Hey guys, At first, i hope you all had a good Coca-Cola created...

Hey guys,

At first, i hope you all had a good Coca-Cola created Christmas culture time and a nice, good start into the new year. Good luck and health in 2017 for you all. And yes @All4One, you are included - i wish you luck and health for 2017 too ;-)

But now back to our business, investing, and let`s have a look at POG, important for us all.
As POG had it`s low at 1123/1124 USD, i wrote @slimwanderer "Do you see, what i see?". Once i wrote, that i think, the Fibonacci resistance at 1120 - 1135 should be the time for a reversal move, so downtrend changing in uptrend. At round about 1123/1124 USD POG i said, i would see a microflower. It seems, and that is the good news, i don`t need glasses, my eyesight is usefull

It is a very nice sign of life in POG we all see at the moment. And it was really time to see it, after hard last 3-4 months of 2016, especially since Trump election.

In my opinion the uptrend will go to 1200 USD. But at 1200 it could get a break and a pulback. Nothing i worrie about. Most of the investors, or let`s say not a small amount of investors, took a seat in the goldtrain of 2016 as it touched 1200 USD. 1200 was a entry point, more wanted to join the goldmarket. After that hard and in some case painfull pullback, some had written of gold and sold, and some decided to ride it out. And the back hitting at 1200 will give some who wanted to ride it out, the opportunity to step out gladly, with plus/minus zero or a small profit, depending when they steped in exactly. After Trump (imo) we saw a huge unnecessery emotional sell off, because of fear. At 1200 USD POG i expect a next sell based on emotions. This time because of short term thought happiness, to get the opportunity to step out nearly at the step in zone of 2016. As a chart picture i estimate   something like cup-handle formation hitting 1200 USD POG. From 1123/1124 to 1200, a pullback and after next climbing of POG.

But let us try to have a deeper look.
At the moment the USD currency is strong. Let us imagine, we were President of USA. What we want is to increase US economy. For that, we need first a good within economy and a good export economy. From point of view of individuals a strong USD is great. You get products of foreign countries cheaper. The economy is able to buy primary goods for products cheaper. But the other effect is, that for foreign countries US products gets more expansive. And thats a killer for export. Strong USD will lead to decrease exports, and the export is one of US big problems. And that won`t effect US economy positive. It can`t be your strategy for USA to have a strong USD. USD must get weaker. If not, whenever China is the cheaper opportunity, foreign countries will choose to buy YEN products. Same calculation we do. No one is buying stuff at the most expensive store. We look for cheaper alternative.

Next problem is debt. You don`t want to have a strong currency with low inflation, if you are in debt, especially if you are in debt and want to make more debt like Trump. This would make any payback harder. With inflation you have more opportunites. So the next reason for weaker USD.

But let us not stop here. As Putin become president of Russia, many things changed. The Oligarch group of Russia splitted themselves in two groups. One group, those who made profit by corruption with selling Russia to the West under Boris Jelzin, and the other group, who wanted to be a partner of the west with eye level. At first they cleanded up their oligarch group, and those who sold russia with big gain being not on eye level with west were kicked out of the game. That was the first step of the new russian geostrategy. The aim was to get back control of russia, especially of russian resources. That gave them two opportunities: At first, a stronger position to negotiate the realtion bewteen russia and west. And russia tried it. They tried to be a participiant in the power structure of the west, and not their victim. Putin even talked completly in german in german parlament and articulated that wish. But the west refused. They thought, it would only be a matter of time and russia would take his old victim role of Boris Jelzin. But they were heavily wrong.

Russias new geostrategists were and still are very strong and smart. At the same time they started to increase relation bewteen russia and china. The focus changed more and more towards asia. So they were prepared for the case the west refuses. After increasing realtion with china, they increased their economy structure to asia with for example joint venture between companies of russia and aisa. With that they started an exchange in Moscow 2011, where you can buy commodities without USD. And both, China and Russia are buying gold. They stick up to Gaddafis plan, to build a new gold currency which they want to become the new world commoditie currency. And the west knows it. Thats the reason, why russia and china is under attack of the US(west). Russia and China are attacking one of the elementary foundations of US power - their currency.

At the same time the USD has another problem. The Eu would like to see their currency as world commoditie currency as well. Thats the reason why EU increased his members so much. That increases the volume of the traded Euro. And if you want a world commoditie currency, you want a currency with high volume. Thats a important point, to understand, why the EU desperatly wants to keep the Euro.

So, the USD is under attack of russia/china and some of EU dream of euro world currency. If you asked yourself, why that Apple and VW cases are there - thats the reason - Eu and US are also attacking themselves. But of course, at the same time, they need to stick together - first reason is is connection of power between them and second, for both is russia and china a thread, and together you are stronger against them. It is a creepy balance the west trys to play.

Back to USD. If the USD gets stronger, less exports for USA. Less exports for USA and nothing will change in economy. Strong USD will lead foreign countries to buy somewhere else and decrease USD Volume. More and more will move into alternative like russia exchange to buy commodities in other currencies. And that in a time, where the US currency is under attack like never before. So strong USD is not only a killer for US economy, it also decreases US Power and weakens their world currency status.

In that game you can`t like to have a strong USD. Under that conditions you can`t want low inflation. You have to fight a economy war, most don`t even know is fighted right now, and you have to keep up the conflicts in middle east, at russia border and with china. And all that with a dolar volume which must keep up and only can be kept up by weaken it. To strong USD and the volume will decrease.

Next problem is inflation. At one side inflation is heavily needed. At the other side you need to have control. Without control of inflation it can suprise you and move faster than you expected and wanted. And now we have the opposite effect. A much too weak USD. Yes, will be good for export for a while, but primary goods will become more expensive for you now. What will happen? Decrease of production. Bad for economy.

Thats a very tricky time we were in now. You need a balance in multiple directions, and thats a tough game.

And exactly those circumstances are the reason for gold, POG. One day this conflict will be over. But that day won`t come in the next 3-5 years. Longer it goes, stronger china and russia will become.

Russia economy and stocks are starting to increase now. And that with sanctions. Why? Remeber what i said: Russia lead their economy more and more into asia. And now the fruits of that strategy starts go grow and the west with sanctions gets less and less effective against russia.

Inflation in EU is stronger than expected. I think, this year, we will see first rate raise in fourth quarter of 2017. They can`t risk to increase inflation too fast, they don`t want to lose control. But nevertheless, inflation is needed and won`t be stopped. They only can and will try to manage its pace. Same for FED.

Next point i want to mention is energy. The air to breath for every economy. With strong USD it will be hard for emerging markets, or those like Myanmar, which started since 4 years to be part of global market with heavy investings from all over the world (for future investings i suggest to keep an eye to Myanmar and his development, it has the chance to  give great opportunities, i wouldn`t want to miss - but not yet, perhaps in 5-10 years), to keep on increasing. Needed energy demand for increasing economy won`t be able to make with strong USD. Would lead to decrease to USD volume demand and hurt the west and USA too, beacause their invested in their (emerging markets) too.  If you don`t participate in those countries, you let the field to russia and china who will have more influence at those countries through economy power and with that mor alliance to them. The west, especially US can`t risk that. And with strong USD they risk it.

I mentioned that points, not because i think, that are the only important once. There are many others as important as well, pro and contra POG we mentioned here and were mentioned in articles. But those  points i tried to describe  are the once, most don`t think of or mention it in media.

Sorry, if it got too long. Only wanted to give a new input in our discussion about POG.

good luck to all
regards
Auge