October 17, 2021 

Gold Enters Major Bull Market


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 By bluejay

05/07/2009  10:53AM

Last on gold is $912.60.

/More on China/

U.S. Dollar, Yuan and the New Reserve Currency
Chinese are making small moves to get more and more insulation from the dollar.

By Vadim Pokhlebkin
Thu, 02 Apr 2009 10:00:00 ET Email | Print | RSS | My Updates Bookmark and share It!

There has been a lot of talk lately about replacing the U.S. dollar as the world's reserve currency. Read these thoughts on this and another hot subject -- China's dependence on the dollar -- by Chris Carolan, the editor of Elliott Wave International's Sunday-Tuesday-Thursday Asian-Pacific Short Term Update. (Excerpted from the recent APSTU issues.)

...the Chinese have announced that they would like the world to establish a reserve currency alternative to the dollar, perhaps under the auspices of the IMF. The U.S. has responded (through Paul Volcker) that the Chinese have created their own predicament by not allowing the yuan to float higher. But we believe that the larger trends to watch are the inevitable leadership role that the Asian-Pacific markets will play in the next bull market as they have access to cheaper capital than the debt-stressed West.

We think that people who focus on the alleged Chinese problem of holding too many dollars miss the point. In the long run, they can reduce their new dollar positions, while the U.S. government is, through their recent actions especially, committing themselves to issuing greater and greater amounts of dollar debt. The Chinese can (and may) push themselves away from the table, but the U.S. does not have the luxury of that freedom.

The yuan, whose exchange rate is controlled, seems to be pushing higher within the boundaries of its restricted trading. [This] chart shows the dollar falling relative to the yuan.

(Sorry chart would not transfer)

How will the Chinese cut their exposure to the dollar over time? News accounts tend to focus on one big event, such as the possibility of a new reserve currency to replace the dollar. But in all likelihood, the Chinese will be making a series of moves, each one gaining them a little bit of insulation from the dollar. If they can protect one hundred billion (US$) here and another one hundred billion there, pretty soon they will have cut their dollar exposure significantly.

We highlighted one such action in our recent discussion of China’s move into owning more resources as a way of diversifying out of the dollar. Now comes news of China executing more currency swaps, where they trade yuan for a local currency, thereby allowing that trading partner to use the yuan in future trade with China. These swaps then remove the need for dollars as an intermediary exchange between trading partners. The Chinese have signed six such swap agreements since November totaling $95 billion. The latest swap agreement is with Argentina.

Step by incremental step, the Chinese are solving their dollar problem, or at least ameliorating it. Those looking for that one big news event to signal the dollar’s irrelevance may be missing the trend, though such an event may still occur further out in time
 By bluejay

05/06/2009  10:53PM

Last on gold is $913.80 in Asian markets tonight.

The most significant development for gold has been the recent announcement by China that they have secretly added gold to their reserves over the past few years with a well placed official stating that this trend should continue.

China for some time now has been bartering off US dollars for natural resources around the world. Since they hold large quantities of US Treasuries they have to be delicate in their divestiture of them. As they slide out of some of their Treasuries, it is at the same time they're maintaining the posture that they continue to buy them but overall their holdings are being scaled down.

China is preparing for their future and it doesn't involve the US dollar being the world's reserve currency. China is increasing its central bank hoard of gold in preparation for the Yuan becoming the world's reserve currency within 20 years or sooner.

The bottom line is that China has declared war against those who are manipulating gold's price to prop up their ailing fiat currencies as they have being since Bretton Woods and before.

It appears that China, as the number one producer of gold, is no longer willing to stand idly by watching fiat central bank manipulation of the gold price. One has to only recall that it wasn't too long ago that China suggested that the IMF sell its entire holdings of gold. Not only is China keeping all their domestic gold in country along with nibbling here and there on the international market, they want all the IMF's gold. One can only guess what amount of gold they are looking for.

