I think the title script,
like the subject matter, reveals more than first meets the eye. While almost
everyone is trying to convince their readers that they have tremendous foresight,
in reality most are just followers trying to hop on the latest bandwagon.
They use charts to try and convince us that they can read the future, but in
this case they don’t realize that charts are actually misleading.
“It could probably
be shown by facts and figures that there is no distinctly native
American criminal class except Government.”
“ Mark Twain”
CHARTS
What are they and why are
they misleading in this situation? Charts are a reflection of human
nature commonly referred to as MARKET SENTIMENT. But today’s Gold and Silver
situation has nothing to do with Investor Sentiment; rather, it is the direct
result of the biggest, contrived and manipulated fraud in trading history
making the bear raids of the past seem like mere child’s play. It has been
estimated that the latest bear raid defrauded the investing public to the
tune of $1.2 trillion in two days. What most don’t seem to realize is that it
was merely a desperate attempt by a DESPERATE government to strengthen its
currency and hang on to its position as the world’s only reserve currency.
But in the end, the devils who have been manipulating the Gold and Silver
markets since the early 1970’s will get their just comeuppance.
The tables have now
turned and anyone who can’t see it is just not looking. To begin with, the
Precious Metals have the natural laws of economics on their side. “A LOWER
PRICE INCREASES DEMAND” (Economics 101). Gold has another but much less
well known Law of Economics going for it: Gold is a “SUPERIOR GOOD”. What
that means is that when a Superior Good rises in price, unlike all other
products demand increases; the higher the price increases go, the higher
demand increases.
Once the general public
and the professionals realize that they have been defrauded, they will be
coming back into the GOLD and SILVER markets with a vengeance; not only to
get even but more importantly, to make money and most important of all, “TO
PRESERVE THEIR BUYING POWER and PROTECT THEIR WEALTH.”
THE MOST PERFECT
BUYING OPPORTUNITY
The CFTC releases its CoT
report late every Friday afternoon, as of the preceding Tuesday. So the
latest available data is as of Tuesday, July 9th and it is truly
stunning. Gold-futures speculators held the short side of an astounding
178.9k contracts! This was at least a 12 year high; the
most-extreme gold-futures spec short position in its entire history.
The sheer size of this
bearish bet is breathtaking. Each COMEX Gold contract controls 100 troy
ounces of Gold. So American futures speculators have borrowed and sold
17.9 million ounces! That even dwarfs the record selloff in the
holdings of the flagship GLD Gold ETF over the past 7 months, which now
weighs in at 417.3t. This epic Gold short is wildly
unprecedented. (Adam Hamilton)
The risks of such a huge
downside bet on Gold are mind-boggling and therefore provide all the
necessary makings of a HUGE SHORT COVERING RALLY. By
definition, futures speculators are not producers since
they aren’t Gold miners: The only way they can deliver the 17.9 million oz of
Gold they’ve borrowed is by buying it in the futures market. But even
that won’t be easy - 17.9 million oz is the equivalent of 1/5th
of the world’s total production!
My 2005 Gold projection
of $6,250 by 2017 did not take into account the recent $1.2 trillion fraud
nor did I account for $85 billion per month of QE to Infinity, so my
projection may be somewhat understated and have to be raised as well as the
time period be shortened. But I will leave it as is for the time being since
it would only be an exercise in mental masturbation and I have gotten too old
and lazy for that.
THE DETROIT
DECLARATION OF BANKRUPTCY
Could this be the BLACK
SWAN that I have been expecting as well as the WAKEUP CALL that the Bull
Market is also nothing but a manipulation by a corrupt government creating
massive irrational exuberance using lies, fraud and false government reported
statistics and massive printing of Fiat Money ($85 billion/month) in an
effort to convince its people and the world that all is right with the
economy and the US is not bankrupt. But like Europe and Japan, it is
definitely bankrupt and it is just a matter of time before the whole world
realizes it. We are about to witness and experience the inevitable end of
Socialism. The only thing that can salvage the situation is a return to
FREE MARKET CAPITALISM. However, with the world’s education systems having
been almost completely hijacked by Keynesian Socialism (beginning in the
1920’s), there are no longer any influential FREE MARKET economists left who
are capable of leading us and the world out of the hole we have dug ourselves
into since FDR and his Democrats convinced us that they had saved “capitalism
from itself.”
SO WHAT DO WE DO
NOW?
There is only one thing
we, as individuals, can do now and that is to save ourselves and our families
“financially” by buying Gold and Silver coins and taking personal possession
of them.
Gold and Silver mining
companies are now more undervalued in relation to their bullion
prices than they have ever been. They are all down an average of 50%
or more since their 2011 highs. To be safe: Make sure that the majority of
their mines are in the US or Canada. Maybe even mining friendly Mexico, which
I am not so sure of: Remember what happened to MAG SILVER (MVG), but at least
that was not government sponsored. So maybe we can add Mexico as a safe
country to invest in.
By now you all should
already have a list of PM mining companies that you were prepared waiting for
that trigger. I think that the announcement of the DETROIT CITY BANKRUPTCY
could be that trigger.
The following is an
example of a strategy, using my three favorite companies that you may
consider using:
#1 ROYAL GOLD
(RGLD) BUY OCT 50 CALLS @ $2.40, while
simultaneously selling OCT 45 Puts for a credit of $3.90. Enter both
orders as a spread order with a credit balance of $1.40.
#2 SILVER WHEATON
(SLW) BUY SEPT 23 CALLS @ $1.00 while simultaneously
selling OCT 23 PUTS @ $2.65. Enter both
orders as a credit spread of $1.65.
#3 FRANCO NEVADA
(FNV) BUY OCT 40 CALLS @ $1.40 while
simultaneously selling OCT 45 PUTS @ $7.00. Enter both orders as a
credit spread of $5.50.
These three are my
favorite low risk Precious Metal Stocks since we have entered what I consider
to be a low risk excellent buying opportunity. Do your own DUE DILIGENCE and
guide yourself accordingly.
NOTE: REMEMBER TO CHECK
YOUR MARGIN REQUIREMENTS BEFORE ENTERING ANY ORDERS.
GOOD LUCK AND GOD
BLESS
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Aubie Baltin CFA, CTA, CFP,
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This article, like all my others, is for education purposes only and
is designed to help you make up your own mind; not for me to make it up
for you. Only you know your own personal circumstances, so only you can
decide the best places to invest your money and the degree of risk that you
are prepared to take.
