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Precious Metals investors are licking their wounds from
yesterday’s Cartel attack, just another day at the office as far as
I’m concerned. Today, I wanted to help you understand the planning, execution,
and most importantly, mindset of such attacks, as they pertain to the overall
GOVERNMENT STRATEGY of keeping precious metals MOMENTUM to a minimum. And
mind you, the key word is MOMENTUM, not suppression!
My decade of experience in this sector, which as you
know incorporates an exhaustive level of research, tells me the MOST
IMPORTANT FACTOR in gold and silver trading is MANIPULATION, hands down.
PHYSICAL gold and silver demand has EXPLODED over the past 11 years, and thus
it is IMPOSSIBLE to prevent prices from rising. However, by exponentially
increasing the PAPER supply of FAKE gold and silver (via creation of OTC
derivatives and unbacked ETFs, plus naked shorting
of ETFs and futures contracts ), TPTB have been able to not only slow gold
and silver’s ascent, but make trading in all related securities
mind-numbingly volatile and enigmatic.
I have to laugh when I read so-called pundits conclude
that “if they are really conspiring to keep prices down, how come they
keep rising?” As well as, “how can they continue to be short if
they are losing so much money?” These are two of the most asinine
statements I have heard, made worse when coming from people who spend their
time analyzing and often publicly commenting on the myriad other frauds and
corruptive practices of the world’s bankers and politicians.
To refute the first statement (per my above
commentary), the goal of TPTB is NOT to keep gold and silver from actually
rising, but to PREVENT THE PUBLIC FROM THINKING OF THEM AS SAFE HAVEN ASSETS!
Not only are Precious Metals fundamentals stronger than at any time in
recorded history (going out on a limb, but certainly arguable), but
essentially EVERY COMMODITY has been in a strong uptrend for the past decade
as well. So no, they can’t stop it from RISING, just from rising TOO
QUICKLY, and with AS LITTLE FANFARE as possible.
Remember, humanity has 6,000 years of history with
Precious Metals, which not only meet the actual DEFINITIONS of wealth,
fortune, and MONEY, but have also become synonomous
with these concepts in the same generic fashion as the brand names Band-Aid
or Q-Tip (i.e. “good as gold”, “worth its weight in
gold”, “gold star”, “gold standard”,
“silver lining”, etc.). This association has become so ingrained
in the human psyche, that it in some ways can almost be considered GENETIC.
And history demonstrates this “gold gene” can get turned on
extremely quickly when prompted by either FEAR (depression, hyperinflation)
or GREED (gold rushes, soaring prices).
More importantly, just as investors have been
conditioned that the DOW JONES INDUSTRIAL AVERAGE is a “barometer of
economic health” (which is why it is so maniacally supported by the
PPT), gold is seen as a “barometer of bad tidings.” My STRONG
belief is that even the least sophisticated investors in the world, and even
most “Joe Six-Packs” with little or no investing experience,
understand that a rising Dow and falling gold price are considered
“good”, while a falling Dow and rising gold price infer something
“bad.” THAT is the fundamental precept behind what Jim Sinclair
calls MOPE, or “Management of Perspective Economics,” or per Bill
Murphy of GATA, “behavioral finance.” In other words, if the
government can cause you to PERCEIVE economic improvement by propping the Dow
and attacking gold, you are less likely to sell your stocks, protest against
TPTB, and stay quiet and submissive to their whims.
As I’ve written NUMEROUS times in the past, the
Dow ALWAYS seems to be rising (care of the PPT), but never goes anywhere due
to its poor fundamentals, while gold ALWAYS seems to be falling (care of the
Cartel), yet rises each year due to exponentially rising demand and stagnant
supply. Moreover, the Dow’s volatility has in recent years reached
all-time lows thanks to these manipulations (which tend to have a calming
effect on investors and the public in general), while gold and silver prices,
and even more so the mining shares, are among the most volatile in the market
thanks to these constant (think 24/7) suppression.
Moreover, the Cartel plays on your EMOTIONS by making
sure the sector never does what it SHOULD do, constantly COLLAPSING when a
new high is achieved and not only falling, but often PLUMMETING upon the
release of gold-bullish news (yesterday’s bank stock collapses are a
perfect example). Moreover, they employ dozens of other “dirty
tricks”, many of which I have described EXHAUSTIVELY in the past such
as “Don’t let it turn green” and “never let gold,
silver and the PM stocks rise sharply SIMULTANEIOUSLY.” Cumulatively,
these attacks wear you down, so one must not only be savvy to both SURVIVE
and PROTECT ONESELF, they must also be MENTALLY STRONG, the opposite of what
is required to invest in GOVERNMENT-SUPPORTED MARKETS such as the Dow and
U.S. Treasury Bonds.
I’d bet 95% of all investors that have touched
mining stocks have lost money over the course of this 11-year bull market, as
the constant enigmatic attacks, “technical breakdowns”, and
fear-mongering via both “official” and Wall Street lies and
propaganda takes its toll financially and psychologically. That is why you
MUST have a core position in the actual, physical metal (you will NEVER sell
it), and why you need to resist blind purchasing of mining stocks on
“technical breakouts”, contrary to the investing mantra most
investors utilize for essentially every other asset class. Mining stocks are
as historically cheap as at any time in the past decade, but one must adjust
his accumulation patterns to escape the continuous rain of Cartel daggers,
acquiring more when prices DECLINE and less when they rise.
