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Tuesday, December 27, 2011

Gold Bull Alive and well. Technical Analysis is Dead

If there is one thing you can count on, no matter where the price of Gold goes in the short term, the Gold Bull is alive, well and thriving.

But how can that be?  Doesn't price determine the direction of a market?

Only in a Free market.  Nobody believes this is a free market.  Especially not the market makers at the Big Banks.  This is a Fee Lunch for them.  They receive untold, uncounted, unaudited TRILLIONS from the Central Banks and they use it to push around the risk markets to their heart's content.

If you don't know or understand this, then all your money will end up in their pockets.  If you can't understand this then when you, or your favorite deluded technical analyst draw their little lines on their little charts - all they will reveal is the short term trading patterns of the traders at the Big Banks.

Let's face it.  Any idiot can figure out moving averages, stochastics, flag patterns, spinning top candles, and Fibonacci retracements.   Any dull normal can plot wave patterns, breakouts, and breakdowns.

And in a free market those who can artfully interpret these patterns can make money over time, with competent risk management. 

In this market, none of these things matter.  In fact they only serve as a substitute for thought.

Thought will lead you to one conclusion.  These markets would all be dead already if not for the massive infusion of central bank money into the banks that gets gambled in the risk markets.  And when you take into account the fact that printed money = debt, you can not but conclude that the Debt Explosion is but a very temporary fix to the debt problem.

Debt destroys paper currency.  Gold is the beneficiary.  Think it through.  Throw out those chats, and think it though, before it's too late and you do something suicidal - like panic selling your gold.

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