yellenLate in the fall of 2013, I predicted that the Fed would begin to taper QE, and keep tapering until it was gone. I stunned a lot of investors, by suggesting that this “taper caper” would be bearish for the Dow, and bullish for gold and gold stocks.
During 2014, I expect Dr. Janet Yellen to continue (and possibly accelerate) the tapering process that Dr. Bernanke started, creating more selling in the Dow, and more buying in gold!

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Submitted by Stewart Thomson:

  1. Global stock markets are tumbling. While mainstream media personnel discuss a “short and healthy correction”, many value-oriented investors believe that most stock markets are entering a significant bear market.
  2. Please click here now. Double-click to enlarge. I’ve highlighted the 14,5,5 Stochastics series, which I use exclusively on this key quarterly bars chart of the Dow. It’s flashing a gigantic sell signal.
  3. Note the declining volume that has occurred since 2011. For a closer look at that volume, please click here now. This monthly chart shows that since the fall of 2011, the growth of the money supply has not attracted sizable investment into the stock market.
  4. There have been more buyers than sellers, which has pushed the Dow higher, but the total amount of trading volume has declined significantly and consistently.
  5. While the Dow has gotten fundamentally weaker from a liquidity flows standpoint, gold has become fundamentally stronger. Weak-handed ETF investors have left the gold market.
  6. They’ve been replaced with very strong hands, in the Chinese gold jewellery market.
  7. While increasing Western mint coin sales make headlines in the gold community, investors should understand that the total tonnage involved in those sales is tiny, compared to Indian demand that has been stifled by their government.
  8. Unfortunately, many players in the enormous Indian gold market believe their government is quickly turning the gold import business into a dirty protection racket, controlled by the Indian mafia.
  9. Regardless of who wins the upcoming Indian election, it is likely to be followed by new growth in Indian demand.
  10. Late in the fall of 2013, I predicted that the Fed would begin to taper QE, and keep tapering until it was gone. I stunned a lot of investors, by suggesting that this “taper caper” would be bearish for the Dow, and bullish for gold and gold stocks.
  11. During 2014, I expect Dr. Janet Yellen to continue (and possibly accelerate) the tapering process that Dr. Bernanke started, creating more selling in the Dow, and more buying in gold stocks.
  12. Institutional money managers are under tremendous pressure to perform, and they are not performing now.
  13. Gold stocks were the best performing asset during the month of January. Even if the rout of global stock markets subsides, institutions are likely to move some liquidity into the precious metals sector.
  14. Most investors believe Dr. Yellen is a “dove”. I call her a “gold bull shark”. I think her main focus is going to be increasing the low official inflation rate, by increasing the velocity of the money supply.
  15. I don’t think she has much interest in QE or the stock market. I think she’s more of an “old school” central banker who is primarily focused on the inflation rate, gold, and commodity prices…. and rightly so.
  16. A picture speaks a thousand words, so please click here now. I think this picture sums up all you need to know about which market the gold bull shark is focused on.
  17. I’m forecasting global cuts in interest rates this year, with Dr. Yellen spearheading the process. I think she will be remembered as the Fed chief that orchestrated “significant revaluation of the gold price, in the free market”.
  18. Please click here now. Double-click to enlarge. From the standpoint of technical analysis, this monthly chart of US ten year bond yields supports my fundamental view that Dr. Yellen is going to oversee significantly lower long term interest rates. That should fuel a rise in inflation, and a significant rise in the “POYG”, the price of your gold!
  19. Note the position of the key indicators and oscillators that I’ve highlighted with red circles on that chart.
  20. For a shorter term look at ten year yields, please click here now. This daily chart suggests that Dr. Yellen will oversee a drop in the ten year bond yield, to the 2% area. That would likely would push gold towards the August highs, in the $1432 area.
  21. For the past couple of weeks, I’ve asked investors to show a bit of patience with the gold markets. Gold is working off a technically overbought situation on the daily chart, and it tends to decline in front of most jobs reports.
  22. Please click here now. This daily gold chart shows gold working to rise above a key downtrend line, with my stokeillator positioned in the 50 area, where strong momentum-based moves can occur.
  23. The next jobs report is scheduled for release this Friday.   There’s a good chance that the entire precious metals sector begins a fresh leg higher, once the drama surrounding that report subsides.
  24. Please click here now. Double-click to enlarge this daily GDXJ:gold ratio chart. Considering that gold stocks are technically overbought, they are holding up remarkably well while global stock markets are crashing, and the Fed is tapering. My suggestion is to put the proceeds of all gold stock sales into gold (via ETF, futures or bullion), rather than into fiat currency. If the stock market rout accelerates and Dr. Yellen cuts rates just once, gold could begin a powerful surge to the upside, while global stock markets keep falling!

