Category Archives: Notable Posts

Previous articles and posts of interest.

Bird Doo; Yellen Goes to Congress

By Biiwii

This is only the second best Fed Hawk photo I’ve ever seen.

yellen

The best one by far is the un-photoshopped Loretta Mester in all her natural hawkish glory.  Note the piercing eyes, the aerodynamic features and the focused intensity.  Also I must say, at 56 she has a youthful dynamism about her.  If she were Fed chief and told me to jump I’d ask ‘how high?’… or if she told me to print I’d ask ‘how much?’

mester

Okay, moving on; the funny Hawk at the top is going to gulp down a mic in front of Congress and the media are all over it.  The lead article in the graphic above would actually turn your friendly blogger into a nice contrary indicator, what with his status among the majority that were bullish on the S&P 500 at the last polling by Tickersense.

Continue reading Bird Doo; Yellen Goes to Congress

Gold: Value, Re-Propositioned

Last weekend, in a segment titled Gold Obsession & Ephemeral States of Mind NFTRH 330 talked about a growing presence that seems to follow Martin Armstrong’s anti ‘gold promoters’ theme.  This theme seems to be – coming as it does in a gold bear market – something of a promotion itself; just as the over-the-top inflationist gold bug stuff was during the bull market.

Please understand, dear followers of Marty, I am not at all calling him a promoter.  He is the originator of ideas, thoughts and analysis that while not all my cup of tea, is interesting enough that it is linked at NFTRH.com and Biiwii.com.  But behind this mindset that is solidifying in the public consciousness, is a growing cadre of gold bugs – some of whom benefited from the notoriety lavished upon them by the likes of Mr. Gold, Jim Sinclair – that seems to be taking things over the top*, as always seems to happen with humans and in markets.  Every mental elastic band seems to stretch too far.

In the above noted NFTRH 330 segment an article I wrote in 2007, A Value Proposition, was referenced.  In re-reading it for the first time in years I was impressed with how the ‘value’ case for gold has not changed one bit in the last 7+ years.  At least in my interpretation of value, which has kept me personally at an even pulse rate during the bear market and given NFTRH subscribers consistent perspective through a difficult, but ultimately necessary and healthy phase for gold.  It felt refreshing to re-read it.

So, if the article benefited me, its author, all these years later, I thought it might be of benefit for other peoples’ perspective as well in this emotional time of gold obsession.

As a final note, I’ll just say that it sure is interesting that today, in a wicked bear market, gold is nearly $500 an ounce higher than it was when the article was written.

* I have done my share of gold bug critiques, complete with the requisite incoming hate mail.  But the point is that the new thing going on now was nowhere to be found when it was unpopular to take shots at the gold bug ‘community’.  Indeed, with the help of a subscriber who stated ‘enough already, we get it!’ I came to realize that the horse has been dead for a while.

A Value Proposition  (November 3, 2007)

As the rot in Wall Street’s dark alleys works its way from the inside out, from the seediest hedge funds’ leveraged ‘investment’ vehicles to Main Street’s financial institutions (pensions, 401K’s, savings, etc.) gold has taken center stage, closing above $800 for the first time in its still young bull market. Fear and anxiety are increasing as the US Dollar falls further below serious long term support and in this environment, gold is an emotional conduit through which growing fears of fiat monetary instability pass. Picture a burning building with a limited number of exits and a large crowd trying to pile through the door. Let’s call it a… oh I don’t know… let’s call it a casino.

Gold is the object of many strange and varied perceptions, perhaps because it is an ancient asset that has always stirred basic human instincts for wealth, good fortune and even survival. But in light of the perverted and multi-headed monster we call a financial system – with seemingly infinite instruments of ‘profit’ limited only by the imagination of financial engineers – perceptions toward gold have become distorted, helped by an enabling Wall Street and mainstream financial media.

The main point to remember is that gold does nothing; it just sits there and does not care about the crazy gyrations going on all around it. But to understand and accept this, casino patrons must first accept that the metrics they have been schooled in and the rules they have been taught over the fiat decades to play by are not applicable. Filling the void that this lack of understanding creates is a whole host of opinions, many disparaging and/or dismissive. Others simply attempt to fit this “asset class” into conventional metrics. The inspiration for this missive was a recent SeekingAlpha piece by Brad Zigler called All That Glitters May Not Be So Golden. Mr. Zigler did not write a ‘hatchet piece’ on gold but what I find interesting is his and many other financial media correspondents’ analysis of gold as a return (or lack thereof) instrument.

