Richard Russell: Stocks and gold have been climbing on the rumor that the Fed is about to embark on its newest adventure, known as quantitative easing number two or QE2 (it always sounds less harmful when it’s reduced to letters and numbers).

And cynic that I am, I’m thinking that everything (stocks, gold, bonds) will correct on the actual news. Fed Chairman Bennie Bernanke must be thinking, I’ve got a mandate to keep the dollar steady and to implement full employment. If I open the monetary spigots and keep short rates at zero, this blankety-blank economy has got to lift off. If it doesn’t, then what the hell, I did my best, and it’s not the end of the world or the end of the US. And if the dollar swoons, so what. The next administration can deal with that, and I’ll be back at Princeton teaching those smart-ass kids about the economy. And this time I’ll have “former Fed Chairman” on my teaching credentials. So get off my back, I’m doing the best I can, and I’m doing what boss Obama wants me to do.

Richard Russell has made his subscribers fortunes. One of the best values anywhere in the financial world at only a $300 subscription to get his DAILY report for a year. HERE to subscribe. Amongst his achievements Richard was in cash before the 2008/2009 Crash and he has been Bullish Gold since below $300

Gold Surges After Japan Says It Is Considering New QE And Geithner Guarantees Currency Wars

via zerohedge.com

A quick look at gold price action demonstrates that someone somewhere is actively debasing currencies. An even quicker scan of headlines confirms this to be the case: per Reuters “Bank of Japan Governor Masaaki Shirakawa said on Wednesday the central bank will consider expanding a new scheme for buying assets ranging from government bonds to exchange-traded funds when deemed necessary.” Harakiri Shirakawa continued: “We have taken a very bold measure … If the need arises in the future, making further use of the new fund as part of monetary policy is one of our strongest policy options.” Judging by the chart below, either gold has a tent in its pocket or was really happy to hear this announcement.

….read more HERE

Buy and Sell recommendations should be added at the recommended price.
The Surge Index System Buys Weakness and Sells Strength

Super Force Gold Bullion Analysis:

Gold has a Surge Index 100 Sell Signal as of Oct. 1st. This is the maximum Surge Sell Signal.

1. Repetition is one of the key building blocks of excellence. Factory owners know that replicating a small profitable production line with a big one is the key to massive expansion. Easier said than done.

2. Some say that repetition is boring, but if you ask a soldier in combat if repetition is boring, the answer is, altogether now, “No!”.

3. In the market, buying price weakness and booking profit into strength seems boring, until you actually do it. Then you find yourself in a near life and death battle with your emotions of greed and fear.

4. Martin Armstrong has wondered out loud whether gold stands to break upside out of the defining bull market up channel. Or, whether it stands to collapse back to $1000 before blasting to new highs.

5. Most gold market investors don’t have any tactics in place to handle either scenario, and are really counting on Lady Luck to carry them through the remainder of the bull market.

6. It’s very important that investors remain extremely calm and rational. When you handle large sums of money for people, and I do, you need to bring a level of professionalism to the table that takes into consideration the hopes and dreams of investors, while managing risk at the same time. Again, easier said than done. You cannot be ruled by your emotions. One mistake can create a huge catastrophe. I’m personally not interested in being involved in a market catastrophe, not at all, and I don’t subscribe to the mantra, “well, everyone is in the same sinking ship as I am”.

7. Here’s a wakeup call for those of you who feel you are missing out on gold’s move:

8. You are.

9. You failed to buy any gold on any correction for the past 10 years, and now the big money is in gold stocks, not gold bullion, and you are stuck in the bullion trough, stuck on the wrong road, stuck chasing price, again. It will end horribly for you, another failed price chase, followed by another session of massive loss-booking, from the fetal position.

10. Here’s how to prevent that horrific future from occurring: Get your hand off the gold bullion buy button. What are you doing? Just the fall into $1200 from $1266 caused massive loss-booking!

….read 11-24 HERE

Ten years ago, the western world’s central banks were selling gold from their vaults just as fast as they could… at a rate equivalent to 10% of annual demand, about 442 tons.

They didn’t see any further need for such an ancient symbol of monetary stability in the 21st century. After all, it paid no yield; it just sat there, incurring storage and insurance costs along the way.

So they opted instead to fill their vaults with “safe” sovereign debt, with its yields and interest.

Fast forward to today, and that same investment looks far from reassuring. And central bankers are finally beginning to see the light.

They now understand the value of gold, a store of value for 2,000 years and one free of liability.

Central banks are no longer selling gold; in many cases, they’re buying it. This makes for one of the most important developments in recent history for the gold market.

