Every news item about gold is not a cause for hysteria or proof of a conspiracy, although many internet writers view them so. Take for instance the Zero Hedge article today, "PROJECTED PIIGS PILLAGE: 3233.5 Tons of Gold TO BE CONFISCATED BY INSOLVENT EUROPEAN BANKS." Ahh, first of all when a lender reclaims property from a borrower it's not called "confiscate" but "foreclose." Second, when the country voluntarily makes its gold reserves liable to seizure for debt default, it stretches vocabulary to call that a confiscation. Third, the Greek population is not about to lose its gold, as the article claims, since the individuals of the population do not own the gold, the government or the central bank does, quite different persons. Individual Greeks, I feel sure, will hold on to their gold quite tightly. The article claims that the Greek sellouts -- the technocrats installed to engineer the bank bailout -- are making or have made changes to the Greek constitution that allows the creditor banks to "plunder" the Greek gold," amounting to 111.6 tonnes (3.583 million oz.) Tyler Durden then bootstraps off all these claims to aver with "100% certainty" that the other PIIGS countries will be plundered of their 3,234 tonnes of gold (103 mn oz). But where is the surprise, and where is the confiscation? These borrowers made themselves slaves to the lender, the banks, who control their respective governments & the EU. Did anyone believe that the banks would not strip these lands of every asset, private & public, when they couldn't repay? What is as cold as a banker's heart? And when you lose the collateral, it's not confiscation it's bankruptcy and foreclosure. What is truly surprising & grotesque here is not that the bankers are sucking Greece dry & impoverishing the people, making debt slaves of the nation. Rather, it is surprising that the Greeks so mildly accepted the technocrat(s) the bank imposed on them as their government & that they don't rise up in arms to overthrow them all. Now that is truly amazing. But what do I know? I can barely operate a computer & am still not too hot at tying shoes. The euro today surged on better than expected German economic data. That took the euro above the last high (1.3322s) and sets it up to retrace at least 50% of its November - January fall, targetting 1.3435. That news was enough to panic folks out of the US Dollar. The dollar index lost 56.5 basis points, a hefty 0.73%, to end at 78.646. Alas, for you dollar holders, that took the dollar below its 20 DMA (79.11) and bends momentum downward. Don't write the Samolean off just yet, though. As long as it abides above 78, it holds the hope of higher prices. It is drawing nigh its last low (78.36), though, where it must either buy a ticket or get off the bus. As I suspected, the yen rallied 0.39% off its close yesterday to end at 125.09c/Y100 (Y79.94/US$1). It could rally to fill several gaps all the way up to 128.6. That ought to end its downward bias for a while. This stock thing causes pain in the watching. Today the Dow reached 12,996 -- almost, but not quite that 13,005 high of Tuesday. I suspect a lot of people, stuck with losing stock positions, view 13,000 as their flashing Green light to get out of stocks. Dow rose 46.24 (0.36%) to 12,984.91, but notice that the Dow In Gold Dollars fell again. Nor did the S&P500 reach its Tuesday glory, but closed up 5.79 (0.43%) to 1,363.45. Folks get antsy when they look only at stocks & see how much they've climbed since March 2009, overlooking that silver & gold have climbed much, much more. When you view the Dow divided by silver or gold (on StockCharts.com, use symbols "$Indu:$silver" or "$Indu:$Gold" & compare to "$Indu") you can see stocks' steady downward trend. Surprise! Silver did not punish my impatience in buying yesterday, but confirmed my suspicions with a 130c jump through the 300 DMA to 3555.6c, up 3.9%! Gold was no slacker either, rising $14.90 (0.84%) to $1,784.90. This broke gold through the fan-line drawn from the September high to the February high, a fan-line already raised from the November high. Gold is climbing up the backside of the uptrend line from the December low, & should break above it tomorrow. In fact, it should hit $1,805 (November high) tomorrow. From there we either get a correction (or maybe a rise to $1,825 & then a correction) or the ride gets wild indeed. (today's high came at $1,787.18). Stepping back and looking at a three-year chart, the gold peak in early September at $1,923.70 appears to have completed an A-B-C correction, so unless gold gainsays that will a fall through its 150 day moving average, I will work on that presupposition. I don't know what was holding silver back, but nothing could hold it today. After it hit 3559c, it dropped only pennies to close at 3555.6c This is textbook stuff now. Silver has punched through its 50, 20, 300, & 200 DMAs. Momentum is nearly as UP as it gets. It also broke through internal resistance about 3440. What can go wrong? Only this: Silver's Relative Strength Indicator is at 72.11, well above the 70 overbought mark. Also, the MACD appears to be topping. Still, hard to see how silver will not reach 3950c before it pauses for a correction. On 23 February 1916 French artillery killed an entire 72nd division at Samogneux Verdun. I don't know much about World War I because frankly, it's too depressing to think about an entire continent committing suicide for no reason at all. But the Battle of Verdun lasted from 21 February to 18 December 1918, and killed 362,000 Frenchmen & 336,000 Germans, a total of 698,000. That's about 35,000 more than the present population of Memphis, Tennessee. If every casualty averaged 5.5 quarts of blood, then nearly 1,000,000 gallons was spilled at Verdun, never mind the poems never written, the work never done, the loves never loved, the children never born. God deliver us from war! On Friday, 24 February, I will be speaking for the Fayette County (Tenn.) Tea Party at the Fayette County Courthouse, in the town square at Somerville, Tennessee. Party starts at 7:00 p.m., and the topic will be "Restoring Freedom by Rebuilding Local Economy." This may be your only chance to see a natural born fool from Tennessee live and outside captivity.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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