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Sunday, November 16, 2014

Mickey Fulp knows I'm right


Remember how I've been screaming from the rooftops that gold has only broken down in US dollars, and the chart is fine ex-US? Well, now Mickey Fulp has crunched the numbers and proven me right.

Mickey Fulp - mercenary musing (pdf). Like I said, gold's price moves over the past 120 days have been entirely a US dollar story. A correlation coefficient of -0.96 is pretty damn convincing if you ask me.

And since Americans don't buy gold, the action on the USD gold chart doesn't have the effect on demand that you think it should have. All I'm saying is that perspective is imperfect and you need to look at a wider view, and you may as well ignore the clowns in the media who stick with this imperfect perspective.

A funny corollary of that -0.96 correlation is that gold's price ex-US has bottomed and gone to sleep. Um... which it has.

Anyway, so Mickey's takeaway from this is that we're in the beginning of a long USD bull move, and that will make for a long-term bear market in metals. If he hasn't yet, I'd strongly suggest he read Jim Rogers' Hot Commodities, because Rogers (though he is a loony) did nail the macro explanation for this secular bull/secular bear mechanism decades ago.

Buy it for yourself for Xmas. It really is a good book. 

Anyway, interestingly for a hard-money type, Mickey finally accepts that the US dollar is still the world's safest currency. How's that Ben Bernanke look now, bitch? Huh?

Oh and Mickey says he cheated in university. Quote:
As an aside, I had 14 hours of high-level mathematics beginning with engineering calculus in college, but did not take statistics, a low-level course that would not credit toward my undergraduate degree. However, it was a requirement when I entered graduate school at the University of New Mexico. To get around taking a freshman-level math class, I convinced the geology department that a course shown as “Statics and Dyn” on my undergrad transcript, was a sophomore statistics course. In actuality, it had nothing to do with statistics but was a civil engineering course called “Statics and Dynamics”. LOL.
You're a very bad person for faking your way out of a university stats course, Mickey, and you should feel bad.


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