Two Weeks Before the End of the World (So Let’s Review the Charts)

by JDH on December 8, 2012

As you are all aware, the world will end on December 21, 2012 (according to a bunch of people on the internet).  Those of you who read George Ure’s daily commentary on Urban Survival will know that some guy named Patrick Geryl is predicting very big earthquakes this week.  George’s friend Clif from Half Past Human is also predicting bad things ahead.  Here’s the thing: everyone who has ever predicted the end of the world has been wrong.  We are still here.

I’ve been reading George’s earthquake and end of the world predictions for years, and they have all been wrong.  There was supposed to be something bad last week, or last month (I can’t really remember), and when it didn’t happen George printed Patrick’s explanation:

I sent a note to Patrick this morning to see how this fits with his expectations for the period ahead. As you will recall, in his earlier work, he’d mentioned Dec. 10 as a possible 8.0 magnitude window, but with the quake off Japan this morning, I wasn’t sure it this was enough energy release to meet his expectations.

George,
I mailed you Wednesday that i overlooked An important line up… This is him in total
1) The Earth is in a conjunction with Jupiter till December 9. Started November 29… So long conjunction…
2) Uranus is in an opposition with Venus from November 30 till December 8
3) On December 7-8 there is a line up Uranus – moon – earth…
So this was the trigger. When the conjunction with Jupiter ends…possible aftershocks... “

Uh huh.  Patrick predicted an 8.0 earthquake on December 10, and when it didn’t happen it was back-pedaling time (apparently the planets didn’t add up correctly).

I prefer sidewinder’s take on the Buy High Sell Higher Forum:

This shift better hurry up and get the paradigms in motion because according to Patrick Geryl and his new promoter George Ure we only got two weeks left before it’s lights out. Geryl is now gone into the earthquake prediction business and Ure is into everything weird from time shifts to aliens is posting his predictions. Doesn’t matter if any of the predictions are accurate he will just say it happened and turn a sow’s ear into a silk purse before you very eyes. Sorta like the US bureau of Labor Statistics. I know I’m on safe ground here because if the poles shift and the Earth stops and starts spinning in the opposite direction on 21 Dec nobody’s going to be around to beat me up or chide me about it anyway. on the other hand on 22 Dec when I gloat about it I can only have been right and all these guys will be exposed as the phoney phakes they are.

I still say just buy a little junk silver on a regular basis, shove it under the mattress then drink, sing, fight and pray. Life can’t possibly be much simpler.

Bingo.

If the world ends, we are all dead, so don’t worry about it.

I agreed with sidewinder’s approach: be prepared (have some junk silver or some gold/silver coins and some cash on hand, and some food, and fuel, and shelter) in case there is a disruption in your world.  The people of New York City understand that sometimes bad things happened, so it’s prudent to be prepared.  Beyond that, don’t get silly about it.

As an aside, if George Ure is reading this, here’s a question for you George:  why didn’t any of your prophets predict Hurricane Sandy?  Arguably the most important city in the world is shut down and partially destroyed, and there was no advance warning?  How is that possible?  But I digress……

Dow Jones ChartWhile we await the end of the world, let’s review the charts (click any of them to enlarge).

The Dow is doing just fine, thanks.

The three year up channel remains intact, so it would not surprise anyone if the Dow got back over the 13,500 level and hit 14,000 in the next few weeks or months.

A drop to 12,000, the midpoint of the channel, would also not be a surprise.

Of course I predicted a much lower Dow at the start of this year, and I was completely wrong.  Lesson learned: never underestimate the power of the government to print money in an election year to get re-elected.

Unless we do have a major earth changing event, the Dow will presumably continue to meander along.

Gold Chart

Interestingly, while the stock market has risen in a herky-jerky fashion over the last three years, the price of gold has increased in a much more steady fashion.

It would appear that the area around $1,700 is a solid base, and gold is at the cross roads: it will either fall below $1,650 and break the three year up trend line, or it will get above $1,800 to break the consolidation phase that started with the $1,900 peak in the summer of 2011.

Which will it be?

In the short term, I have no idea.

In the long term, I cannot envision a scenario where gold has a significant drop.

In the short term I suppose the government could confiscate gold, or they could stop printing money which could lead to deflation which could significantly lower the price of gold.  It could happen.

But it’s not the price of gold that matters; it’s the value of gold relative to everything else.  In an inflationary environment gold isn’t going up; it’s holding it’s value while dollars become less valuable.  In a period of deflation, dollars may increase in value, but gold holds it value just the same.  In other words, just like 100 years ago, an ounce of gold will still buy a decent man’s suit.

Of interest to stock market investors are charts of particular gold stocks.

Royal Gold

For example, RGL.TO – Royal Gold Inc.‘s chart does not look like the chart of gold itself.  Royal Gold (a senior blue chip) consolidated in 2011, jumped for the first nine months of 2011, corrected into the spring of 2012, jumped from late spring 2012 to the end of September, and has corrected since.

Why?

Part of it has to do with the seasonality of gold, with October a traditionally weak month (as explained in this Casey Research article on gold seasonality).  Also, as something goes up, profit takers take profits.

Now that Royal is down below it’s 50 day moving average, and close to it’s 200 day moving average, I plan to increase my holdings.

There’s an added benefit: Royal pays an 80 cents per year dividend, so at current prices that’s better than a 1% dividend, which is more than you will get putting your money in the bank.  Buy it, and forget about it.  You get a small amount of income, and if gold goes up, you win.

So, to summarize: relax, go for a walk, buy some gold, and we’ll chat again if the world doesn’t end….

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