Gold pays no risk premium as it carries no default risk. But in the world of financial media-fed perceptions that is a bad thing. No return you say? No markup? No leverage? Who needs that?! Gold is about value and nothing more in my opinion. That is why I refuse to get excited when its fiat currency denominated price goes up and why I also remain at a normal pulse rate when said ‘price’ declines sharply. I do agree that when trading or investing in the gold miners (as I do) it is important to keep traditional metrics in mind. But the miners are my casino of choice and I most certainly do not see the gold miners as gold, a gold equivalent or anything other than a potentially hugely leveraged play on an enduring asset of value.

Back in the real world, players are just beginning to get the hint that the risk they have taken on in the hunt for return in some very dark corners has come at a price and the price is a massive debit against the entire system of something for leveraged nothing. Yes, gold pays no premium but neither is it subject to this debit because it never went anywhere to begin with. It Is What It Is and as a barometer of global financial sentiment its exchange value is rising versus a whole host of paper promises not to mention many hard assets. So what many investors now need is a sort of 12 step program as they attempt to ‘put down the crack pipe’ and come to an understanding that real value has nothing to do with return (unlike modern portfolio and asset allocation theory) and it certainly has nothing to do with leverage.

Mr. Zigler’s assertions and my responses:

Debate has raged for some time now about the utility of gold in a portfolio. Forget, for a moment, the breathless claims of infomercial touts and Parade magazine advertisers. Think, instead, of asset class selection.

Why should anyone add gold—or, for that matter, any asset—to a portfolio? The answer that comes immediately to many people’s minds is “return.” It’s the promise of outsized, and often outlandish, returns that entices people to call that 800 number in the wee hours of the morning to get their hands on the yellow metal.

There should be no debate. An asset of historic value belongs in a portfolio if debt obligations (bonds) and calls on corporate earnings (stocks) belong there. I agree, the 800 number pitch men are seedy characters capitalizing on fear and insecurity, but why are they part of the conversation? Have you ever seen the movie Boiler Room? The world of stock scams dwarfs that of unscrupulous precious metals dealers.

Gold isn’t the end-all, be-all, however. In the long term, the metal’s price is notoriously unstable. Since gold’s price was allowed to float in 1970, its annualized standard deviation—its price variance—has been clocked at nearly 20 percent, versus 15 percent for blue-chip stocks. And in that time, gold’s return has only averaged 8 percent. The S&P 500 earned 11 percent per year.

There is the word “return” again. The reason gold has under-performed over the measured time frame (minuscule in the context of history) is because contrary to what some gold bugs may think, there certainly was upside to the fiat money system. This upside was manifested in liquidity to build out all manner of productive enterprise. The United States for example spent the majority of the 20th century on the upside of this build-out. The question now becomes ‘do we remain on the upside or have the secular changes beginning in and around 2000 marked a decided switch to the inevitable payment to the piper (of the debt used to keep the dream alive)?’ If you think there is still productive upside, you will see gold’s ‘return’ as sub-par. If you believe that secular changes are at hand, you are looking for that exit door in a crowded casino and you don’t give a damn about return. You want to stay whole.

So what return can we expect from gold? Well, financial theory says you can’t expect any increase in an asset’s value without growth prospects. Stocks’ expected return derives from earnings growth. Issuers of corporate securities can create things and grow. There’s a real prospect for a company trading its shares or warrants to be worth more and more as the result of management decisions. Gold itself doesn’t produce earnings, and for that reason its expected return can be approximated as zilch. Nada. Bupkis.

Mr. Zigler is correct. Gold provides no ‘return’ in the modern asset allocation theory sense of the word. But in bringing the word ‘value’ into the equation he again shows how modern portfolio theorists are trained; no return, no ‘growth’ = no value proposition. Gold does not stand at $806 this morning because of its growth but rather because of its retained value vs. paper instruments – USD first and foremost – which are coming under heavy questioning. It should be noted that in the US the stocks of these growth entities are denominated in USD.

Appreciation in the price of gold, of course, does occur. History attests to that. There’s just no reason to expect it. What influences the price of gold are external, not intrinsic, forces.

It appears Mr. Zigler and I have been watching two different financial systems over the last several years but I certainly agree that gold’s value is affected by external forces.

He then goes on to write about the gold miners which is my usual subject matter on the TA Blog [edit; much less so now, as too many patrons micro manage every squiggle in this sector publicly and NFTRH reserves most of its gold stock analysis for subscribers], so I will just end here this critique of modern portfolio theory as it applies to gold. I hope it helps shed a little light on an alternate way of thinking for a few people.

