Tag Archives: HUI index

Are Citibank, Goldman Sachs & Merrill Lynch – all bankrupt?

 Any card-carrying gold bug worth his salt knows that gold is money. It has been since the origins of time. And has continued to be – even into the face of mass dumping and manipulation by global Central Banks.

While it’s price may fluctuate – it’s role as money – never will.

Unquestionably gold’s role as money, and as a barometer of inflation and reckless behavior among  bankers has once again emerged – directly into the face of every effort to silence it.

The one place where gold’s voice is always ultimately heard – is in the global currency markets. The beauty of the currency markets is that it’s the only market too large for central banks to manipulate for any prolonged period of time.

Yes, Central Bankers can and do intervene in the currency markets from time to time. But, the bully-pulpit, not actual intervention is their main weapon, for no Central Bank has the currency reserves to manipulate any major currency for any prolonged period of time.

Over the last year and a half, both gold and gold stocks have been stuck in a trading range. But, a few months ago, this writer began to see action in the currency markets – specifically in the Euro Dollar, that signaled that gold was not just “alive and well” – but, also ready to soon launch to new highs.

 Back in July this blog cited the “Euro Dollar:Gold Ratio” as the key indicator to watch, in confirming that Gold and Gold stocks were about to enter a new rally phase:


 And “rally” they have!

HUI Index Sets New Highs!

Gold has finally entered it’s most profitable and perhaps it’s most parabolic stage as the ultimate flight to safety currency:

“Gold as the only safe, true, and honest form of money.”

Over the last few weeks we have seen more cracks develop in the global financial system. Stanley O’Neil was forced to resign as the CEO of Merrill Lynch as the firm wrote off $8 Billion Dollars in subprime credit derivative losses. Citibank’s CEO looks to be the next casualty as Citi’s stock crashed over 20% in the past week. And speculation swirls over “Level 3 Off the Books” assets that are still valued at the banks own “market to model” valuations. Goldman’s “Level 3 Assets” which are valued at their own “mark to model” valuations are said to be $72 Billion – over twice the firms capital base of $36 Billion.

Goldmans entire existance relies upon the valuation of those “off the books” Level 3 assets.

The “books” of America’s largest banks and investment houses are now being exposed as another — “Enron.”

No wonder the U.S. Dollar has collapsed to all time lows, and no wonder Gold is exploding to new highs.

If you have any questions about gold as money, or about it’s role as a safe haven in times of crisis – here’s your answer!

Gold is MONEY!

Just look at that chart – what a thing of beauty!

That chart holds up as a self-evident truth, even into the face of all the lies and manipulation that the Fed, the Treasury and the Investment Banks can muster.

No spin-meister can change these facts:

Just since August:

– Gold is up 33% against the U.S. Dollar

– Gold is up 23% against the Euro Dollar

– Gold is up 17% against the Swiss Franc (the “other” ultimate safe haven currency!)

– Gold is up 16% against the Japanese Yen

Make no doubt about it – Gold is the answer!

And the questions it may be answering are these:

Are Citibank, Goldman Sachs, Merrill Lynch, Bear Stearns, Countrywide Financial and Fannie Mae – all bankrupt?

Have the “books” of the entire U.S. Financial & Banking System  become – one giant “Enron”?

Are we about to see the largest bailout in modern history – dwarfing the S&L crisis and the post September 11th reflations?

And the final question:

 If so – how high can Gold go?

Michael Cerulean


Ben Bernanke Blinks and the Market Calls!

Gold, the HUI gold stock index, commodities and global markets have exploded to new highs, as Ben Bernanke decided to take the handoff from Alan Greenspan and run with the “asset bubble” ball by unleashing unbridled inflation upon the American people.

Greenspan has to be the luckiest man alive since that last Iraqi to make it over that Kuwaiti bridge in the Gulf War… all thanks to Ben Bernanke.

The market dealt Bernanke his hand and even with 3 inflation cards up, Bernanke blinked and decided to cut rates and bail out Wall Street. 

Bernanke’s decision to cave in to market pressure and to put Wall Street and the DOW above the American people and  fiscal responsibility, is a day that will live in infamy. It was also the day that insured “Greenspan’s Getaway” with his legacy as “Maestro” still intact.

And how about the Alan Greenspan legacy book tour?

Were you as amazed as I was?

From appearances with Matt Lauer on Good Morning America, to 60 Minutes and his book promo appearance charading as an interview with CNBC’s Mario Bartiromo – U.S. Taxpayers were treated to the equivalent of hoisting Barry Bonds up to America’s youth as the flag bearer of  sound mind, sound body and sportsmanship.

I almost gagged on my portabella tortellini when asked if he felt any responsibility for the present credit, subprime and housing crisis, and he replied – “No….none”

No responsibility for cutting interest rates to record lows and leaving them there far too long which created a global debt & credit orgy! “No responsiblity… none.”

 That’s beyond incredulous.

There’s irrational exhuberance and then there’s unbridled hubris.

The biggest bubble Greenspan ever created still remains unpopped.

— his ego.

I was nearly speechless when I saw his denial of “any and all responsibility” for this mess America finds itself within.

Do you want to know what I think about Greenspan’s legacy?

Alan Greenspan should be charged with crimes against humanity for dropping bombs of economic mass destruction upon  America’s economy and it’s people, because our children and perhaps our children’s-children will be paying for his ego and hubris.

  • The U.S. Dollar is collapsing.
  • Inflation is exploding.
  • The U.S. economy is rolling over into recession.
  • The Housing Bubble is going to make the “S&L Bailout” look like a pimple.
  • And millions of Americans stand to loose their homes, their jobs and their futures because of Alan Greenspan – and now Ben Bernanke.

Just look at this message from the markets.

Here’s what the market said about “Bernanke’s Blink.”

And the HUI Gold Stock Index explodes +120 index points in less than a month:

“Bernanke speaks and commodities answer!”

 Alan Greenspan has now exited — stage left. And Ben Bernanke has taken the “asset bubble ball” and decided to run with it.  Gold and commodities are not just reflecting a weaker U.S. Dollar, nor are they just riding a liquidity tide that lifts all boats. They are signaling that Ben Bernanke has  not only “blinked” and lost his “stare-down with inflation,” but that he has also adopted the Greenspan methodology of trading one bubble for another… digging America and Americans an ever deeper economic hole.

The Fed has injected a massive amount of liquidity over the last month with 3 repo injections of $31 Billion, $29 Billion and $38 Billion.

As the U.S. Dollar collapses, investors jumping upon this Fed & PPT orchestrated DOW bandwagon rally resemble those arranging deck chairs on the Titanic. 

In case no one else has noticed, those charts above have signaled that the lifeboats have already been launched.

— Michael Cerulean