CONFIDENCE – Always the Key to the Crash & Burn

Euro-Crumble

The crisis in the Euro is leading to an extreme bubble in government bonds as central banks move to this crazy idea of negative interest rates. The attack on Denmark to abandon the peg to the Euro continues. Now we are seeing even Sweden is cutting its rates below zero. These central banks have no concept of what damage they are causing long-term.

Gold-bugEven the goldbugs are lost in their desperate attempt to keep up the good talk. They are lost in their domestic analysis of money supply and think gold is declining because there is some robust US economic recovery. They fail to grasp that the ONLY reason gold will EVER rise is not due to inflation, but a collapse in confidence. That is a significant difference. They hate to listen but look, the national debt was $1 trillion in 1980 and it now is approach $18 trillion. Gold was $875 and  it is trading at $1230. The Dow Jones Industrial were at 1,000 in 1980 and are trading at 18019. I think waiting for 35 years to make a profit is just crazy. These people keep fighting everything and the entire world is wrong – never them.

So all those who claim the World Gold Council numbers are wrong, so what? That will not make you right. Sorry, you haven’t been right. Only a fool fights the trend. To survive, it never matters what you BELIEVE, it only matters what the markets believe. BUY the RUMOR and SELL the news as they always say. This is about surviving and making money. It is not about donating to the banks and government. I have been getting emails saying I am wrong. As long as they keep coming, then the low is not in place.

ECM-Wave-2011-2020

Gold remains under pressure as the dollar rises. The US share market is not ready to collapse because as the world turns more nutso, the dollar remains the only game in town. This is never about money supply. It is about CONFIDENCE. As the ECM turns down, then you will see the US economy go with it and CONFIDENCE will crash and burn.