I will leave you with a final thought that I was taught early on in a school of decidedly unconventional asset theory. Price is price and value is value. They are not one in the same. Unfortunately that simple thought has been schooled out of the masses. I have no doubt that pitchmen of all types will come out of the woodwork to hawk the golden solution to an awakening public. A fortunate few will keep it simple however and remember that real value is enduring and real value is not a pitch. I find value splitting wood at my wood pile. I find value in jamming loudly on guitar. I find value in Google. I find value in the air I breathe. I find value in remaining financially whole. I do not find value in debits attached to an unpayable black hole.

The Financialized Economy

This segment is excerpted from this week’s Notes From the Rabbit Hole, NFTRH 329, and was originally titled…

Does the US Economy and Stock Market Need Manufacturing?

The ISM PMI reports for December and January showed deceleration in line with our view that a persistently strong US dollar would begin to eat away at US manufacturing, exporters and other companies that depend on significant foreign business.  But in an age where investors will bid up Twitter* (with its forward P/E of 141 and 30B market cap to 1.2B revenue) by 16% in a day, are we returning to the old days of ‘PE’s don’t matter’ with the hook or tout being ‘it’s all about ad revenue’?

One analyst quoted in the WSJ:  “Given FB’s (Facebook) history… we think that investors do not want to miss out on another social stock run”

Is this type of mentality not reminiscent of the late 1990’s?  Twitter, like Facebook, is implementing strategies to monetize all those short attention spanned eyeballs, but 30B?

As you will see by the charts in this week’s report, despite elevated general forward valuations (graph below) and ridiculous individual valuations like Twitter and so many other fad stocks, the bull market’s technical situation remains unbroken and generally bullish, although the volatile ‘swing’ market theme remains intact for now.

* Personally, I deleted my Facebook account because after all, who really needs to see yet another picture of someone’s super bowl chili or winter vacation in the tropics?  I use Twitter as a button at the websites.  Make post, press button… done.  Another tweet the world really doesn’t need.  But it is a handy little tool.

Back on topic, here is the current forward P/E level of the US stock market (graph source is factset.com, by way of the free ‘Daily Shot’ email service from soberlook.com).  They each cover relevant global macro data and are recommended.

pe

P/E is as stretched as it gets for US corporations.  But in a world where deflation is the key theme, capital flows have well, flowed into US asset markets.  On a risk vs. reward basis, the view continues to be that certain global areas are more favorable than the US for new investment.  As an example, we have been noting that Germany, as an exporter operating behind a weak currency and QE-inclined Central Bank, could be a destination for favorable investment vs. the US in 2015.  Deutschland factory orders are improving.

Continue reading The Financialized Economy

Hulbert on Rate Hikes & Stock Market; a Response

Mark Hulbert has a piece this morning at MarketWatch in which he de-correlates the first Fed interest rate hike from any supposedly corresponding stock market movements.  I agree with some but not all of what he writes.  Let’s take it a chunk at a time.

Investors, it doesn’t matter when the Fed raises rates

Are you obsessed with whether the Federal Reserve will begin to raise official interest rates in July, September or sometime next year?

No.  I’ve wanted them to do it for years now.  So I’m obsessed with why the Fed refused to raise rates, despite a strong economy and inflation signals that were not nearly so tilted toward the dis-inflationary end of the spectrum as they are now.  I am obsessed with wanting to know why the mainstream media and financial establishment even take their oh so heavily anticipated policy decisions each month seriously.  I am obsessed with the all too obvious underlying message that this is all about a stock market ‘wealth effect’ that eventually trickles a little stream down Main Street, with Grandma and other prudent savers thrown in the gutter.

A review of historical data fails to find significant statistical support for believing that higher rates are in themselves bad for the stock market. And even if they were, the difference of a few months in the timing of increases makes little difference when determining if equities are expensive or cheap.

I concede that both of those beliefs are far from conventional wisdom on Wall Street. But the job of the contrarian is to challenge norms.

Agree.  But I am not sure why Mark is using the 10-yr yield in his article.  With the Fed at work on all parts of the curve, the whole thing is corrupted and not subject to extrapolation of historical data anyway.  But insofar as it would be, why not use the Fed Funds rate or the 3 Month T Bill?  This chart from NFTRH has clearly shown that rate hikes did not matter to the stock market for extended periods on the last 2 cycles… until of course, they suddenly mattered… big time.

irx

Continue reading Hulbert on Rate Hikes & Stock Market; a Response

Bottom Line Thoughts on the Gold Sector

Improving Macro Backdrop

In light of a shifting global macro backdrop that we can finally sink our teeth into with respect to a bullish orientation on the gold stock sector, I thought it might be a good idea to publicly post some bottom line thoughts from this week’s NFTRH report.

