DEC 2 JWU

Juniors Written Update JWU.

(Pronounced “Jaywoo”)

 

     Dec 2, 2014

 

     JWU UPDATE

 

  1. An article has been posted on Seeking Alpha News, suggesting that Tanzanian Royalty could be bankrupt soon.
  2. There’s no question that it’s been a tough go of things, for many junior miners since the stocks were attacked by the banksters, using an illegal naked shorting weapon as the main force of attack.
  3. Management of the gold stocks was sloppy at my “loss of sanity” highs of October 2010, but not sloppy enough to put the stocks where they are. It was the relentless naked shorting attacks that pounded the companies.
  4. MSM (mainstream media) hasn’t helped things. Oil has fallen, while gold has been steady, but no mention of lowered cost of production due to lower energy prices is made in MSM.
  5. I originally predicted the Indian duties would be reduced in the spring of 2015. The statements made by Governor Raj today suggest the duties will be cut then, and potentially much sooner.
  6. Raj seems to be hinting that the government must earn a rate cut by acting professionally. Failing to cut gold import duties when oil is tanking is not professionalism.
  7. Disgustingly, the finance ministry was actually petitioning Raj to increase the gold restrictions as oil careened lower.
  8. I don’t think the finance ministry is going to get any rate cut from Raj, until they start acting like adults, rather than as miniature mobsters, on the payroll and leash of kingpin Chidambaram.
  9. The gurus in the Western gold community need a serious reality check. If I read another “one more trip down, and then we go vertical!” load of analytical drivel, I’m going to throw up.
  10. General commodity prices may stay low for years. And that’s not necessarily bad news for gold.
  11. Please click here now: http://www.biznews.com/global-investing/2014/12/01/this-is-the-future-what-looming-chinese-deflation-means-for-the-world/ That’s a look at a potentially deflationary future, spurring by issues in China.
  12. A devaluation in China could spur a new wave of gold buying by citizens there. Europe would suffer more deflation, and general commodity prices, including oil, could fall for years.
  13. What you need to understand, as a junior mining stock investor, is that Chinese demand for gold has some inelasticity, but it is not totally inelastic.
  14. Indian demand is 100{7d2759035a2769ee7a6afa7c646e6642b67314b0cd0e17ac0c6ae4f965ff87d9} inelastic, and lower commodity prices mean lower inflation in India. That means lower interest rates, and potentially a current account surplus.
  15. I don’t see anything negative for gold about Chinese-oriented deflation. I see the opposite of what Joe Blow guru sees. I see deflation creating monster demand for gold in India, that is free from government restriction.
  16. Can Indian demand surge in time to save companies like TRX from imploding? I don’t have the answer, but I do believe most of you should define yourselves as either ETF investors, or individual stock investors.
  17. If you are individual stock investor, I would suggest shorting items like GDXJ and JDST, as a counterbalance to your positions in individual situations. Why is JDST a counterbalance, when it is a bet that gold stocks fall?
  18. Answer: it is highly inefficient. Yes, in the short term it can rally if gold stocks fall. But over time, it tends to decay, like bread mold.
  19. Also, many gold community investors don’t like shorting gold stocks, even in a small way. Shorting JDST is shorting the bears, and if gold stocks rally, JDST collapses.
  20. Please click here now: http://gracelandjuniors.com/wordpress/wp-content/uploads/2014/12/2014dec2j1.png That’s the hourly bars chart for GDXJ.
  21. It’s almost back to the same levels it was at on Friday. Why is gold up $60 from it’s recent lows while GDXJ is floundering?
  22. The answer is: loss booking season has begun. The month of December is when investors typically book a lot of losses, and load up on whatever is up, to price chase the asset higher.
  23. Generally, the price chase goes awry. As you saw last year, as Dec 2013 was in play I argued that there would be a taper, and it would be bullish for a gold stocks rally and turn the Dow into a wet noodle. That’s exactly what happened.
  24. Gridtime! I think something similar will happen in 2015. Investors are selling gold stocks now and buying the stock market and junk bonds and real estate. Professional investors buy what losers sell in loss booking season. So they get richer! Let’s hit the grid lines now, and take no prisoners, as you take what the loss bookers have. See you there!

 

Kirk Jr. on the gold explorers bridge, out!

Thanks!

           Cheers

           St

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