Our central bank has manipulated gold where it stands today, well below where their own skewed CPI figures dictates it should be somewhere in the neighborhood of $2500 an ounce just to keep up with the erosion of our money's real worth.

The paper products shorting of gold at the COMEX by the bullion banks is just a matter of time before it all becomes history and blows up in the end. The supposed largest central bank holdings of gold by the US and Germany may very well be challenged in the not too distant future. It's my belief that these two countries have known the jig is up for the past 18 months and are scampering to get the gold back quietly. Has anyone wondered where all the scrap gold sales that amounted to about 500 tons went last year? Who is running all these offers on TV to buy the public's old gold jewelry for "quick cash" during this severe recession?

Let the games begin!

China wants to buy more gold

Posted Apr 24th 2009 6:20PM by Connie Madon
Filed under: International markets, China, Commodities, Financial Crisis

In rare public announcement, China has revealed its gold holdings, which are 1,054 tons up from 600 tons in 2002. Why is China's gold pot of concern to us? Well, for one thing China has been moving away from the US dollar as part of their reserve holdings since 2005. China is increasingly worried about the world economies and wants to protect itself against any deepening of the world financial crisis.

China is also asserting itself on the world stage. Chinese leaders feel that the country's gold holdings must be increased because of the size of China'a economy and the strengthening of its currency.

In a policy statement Hou Huimin, vice general secretary of the China Gold Association said that China should build its reserves to 5,000 tons. He feels that China should hold more gold than any other country because of China's international status and because of the financial crisis. He further said: "The financial crisis means the US dollar's value is changing fast and it may retreat from being the international reserve currency. If that happens, whoever holds the gold will be at an advantage."
 By bluejay

05/05/2009  10:55PM

Last on gold is $902.40

Effectively, Venezuela is reducing their gold exports by requiring the central bank to increase its purchases of the metal. Venezuela joins China in building up their gold reserves.

 By bluejay

05/03/2009  1:44PM

Gold $885.80
Silver $12.50
Gold/Silver Ratio 70.86
Gold/Xau Ratio 7.36
Canadian Dollar $0.8435

The Canadian Dollar's last sale is provided as an incentive for consideration to follow its action in the months ahead or take action as a result of its recently completed bottom formation against the US dollar when it advanced over $0.83. Smart money will be aggressively trading in their US dollars for Canadian dollars in purchasing Canadian gold orientented securities on any renewed strength in gold. In the mean time, these securities should have strong bids going forward as a result of the US dollar going negative against the Loonie.

Your secured cash wealth can be moved from US Treasuries into Canadian Government bonds with a great probability of success. Thus, avoiding continuing debasement of the US currency which the government likes to call inflation using their Mickey Mouse formula for it.

Just read in this mornings paper that Social Security increases for inflation adjustment will stop for the next two years. Whatever the cooked up reason is for this, it sucks. I guess the bankers are more important to them than are elderly which should require more respect than the government is willing to extend to them in their obvious time of need due to this cruel recession. Cut our Social Security inflation adjustments increases and keep handing out our IOU's to the banks when they are the big screw-ups is not the way to make friends.

There appears to be a floor in gold market at $860 as a result of China's declared intention to increase their gold reserves in a boston.com carried report from Shanghai/Beijing Reuters published on April 24, 2009. China revealed that it has been secretly buying gold. Currently, they hold 1,054 tons or $30.9 billion at current levels. Considering the Chinese hold nearly $2 trillion in their reserves account, they will have no trouble coming up with cash for more purchases anytime that they feel the metal is underpriced. The most significant aspect of their announcement is that a new trend has begun to acquire the royal metal by a potential sizable buyer.

Why did China ever make this disclosure if they are still buyers? It's quite apparent that it was intended as a stern warning to US monetary officials to get their house in order, or else. Reuters reports that Mr. Hou Huimin, vice general secretary of the China Gold Association, said China should build its reserves to 5,000 tons.

