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Dow over Gold

Submitted by Roanman on Sun, 03/13/2011 - 12:15


Since we updated our Housing over Gold post yesterday, might as well update the Dow Jones Industrial Average over Gold today.

Both charts are from Fred's Intelligent Bear, click either chart to access Fred's excellent if slow moving site.




Then just because we watch this thing without fail, every single time we cruise through Fred's site, here's the legendary John West Red Salmon commercial.



Housing over Gold

Submitted by Roanman on Sat, 03/12/2011 - 14:18


We've posted this chart two or three times over the past couple of years.

It's getting no better unless you're invested in Gold rather or in addition to a house.

Click on the chart to go to Chart of the Day's page.

They're going to tell you that it presently takes 120oz of gold to buy the median single family house, in 2001 in took 600oz.

We think we're going to get the double bottom ..... or top, depending on your point of view, and are invested that way. 



Now that's what I call a buyout

Submitted by Roanman on Fri, 01/28/2011 - 06:21


From the Telegraph U.K.

Tunisian former president's wife "fled country with £38 million in gold"

That's 62 million in dollars.

 9:30PM GMT 17 Jan 2011

Click on the photo for the entire story. 


Tunisian protesters were goaded to new pinnacles of indignation on Monday as it emerged that the former president's wife, Leila Trabelsi, spirited 1.5 tonnes of the central bank's gold onto the aircraft that flew her and her family to Dubai. 

Intelligence officials in Paris told Le Monde, the French newspaper, that Mrs Trabelsi visited the bank last month, when protests were gathering momentum, and instructed the governor to hand over gold ingots worth £38 million.

Although he initially refused to comply, the personal intervention of the former president ensured that the gold was handed over.

The disclosure of Mrs Trabelsi's final act of avarice has enraged Tunisians, but not surprised them. The first lady's love of showy opulence and reputation for grasping corruption made her and her equally unpopular nephews the country's principle hate figures.

Three days after they ousted their president, Tunisian protesters returned to the battle-scarred streets of Tunis yesterday to demand the complete purge of former regime loyalists from government positions.



Speaking of Gold

Submitted by Roanman on Thu, 11/11/2010 - 11:42


Bix Weir in his The Road to Roota Letters publishes a pretty fun, non threatening and easy to follow essay on the symbolism within the new $100 bill.

It begins as follows.

First of all, I must admit that I am one of those "Conspiracy Nuts" who loves to read meaning into the back of the US $1 bill like I'm trying to solve a centuries old puzzle.

The "All Seeing Eye", the pyramid, "One World Government", Masonic symbols, the implications of the Latin words, even the words "In God We Trust" added in 1955...all of it...I'm a big fan of secret meaning. Just Google "US Dollar Hidden Meaning" and you will find almost EVERY INTERPRETATION you can imagine.

Since I don't know which is true...I tend to believe ALL OF THEM.

More fun that way.

If you think this is all hogwash and there is no meaning to the back of the $1 bill..."Duh, it's just a nice picture"...then this article is not for you.

Click in the bill to link up to the entire piece.



Two charts from Richard Russell

Submitted by Roanman on Fri, 10/15/2010 - 08:08


As previously disclosed, for many years, I've read people who have been reading Richard Russell for many years.

When what I should have been doing was reading Richard Russell.

Along with Harry Schultz and Joe Granville he clearly is one of the grand old men of the financial newsletter business.

Despite the fact that Mr. Russell is now 86 and significantly less hail than he used to be, I just dropped another $175 for a 6 month subscription to his newsletter, the Dow Theory Letter, despite the disclaimer at the bottom of the offering that reads something to the effect that, "You know Richard is 86 years old, Right?  Ain't gonna be no refund.

If it goes just one week, it will have been cheap at twice the price.

The chart below is for DBC, the commodity tracking index offered on the New York Stock exchange.



Richard pulls out some of the items that make up that index immediately below.


 Scoreboard year-to-date in percentages -- Agricultural 

Cattle (lb)....................+12.0%
Coffee (lb)...................+36.9%
Corn (bu).....................+37.3%
Cotton (lb)...................+46.7%
Lumber(1000 bd.ft.)....+32.9%
Orange Juice (lb)..........+19.7%
Soy beans (bu)..............+13.2%
Wheat (bu)....................+29.8%


 With the following commentary


"Trouble -- The poverty sector and the middle class are having trouble enough, but the chart below spells more pain. This is the Commodity chart, and it's telling us that the price of food is heading skyward. With the price of food (corn, grains) heading higher and with oil now over 83, the squeeze is on for the majority of Americans.

The US is floating in liquidity. And nobody knows what to do with it. Which is one reason why stocks have been floating higher. Should you buy farm land, housing, commodities, silver, bonds, gold, insurance, what? There's no safe return on anything."


Here's Mr. Russell's latest writing on Gold.


