The U.S. Dollar is consolidating.  Consolidation precedes expansion.  The next expansion in the dollar is likely down.

US Dollar

Gold is moving well.  It is up nicely since my post on October 30.  The oldest trick in the book works and works and works, until it doesn’t.  When it doesn’t work anymore, there could be a larger scale attempt at manipulation.  Think 1933.  All of this is good and supports my thesis that the action in gold is going to be mind blowingly bullish.  The media will be shocked by it’s velocity.  Everyone will be rushing to own it.  All the while, my store of energy will be building.
Gold can only be held down for so long. Increasingly, the mathematics will demand the courage to face it’s implications.

Gold

The Office

Do or do not, there is no try. -Yoda

Peace

At the moment I own gold, I am short the dollar and I am waiting to short the REITs again.

When to short them?

Well, I’ll let you know. As they say, it’s all about the timing. That’s where Mr. Volatility comes in. He is the timer. Pay attention to the timer.

Seabiscuit

Each year I find a Santa Claus that stands out. This year I found him in Miami.
Stay warm my brother.

Miami Santa

Did you have a good world when you died? Enough to base a movie on? -Jim Morrison

Peace

The US Dollar is breaking down and gold is acting strong. I will continue to benefit from my weak dollar, strong gold thesis. The Dow Jones US Real Estate Index (IYR) is rallying. This is very opportunistic.

At some point the (IYR) is going to be a massive short, again. I do not think that point in time has come. I wonder how much retracement we will see in the trend?

Nature’s math is evident in all places. Especially markets.

Peace

Click to Enlarge

I’ve been penning my thoughts here for a few months now. Looking back, my favorite post to date is the ever simple Party and Counterparty Risk Demystified.

Speaking of Parties, NYC and Miami don’t lack them. My travel at the moment is mostly business, but ya know I always keep it eBC. While keepin’ it eBC in NYC, I attended a charity event. I walked in, checked out the band, said hello to a few, and then something happened that I will never forget. I glanced over to the silent auction and saw the cape that I’d been looking for. Evel Knievel’s cape.

Evel did something really cool for a kid that lived on my street growin’ up. Ultra cool. I also saw him jump when I was around 5 or so. Then I ended up winning his cape at an event for kids. Things kind of circle around like that. You know what I’m sayin?

What about the short squeeze in (ARE) and (HCP) and (PLD)? These rips are to sell. The more they rally them, the more we’ll make on the downside. In an over leveraged situation, the common shareholders are left holding nothing.

Peace

Evel Knievel

Let’s take a look at the current relationship that the dollar has with the U.S. Equity market.
As you can see it is inverse. Dollar up = stocks down.

spx-vs-dollar

How is this relationship going to look moving forward. In other words, tell me about the future.

While not a psychologist, I do have some experience with markets. And my experience tells me that this relationship has to change. It has no choice. It will roll in ecstasy into my bankroll. What we are staring at here is deep into the eyes of volatility.

The decoupling of this relationship is going to happen. We are no longer going to see the dollar rally as stocks go down. We are going to see the dollar decline as stocks go down. If you don’t believe me, allow me to elaborate with a picture. From our history. Take a look at the chart below. This is what the relationship is going to look like. The dollar and stocks will no longer have an inverse relationship. Position yourself accordingly.

Nothing changes in the markets. Just the participants.

usd-vs-spx02

Until we meet again….I’m back. Back in the New York groove.

Peace