It will be a most interesting scenario in the months and years ahead witnessing China buying more gold for cash as opposed to the bullion bankers playing with the gold price on the COMEX with paper instruments or mirrors. The bottom line is that gold exports from China will cease to exist in the years ahead while they are temporarily the biggest world producing country. I say temporarily because China's gold deposits that can be mined at a profit at prevailing prices are only good for another 6 years or so. Some analysts say it could be as long as 14 years. Massively Putting the drill bit to the ground will tell the final story.

The silver market at $12.50 an ounce is still recovering from the damage done to it by some US banks in shorting it from the later part of last year from just under $20 all the way down to just about $8. The CFTC is a shameful outfit when they turned their heads while miners and silver holders were getting robbed blind during the beginnings of the banking crisis. The CFTC has a habit of listening only to the short manipulators and not the boni fided cash buyers.

As an example of this, years ago when Warren Buffett began acquiring a big silver position through a Connecticut broker and squeezing the shorts they all went crying and complained to the CFTC. The CFTC tracked down the broker buyer and demanded to know who they were representing. The buyer, Buffett, instructed his broker not to give up his name. The end result was that Buffett sold his silver forcing down prices in a hurry and packed his money bags and moved his buying operation to London where he acquired a $1 billion position and left it there, far away from the hands of the CFTC and its friends. When I complained through my Congressional representative concerning the bank's manipulative activity in the silver market last year, I have yet to see any regulatory action or a response to the complaint. I guess we know who is working for whom.

The Gold/Silver Ratio at 70.86 is still acting in favor of gold over silver. For the ratio to turn positive for silver against gold it has to spend some chart time below the 69.00 mark, then we'll see.

The Gold/XAU Ratio is in neutral territory at the moment. Above the 7.60 level it supports a better relative strength for gold while below 7.00 supports the case to hold gold shares versus the bullion.
 By bluejay

04/15/2009  3:43PM

Gold $890.80 UP $0.20
Silver $12.77 UP $0.01

Martin Armstrong's April 9th, 2009 commentary is available from the provided link below.

Mr. Armstrong's words give a surprising better insight into a Goldman Sach's conspiracy to control world financial markets along with his explanation why is was sent to prison and why he remains there.

The informative article is a real eye opener and may shake your world of beliefs but it is worth your time.

 By bluejay

04/14/2009  1:29AM

Gold $897.70 UP $5.10 versus today's NY close

Memories of 2005 flashed through my memory today when I learned of a Barron's article attacking another gold related company. This time the news media went after Jim Sinclair's company, Tanzania Royalty Exploration.

In 2005 the L.A. Times attacked our company and Barron's, again, Royal Gold. It was just a matter of a few days ago when Mr. Sinclair started drawing reference, again, to the thrashing a Barron's editorial gave Royal Gold. The source for that publication came from an entity that had an interest in seeing Royal Gold's stock trade lower which the article facilitated. Was the Sinclair attack coincidence or planned by Barron's? I guess you can take you pick but I vote for the later.

The article, All That Glitters Is Not Gold by Vito J. Rancanelli, was basically an attack dog stunt something that Original Sixteen To One shareholders know about, too well. Mr Rancanelli unfortunately had his name penned to the story but more importantly for speculative curiosity, who pulled on his strings for the hatchet job?

Most of the media in this country it seems has nothing nice to say about gold or the related companies. I remember some years back mentioning that the Boston Globe in an article trashed gold with some wild talk about "what ifs." Mr. Rancanelli's review did more than that, it may have set a Guinness Book of World Records for the most negatives ever submitted with a business report.

The writer started out by stating, "no revenue, no earnings, no proven gold and accounting issues" and it got worse. He attacked Mr. Sinclair for selling his company's stock 50 or so times last year while at the same time participating in special offering which brought money into the company.

I see Mr. Sinclair's motives as being genuine in avoiding the investment banks which are notorious for driving down the share prices following secondaries. I view Jim as a talented innovator.

