Graceland Updates 

By Stewart Thomson

1. The case for gold ownership is not any weaker or stronger now, than it was a thousand years ago. Gold is the world’s ultimate asset, and that’s irrespective of whether the price is currently rising or falling.
2. Currently, most commodity indexes are dominated by oil, and game-changing events in the mid-East region are poised to occur in 2016. 
3. Gold tends to track oil very closely. I expect oil to stage roughly a 50% – 100% rally from the 2015 lows, over the next 18 months. Here’s why:
4. American politicians appear to realize they’ve been overly aggressive in Syria, Iraq, Libya, Egypt, and in the entire mid-East region. The US policy of regime change there has clearly been disastrous.  
5. As Western politicians begin to back away from that policy, a door is opening for Russian and Chinese politicians to become serious mid-East players.
6. A number of powerful institutional analysts have the same view that I do. On that note, please click here now. Interviewed by Barron’s, Larry Jeddeloh predicts that an Iran-Saudi deal is coming, whereby Iran stops backing the anti-Saudi rebels in Yemen, and in return the House of Saud announces a major cut in oil production.
7. Russia, Iran, and Saudi Arabia all want a higher oil price, and that deal would do it. I expect a deal will be signed in 2016, and create a major rally in oil and gold.
8. Another huge beneficiary of this deal would be the country of Canada.While rest of the West focuses on economically useless programs like QE, the new Canadian government is poised to ramp up infrastructure spending.
9. QE creates a drag on money velocity, by funnelling printed money into bank and government coffers. That forces elderly citizens to engage in dangerous risk taking with their savings.   
10. Until US banks are incentivized to make profitable loans with higher interest rates, America will continue to burn the savings of its elderly citizens, like burning rice paper in a “risk-on blast furnace”.
11. Regardless of America’s chosen path, Canadian oil stocks should have a truly spectacular rally in the second half of 2016, and I’m an eager buyer, here and now.   
12. Historically, gold tends to rally after the Fed’s first rate hike, and the dollar tends to weaken. I’ve suggested throughout 2015, that gold could remain “generally soft”, until Janet Yellen pulls her rate hike trigger. If the first hike comes at the December 16^th meeting, and I think it will, early January could see an institutional rotation out of general equities, and into gold stocks.
13. Please click here now. Double-click to enlarge. That’s the daily gold chart. Note the beautiful technical action of my 14,7,7 Stochastics series oscillator, at the bottom of the chart.
14. I refer to that oscillator as “Tony the Tiger”, and Tony is flashing a crossover buy signal now. Gold is firming nicely. A move above the 20 line by that oscillator, would be more good news for gold price enthusiasts. 
15. The most likely scenario for gold, in the short to intermediate term, is a double bottom pattern, ahead of the mid-December FOMC announcement.
16. I think it’s important for the entire Western gold community to be open to the idea that in the mid-East, and in the global gold market, BRICS countries are going to fix what America broke. 
17. The Shanghai Gold Fix is coming within a few months. That will move more price discovery away from Western economic events, and towards Chindian jewellery demand versus mine supply. In early 2016, Chinese New Year celebrations could also add some serious zest to a post rate hike rally in gold.
18. Please click here now. When all is said and done, India is the world’s main demand-side driver of the gold price.
19. Mines are the main supply-side driver. New discoveries are becoming smaller, as gold-obsessed India begins to industrialize at a mind-boggling pace. In the next few years, while the rest of the world languishes in a QE-induced quagmire, Indian GDP could hit 10%! 
20. Jewellers are in expansion mode, refiners are racing to expand capacity and get LBMA certification, and the citizens are building more wealth, which they celebrate by demanding more gold.
21. Also the media drama surrounding Indian gold monetization and paper gold bonds is over, and the surge in Indian refining of raw Dore gold is rightfully taking centre stage. There’s a shortage of Dore bars, and Indian refiners are eager to sign contracts with gold miners.
22. On that note, please click here now. That’s the GDX daily chart. Gold stocks are staging a very interesting technical non-confirmation with gold bullion. Gold has moved decisively below its summer lows, while many gold stocks are well above their lows.
23. Volume is also very positive; it’s been declining on price softness, and rising with price strength. Overall, there’s been a huge surge in volume in gold stocks since early July.
24. The average American investor in the gold community has a lot on their plate. My suggestion is to stay focused on the relentless industrialization taking place in India, the shrinking mine supply, and on the highly significant non-confirmation taking place, between gold and gold stocks. Keep it simple. Stay focused on gold stocks more than the bullion, for a winning year in 2016!

Thanks! 

Cheers

st

Stewart Thomson 

Graceland Updates 

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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form. Giving clarity of 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 qualified 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 investor 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?

The gap in financial wellness is narrowing, but the data in this report still hits home hard – women need to save more than men AND do it faster.

Darcie Crowe, Crowe Wealth Management

Men are short of a standard goal by $270,000. Women? Half a million dollars, according to a new report.

So here’s what you need to do: Just save a lot more while earning a lot less.

While both men and women face big retirement-savings challenges, the hurdle is higher for many women. To have a decent standard of living in old age, women, who earn on average 78 cents to a man’s dollar, need to save $126 for every $100 men do. 

