Investors Around The World Are Monitoring The Expiration Of QE2 (SLV, GLD, GDX, UUP, FXI, CYB)
Jeb Handwerger: We are witnessing an important watershed in world history with the unwinding of QE2. Every citizen no matter where, has a ready camera eye on the world, carried in his smart phone case. Even more so does the internet provide the anvil for major nations to forge economic strategies. “Swords are being hammered into cybershares.”
We think of wars being fought with soldiers on battlefields, now Cyberspace is the new field of combat. As we have seen with the uprisings in North Africa and the Middle East, the use of the internet is becoming a vital instrument in fighting the wars of the future. Cyber-spying to formulate the economic policies of nation states are an increasingly critical factor especially as the two year accommodative actions comes to a temporary halt.
An interesting development that underlies the growing importance of the internet in our daily lives is occurring under our very noses. An unnamed nation state recently cracked into the confidential, super secret network of the International Monetary Fund (IMF). The IMF is an integral component of the global financial system.
It is important to comprehend the significance of this recent story. Indebted nations are strategizing methods, in which they can pay off ever mounting debts with cheaper currency.
Countries who are sitting on a hoard of devaluing dollars must exchange them for real assets in the form of precious metals and natural resources in the ground. That is why this past year Central Banks worldwide are becoming net buyers of gold after years of selling.
History presents us with watershed events which are difficult to perceive while we are in the midst of them. This has been no surprise to readers of Gold Stock Trades.
In a series of articles entitled the “Chinamese Twins”, I have identified the attempts on the part of China and America to achieve a kind of symbiosis. It is a pro quid pro where deals are being constantly negotiated between the two superpowers.
The recent arrangements consisted of the U.S. paying off rising debts with cheap dollars (NYSE:UUP) while China increased the value of the Yuan (NYSE:CYB) in order to combat inflation. At the same time, the higher Yuan might purchase real mineral assets.
This year the Chinese Investment Corporation, who has been given a duty to look for potential North American resource assets by the Government of China, opened its first international branch in Toronto, the North American epicenter of resource companies. It is within conjecture that China (NYSE:FXI) may step up its hunt for resources in the second half of 2011.
So it has ever been thus that even friendly nations will spy on one another in order to formulate their investment timing.
Egypt has upcoming elections where the Muslim Brotherhood looks to be taking a major role, Democracy-Islamist style. Then we have the imminent Iranian Nuclear developments probably in 3 weeks. Did we forget about the PIIGS and the U.S. Debt Problems?
There is a whole flotilla of Black Swans straight ahead that could lead investors to the safe havens of precious metals and strategic metals resources.
Overall we have been in the summer doldrums for mining stocks (NYSE:GDX), gold (NYSE:GLD) and silver (NYSE:SLV) unless some exogenous event swoops down upon us. Although things may taste flat to bitter at this time the aforementioned additions to the soup can serve to bestir the pot. Important reversals are being monitored as QE2 expires.
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Disclosure: Long GLD,SLV and GDX
I started reading charts at eleven years old. One day my father, a market trader and technician found his library of books on technical analysis mysteriously disappearing. He later found the textbooks under my bed. For many years day and night I studied technical analysis and charting, working and learning from my father who has over 50 years of trading experience. Technical analysis is my passion and love. In 2001, I started noticing the junior mining stocks and gold as having a tremendous upside. For the past 9 years I have researched many juniors and have identified the major winners using technical analysis and finding top management.
I earned a Bachelors Degree in Mathematics and a Masters Degree. I learned most of my technical analysis from the school of hard knocks, managing real money for myself and for my family. Constantly perfecting my craft, I have traded for two decades of success in many different markets. I have been asked to post ideas to some of my students who have taken my course in charting and technical analysis. I have made an excellent living trading stocks for myself.