Keeping the investment bankers out of the picture prevents them from getting their hands on warrants to be used as stop gaps for financial protection if their short operation fails. If they obtain a pile of warrants watch out! I have seen this happen far too often and in the end shareholders always suffer watching their stock tank later. In Mr. Sinclair's selling, he was just rolling over the shares to the market and keeping the bankers from performing their demonic act thus supporting his shareholder's investments.

Although last year, Mr. Sinclair was no match for the two or three US banks that were allowed to freighten holders of precious metals and the related stocks when they went on a planned and methodical bear raid looting spree.

It's really kind of sad for shareholders when slanted stories can be so vicious.
My guess is that if you own gold directly or indirectly, you will ALWAYS be subject to attack by the owners and supporters of any fiat money system. So, be prepared.
 By bluejay

04/12/2009  9:44PM

Gold $886.90 Up $7.70
Silver $ 12.55 Up $0.22
Gold/Silver Ratio 7.22
Gold/XAU Ratio 70.67

For the past six years the smart way to buy gold is to place mental scale down buy orders in for coins or small bars starting from a 12% retracement below the metal's previous high. Trading gold is not advocated as it can drive you nuts. Recently, it was mentioned to buy gold when it was off nearly 13% from a previous high just over $1000 at $865.

In 2003 gold reacted from its previous high down 20%, 2004 about 13%, 2005 no 12% reaction, 2006 it sold off 23%, 2007 no 12% reaction, 2008 it sold off 32% and so far this year it has been off the most at about 13% at $860 with a last price of $886.90.

Jim Rogers was interviewed on Bloomberg TV tonight and said for a period of 1 year he would prefer holding oil as opposed to gold. The reason, the IMF wants to sell gold to shore up their finances.

George Soros was interviewed on the same station by Kathleen Hayes and was asked what he thought of the US dollar? Mr Soros said, "I have no opinion." It sounds to me that Mr Soros is either actively shorting the dollar or buying it. Earlier in the interview he said the extended rally in the stock market is a bear market rally.

Mr. Martin Armstrong's view is that if the rally is contained below 8400 on the DOW then the possibility of a waterfall decline is still possible. Mr Armstrong has stated that a move to the 4200 level is expected if 8400 or lower is the reaction high on this good rally. If that decline starts it may encourage foreigners to sell stocks and repatriate their funds somewhere else thus weakening the dollar to some degree.

More than likely based on Mr. Soros' negative opinion on the stock market it appears he has been shorting the dollar and not buying it. If the dollar declines gold should advance. The dollar has been having chart troubles in the 85.00 to 86.00 range and may be setting up for an intermediate decline. We'll just have to wait and see what happens.

It's fun guessing and second guessing to add a little excitement to the gold picture as it beats having your gold locked up at the bank which is not too much fun. When this gold decline is over it will be another trip to the bank for another deposit.
 By Rick

04/10/2009  5:10PM

Surprised, but due and worthy. After all, the Original Sixteen to One is a real gold mine...
 By studbkr

04/09/2009  4:45PM

Additional note: I'm quite surprised that Sinclair was watching this forum (or one of his readers pointed it out)
 By studbkr

04/09/2009  4:43PM

FYI: this morning, Jim Sinclair on www.jsmineset.com quoted BlueJay's January 31st posting about RGLD. There may have been a jump in web traffic to this site today...
 By bluejay

04/08/2009  9:58AM

Producers vs. Explorers

If gold is a low risk investment during the Kondratieff winter, should we buy the gold producers or the exploration companies? Let's examine the 'pros' and 'cons' of each of them.

Gold Producing Companies:
· Investment grade. Large Market Caps-appropriate for investment funds.
· Cash flow via production.
· Excellent liquidity.
· Share prices generally rise faster than the price of gold itself.

