Tag Archives: HUI Gold Bugs Chart

Will Bailout Part II Unleash The Mother Of All Gold Rallies?

Back in November 2007, I wrote the blog post below about Citibank, Goldman Sachs and Merrill Lynch all being on the verge of bankruptcy.

“Are Citibank, Goldman Sachs & Merrill Lynch All Bankrupt?”

https://goldsilverstockcharts.wordpress.com/2007/11/04/are-citibank-goldman-sachs-merrill-lynch-all-bankrupt/

And less than one year later, Bank of America was forced to save Merrill, Citi required 2 emergency capital injections, and Goldman a capital injection from Warren Buffett and TARP.

And now 4 months after Hank Paulson threatened America with “Martial Law” and flip-flopped from buying bad assets to injecting capital, the banking system is still in collapse.

Here’s a chart of the XLF Financial ETF since Paulson’s October TARP plan.

xlf-oct-2008-to-feb-2009

The XLF Financial ETF has lost 62% of it’s value since Bernanke & Paulson’s original TARP bailout. 

And while October, November and December were brutal for gold and gold stocks with the deleveraging of hedge funds and the massive withdrawls from mutual funds; gold has now  recovered all of it’s losses, and has broken out against virtually all major currencies, including the US Dollar!

gold-vs-currencys-oct-3rd-fed

And it’s been even better for gold stocks. Here is the HUI Gold Bugs Index for the same period.

hui-double-from-october-to-feb-09

The God Bugs HUI Index has now “doubled” from it’s October lows, while the S&P is down over -25% and the XLF Financial ETF is down over -62%!

Get ready for the Mother of All Gold Rallies, because its coming.

Michael Cerulean

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