The report went into great detail to explain why more fundamentals that matter are starting to come in line, after the chart below refused to make a signal against our big picture view of global economic contraction, which has been the biggest key for the counter-cyclical gold mining sector.

During the worst of the gold sector cyclical bear market we used Gold vs. Commodities to gauge a higher low to the 2011 low, which despite perceptions of the time, kept our longest-term macro view intact (as noted to subscribers several times, if Au-CCI had broken down we’d have had to admit that the view had failed, no if’s and’s or but’s).

The moving averages have triggered, a higher low has been made and the long-term thesis is being confirmed.

au.cci

Hence, a bullish stance on quality gold mining operations (a unique counter-cyclical sector) has finally come about and the relevance of this chart of HUI vs. the S&P 500 now means more than simply one market crashing in terms of the other.  It means RISK vs. REWARD is on the side of the counter-cyclical gold mining industry vs. the cyclical broad US stock market.

Continue reading Bottom Line Thoughts on the Gold Sector

Welcome, Baby 2015

babynewyearSo Baby 2015 has slammed the book on wrinkled old 2014 (this imagery just cracks me up), a year that featured the continuation of existing macro trends like US stocks up, global stocks wobbling, precious metals weak and commodities weak to tanking.

Personally, I found the year revolting as an honest market participant, but thankfully made like a caveman and simply used my tools to help me avoid the pitfalls of my emotions and logical mind.  I try very hard to tune down the Tin Foil Hat stuff, but I continue to be in awe of Policy Central and the depths of what looks to me like depravity that they will stoop to in order to keep up appearances.  Reference Operation Twist and its “inflation sanitized” selling of short-term notes and buying of long-term bonds.

Who would’ve thought managing an economy and a financial system could be so easy, so controlled and well, so sanitary?  Of course, that was way back in 2011, when the macro began to quake in anticipation of change.  An anti-market (AKA gold) was brought under control but good and though the masses would hold tightly to their fear (so deeply ingrained from 2008) for another year or more, 2013 and 2014 saw increasing momentum toward a complete recovery of hurt feelings from the 2008 crisis time frame.

Continue reading Welcome, Baby 2015

Deflation!

soda.jerkWell, now that the title has hopefully gotten your attention I’d like to talk about the ‘d’ and ‘i’ words that so many financial types – myself included – throw around so often.  This is due to a reader/subscriber KR’s aggravation at my use of the word deflation, which he had thought was meant sarcastically, but then came to find out I am serious when I use it.

First I want to note that I seem to have been pissing everyone off lately, gold bugs (one of which I am) and gold bears in particular.  That is due to my writing style being one where if I’ve got something to say, I say it.  Sometimes that’s bad for business, as I can get a little heavy handed.

I’ll try to be less heavy handed going forward but in criticizing what I view as promotion with little backing substance (whether bullish or bearish), I don’t retract any comments aimed at the type of people that I think are not being square with readers or are simply not doing the work required (i.e. promoting lazy analytical thinking).

Continue reading Deflation!

US’s Debt Not Such a Big Deal –Mr. Gold

[edit]  Mr. Gold’s last paragraph is the tell on his bias, as he is unwilling or unable to conceal the contempt he has for people who were absolutely right for 10 years+ and are now suffering a bear market, both to their asset of choice and in sound monetary thinking.

“The vastly improved fiscal situation may last only a few years, but it’s a big plus for U.S. markets and the U.S. dollar — and another nail in the coffin for the gold bugs and doom-and-gloomers who can add one more item to the long list of things they got really, really wrong.”

Why the US’s Debt is No Longer Such a Big Deal  –Howard Gold writing at MarketWatch

Before we find out about Howard’s thoughts on the debt situation (I am only going by the headline right now) let’s divide the GDP by the Federal Debt.  This is a view of a deluded nation going right down a sink hole in service to greed and denial.

gdp.feddebt

Now let’s see what Mr. Gold (not the discredited and now strangely silent ‘gold bug’ Mr. Gold) has to say in regard to “the US debt is no longer such a big deal”.

