Now is the time
Gold
$427 Silver
$7.24,
http://stockcharts.com/def/servlet/SC.web?c=%24gold%3A%24xeu
http://stockcharts.com/def/servlet/SC.web?c=%24gold
Gold is now above both US $427 (200 DMA)
and 350 Euros.
Check out my outlook given last November
http://goldinsider.com/outlook.htm
(under scenario)
The outlook will give you an idea of
what I look for. $500 for sure but $800
breakout will depend on what happens when
Greenie retires at year end.
Yes, I was a bit wrong with timing (better
late than never!), but I believe the blow
off phase for gold is now finally in motion,
seeing dollar topping while gold on major
supports.
Now it's safe to really step up in microcaps.
If you follow those, undoubtedly you have
your favorites. It doesn't really matter
which ones you follow, they will all go
bananas. If you don't follow microcaps,
stick with what I outlined in the newsletter.
STICK with gold and silver. That should
narrow down your selections.
I have said 4% short rate as profit taking
level. Sticking to that. One note on interest
rate news came in from ft.com
-----------------------------------------
GLG Partners, Europe's largest hedge
fund manager, has admitted that flaws
in its trading models were partly to blame
for a 14.5 per cent drop last month in
the value of its Credit Fund.
In particular, it has acknowledged that
the mathematical model it used to price
complex credit derivative products failed
to foresee market swings after last month's
ratings downgrades of General Motors and
Ford.
---------------------------------------------
Just how much did GLG lose? Considering
Morgan Stanley (involved in the credit
swap market) fired chief executive Purcell,
I’d say the loss was probably A
LOT.
Hedge funds are beginning to get shaken
at only 3% short rate, At 6%, GM and GE
will need to fork out $10billion more
per year for interest payments. sky would
fall off. And 6% is not even enough to
reign in commodity prices and inflation.
Folks, we are in interesting times…
Lastly I want to caution again, this
last gold leg will last around 12 months,
max. Be prepared and don't get caught
up. All commodities are due for a hard
breather, just not now yet.
John Lee
john@losb.net
www.maucapital.com
14 June 2005
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