Gold & the Future
QUESTION: Marty; Great call on the gold again. The June low was spot on. At the Conference you warned we could still make another pass at the lows in dollars in 2015 but this would be a delicate ballet between the varied trends in currencies. Do you still see this as a possibility?
Best regards;
HP
ANSWER: Yes. June was the perfect target both seasonally as well as being 34 months from the highest monthly closing.In spot. We still have the seasonal June low in 2013 whereas in nearest futures the low is remains December 2013. So we do not have a low UNDER 2013 as of yet and until we get a monthly closingABOVE 1550, we must respect that new lows in dollars are still possible especially if we get a real surge in the dollar until the markets regroup.
The report on the metals group is being edited now. We will include some stocks as well.
Confusing Share Market
In the short-term, we still have the risk of a modest correction. There is typically the false move before the breakout. There is little question that there has been low volume over the past couple of years with light on up days and higher volume on down days. This has been the constant attempts to short the market that causes the grinding rally. The retail speculators who are the typical buy high sell low crowd are still absent. This seems to be caused by the perpetual bearishness among the retail “advisers” and the typical mainstream press.
Yes, there has been the company repurchases, but even this has not sparked a lot of piggy-backing one expects in a bull market. Then there is the foreign central banks that have been active buyers pushing the market higher just trying to diversify. Therein lies a WARNING. Why are central banks buying stocks? (1) To diversify away from sovereign debt that they know is a huge problem, and (2) the diversification away from just dollar bonds given the lack of any alternative currency. Even Russia is smart shifting issuing their debt in dollars to euros. Why? The dollar has a risk of new highs while issuing debt in Euros has a better chance of depreciation.
Then we have the rising risks with Japan. There is a strong correlation between USD/JPY and S&P futures. What is this about? Again, diversification if war appears on the horizon with Russia and China. The risks of capital flows into the US equities remains high, but more so after September this year.
The Fed wants the stock market to rise so they can raise interest rates. They need higher rates in order to have room to lower them when necessary. We most certainly live in interesting times.
Fed’s Exit Tax – IMF Proposal Extend Debt Maturity Unilaterally
Things are starting to get chaotic. It is very interesting that the Fed is concerned about liquidity in the world’s most liquid market. This dovetails into the IMF proposal. While the IMF is suggesting that government simply extend maturity of government debt unilaterally to prevent liquidation, the Fed is taking another approach and is looking at putting an exit tax to hopefully prevent liquidation voluntarily. This is all about the Sovereign Debt Crisis and behind the curtain, they are scared to death about the seriousness of the banking, municipal, and federal debt insolvency on the horizon in Europe. This is why the EU Commission is pushing hard during the World Cup to federalize Europe.
I have been getting a pile of emails blaming me for these actions arguing that they are listening to me. No doubt they read what we put out – fine. That does not mean anything other than they seem to be aware of what is coming. The media are not reporting it at all. One friend in Europe called a major newspaper and insisted they interview me on the IMF report. Their response – they already read the IMF paper and see nothing to report. The media will NOT explain the facts. Sorry – that is just the way it is.