Even overlooking its psychological boost, it has removed a very real, very large source of supply from the market. In Europe, for example, central banks have all but halted sales of their gold reserves, ending a run of weighty disposals averaging 388 tons every year for over a decade.

From 2004 to 2005, the continent hit its peak selling 497 tons of the shiny metal. Compare that with the 6.2 tons it has sold so far this year, down 96% from 2009′s total.

Gold’s Recent Spike Due to Major Power Shift

Gold’s recent ascent to $1,300 an ounce also comes from a major power shift.

As Asian economies grow, their central banks and sovereign wealth funds have begun stocking up on bullion. This reflects the importance of gold in the region’s culture and history.

China gave the clearest sign of this new trend last year when it almost doubled its gold reserves. With 1,054 tons, the country has become the world’s fifth-largest holder of the metal.

Yet only 1.6% of its $2.5 trillion of reserves is in gold. If China increased the proportion of that gold to the world average of 10.7%, it would need to buy some 7,000 tons more. That equals three times what they mined globally last year!

More recently, other countries – including India, Saudi Arabia, Russia and the Philippines – all announced big additions to their official gold reserves. And even smaller countries like Sri Lanka and Bangladesh have made small purchases.

Precious metal consultancy GFMS says that central banks – led by emerging markets – are, as a whole, buying it up for the first time since 1988 this year.

That emerging market trend will likely continue too. The proportion of bullion as a percentage of official reserves in the BRIC countries, for example, averages just 5%. This compares with over 50% in the US and most European countries.

Some countries like Russia and China may even be buying all of their own domestic gold mine output. That says something, since China now produces the most gold and Russia claims another large chunk.

Put simply, production from their mines will never hit the global market, thus supporting gold prices.

Gold Has Nowhere to Go But Up

Investors shouldn’t expect emerging markets’ central banks to make large purchases elsewhere though. In order to keep gold prices low for as long as possible, they have to buy more conservatively.

The global gold market simply cannot support large purchases. The entire global gold supply amounts to less than $200 billion a year, while global foreign exchange reserves come to $8.5 trillion.

So emerging market central bankers will wait for opportunities… like India’s 2009 purchase of 200 tons of gold from the International Monetary Fund.

And with the continuing problems in the periphery of Europe, more opportunities could arise. For instance, Portugal has over 80% of its reserves in gold.

It may have to sell some of that off in order to stay solvent, considering its current financial problems. And that would just shift economic power to the emerging world that much more.

With all those factors at play, gold can easily gain more. Adjusted for inflation, current record prices are far below what they touched in 1980: about $2,300 in today’s money.

Why Now Is the Time to Invest in Gold

Gold even has famed hedge fund manager Paul Tudor Jones’ attention, who normally doesn’t like gold. He wrote last year:

I have never been a gold bug. It is just an asset that, like everything else in life, has its time and place. And now is that time.

Investors can join the new gold rush through stocks such as Randgold ADR (GOLD), which has risen about 28% so far this year. And there are, of course, ETFs like Market Vectors Gold Miners ETF (GDX) and the Market Vectors Junior Gold Miners ETF (GDXJ), which focuses on smaller mining companies.

Or, SPDR Gold Shares ETF (GLD), a so-called paper ETF, claims to hold bullion in storage. But for investors who don’t trust any such thing, physical bullion and/or coins make excellent gold investments as well.

About Investment U

It’s a shame, really, that much of what is offered here – at no charge – is not taught in the public schools. Why is it that you can graduate in the top of your high school class and know next to nothing about credit card debt, adjustable-rate mortgages, or 401(k)s?

**The Oxford Club LLC/Investment U and Stansberry & Associates Investment Research are separate companies, and entirely distinct. Their only common thread is a shared parent company, Agora Inc. Agora Inc. was named in the suit by the SEC and was exonerated by the court, and thus dropped from the case. Stansberry & Associates was found civilly liable for a matter that dealt with one writer’s report on a company. The action was not a criminal matter.

Goldman Sachs has raised its 12-month forecast for gold to $1,650 an ounce, citing expectations for further quantitative easing in the U.S. and prospects for long-term interest rates to continue falling.

“With U.S. real interest rates pushing lower off the slowdown in the pace of the U.S. economic recovery and the growing prospect of another round of quantitative easing, we expect gold prices to continue to climb,” said the Goldman report, authored by David Greely and Damien Courvalin. “Despite the rebound in net speculative length, it remains well below levels consistent with the current low U.S. real interest rate environment.”