Continue reading US’s Debt Not Such a Big Deal –Mr. Gold

Huey, Dewey & Louie

huey.dewey.louieLooking around the gold sector at some of those who have tried to keep ‘em bullish all the way down.  The peddlers of hope are irrepressible.

Huey writes that gold stocks are well supported by the enormous expansion in the global gold jewelry business.  In fact, according to Huey Western mining stock shareholders stand to reap substantial reward from the relentless growth in gold jewellery demand.

Do you hear that?  Not just have an end put to their misery but if they will just hang in there a while longer they will be in line for a substantial reward… all due to a supposed fundamental underpinning that has nothing to do with the investment case for gold miners… and is not nearly the best driver for gold either.  Keep bafflin’ ‘em with bullshit Huey.  All the way down… unbelievable.

Dewey is getting excited about the Switzerland gold vote.  This has less to do with a fundamental case on gold than Huey’s constant hair brained babbling about Modi, Indian Weddings, China’s demand and whatever else he throws at the wall that sticks.  Dewey recently got some serious play at MarketWatch and indeed is often seen in the mainstream media.  He also sells gold.  How convenient.

As to the Swiss vote, if it goes positive any hype driven upside will not last.  If it goes negative as I think it might, any downside based on that would be bogus as well.

Louie (who I have never heard of before but works with a key silver figurehead who I have heard a lot of) is going on about the streams of gold leaving Western vaults and heading east.  Yes, it’s the old China demand thing.  The same China demand thing that we had to ignore in 2013 and 2014 to our benefit.  Unfortunately, people who keep grasping at these straws laid out by promoters keep finding disappointment after the hype wears off.

A peak in bullshit was during the summer with all the Ukraine/global geopolitical tensions hype.  They will try to find anything to promote a bullish case for gold.  Ebola?  That was a low point as someone I thought reputable allowed himself to get tangled up in a headline about Ebola being the thing that would finally drive gold and silver prices.  It’s a sickness with this sector.  It’s dumb, dumber and dumberer.

I have tried to lay out some signs to look for with respect to the propped up US economy and even further propped up stock markets.  Gold is not going anywhere until economic signals start to come in (it’s why I posted about something as boring as the Semi sector’s book-to-bill ratio).  Some signs are coming, but not nearly to the degree needed.  Meanwhile, these clowns with their theories that have long-since been discredited, ply their trade.

Now of course, as we have been noting all along, technicals may precede a full fundamental engagement and so technicals I shall continue to use.  There is improvement and being a long-term gold bull I’ll keep on it every step of the way.

But what we will do is real charting (i.e. charting that does not pretend to predict the future), that explains the positive and negative probabilities; not this charting I often see that portrays what the chartist wants it to portray.  Huey actually wrote that “silver bulls need to put on their cheerleading uniforms, and cheer for a breakout.”

You can’t make this up.

[edit]  It is not lost on me that on the internet the delivery of easy to digest content is king.  I sometimes get propositioned about mutually beneficial relationships and what it takes to really rake in the eyeballs.  I get advice like you get X% more opens if you put a shiny picture of gold in an article (seriously). 

I get asked to write bullish things about silver to mutual benefit (i.e. I’d be positioned as a ‘featured’ writer on a given website).  Yes, a lot of the sites you visit that have featured writers – as if they are above the other writers – is simply because those writers took a deal of some sort. 

I have even been labeled an “expert” (which I find a little embarrassing) simply because I write a lot, I guess.  There’s a lot of bullshit out here on the internet folks.  A ton of it.  As I try to become better at marketing my services, I am constantly faced with making decisions to avoid this crap.  Not that there is really any decision to make.  Integrity wins ultimately or else we are all just bunch of tools.

I’ve written the word “bullshit” a few times in this post and that speaks for itself.  Information may be free but it is well massaged and thoroughly evaluated for its potential… to sell something… to somebody.

Draghi Speaks the Truth

Draghi Speaks the Truth; ECB Will ‘Do What it Must’

Words are important.  This is not just a headline, it is a reality…

Draghi says ECB will ‘do what it must’ on asset buying to lift inflation

Not ‘do what it thinks would be the best course for the European economy’, not ‘choose the path of least resistance in guiding the financial system to recovery’… the ECB will DO WHAT IT MUST.

As I have written til I’m blue in the face for the last 10 years, we are in the age of ‘Inflation onDemand‘©, 24/7 and 365.  “…do what it must”… let that sink in for a moment.

