AUG 16-17 FCU UPDATE

Aug 16-17, 2014

      JWU UNDERSTANDING FCU UPDATE

 

1.           According to the world gold council (WGC), demand slipped a bit in Q2 2014, but is still “robust”. 

2.           Chinese total demand fell to 195 tons for the quarter, which works out to a decent 65 tons a month.

3.           It’s important to remember that the WGC doesn’t include smuggled gold in their numbers.  The mainstream media is pumping bankster propaganda that Chinese gold demand is down because crooked government officials aren’t buying now, since they’re being arrested.

4.           It’s true that they are being arrested, and they were a source of sizable demand, but the media is ignoring the fact that average citizens were subjected to a premiums scam, and cut off from buying all the gold they wanted, by Chinese bullion banksters.

5.           Just how much gold was unofficially imported into China in Q2, and re-routed to India, is also unknown, but it’s obviously not zero.

6.           It’s important that junior subs understand that the reason demand is down in China is because of the huge drop in ETF supply.

7.           Relative Strength:  While many junior gold stocks are bitterly disappointing, failing to rally much at all in 2014, that’s life in the junior stocks arena.  Others are performing remarkably well.

8.           Stocks like Elgin, Golden Minerals, Asanko, Pretium, Golden Tag, and Timmins have taken their March highs out.

9.           The March highs are significant, because they are an intermediate trend high. 

10.        No intermediate trend high has been exceeded by GDX or GDXJ since 2011, so the more of the stocks that can do it, the better the odds are that the big ETFs and gold stock indexes do it.

11.        When I’m a little quiet, it’s usually because I’m working maniacally on an problem, not because I’m being a bum.  I spent the last 15 hours straight, trying to get a solution to SPAM, and I think I finally got one that’s solid and works with my servers.  (That should free up more time for me to study the market rather than SPAM.) I should have it set up by tomorrow, if all goes well.

12.        Please click here now: http://www.gracelandjuniors.com/images/stories/14aug/2014aug17u1.PNG While uranium has had a nice rally recently, from about $4.47 to $5.37 (like gold moving about $200), like a lot of the gold stocks, it’s still far below the March highs.

13.        The yellowcake stocks are also far below those highs.  My view is that the March highs all across the commodity sector were created by the banksters, because too many fund managers were starting to talk about inflation instead of growth.

14.        That came on the heels of the December bail out of the Dow by value-oriented fund managers.

15.        Please click here now: http://www.gracelandjuniors.com/images/stories/14aug/2014aug17usa1.PNG  That’s Friday’s industrial production graph report. 

16.        You’re in the transition zone.  From deflation to inflation.  Inflation is near, but not here!

17.        Please click here now: http://www.gracelandjuniors.com/images/stories/14aug/2014aug17usa2.PNG  Since the 2009 Dow lows, FCU (factory capacity utilization has steadily moved higher, like an inflationary bulldozer.

18.        It’s now at about 79, up again to a new high for the economic upcycle in July.  Nobody in the gold community is wildly cheering for a huge ramp up in American GDP for the rest of the year in America.  Other than me.

19.        Everyone else thinks Hag Janet will bring back QE if GDP slips.

20.        Wrong.  100{7d2759035a2769ee7a6afa7c646e6642b67314b0cd0e17ac0c6ae4f965ff87d9} wrong.  The Fed doesn’t care if the Dow tanks 3000 points if they finish the taper, but if GDP slips, gold could have a bit of a hard time, especially if India and China pumps that theme at their gold buyers.

21.        Higher GDP is what drives FCU over 80 and towards the magical 85 number that sends a wagon load institutional money managers into your gold stocks while talking about inflation.

22.        Who cares about the Dow?  I don’t.  The Dow can tank while the economy grows.  Rising GDP, a commodity rally, and decent Indian demand in Diwali are what carries gold modestly higher for the rest of the year, and then you can start looking to see some real action on the GDP growth side coming out of India, probably coupled with another refinery being planned and perhaps beginning construction.

23.        Gridtime!  How many bank econs joined the thousands of journalists around the world in talking about “tanking Chinese demand” this week?  Answer: zero.  I told you a year ago that the econs focus on demand trend versus supply trend.  Welcome to the era of bank econ rationalism.

 

Kirk Jr. on the gold explorers bridge, out!

Thanks!

           Cheers

           St

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