· Depleting their resources through production. Difficulty finding sufficient reserves to maintain production at current levels; e.g.
Newmont produces 7.2 million ounces each year. Approximately 9 million ounces is required to replace this production.
· Hierarchal management-slow to make decisions.
· Exploration subject to committee review and budgetary constraints.
· Limited exploration since 1998.
· Only a small number of companies to choose from.

Junior Exploration Companies:
· Responsible for 70% of discoveries.
· Growing their gold.
· Quick response management.
· Innovative geologists; prepared to see the unconventional.
· The onset of the Kondratieff winter suggests the largest bull market in gold in the entire cycle. In that environment share prices
rise faster than those of their production counterparts.
· A major discovery positively impacts the share prices of most exploration companies.
· An ability to release regular news in progress.
· Management usually owns a large stake in the company and has a vested interest in achieving positive results on the behalf of all shareholders.

· Management not trusted - think Bre-X
· Viewed as very high risk investments.
· Investors don't understand news releases, because they are usually not geologists-and are unable to evaluate a discovery in progress.
· Poor liquidity; small market caps-not suitable for most investment funds.
· Difficulty in raising money; major dilution at low share prices.

Evaluating Juniors:
The key is Management. The Long Wave approach, developed by my team at Bolder Investment Partners is subjective but still useful.

A Simple Evaluation System:
Management: 30 Points
· History
· Integrity
· Technical skills
· Management skills
· Relationships
· Ownership in the company

Properties: 20 Points
· Grass roots/discovery/gold in the ground
· Access/Power/Water

Blue Sky: 15 Points
· How big could this be?

Political Risk: 15 Points · A, B, C, or F
· A = Quebec
· F = Venezuela, Ecuador

Market Capitalization: 15 Points
· Comparative values
· Value of gold in the ground

Promotion: 5 Points
· How well does the company get the word out?
· Conservative versus flashy

I much prefer investing in juniors versus seniors in a gold bull market, because:

· There is significantly more upside price potential, because of the leverage.
· Easy to be selective. There are plenty to choose from. Follow the management.
· Exciting to follow progress; discovery-resources-reserves.
· Management is usually dedicated to enhancing shareholder value. It wins, too.

So there you have it, I believe that gold at this point in the Kondratieff cycle is a low risk investment and good junior gold mining shares are arguably an even lower risk than their senior producing counterparts. Please direct any questions, comments or queries to:

Ian Gordon, The Long Wave Analyst
Bolder Investment Partners, Ltd
Phone: 604-742-3200
Email : igordon@bolder.net
 By Michael Miller

04/06/2009  2:15PM

A shareholder called this morning to say, “This is a confusing market. Gold is pushing lower. We seem to be in a total deflationary market.” The real estate/housing sector is proving to be quite influential. Maybe by deflating all other properties/commodities this is a good way to “inflate” real estate and housing or protect values in their well-recognized fall. If everything in the world marketplace declines (or increases) pro rata is there an economic impact?

Other than hot air, my life’s experiences in the market place have been this: it is easier for prices to fall than rise. Many years ago Lee Erdal, a retired director cautioned me about offering opinions on the spot price of gold. It is beyond my control or technical ability to predict. I appreciate your thoughts on the subject. I do know, however, that a little interest in gold or a real undervalued gold mine equals other forms of insurance (peace of mind). It beats worry or sleeping pills.
 By bluejay

04/06/2009  1:48PM

Last on gold is $869.90 off $24.20
Last on Silver is $12.11 off $0.64
Gold/Silver Ratio 71.81
Gold/XAU Index Ratio 7.05

Well, well, well, everyone is selling gold today. Gee, it must be nice to have the luxury to think stupid with your future.

Gold is in a decling phase prior to breaking the $1000 level sooner than most people think. This is the time you buy, not sell.

Soon after April 15th the push begins to reach the $1000 level and trade above it, to stay. The people that are selling gold today and possibly in the next ten trading days will be proven quite foolish.

