http://www.oftwominds.com/blog.html
i.e. Hold EUO for a while longer.
i.e. Hold EUO for a while longer.
As a rule I try to give links to commentators who I think say things better than I do. My comments usually reflect how I see things based on many blogs and reports I look at and my personal experiences. I have been very accurate for the last few weeks which does not mean I will be accurate in the future. My trades - right now EUO is my only position - reflect what I think and do.
Right now we see Europe fall to pieces. The rest of the world is not far behind. The best cure would be to press the re-set button and cancel most of the debt - this will not happen because it will wipe out the banks and the politicians. This link http://www.zerohedge.com/contributed/mf-global-repo-maturity-and-large-bank-obs-exposures shows the next worm hole we are uncovering and there are many more. The ONLY way the current 1% can protect themselves is to bail out the banks. It will not surprise me if we see more liquidation tomorrow and perhaps on Friday but then the US will get involved via the IMF and print money and credit to bail out the US banks via . For now I will hold my EUO position but if we get a huge sell off I will be looking to reverse my position and go long stocks or gold and silver in the expectation that over the weekend the "IMF" will ride a white horse to the rescue. This is a market that you should avoid unless you can turn on a dime . Heavy liquidation in most markets as a combination of counter party risk, forced bank sales, MF Global THEFT of client funds resulting in margin selling and chaos in Europe all came into play. I suspect we will see another day of this and then the FED disguised as the IMF will step up to the plate. Our politicians will do everything they can to protect the banks at the expense of the 99%. EUO worked well in our favour and I am glad I stayed with the full position as opposed to switching some into AGQ. We are approaching December deliveries for both gold and silver and it would not surprise me if we see a squeeze as more and more people realize that certificates of ownership in unallocated gold and silver can just be stolen by the MF Globals of this world so I am looking to buy AGQ. The risk is that paper gold and silver are potentially worthless and at some point AGQ and similar trading vehicles will just be shut down i.e. you need physical gold and silver not paper.
Nicely in our favour today but you can tell from the narrow trading range that it is still being "managed"
At some point governments around the world will recognize that band aids do not work. There are three ways the debt default resolves:
Print lots of money Default and reset the entire economic system - pensions and all Revalue Gold to $ 5000 per ounce or more If they revalue gold they will default on all the paper contract markets first. Here is another report on what took place yesterday. http://www.tfmetalsreport.com/blog/2893/criminal-element
Aside from keeping a lid on the Dollar there has been another heavy handed attempt to knock Gold and Silver while pushing up stock prices. If you believe in not fighting the Fed you should buy stocks on dips. The alternative is to buy physical Gold and Silver every time they try to force it lower.
Things in Europe are rapidly getting worse. One option would be to revalue gold to a much higher number. The other option would be for the US Federal Reserve to start buying their bonds - unlikely unless the US banks are still exposed. The latter option may explain why the US Dollar is not moving higher but more likely there is heavy Central Bank interference to prevent it going higher. I am staying with a big position in EUO but there is no question that AGQ would be worth buying if I owned less EUO. These markets are very difficult to trade and so my focus is on a position that I feel offers a little less risk than others.
I read today that solar energy now consumes 11% of global silver production. When you consider that solar and "alternative" energy is in its early stages of development you realize that silver is in its Stocks managed a small gain. Gold and Silver look strong - it did not hurt that the ECB or one of those European government agencies suggested that Germany pledge its gold reserves against future money printing/bonds (Germans aren't that stupid) and it is possible that they will "allow" gold to float higher as Italy may not have any choice but to pledge its gold reserves. So... the higher the price gold is the better that deal will look.
Everything points to continued decoupling of the world from Europe and thus stocks moving up but I can't help thinking we have a few more bad news items that could shock the market, so for now I am staying clear. The temptation to liquidate some EUO and move into AGQ is very strong as it is depressing to see intervetion keeping the lid on EUO but I still think the dollar is in for a big bounce so EUO is where I will continue to stay for now. I still have a heavy position in EUO so I am not trading anything else ( I do not count physical ownership of Gold and Silver as trading - it i) but the stock market does look set for a bounce. http://www.minyanville.com/businessmarkets/articles/US-Treasuries-market-weakening-equity-market/8/3/2011/id/36110?camp=syndication&medium=portals&from=yahoo
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