muses of the moment

September 16, 2011

Latest Release form Martin Armstrong dated September 16, 2011

Filed under: Economic Confidence Model Cycle, Gold and Silver Investing, Martin Armstrong, Precious metals — Tags: — totallygroovygirlfriday @ 4:48 pm

Click here for Martin Armstrong’s latest release entitled Gold and the Future dated September 16, 2011 (16 pages). This is the report we have been waiting for. Mr. Armstrong’s computer model examines gold from every angle and makes recommendations.

Some key points:

Gold is a hedge against poor government fiscal policy. A gold standard will not solve the problem. The fundamentals for gold are still strong long-term as there is no political will in the US or Europe to restructure debt. Without a restructure of debt, gold will rise long-term.

A daily close below $1730 will signal a decline ahead. A weekly closing below $1605 means a correction is underway. A yearly closing this year above $1405 will mean the gold bull market could continue into next year.

Martin has rebooted his computer models, but he warns they are NOT tested. So keep that in mind as you read the computer’s technical analysis for gold.

If new intra-day highs develop after this year, the bull market may continue into 2013. New dally highs past 2013 means a bull market into 2020.

If we do not make new highs into 2012, then we could be seeing a regular cycle ending, but not the end of the long-term cycle. Since we have not seen a real spike up, this is not 1980.

See page 8 for the computer’s daily trade recommendations. This report has prices, suggestions, and dates. (Groovygirl doesn’t day-trade gold, do this at your own risk.)

See pages 8-10 for computer’s yearly cycle detail. Second half of page 10 and first part of page 11 has the information everyone is interested in-the possible long-term scenarios for gold.

See pages 11-14 for the computer’s quarterly recommendations.

See pages 15-16 for the computer’s monthly recommendations.

H/T to lemming for the following:

Additional observations in Martin’s report per today’s weekly close at 1814.70:

Reversal: broke bearish reversal at 1786.20 but held at 1763.60, reversing higher. Close above 1883.40 required to signal strong upside potential.
Computer: shorted on 9/12 at 1813.30; cover short & reverse to long on daily close above 1881.40. Consider taking profits if new lows on 9/20 or 9/22.
Timing: Turning points 9/15, 22, 23, 26, and 29 with higher volatility due 9/20 (Tuesday).

Reversal: As you said, bullish unless (weekly) close below 1730; worse if close below 1605. Major bullish if close above 1987.60.
Computer: Long. Sell new high above 1900.
Timing: Last night was the minor low, followed by a minor high 9/23, the retesting into lows for a major turn on 10/07.

Reversal: Bullish. Neutral if (monthly) close below 1640. Major bearish if close below 1618. Close above 1983 required to signal renewed uptrend.
Timing: Low expected in October (also matches weekly). If (monthly) close above 1983, this inverts to a high.

Groovygirl: let’s see how these numbers pan out in the next few months. This is great detail and will show us exactly what Martin’s computer model can do.

Thanks, Martin!!

Another hidden land mine in Europe

Filed under: The Banking Crisis, The Financial Crisis — totallygroovygirlfriday @ 4:31 pm

There are so many landmines in Europe, it is just impossible to guess which one will blow up first and ignite all others.

Greek debt is news, but let’s not forget about the original WMD, the derivative.

Austrian banks have an estimated 1.7 TRILLION euro derivative land mine. A 4% move in the market and it implodes. Of course, we all understand by now that all European banks are interconnected and the dominoes will fall soon after.

Click here.

Austria will see a system collapse that is still mistaken as a run-of-the-mill crisis by officials who are increasingly busy holding on to their seats and the comfortable state pensions that come with it. Expect a rapid development aka deterioration once denial mutates into hesitant acceptance of the fact that matters are going to change in a big way.

John Williams

John Williams has released a new commentary. You pay for the good stuff, but here is the punch line (and it ain’t funny):

Consumer Inflation at Three-Year High 
– August’s Annual Inflation: 3.8% (CPI-U), 4.3% (CPI-W), 11.4% (SGS)
– “Core” Inflation Jumped Again with Some Acceleration
– Real Retail Sales Fell 0.3% in August
– August’s 0.2% Production Gain Was a 0.1% Loss Against Initial September Reporting

Real inflation rate is scary! Savers in retirement are totally screwed. Earning, if they are lucky, a 3-4% return, but expenses are up 11.4%. Healthcare is probably higher. That’s an 8% gap.

How in the world is a consumer-based economy going to grow long-term, when the main consumers (boomer and retiree) are losing money on their savings, living expenses are rising monthly, and they are not working again in their life time?

Global printing of fiat currencies can not be contained to the country that started it, so it will be hard to drain. The Fed’s goal of printing money to raise asset prices will backfire into higher consumer prices. And, voila….real inflation is at 11.4%.

This is not going to end well.

On the bright side, as long as you can work for your current living expenses, your savings stored in physical precious metals will eventually met the true inflation rate. Groovygirl and others use John Williams inflation-adjusted prices of gold and silver to determine if gold and silver is cheap or expensive. We do this because the last time gold and silver hit highs in the late 70’s and early 80’s, they were actually meeting the inflation-adjusted cost of the dollar at that time.

According to Mr. Williams the inflation-adjusted dollar price of gold should be $8,639 and silver should be $503 per oz. They are super cheap. The ups and downs in the prices are just noise and an opportunity to buy to hold long-term.

Retail sales look like they are heading for another downturn.

The M3 (money supply stat that the gov stopped issuing) is still contracting, signally what most economists are now acknowledging: we are in a downturn, not a recovery.

Mr. Williams is just waiting for the dollar dumping to start, which will signal a hyperinflation. A hyperinflation is an extreme increase in consumer expenses and a severe depression in debt. We are already heading down this road, we just have not come to the cliff yet.

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