Buy, Buy, Buy and Buy More!
 By bluejay

02/24/2009  9:21AM

In the previous submission the supplied link may not work. The article was originally posted to kitco.com under commentaries, "Silver again is outperforming gold" by James Turk.
 By bluejay

02/24/2009  9:13AM

Last on gold is 963.30, off 28.40.

Check out the following link to a James Turk article on the gold/silver ratio with a nice long term chart.

 By Dave I.

02/20/2009  3:52PM

Spot Gold price per once

high: $1007. 20
Low: $969.70
Close: $993.20
 By Dave I.

02/18/2009  12:44AM

The bail out you have stated is pretty much the one that is being adopted for the existing distressed mortgage loans that the 50 billion will be used for.
It is also being reconsidered for the next bank bail out stimulus. This also includes a policy that the bankruptcy court are planning to use for a solution to over indebtedness by official ordering bank and the bankrupt debt holder to renegotiate the mortgage as you recommend.
Congress would like your input.
 By bluejay

02/17/2009  11:26PM

Last on gold tonight is $970.90 after hitting a high of $975.60 earlier.

Gold, with the exception of the US dollar, continues making highs in world currencies. The meltdown continues to pick up intensity all over the world as current bailouts are proving inadequate.

The most intelligent bailout of all seems to have never recieved any attention from officials. That bailout out would be to immediately reduce interest payments on everything for everyone and extend term periods. This would immediately put additional money into the private sector and create demand thus lessening the current rate of layoffs and bailouts.

Dumb ass statement of the day:

Alan Greenspan - "We're not doing enough to help(some) US banks."

I remember Greenspan saying during the battle with CFTC Commissioner Brooksley Born in Congress over regulating OTC derivatives, "the banks should be permitted to regulate themselves since they have done such a good job of it so far." Greenspan needs to be put on the next space shuttle, he's a buffoon of the highest order.

We need to get real as Martin Armstrong has said, what's killing the American people is their debt obligations and the interest strangle-hold that the bankers have over them. Usury interest payment limits need to be capped at 10%. In some states they are as high as 27%, that's what's killing our economy. The system is all screwed up. Take for example the retired seniors who are practically getting nothing as interest on their T-bills who used to support their living expenses with that income.

If government had any guts they would close down all the banks that got us into this trouble in the first place and redistribute their customer accounts to the "good banks."

Then the shareholders of the bad banks could proceed with class action suits against all the board of governors in those closed banks and personally recover what they can from those clowns.

As far as the toxic assets are concerned, the American people are already consumed part of them. Some part of the toxic assets should be pledged against the bankers homes after all their other assets have been divided among the shareholders that they screwed. Also, the government should extend long term deductions, to some degree, to all shareholders of the closed banks so that they can recover some portion of their orginal investments as the government's colossal failure was to trust the banks.

Thanks Alan Greenspan, you POS.
 By bluejay

02/16/2009  9:02PM

Gold's last is $953.90, up $12.30.

The following was just reported at the jsmineset.com website:

It’s getting bleaker by the minute in Eastern Europe. In case you didn’t catch the latest from the Telegraph’s Ambrose Evans-Pritchard, he warned at the weekend how a growing crisis in Eastern Europe could cause nothing less than a total collapse in the West, or as he put it: “If one spark jumps across the euro zone line, we will have global systemic crisis within days.”

Sinclair basically says that we have the big Wall Street investment banks and the big commericial banks to thank for this mess that they have delivered to the world via their out-of-control leverage and greed.

I looked at the monthly long term chart on gold tonight and it looks to me that we are in position to put a rhino horn in on the chart which means almost straight up to the $1288 to $1300 area.

The battle between the bears(the big commercial international bankers) and the bulls was fought between $900 and $700 and the bears are currently running for the hills with their tail between their legs.
 By bluejay

02/15/2009  6:49PM

Last on gold is $937.50, off $4.40.

Another great article on money, debt and interest:


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