Japan is trying to kill the Yen, China is dropping interest rates and the world over we have a rolling inflationary operation that is little more than a game of Whack-a-Mole.  BoJ popped up a couple weeks ago and now this one…

draghi
Source: MarketWatch

US Situation

Continue reading Draghi Speaks the Truth

Goldzilla

godzilla“History shows again and again how nature points out the folly of man”  –Blue Oyster Cult, Godzilla

I would have written off the gold sector long ago in its ongoing bear market had I thought for one moment that gold’s utility as insurance against the acts of monetary madmen/women in high places had been compromised in any way.  On the contrary, the monetary metal is simply having its price marked down in a bear market while its value, especially given its current price and all that has gone on in the financial system over the last 3 years remains just fine.

Indeed gold, an element dug out of the ground for centuries, once as money and now as a marker to sound money systems will one day be shown to be a calm oasis from the fallout to global monetary shenanigans currently ongoing.  At least it would be an oasis to those who have valued it as such.  It is going to feel like a giant dinosaur (minus the kitsch value) ripping through a city built on paper to the multitudes who have taken the bait on the current too big to fail global inflationary operations.  They will fail.  Timing is the only question.

Despite what many are compelled to believe by aggressive (read: maniacal) global policy making that has turned down to up, right to left and symmetrical to asymmetrical, gold is and has been a lump of monetary value just sitting there, waiting out a phase where monetary policy is working seemingly as intended, to impoverish the working and saving classes and further enrich the asset ownership and investment classes.

I have gone hard on the gold “community” for a few years now because I watched in real time as the dark clouds gathered against the honest money relic and those bullish upon it.  The narrative never changed for many of the most high profile gold “community” leaders and spokespeople, and in the modern financial markets that simply will not do.  In the past, even during the previous bull market, I have likened being a gold investor to being at war.  You are at monetary war in support of ideals and a sense of what is right vs. entities that manipulate and control markets toward desired outcomes.

And do you know what?  They have won every damned battle since 2011.

The most brilliant move made by the US Fed in targeting gold (either directly or as part of the fallout) was Operation Twist, which came on the heels of gold’s flirtation with the $2000/ounce level.  Op/Twist very simply was designed to “sanitize” (the Fed’s word, not mine) inflation signals by selling short-term T bonds while buying long-term T bonds.  It was brilliant, evil and awe-inspiring all at once; genius.  Simply manage paper and digital entries in the bond market so that a long relied upon macro signal (the relationship between short and long-term Treasury yields) will at once show a financial system under diminishing stress (yield curve decline) and a lack of inflationary expectations.

So the US Federal Reserve had the balls to literally paint the macro by turning the out of control 10yr-2yr yield curve (an important gold fundamental) down, sanitize inflation (a less important but sometimes very relevant gold fundamental) and best of all, keep on inflating… and inflating… and inflating… with ongoing ZIRP and QE3 as the global macro pull of deflation put Goldilocks on US markets 24/7 and 365.

Gold bugs would have none of this and why should they?  The average gold bug (the real people, not the pitch men and promoters) is driven by this thing we call honesty and a sense of morality.  To anyone with half a brain and not incentivized to look the other way (like probably 90% of the financial services industry), these macro parlor tricks are ephemeral and will not only not succeed, but one day be looked back upon as a scourge upon future generations.

The problem is that gold is so simple (as a monetary anchor) that eggheads feel a need to make it complex (the old ‘baffle ‘em with b/s’) and those with agendas feel a need to pile on, for example, schooling us over and over again in the media about how gold is a poor “inflation hedge”, when that is not its only utility; not by a long shot.

The post-2011 period has been a veritable Wonderland of possibilities for the printers of paper, enterers of keyboard digits and those who follow their breadcrumbs.

Further, the leadership of the gold “community” have been shown to be little more than dogma spewing robots firmly set in their ideology when maybe what was needed was a more even handed approach that could have helped legions of gold devotees avoid some very unpleasant interim situations before Goldzilla finally rises up and wrecks the cities around the globe made of paper and digits.

The gold sector is rallying as we expected it would from the 2008 lows and a capitulation of at least moderate degree but has not proven much, technically.  Similarly, the fundamentals are not yet fully baked for the sector (ref.  yield curves, gold vs. stock markets, gold vs. certain commodities, intact public confidence in policy making, etc.).  These things will change either sooner or later, but for years now imposing our will upon the market has not worked.  Sit back, relax and let Goldzilla do his thing.

I write the above in the style I used to write as a ‘for free’ public writer (as opposed to the more technical stuff I need to see to now with NFTRH) to hopefully add a level of perspective to the conversation going forward.  The macro is going to change.  It always does.