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1.Tomorrow's FOMC announcement is arguably the most
important Fed event of the past 35 years.
2.It's a defining moment in Janet Yellen's career, and so
I've dubbed it as. "J Day"!The bottom line: Janet Yellen is
going to attempt to raise interest rates without significant open market bond
sales, something that has never been attempted.
3.The Fed's balance sheet has never been this large.The
sheer size of open market sales needed to raise and sustain higher rates now,
would cause a major panic in stock, bond, and real estate markets.
4.The debt-obsessed US government would also face massive
pressure from open market bond sales, and could collapse.
5.What's critically important now is that Janet has
given her theories a test run, but that's been with small amounts of capital.Nobody
really knows what's going to happen when she attempts to execute her rate
hikes strategy with large amounts of money in the real world.
6.So, my somewhat obvious suggestion is for US stock
market investors to move to the sidelines until the end of the first week in
January.
7.The potential reward of a possible market rally over
the next three weeks is dramatically overwhelmed, by the risks involved
with Janet's new and untried rate hikes experiment.
8.Please click here now. That's the latest COT
report for the mini Nasdaq stock futures contract.Clearly, the smart money
commercial traders are net short now, anticipating a sell-off in stocks.
9.What's next for gold?Well, a week ago, I predicted gold
bullion would trade down to about $1157, before the Fed makes its
announcement. It went to $1058.
10.Please click here now. Double-click to
enlarge. In the short term, whether gold begins a dramatic rally after "J
Day" or not, will depend on the language used in the FOMC statement.
11.A potential inverse head and shoulders bottom
situation may be developing.To view that scenario, please click here now. Double-click to
enlarge. Gold feels solid here, and there seems to be a wave of confidence
sweeping through the Western gold community.Just as citizens eventually rebel
against oppressive leaders, the overly-bearish tone used by some gold gurus
may backfire on them.
12.Here's why:Stock market investors who bought value in
the 1970s made a fortune in the 1980's and 1990's.
13.Those investors never called any stock market bottom,
but they bought into it, and made enormous profits in the following
years.It's the same with gold now.I bought gold and silver into the lows of
1976, but I never wasted a single moment of my accumulation time talking
about a "bear market".
14.I accumulated gold and silver for nine years in the
late 1960s and most of the 1970s.I'd urge Western gold community investors to
act in a similar fashion now.Ignore the gold bear market label makers, and
buy value, because making labels doesn't make a gold investor richer.
15.Buying value with the sole tool of intestinal
fortitude is ultimately 99% of the wealth building game.
16.Oil has continued to decline, and it's the largest
component of significant commodity indexes.Interestingly, Janet Yellen has
referred to the decline as "temporary".Please click here now. That's the daily oil
chart.Note the key reversal in play, and the "risk-on"
Stochastics signal.Oil traders may be anticipating a very bullish
statement from Janet tomorrow.
17.Her rate hike experiment has the potential to reverse
money velocity, give hope to savers, incentivize banks to put some reserves
to work in the private sector, and pressure the US government to shrink
itself.Low interest rates benefit debtors, and the US government is the
biggest debtor on planet Earth.
18.Alan Greenspan and Ben Bernanke both engaged in a
horrific strategy.They essentially attempted to turn US citizens into
miniature and severely undercapitalized banks.They chopped bank interest
rates and thereby "incentivized" the citizens to invest in
large businesses, through the stock market.That created a drop in temporary
unemployment, and a surge in permanent unemployment.
19.The Greenspan/Bernanke policy has been an
unprecedented disaster for America.The bottom line for any hope of a real US
economic recovery on main street: QE can take a permanent walk, and rate
hikes rock!
20.To view what is probably the most important chart in
the Western world, please click here now.Money supply velocity
(M2V) collapsed as the Fed lowered rates to "incentivize"
citizens to move money from banks to the stock market.
21.During the 2008 financial crisis, the Fed should have
revalued gold.Instead, using QE, low rates, and excess reserve payouts, the
Fed revalued the banks, and devalued the citizens of America.
22.The good news:Janet Yellen has dismantled QE as I
predicted she would, and now there's a 75% chance that she grabs hold of the
money velocity bear tomorrow, and ends it too, with upside pressure on
interest rates!
23.Please click here now. That's a snapshot of
the latest COT report for the yen versus the dollar futures contract. Large
FOREX players use the action of the dollar versus the yen as a key indicator
for gold. The banks have built a massive long position in the yen, and that's
great news for gold price fans!Please click here now.That's the daily chart
of the dollar versus the yen. The massive head and shoulders top pattern in
play is in sync with the COT report, and also bodes well for gold!
24.Please click here now. Double-click to
enlarge. That's the GDX daily chart.In addition to "J Day",
tax season is underway now, and will continue until Christmas Eve.Despite
these twin forces of negative power, GDX still has not penetrated its recent
lows!Gold stock enthusiasts need to buy now, and take a solid stake in what
is destined to become generational gold stock lows!
Special Offer For Website Readers:Please send me an Email to freereports4@gracelandupdates.com and I'll send you my free "The Best Of GDXJ!" report.I
highlight the ten stocks in the GDXJ gold stocks ETF most likely to surge
higher in 2016, with precise buy & sell points for each of them!
Thanks!
Cheers
st
Stewart Thomson
Graceland Updates
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Stewart Thomson is no longer an investment advisor. The
information provided by Stewart and Graceland Updates is for general
information purposes only. Before taking any action on any investment, it is
imperative that you consult with multiple properly licensed, experienced and
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