Gold in 1980 vs. today

Pink lines = today's bull market
Green lines = 1970's bull market

If the close resemblance continues, a major blast off could be fast approaching

An attempt at creating a photogenic homemade meal

Pan fried pork chop, toasted potatoes with chipotle sauce, sweet black eyes peas with onions, and salad.

Jim Sinclair quote

Jim Sinclair’s Commentary
You know what respect I have for Martin Armstrong as a broad market trend timer.
He is simply the best in modern times. Yes, he is a tad self-destructive but that does not detract from his genius. I have known MartinArmstrong since the late 60s and have yet to see him seriously wrong.

In Martin Armstrong’s last writing he said the following about gold. His history of accuracy demands that we all listen carefully to him, myself included.

“I have given a number for gold $5,000 that is very conservative. If we take U.S. gold reserves at 252 million ounces and we divide that amount into the national debt of 14 trillion that yields a staggering amount of $53,639 per ounce. Even taking the world official gold reserves divided into the US debt of 14 trillion we still get $15,873 per ounce.”

This makes my eight year price objective of $1,650 in January of 2011 look pitifully on the low side. Assuming Armstrong is right (as he has been for 40 years), the shorts of gold and gold shares are going to be destroyed.

Watch crude

Crude looks like it's ready to make another ATTEMPT at breaking through its key overhead resistance which stands now at the $90. Any convincing break above this will signal new highs in gas and oil prices

Roubini speaks

Roubini today spoke about the sovereign debt crisis road map going forward. To a great extent I agree with him. One point I think he fails to embrace is the propensity of troubled governments to engage in as much quantitative easing as it takes to keep this wretched system afloat for as long as possible. Regardless, you can read his piece here

Summary:
Many PIIGS states are in trouble. Super sovereign entities such as the IMF and ECB will attempt to 'socialize the losses' by bailing them out. This can have severe repercussions because the risk is then transferred to these super sovereign entities, and the can is only kicked down the road. Once the day of reckoning comes and its time to pay the piper, theses entities go bust as they become insolvent. Necessary austerity measures will prove extremely difficult to implement if the riots in France are any indication of what the consequences can look like. Spain is too big to fail and too big to bail.

My take: Europe is doomed.

A couple of thoughts for today

1) Moving forward through the perilous waters in the next 6 years, those who survive and prosper will be those who understand how markets truly work. As much as it saddens me to say this, I believe the only way to not get slaughtered by the oncoming tsunami is to know how to trade the markets. This is the pathetic situation the Federal Reserve and US policy makers has put us into. Honest, hard working people will suffer as they see their wealth contract. Those who know how to shuffle stocks will prosper.

2) To become a true sage of the markets, one must become "one with the markets". Understand what the markets are saying. Every move has a message. It is not the markets that are irrational- it is us who are incapable of interpreting the message that the market is sending. Just because one doesn't speak the language of the market does not mean the market is wrong.

Quote of a true idiot

Daniel Sadek was a renowned subprime loan pusher- who made millions on selling worthless mortgages to gullible California home buyers. This is what he had to say in defense of his business and his loans (it really shows the incompetence and stupidity of certain people, especially those who use 'Wall Street' as a measure of credibility)

"If my loans were so bad, why did Wall Street keep buying them to securitize?''