More from this Author
- July 14, 2011
- July 6, 2011
- May 25, 2011
It’s all about the Benjamins, baby.
Last week, the prime meme pushing the dollar down was “QE-1-2-3-whatever.” That is to say the herd had gleaned from careful reading of Ben Bernanke’s statement to Congress that the Fed would somehow, someway, ride to the rescue the flat economy with another trillion or so free dollars.
Ruination on Both Sides of the Atlantic
This week, the grand battle for hearts and minds is drifting in a slightly different direction.
Now a bit of “euro-fear” creeps back to the forefront of the herd’s mass consciousness as Italy joins Greece, Ireland, Spain et al. on the brink of sovereign insolvency.click images to enlarge
The euro really does represent an amalgam of Europe’s worst ideas and tendencies crammed into a single pay envelope. In the long run, euro holders are most probably well- and truly screwed.
And on this side of the Atlantic, Washington is rubbing its hands with glee at the whole euro crisis; the falling euro offers cover for their next dollar-printing binge.
The question is, Who wins when two of the world’s reserve currencies are for losers?
Gold Tops the Charts
Now, I know that the vast majority of this column’s readers are interested in one single question this week…
Was this the top?
Should they sell some of their sizable gold holdings into this latest gold spike, or is this just another mile marker on a years-long road to further gains?
Memetics’ Unique Window
Memetics offers us a unique window into this puzzle.
Let’s start with the latest search and press figures from Google (and thank the gods for Sergey Brin and Co. Before them, I used to have to tot up stuff like this with a fountain pen and a yellow pad).
These signals quantify the long and strong fascination with the shiny stuff undergirding most the minor perturbations in the market.
The answer lies in a fascinating detail hidden deep in gold futures’ technical chart.
Note that most recent gold futures highs have been accompanied by a strong surge in the money flow oscillator, an indicator that integrates both price change momentum and volume change.
This time, however, gold is rising early in the oscillation cycle, indicating the strong possibility of further increases as the herd swells in behind the advance already in place.
Straight answer: Gold has more upside both in the short term and long term.
Good luck and good hunting,
– Adam LassSource: Wealth Daily
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