1. As I write this update, US stock markets have already given up all of yesterday’s gains this morning. To make an already-bad situation worse, “Quadruple Witching Hour” occurs on Friday.
2. Individual stock options, stock futures, stock indexes and stock index futures all expire then, and this expiry could ignite a new wave of panic selling.
3. Please  click here now. The volume on this daily chart of the Dow is very bearish. It’s surging on declines, while drying up on rallies.
4. For a closer look at this morning’s action, please  click here now. That’s the hourly bars chart, using December futures. There’s a head and shoulders top pattern in play.
5. The Fed’s QE program fostered the growth of government size and power, while causing banks to hoard capital, rather than loaning it out to businesses.
6. QE also caused US companies to borrow money and engage in stock buybacks. This created phoney PE ratios, and made the market look less overvalued than it was, and is.
7. With low rates, banks have no incentive to make loans, and government has massive incentive to borrow money and expand itself. The bottom line: The stock market and the government are not the US economy, but QE and low rates make it appear that they are.
8. In my professional opinion, the Western gold community needs to stop cheering for deflationary QE and deflationary rate cuts, and start thanking Janet Yellen for her taper, and for her upcoming rate hikes.
9. Those rate hikes will increase money supply velocity, cause inflation, and significantly boost gold prices.
10. Please  click here now. UBS bank economists just presented a highly rational view of gold to their clients. Their statements feel “solid”, and that’s appealing to institutional investors.
11. UBS bank can move significant client risk capital with their research reports, and this one is great news for gold price enthusiasts around the world.
12. Also, I expect the new and fully transparent PBOC gold buy program to become a “game changer” for most gold market fundamentalists in the coming months. When bank economists begin focusing on the PBOC buying, that will bring even more institutional money into gold.
13. Please  click here now. Gold stocks tend to lead gold, and this daily chart suggests that GDX is poised to leap upwards, above a key downtrend line.
14. A GDX breakout would likely usher in an acceleration of the current gold market rally, and my key 14,7,7 series Stochastics oscillator suggests that the breakout will happen.
15. When will it happen? For the possible answer, please  click here now. The next COMEX gold option expiry date is Thursday.
16. Gold has a tendency to lose upside momentum in front of expiry days, and then rally after the options expire.
17. Please  click here now. That’s the daily chart for gold. While the technical picture looks solid, a decline to the minor support zone at $1115 – $1125 ahead of options expiry day is likely.
18. From there, I expect the US dollar to run into serious trouble against the yen, and create a surge of FOREX liquidity into both the yen and gold.
19. On that note, please  click here now. That’s the daily chart of the dollar versus the yen. The uptrend line is broken, my Stochastics oscillator is verging on a sell signal, and there’s a nasty symmetrical triangle pattern in play. The implications for the dollar are clearly bearish, and that’s good news for gold.
20. Janet Yellen spoke several months ago about the “waning effects” of the rising dollar, and my technical analysis suggests her outlook was very timely.
21. For another look at that key dollar versus yen chart, please  click here now. There’s a double top pattern in play, with major implications for downside price action in the dollar.
22. Please  click here now. President Xi Jinping looks and acts like a “Golden Terminator”, and I want to remind the Western gold community that a large part of his reform include the internationalization of the yuan.

     

23. On that note, please  click here now. This key policy paper from PBOC official Dr. Yao Yudong is arguably the most important paper published about central banking and gold in decades. Gold is clearly going to play a very transparent and official role in the reformation of China’s currency, and ultimately in the entire global financial system.

     

24. Like an arrow shot by a “bull era” archer, Dr. Yudong’s roadmap for gold and the yuan can’t be taken back. Both China and India want to see global gold price discovery less pinned to things like Thursday’s COMEX option expiry, and more to gold jewellery demand versus mine supply. They’re taking the steps to make this “reformation” of the world’s ultimate asset a wonderful reality. Good times await the Western gold community in the coming years, and the dollar versus yen chart suggests the good times may begin… in just a few days!

Sep 22, 2015  
Stewart Thomson  
Graceland Updates
website: www.gracelandupdates.com
email for questions: stewart@gracelandupdates.com 
email to request the free reports: freereports@gracelandupdates.com

Graceland Updates Subscription Service: Note we are privacy oriented. We accept cheques. And credit cards thru PayPal only on our website. For your protection we don’t see your credit card information. Only PayPal does.

Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am. The newsletter is attractively priced and the format is a unique numbered point form; giving clarity to each point and saving valuable reading time.