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Thanks! Cheers  St

Stewart Thomson  Graceland Updates

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  1. I believe they Tapered for several reasons: 1) Bernanke was about to leave the Fed and wanted to make it seem as if if he had stayed another 4 years he would have completely unwinded QE. 2) Markets expected tapering 3) Needed to Deflate the Markets before they got completely out of control. 4) Needed to Strengthen the dollar above 80. Had it fallen below 78 it could have sent it cascading to 75 or worse 73. Which may have begun a dollar panic.
    Now that the dollar is above 80 and the Dow has deflated a little, it buys them some more time. They are trying to stretch this charade till past 2016. Like I expected I could see the DOW and S&P fall 12% from its highs which most media Market pundits can just shrug off as a healthy correction. I believe they dont want the dow to fall below 14700 because if it does it could fall to 10,000 easily. When the time is right they will extinguish Tapering and double the money printing if they arent already doing it. During this time I could possibly see Gold and Silver fall further and wont reverse to the upside until the Dollar gets shocked lower by some unforeseen event. Possibly sending Gold to $1,000 and Silver to $15 which to me is unbeliveable. I also believe the Dollar will rise to 85 before they stop tapering. The reason being they want to  cause price deflation, making it appear as if a recovery is at hand. This false perception will benefit the President during the Senate and House Elections this year. On March 19th the fed IMO will pause Tapering till probably late Fall. Then they will probably announce raising QE to 100 million per month around October. Causing the Stock Market to Rise substantially. The Dow IMO will rise past 20,000 points by the end of 2015. past 25,000 bythe end of 2016. Then Crash by 90% after the 2016 election results are in. As for Gold and Silver it could be more of the same price manipulation till the Dollar begins to fall below 78.

    • Some of these clever analysts should devote some time to trying to figure out ways the Fed can continue to print money without our knowledge. QE (Stealth).  Because that’s where I think we’re going.

    • I’m puzzled why you think they would be trying to hold on until 2016. Just because that’s the next election? Even if administrations only think in 4 year chunks, the Fed should be thinking longer term.
      There’s a good chance Obama will be impeached before then, IMHO.

    • “There’s a good chance Obama will be impeached before then, IMHO.”
      Obama fully deserves to be impeached but there is no way that the Dem-controlled Senate will ever vote to convict the anointed one.  We saw this first emerge when Bill Clinton was impeached by the US House with the Senate failing to convict him.  The Dem message was clear:  “We are not convicting OUR guy for ANY reason, EVER”.  Just as clearly, both the Dems and the Repubs love their party more than they love their country.  If they didn’t, Obama would already have been impeached, convicted, and would be serving time for treason in a federal country-club  pen somewhere.  Hmmm… Club Gitmo?  lol
      Now, if the Repubs win control of the Senate in 2014, impeachment AND conviction could become plausible actions.
      Let’s see just how far that pen and that phone get him when he is facing a hostile Congress instead of merely a hostile House.

  2. The one and ONLY answer to the debt problem is to declare it null and void because of FRAUD!  It is fraud because it is mathematically impossible to repay !   It can not be repaid because the interest is never created on the loan and that is fraud !   And fraud voids all !   If we don’t void all out of thin air debt the bankers will own almost EVERYTHING !    And we will be homeless slaves !  They have a license to counterfeit !   Can I counterfeit the money to repay the loan ?  Why not ?   If we even attempt to repay a impossible debt (the national debt) all we do is show our ignorance !   The way to fix this mess is so simple a 3rd grader can figure it out !   We void the fraudulent debt!  and everyone keeps ALL the items they have so called debt on !   And then we start to use a debt free currency and / or gold and silver !  And then we will have a robust economy like never before — OR WE LET THE BANKERS STEAL EVERYTHING !
      I was in about the third grade when the news was talking about the national debt and I asked my dad who do we owe money to and who could possibly be richer than the United States?  and where did they get the money?  And then my dad took a gulp off his beer and said we owe it to our self !   I said that’s the dumbest thing I ever heard of !  that’s like me borrowing from my right pocket and setting fire to the interest and putting the rest in my left pocket !  This was about 1972 !   And yes it really is this simple  !  The bankers have a shoe in on ALL loans they make !  All they have to do is stop lending and then start foreclosing on ALL debts!-meaning they now own everything that has a debt by having a license to counterfeit !  So we 1 keep getting fleeced by continuing to pay this fraudulent scheme !  OR 2 we declare ALL out of thin air debt NULL AND VOID because of FRAUD !   And we ALL keep everything we have so called debt on!   MOST people don’t get this part Every car, boat, house, machine, tool, farm,ect.  has already been paid for by the fraudulent paper!   So no one looses !   WE sure as hell cant give it to the banksters!   (let them steal it)   AND IT DOESENT MATTER IF YOU WANT TO  REDUCE THE DEBT 90% ITS STILL UNPAYABLE!  So when we void the FRAUD This will be the ultimate FRESH start for everyone !   Share this if you want THE solution to the WORLDS problems!   If not everything will continue to get worse until we have HONEST DEBT FREE MONEY /and GOLD AND SILVER !  And there is plenty of gold and silver!  just Divide the paper money (FRN) by the gold /silver and you have the value of them!  NO MATTER WHAT IT COMES TO per OZ ! Then we would be happy to work for SAY A ONE OZ. SILVER COIN A day ! Because NOW REAL MONEY will buy what  $100 did before the reset!   THINK ABOUT IT!   This is what Scripture calls the jubilee ! 

  3. Re:  Yellen
    The record of PhD economists running the Fed is dismal at best, so perhaps a change is in order.  Instead of hiring these egg-heads, perhaps we should look for someone who is wise in the ways of Street-o-nomics?  This would be a person who has to scratch and scrimp to make ends meet, who knows that food and fuel MUST be purchased in order to live, and who doesn’t view a lot of slight-of-hand B$ as the way to subvert reality while making political points.  Such a person would make a wonderful Fed FOMC chair, IMO.  Who knows?  They might even get this nation on a path that leads somewhere besides collapse.

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