  Around 1999 and 2000 gold was selling at just above 260 an ounce. But more important, many well-known gold shares were selling like second-hand rain coats. These formerly much-loved gold shares were selling at such low or bargain prices that I thought one could buy thousands of shares and just "put 'em away" and forget about them. I knew gold wasn't going out of style, and it was just a matter of time before interest in gold returned, as it has in all history.

Great bull markets start with stocks selling "below known values." That's where gold mining shares were selling around 1999 and 2000. I equated gold shares in the year 2000 with the Dow in June 1999 at a time when the Dow was priced at 161. In the year 2000, I thought to myself, "Could this be the very beginning of a great bull market in gold, a bull market that could ultimately take gold above its January 1980 peak price of 850? That idea stuck in my head; in fact I became obsessed with the idea that a great bull market was beginning and very few people even suspected that was happening in gold.

Question -- OK, Russell, gold is now well above its peak price of 850 struck in 1980. So what do you expect next?

Answer -- I went through this same phenomenon in the 1960s with the stock market. We went through the correction of 1953, and we staggered through the vicious correction of 1957. In 1957 a severe recession enveloped the US economy, and almost everybody was convinced that the bull market that had started in 1949 had ended.

I learned from George Schaefer that big bull markets almost always end with a speculative explosion. We had not seen that kind of action in the bull market that started in June, 1949. I was convinced that a speculative third phase of the bull market lay somewhere ahead. For that reason I was convinced that the bull market was not over.

In fact, I was so sure of my stand that I wrote an article that was published in Barron's (December, 1958) in which I made the case for a coming final boom phase in the stock market. That article drew a great amount of interest, and it put me in business. A speculative third phase did appear in the stock market during 1956 through the early '60s.

Today I am taking the same stand regarding the gold bull market. The gold bull market will not end with a fizzle and a whimper. It will end with intense speculation and widespread interest from the funds and the public. We haven't seen that kind of activity yet, but I'm convinced that a period of wild speculation in gold lies somewhere ahead.

This is why I continue to beg my subscribers to load up with gold. As I see it, we are nearing a period of intense speculation that will be beyond anything seen before by the last three generations of Americans. Ironically, more money made in the final explosion in gold than was made during the first two phases combined.

Great bull market are seen maybe once or twice in a lifetime. The current "stealth" gold bull market has sneaked up on most Americans. The very phrase, "gold bull market" is sneered at by most analysts today. In fact, most of the comments on gold today come in the form of warnings; "Gold is too high." "Gold is in a bubble." "Gold will sink back below 1000." "Gold is a fool's play."

Nonsense. Gold is moving ever-closer to it's climactic speculative third phase. The negative comments about gold will only serve to make the gold bull market that much stronger. In this business, there is nothing more powerful than a primary bull market that has been denigrated, spat at, and held back for years.

And that's the end of my "lecture" about the fabulous gold bull market.

Below, the profile of one of history's greatest primary bull markets (and it's not finished yet).


 Either chart will link you up to Richard Russell's fine site.

Super duper way double highly recommended ......... with the previously discussed caveat.


Don't be a Zombie

Submitted by Roanman on Tue, 09/28/2010 - 09:36


Bill Bonner has rather an unflattering view of Americans in this piece.

Still, he makes a point worthy of some personal reflection.


We’re sitting in a JetBlue airplane as we write…heading back up to Baltimore. Each seat has a TV screen on the back of it. A few years ago, you could get away from TV by getting on an airplane. Now, there it is right in front to you…

…which is all part of the creeping zombification of the US. Music plays all the time. It’s in cars. It’s in shopping malls. Some people even listen to it when they work. It’s like prison…or the Orwellian future…where noise is blared out 24 hours a day, so you never have a chance to think.

And now there are all the Blackberries, iPhones, iPads…to say nothing of regular cellphones and portable computers.

And then, there’s TV. You go to a bar. In addition to the music, there’s often a TV screen.

With all these sources of distraction people don’t have any time to think. Who has time to wonder how the dollar has any value at all? Who worries that those pieces of paper could go the way of all trash…to the dump? Who thinks about it at all? Not many people…

Instead, most people go through the day like zombies – watching TV…listening to someone else’s music…surfing the Internet…chatting…schmoozing…distracting themselves…

The passengers on the plane act like zombies…watching other zombies on TV…listening to music…reading airport novels….

Then, on the screen in front of us, there’s a fellow selling…gold!  He’s the second one we’ve seen. “Should you own gold,” is the caption on the screen. A man named Scott Carter is advising customers to buy the yellow metal.  Apparently, his company has been in the business for 50 years…

Hmmm… This is something new. The last time we saw gold on TV was an ad for a fellow who was BUYING gold. “Got gold? You can get CASH” was last year’s ad. The advertiser told viewers that they should take advantage of high gold prices to get rid of their unwanted jewelry…exchanging it for cold, hard cash.

Only the cash wasn’t all that hard, after all. That was about a year ago. And today, the cash is worth about 20% less than the gold.



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