Risks, Disclaimers, Legal
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 qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an invetor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

1. Most mainstream money managers and gold analysts believe that US rate hikes are deflationary. In contrast, in the current global economic environment, I see them as inflationary. 
2. I made it clear several years ago that I viewed QE as a deflationary force, and tapering as inflationary.
3. The tapering of QE laid the groundwork for a wave of reflation that rate hikes will bring to the world. Does “Mr. Market” agree with me?
4. For the probable answer, please  click here now. That’s the monthly chart of the Japanese yen versus the US dollar.
5. The yen peaked in the fall of 2011, and in late 2012 my 5,15 moving average series flashed a key sell signal. That occurred just as the yen was completing a large head and shoulders top pattern.
6. Large FOREX traders tend to base a lot of their gold trades on their analysis of the yen. There are signs that the 5,15 moving average will soon flash a buy signal for the yen, and it’s staged an upside breakout from a massive bull wedge pattern.
7. What’s particularly impressive is that the yen has rallied in the face of Janet Yellen’s frequent warnings about US rate hikes.
8. Gold rose alongside the yen from the late 1990s until 2011. It can rally in a similar way again, but for gold price parabola enthusiasts, there’s a much more important chart that bears watching.
9. To view it, please  click here now. That’s the St. Louis Fed’s M2 money velocity chart (M2V).
10. Inflation comes from rising money velocity, and hyper-inflation comes from a hyper-rise in money velocity. In 2008 – 2009, M2V did turn higher, but the nature of the QE stimulus program meant that the rise was a meagre one.
11. Simply put, the Fed’s QE program increased the size of the overall US money supply, but stifled its velocity. Personally, I was horrified as I watched US congress allow the Fed to run its QE program without forcing the printed money to be loaned out into the general economy.
12. Thus, any economic stimulus created by forcing interest rates lower with QE was overwhelmed by the implosion in money velocity that it also created. The QE money went to government bonds and the banks, and the banks hoarded the money rather than loaning it out.
13. I believe Janet Yellen is attempting to rectify this terrible situation, with immediate rate hikes and a reduction in the Fed’s T-bond holdings.That will incentivize the banks to make loans, and put pressure on US congress to reduce its entitlement programs.
14. The size of the US government is the single biggest problem facing the US economy. The fact that the government is soaked in debt adds gasoline to the fire, but it’s the overall size of government that is the main problem for the economy. The bottom line is that America’s largest manufacturer is the US government, and the main product it manufactures is: red tape.
15. The yen is almost certainly rallying in anticipation of US rate hikes that produce an upturn in money velocity. That upturn is what will create substantial inflation in America, and do it very quickly.
16. Please  click here now. Clearly, former ECB President Trichet agrees with me that the Fed doesn’t need the IMF or the world bank to rain on their “rate hikes parade.” Trichet himself tried to raise rates in the past, and I think he was stonewalled by entities interested in bigger government and a smaller private sector. I don’t think Janet Yellen will be so easily swayed from her plan of action, as her relentless taper to zero of QE has shown.
17. The money velocity chart has lost downside momentum, and has flat lined in the last quarter. I think the first rate hike will be followed by an enormous spree of bank lending, and that will mark the end of what is roughly a 20 year bear market in US money supply velocity.
18. Gold price parabola enthusiasts shouldn’t put on their space helmets yet, but they should start watching the M2V chart more closely than the Dow and T-bonds.
19. Please  click here now. That’s the quarterly bars gold chart. On it, I’ve drawn what is arguably the world’s most important trend line. Drawing a trend line across the 1980 high of about $873 and the $1033 area of 2008 suggests that the recent decline to the $1070 area may produce a significant low.
20. When fundamentals are factored in, like the new PBOC gold buy program, the massive rise in Indian silver imports, and inflationary US rate hikes, it’s clear that this trend line may carry considerable weight, not just for gold bulls, but for gold price parabola enthusiasts.
21. Please  click here now. That’s the daily gold chart. Note the superb position of my 14,7,7 Stochastics series. It peaked as gold peaked at $1170. 
22. Gold looks very solid now, both in the short term and the long term, and from both a fundamental and technical perspective.
23. Please  click here now. That’s the GDXJ daily chart. Like the M2V chart, GDXJ has begun to trade sideways. Relative strength (RSI) is strong, and the 14,7,7 Stochastics series oscillator is verging on a fresh buy signal.
24. I’ll ask the Western gold community to follow Trichet’s lead, and let Janet do her job. Let’s watch her reverse money velocity and pressure government size with rate hikes, to begin the biggest gold stock rally of the past several years! 

Sep 15, 2015  
Stewart Thomson  
Graceland Updates
website: www.gracelandupdates.com
email for questions: stewart@gracelandupdates.com 
email to request the free reports: freereports@gracelandupdates.com

Graceland Updates Subscription Service: Note we are privacy oriented. We accept cheques. And credit cards thru PayPal only on our website. For your protection we don’t see your credit card information. Only PayPal does.

Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am. The newsletter is attractively priced and the format is a unique numbered point form; giving clarity to each point and saving valuable reading time.

Risks, Disclaimers, Legal
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 qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an invetor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

Are You Prepared?

It looks like we are really going to see some fireworks late this coming week, right after the Fed make their much anticipated announcement about whether or not they will raise interest rates. They had better get on with it and do their miniscule rate rise this time, because if they don’t and start making bleating noises again about doing it at some point in the future, their already tenuous credibility will vanish. 

….continue reading HERE