$USB Weekly vs. GBN.V

We have seen the top in the bond market for a time, but since the price mark and the technical indicators were showing a meaningful decline, interventions were in order via open market operations, and S&P downgrades of government debts in Europe, even those countries whose balance sheets were kept in order. This kept the bond price up for an extended period.

Normally a price rout in the $USB takes 24 weeks to complete, but instead this price intervention has kept the price from selling off for almost the whole while. That might mean that we'll see much lower interest rates eventually, or that the bond price go unsupported for the next few weeks, in order that justification is made for a massive round of quantitative easing. But there is probably no justification for saying that the regime of negative real interest rates will be affected, because Operation Twist is, by itself, causing monetary inflation.

At the very least, there are massive gaps to be filled in the weekly chart.

GBN.V stands to benefit directly from a price rout in long dated treasuries. Traders had continued to lay on substantial amounts of lopsided risk during the price peak in the $USB. At the same time, the gold price is well supported with short term interest rates flirting with the zero bound.

imo, GBN.V had better be prepared to initiate a dividend payment quarterly, otherwise the truth will out about the nature of the deposits, and face a hostile takeover. Sprott, via Cormark, supported the hostile takeover of Crocodile Gold by Luxor. Luxor had to raise its bid for CRK.TO because nobody was selling their shares and they fell far short of accumulating an 85% stake. Sprott also supported the hostile takeover of Augen Gold by Trelawney. Trelawney as a gold exploration company is, imho, a total swindle.

Resolute funds has been ultimately very timely in their doubling of their position through cashing warrants. (at the very least, this is what the business profile for GBN.V in the financial times website indicates.)

supersize: http://www.flickr.com/photos/11747277@N07/6760225015/in/photostream

stockcharts.com

-F6