That’s the conclusion of a report analyzing savings shortfalls faced by both genders… CLICK HERE for the complete article

As we head into the black Friday holiday shopping season, cash is king.

Cash will be the most popular payment method for shoppers buying holiday gifts, with 39% of Americans saying they plan to use it for most of their holiday purchases, in a recent survey of 1,000 shoppers personal finance website Bankrate conducted with Princeton Survey Research Associates International. This number was about the same as in 2014, when 38% of holiday shoppers said they planned to use cash.

Behind cash, the most popular choices for payment were debit cards, with 31% saying they would pay this way, followed by credit cards (22%) and checks (3%).

Younger shoppers were especially unlikely to use credit cards; 48% of millennials said they would do most of their holiday shopping with debit cards, and 36% said they preferred cash. Mobile payments are still unpopular; only 14% of U.S. adults with smartphones or similar devices plan to make even one mobile payment during the holiday season, according to Bankrate.

Millennials in general tend to avoid credit cards more than previous generations have done; 63% of millennials don’t own a single credit card, according to a separate Bankrate survey in 2014. “They grew up in the Great Recession and saw what happened with their parents,” Cetera said. “They don’t ever want to be in a situation where they’re in debt. They’re shying away from high-interest loans, essentially.”

Millennial Attitudes

That stat on credit card usage by millennials is precisely in tune with a statements I made in 2008 if not before.

• Kids will be competing with their parents and grandparents for jobs that do not pay a living wage.
• Children whose parents are being destroyed by debt now, will keep those memories for a long time.

Deflationary Trends

1. Millennial attitudes
2. Technology
3. Demographics of aging boomers
4. Student debt
5. Millennials overpay for healthcare
6. Low family formation rates 

The Fed, the ECB, Bank of Japan, Bank of China, etc., are fighting major deflationary forces.

Attitudes are the key force actually. It took two generations for memories of the great depression to go away.

And it will take at least a generation for millennials who saw their parents lose their homes or get into huge fights over money for those memories to vanish.

To top it off, the Fed (central banks in general) has spawned another enormous asset bubble that will hugely add to deflationary woes when it pops.

Doctor copper, can no longer be viewed as a leading indicator, in fact, a name change might be in order. A change of name from Dr Copper to deadbeat copper might in order, given its dismal record over the years. After the financial crisis of 2008-2009, the economy, the stock markets and copper parted ways; while the markets and the economy trended higher, copper plunged into an abyss, and it is still trying to find its footing.

All Jokes aside, the reason copper is diverging from the markets is because the Feds destroyed the concept of a free market system long ago. Copper is indicating that this economic recovery is nothing but an illusion. However, several rounds of QE, plus interest rates being held down for a record-breaking period, have altered reality. The markets are moving higher because of hot money, and the economic miracle would end without the low-interest rate band aid. Against such a backdrop, copper ceased to work. In this environment, fundamentals and basic technical analysis can lead you astray; in such an environment Mass psychology works the best. The masses have accepted that Fed intervention is the new norm and that the Fed is the saviour. Hence, this is what investors need to pay attention too, as the psychology of the masses is what drives the markets. Given the old historical pattern between, copper and the markets, the stock market should have followed copper into the abyss, but instead we find that several indices are dangerously close from putting in new highs.

The chart below clearly illustrates how copper parted ways with the economy and the markets.

The Dow, the NASDAQ and even bonds have soared to new highs while copper crashed. Surprisingly the only sector that took a similar

path is Oil. However, we suspect that oil will diverge shortly too. Now if the Fed’s really wanted to cement this illusion, they would create the forces necessary to give copper prices a boost. Up until 2011, copper trended with the markets and given the proper environment, copper could trend in tandem with the markets. Until, the hot money factor is eliminated from these markets Dr Copper cannot be viewed as a leading indicator.

Why have the economy and the stock market refused to follow Coppers lead?

As we stated before, any shred of free market forces was totally eliminated after the Fed decided that propping up this market was more important than allowing free market forces to deal with the situation at hand. In fact, we came out with an article in June of this year clearly stating that Free markets no longer existed. First we had QE, this distorted the markets, but when it ended officially, the assumption was that everything would return to the norm. The ultra low rate environment favoured speculation, and the corporate world stepped in with massive share buyback programmes. Quantitative easing never stopped, only the players changed. This year the corporate world is on track to shatter yet another record. According to CNN Money, dividends and stock buybacks are set to hit $1 trillion dollars this year. This amount is larger than the GDP of many nations.

Almost seven years into one of the most hated bull markets in history and still 50% of the crowd is still not investing in the market. In fact, we will soon come out with a short article illustrating that more Americans drink coffee on a daily basis than invest in the markets. The markets never top on a negative note. The media is out with a plethora of negative factors, earnings slow down, energy sector collapse, Terrorism, a possible rate hike in December, and the list goes on.

For now Dr Copper has to hang up his credentials, for Copper is in a coma and in no position to give real guidance on market direction.

There is a lot of negativity in the air, a large percentage of the crowd is still not in the market, and the masses are not euphoric; end-result, this market will rise much further than anyone can currently imagine.