Aug 23, 2014
JWU THE DRUG ADDICT’S ATTEMPT TO AVOID MORE PAIN UPDATE
1. Please click here now: http://www.cnbc.com/id/101937441
2. While the price of bitcoin has been disappointing, it hasn’t been a disaster, and….like gold, it’s suddenly gaining status as a real asset class in the mainstream media. In this CNBC analysis, bitcoin is discussed at a point akin to “the start of the internet”.
3. I mentioned in the last bitcoin update I did on the juniors site, that the volume has been pretty decent over the past few months, even though the price has gone nowhere. I own bitcoin now, and via pgen to zero.
4. The Canadian mint has shelved its “mintchip” crypto currency idea, and that may help bitcoin indirectly.
5. The number of “bitcoin wallet” users has soared over the past 12 months, from 1 million to 5 million.
6. It’s become respected by the mainstream community as an asset. Warren Buffet hates it, but he hates gold, silver, and thinks he can take on a Chindian starship with his bankster pals.
7. Please click here now: http://www.gracelandjuniors.com/images/stories/14aug/2014aug23bit1.PNG That’s the bitcoin chart, using 3 day candlesticks. Note the price stoker at the bottom of the chart (14,7,7 Stochastics series.
8. If the moving averages can stage a buy signal and confirm the price stoker, bitcoin may have a realistic chance of surmounting the sell-side HSR at 700.
9. Bitcoin is stuck in a 400 – 700 range, much like gold was, between 1500 – 1800. Unlike gold at the time, bitcoin is getting positive press, and the bankster bitcoin games appear to have subsided.
10. I’m a buyer every $25 down, all the way to zero.
11. There’s no question that ISIS co-founder John Kerry has contributed GEOP (geopolitics) factors to the $1228 “floor for gold” zone that is widely discussed by rational bank econs.
12. Unfortunately, many investors and gurus in the Western gold community are trying to use ISIS and the Ukraine as “super-crisis replacement”. It’s a price driver of its own, not a replacement price driver for QE with identical power.
13. When the QE-to-infinity gold parabola creator was turned into taper-to-zero, the world of gold changed.
14. It became time to look at what the taper meant, and what gold was doing. Alas, the gold community effectively split into 3 distinct groups as 2014 began. Group #1 is best described as the “replacement demanders” group. They tried to look for something to replace QE as a parabolic price driver. GEOP, as mentioned, is a gold price driver, but it’s not a replacement for QE. German repatriation didn’t create a parabola, so maybe Swiss repatriation will? That’s a crackhead thought. The replacement demanders group sound like they are locked in a rubber room, largely disconnected from gold market reality.
15. Group #2 became bears. Their tiny minds work like this: If it’s not black, then it must be white. If gold isn’t going parabolic on the upside, then it must be going to zero. That’s, literally, how their tiny brains work.
16. Group #3 is best labelled “group disillusioned”. They didn’t liquidate, but they didn’t buy any significant price weakness, and, really, they couldn’t sell even if they wanted to; they are totally committed to the gold asset for life, even if they don’t fully understand the price drivers.
17. The reality is that the QE taper was the Fed’s anticipation of second half growth that would end deflation, and begin inflation. The bears think it’s 1980 right now, and the Fed is about to massively raise rates, triggering massive selling of gold. The Fed is highly likely to raise rates in 2015, but real rates may not rise, and even if they do, there are very few Westerners holding any sizable amounts of gold to sell.
18. 2015 will see the Dubai refinery go into action, and more importantly, it may see the next onshore India refinery come on line. The duties and 80-20 rule are significantly increasing the amount of gold ore brought into India, rather than bullions bars, because the ore is exempt from the restrictions.
19. It’s important to realize that dealers importing bars from outside India are at a serious competitive disadvantage to those buying their bars from an onshore India refiner, because both the import duty and the 80-20 rule do not apply to the refiner.
20. I expect 2015 to develop into a year of “refining mania” in India.
21. Arrival of gold at $1228 in June of 2013 coincided with the taper talk by the bank econs reaching a peak. It peaked again in December, with gold again at $1228. The taper ushered in the end of the deflationary cycle. It’s only “day 1” of the inflationary cycle, but there is still the “rate hikes now” fundamental price driver to deal with.
22. While the rates hikes cycle is likely to be as bullish for gold as the taper is, and probably more so, it’s really unknown which HSR zone gold will be trading near, when the hikes happen. Will rate hikes occur with gold around the $1033 area, or with gold in the $1523 area? Unfortunately that’s something that a wealth destroyer predicts, not a wealth builder, and the good news is that either scenario is likely to produce higher junior gold stock prices.
23. $1033 is a price that is very deep inside the cost of production zone, and would be accompanied by massive mine production cuts, at the same time as India begins to aggressively demand ore from your mines. That’s likely to produce gargantuan institutional liquidity flows into your gold stocks from huge value players, perhaps at the same time as Martin Armstrong rings his cyclical death bell for US real estate markets (Oct 2015).
24. If I had to predict the first rate hike, I’d put it around June – Sep 2015. It could create enormous hedge fund flows out of real estate and into your gold stocks. It’s idiotic to attempt to define $1180 as “the bottom”. The gurus are killing themselves to either define $1180 as the bottom, or not the bottom, and it’s turning into an obsession for them. That’s wealth-destructive, in a big way.
25. They are whipping themselves into an irrational frenzy, over the number $1180. In contrast, all that can really be defined, in terms of building wealth in gold, is the surge in Indian industrialization, and a general movement amongst Chinese citizens away from bars and coins bought because of the Western super-crisis, and towards gold jewellery. In America, inflation is not a 20 year old weightlifter on hyperinflationary steroids. It’s a newborn baby.
26. Every day, gold gets stronger as an asset, and every day, another moronic guru acts like it’s a huge casino chip. They blew it completely, with their QE to infinity calls, and yet now they somehow know that $1180 is a “critical number”. It’s not a critical number, and if price traded under there, gold would become a stronger asset, not because of how high it is going, but because of the strength of the investors that would buy it there, and because of the mine supply cuts that would occur.
27. Report Card Day! Never forget this key wealth-building mantra: When pain has been experienced in an investment due to personal surprise on the price grid, attempts to avoid further pain are a natural, and stupid, reaction to that pain. The obsession with $1180, by both bulls and bears, is nothing more than a drug addict’s attempt to avoid pain. Just say no to bottom and top calling drugs, and you’ll be a major player with your junior gold stocks in the gold bull super era, an era defined by India’s demand for ore from your mines, and featuring upside price snacks brought to you by Sir GEOP, Sir Super-Crisis, Sir Little Bro China, and Sir American Inflation.
Kirk Jr. on the gold explorers bridge, out!