Gold. McEwen Mining had 26.8 million shares sold short or 8.6 days to cover, according to NASDAQ. MUX.to has rocketed from December low of CAD1.80 to CAD3.27 close yesterday. Gold breakout will push shorts into the corner, but explosive move in Silver will have even more effect on this company.
TNR Gold is still day dreaming, but move in McEwen Mining should pull out this junior out of its misery. Los Azules Copper development will be next to watch on the back of recent M&A activity in the sector and CRB - commodity index breakout to the upside."
"Frank Holmes presents a very interesting set of charts supporting the bullish case for Gold and Gold stocks. Now with Gold crossing 200MA we have the game changer for the Gold marker. Professional traders have positioned themselves after 20MA was breaking out to the upside and smart money has followed after 50MA. Now the retail public will start buying the new Gold Bull leg.
Number of Gold stocks with, McEwen Mining among them, has printed The Golden Cross already, when 50MA is crossing 200MA to the upside, confirming the bullish reversal pattern. It is very bullish set up and we expect the rally in Gold stocks to widen its base to include the smaller junior miners."