Graham Summers’ Free Weekly Market Forecast (Hit Job Edition)

The “hit
job” is in reference to Bin Laden and the precious metals, both of which got
taken out over the weekend. The implications of the Bin Laden hit are
complicated. The implications for the precious metals hit job is not.

Regarding
Bin Laden, aside from the fact the guy was finally taken down (which he should
have been ten years ago), the first thing we need to address is that it will
spark retaliation of some kind. Whether or not the retaliation will be large in
scope depends on whether Bin Laden was such a crucial player for Al Queda that
his removal will leave them directionless. I cannot claim to know that.

What I can
tell you is that if there is a terror attack there will be a panic rush into
the US Dollar. The world IS moving away from the US Dollar as its reserve
currency, but we’re not so far along in the process that there wouldn’t be a
“flight to safety” move or at least massive short-covering into the US Dollar
if a terror attack or Crisis hits.

Indeed, just
about the only thing that COULD cause a major US Dollar rally would be a Crisis
of some kind (financial, political, etc). The last two US Dollar rallies were
induced by Crises (2008 and the Euro Crisis of 2009-2010). Unless we get
another one soon (I don’t want this just pointing out the facts) the US Dollar
is heading towards a serious collapse.

Indeed, it’s
telling that ALL of the US Dollar’s gains on the Bin Laden news evaporated this
morning in a matter of minutes. In the futures session we’re now into the
sub-73 region: approaching the precipice.

Conversely,
Silver and Gold both took a hit over the weekend. The reasons for this are not
entirely clear, but given the speed of the move it must have been related to
the margin hikes that occurred over the weekend.

For certain
Silver needed to cool off. The precious metal had gone positively parabolic in
the last month. Regardless of the fundamentals of the move (shortages, short-covering
by large institutions, etc) a move like this is unsustainable and needs to cool
and consolidate if an investment is to begin a new leg up.

However,
what’s truly staggering about the weekend losses in Silver is that it had
already retracted most of them by Monday AM. Indeed, if you were not up Sunday
night looking at the futures, you would have thought Silver was just opening
sharply lower (about 5%) completely unaware that the precious metal was down
some 16% over the weekend.

What does
this tell us? That unless we get a MAJOR Crisis in the near-future, the US
Dollar will collapse and inflation hedges will explode even higher. Indeed, at
the current pace we’re going the US Dollar will be collapsing within one month.
This could change, but we’d need
another 2008 type event to pull the US Dollar back from the brink. And judging
from stocks and inflation hedges’ performance today, that ain’t happening.

So if you’ve
yet to take steps to prepare your portfolio for the coming inflationary
disaster, our FREE Special Report, The
Inflationary Disaster explains not only why inflation is here now, why the
Fed is powerless to stop it, and three investments that absolutely EXPLODE as a
result of this.

All in all
its 14 pages contain a literal treasure trove of information on how to take
steps to prepare AND profit from what’s to come. And it’s all 100% FREE.

To pick up
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and click on FREE REPORTS.

Good
Investing!

Graham
Summers

Comments

[sunnydays]

Another Silver Margin HIKE UP - Now 11% more today!

Also msm already saying a nuke is hidden in Europe, they are already promoting a false flag.  They will do anything to keep the dollar up.  So expect the crisis soon and the blame will be terrorist retaliation for Bin Laden. 

http://www.kitco.com/reports/KitcoNews20110502AS_CME.html

(Kitco News) -CME Group is hiking silver margins by another 11.6% after already hiking them twice last week, the exchange announced Monday afternoon.

The “initial” margin to open new speculative positions in the main 5,000-ounce silver-futures contract will rise to $16,200 from $14,513, according to a notice released by the exchange. The “maintenance” margin for exiting speculative positions, as well as both initial and maintenance margins for hedger positions,  will rise to $12,000 from $10,750.

The changes will be effective after the close of business on Tuesday. Margins are also rising for Comex MiNY silver futures and E-mini silver futures.

The notice from CME Group, which operates the Comex division of the New York Mercantile Exchange, said the change is a part of the “normal review of market volatility to ensure adequate collateral coverage.”

The complete notice from CME Group can be seen at this link:

http://www.cmegroup.com/tools-information/lookups/advisories/clearing/files/Chadv11-156.pdf

[ebworthen]

I am certain that someone somewhere is planning a crisis.

Imagine if the FED allows the dollar to crash, chasing money into PM's and Equities, then forewarns the TBTF banks right before raising prime rates 2% claiming that it will help Seniors and hurt the debt speculators.

[mynhair]

Get a major crisis?  Are you kidding?

Look at what's in DC.

[disabledvet]

speculative at best, irresponsible at worst.  get a life because you obviously are going to need a job soon.

[Bullionaire]

100% FREE obviousness.  Whatta deal.

[sabra1]

so if the dollar keeps diving, there would not be a 2008 event? stocks will keep rising?