As for the second flawed “guru conclusion”
that no suppression could possibly occur due to the losses generated by such
activities, that has got to be one of the stupidest statements EVER. For one,
the U.S. government has an unfettered printing press, with essential carte
blanche from the rest of the world (for now) to not only permit $2 trillion
annual deficits upon $16 trillion of public debt and $100+ trillion of
“unfunded liabilities”, but also to monetize essentially ALL
Treasury bonds, nationalize ALL failed industries (FNM, GM, C, to name a few)
and even perpetrate WAR on half a dozen nations at any given time.
ALL the gold EVER MINED on earth is worth just $10
trillion or so, of which perhaps 5%-10% is actually SALEABLE and INVESTABLE.
And in the case of silver, nearly all the silver EVER MINED has been consumed
by industry, with the remaining SALEABLE and INVESTABLE silver (i.e. in
bullion form) worth no more than $40 BILLION at current prices. Thus, gold is
just a tiny portion of global financial assets, while silver barely qualifies
as a rounding error. So when commentators write things like “my god,
the COMEX silver shorts are sitting on $2 billion of losses, I have to laugh,
as even $2 TRILLION of losses is currently manageable by a combination of
unfettered money printing and corrupt markets. Heck, the U.S
government’s public debt rose by $400 billion IN AUGUST!
And oh yeah, how much of those losses are offset by
illicit, insider trading profits when engineered PM smashes are orchestrated,
such as the past two weeks’ DEATH STAR ATTACKS or, even better, major
operatives such as the SUNDAY NIGHT PAPER SILVER MASSACRE?
Which brings me to the point of this
RANT, GOLD INVESTOR LIMBO.
If I could get online, I’d look up the precise definition
of limbo to wow you with trivia, but I don’t so I’ll wing it. The
way I understand the concept, limbo is a place where one’s spirit goes
before God’s decision to send it to heaven or hell. In other words, a
time of great consternation, frustration, and reflection.
From my decade of Precious Metals investing (ALL IN
SINCE MAY 2002), I can tell you confidently I have been in the equivalent of
investing limbo DOZENS OF TIMES thanks to the Gold Cartel and other market/media/public
manipulating mechanisms that work synchronously to affect asset prices and
investor psychology).
A typical example looks something like this (if it
seems familiar, it’s because it just happened!):
After consolidating for weeks on end, with constant 3
AM EST smashes, underperforming mining stocks, silver “flash
crashes”, enigmatic, counterintuitive “technical failures”,
and of course endless “top” and “bubble” calling from
“good” and “bad” guys alike, gold suddenly takes off
on a nice run for a few weeks. The Cartel’s 1% and 2% cap rules are of
course enforced each day, and no real excitement or, god forbid,
“froth” ever enters the market, but once again gold’s price
trend is again reflecting the relentlessly positive fundamentals by rising.
Thoughts of increasing gold mining stock positions race
through your mind (even on margin!), as you ponder whether this is FINALLY
the time when the sector BREAKS OUT for good, yielding the
“internet-like” mania that SHOULD finally occur. Chatter about rising
gold prices, while reluctant, spans the airwaves and circulates on the
internet, ZeroHedge content becomes increasingly
gold bullish, and each Sunday afternoon is enthralling as you wait for Asian
markets to open, potentially yielding the elusive $100+ gold opening print
that you KNOW is coming, with gold NEVER to look back afterwards.
Then, just as the fundamentals AND market action SCREAM
for this to occur (think 120% yield on Greek bonds and collapsing bank stocks
yesterday), gold abruptly peaks at EXACTLY 3 am EST one night, or in the case
of the aforementioned silver massacre, in the first hour of trading on a
thinly traded Sunday night when China was closed for a holiday. Suddenly, the
entire rally vanishes into thin air for ABSOLUTELY NO REASON while no other
markets do ANYTHING significant, and you stare at your screen, at the
PLUNGING metal prices and mining equities, cursing the world and thinking
about which stocks you need to sell to prevent a margin call and the
immediate loss of week’s worth of profits.
When you finally look up and catch your breath, you
realize the Cartel has ILLEGALLY inflicted still more losses on you (THAT is
where they make their profits), the gold top/bubble callers are again out in
full force to rub salt in your wounds (pointing out “technical
breakdowns” and “market action makes commentary” reasons),
and, worst of all, it “feels” like the PM markets are ready for
yet another long bout of doldrums. Or, as I view it, additional weeks and
potentially months stolen from my life.
It is at these times that the INNER FORTITUDE noted
above is required most, because believe me the whole world IS out to get you.
However, you have one MAJOR arrow in your quiver, one that will likely REMAIN
THROUGHOUT YOUR LIFETIME, and that is that gold and silver are in the VERY
EARLY STAGES of a potentially MULTI-DECADE bull market.
I believe simple math regarding cumulative money supply
creation GUARANTEES a gold price of AT LEAST $10,000-$20,000/oz before economic equilibrium is reached, and likely
dramatically more (perhaps infinitely so) if the current, seemingly
inevitable path toward Western world hyperfinflation
is realized.
As for silver, given its level of scarcity
(DRAMATICALLY less investable silver than gold), dual roles as both STRATEGIC
INDUSTRIAL METAL and MONEY, and historic correlation to gold, I believe it
NEARLY IMPOSSIBLE that the gold/silver ratio, which fell as low as 31 in
April, will NOT decline to AT LEAST 10-15 in the coming years. Do the math of
$10,000-$20,000 gold and a 10-15/1 gold/silver ratio, and you get my
“pre-hyperinflation” silver target price of $650 at the low end
and $2,000 in the best-case scenario.
Hopefully, this RANT will help you to IDENTIFY with the
emotions I have encountered for the past 9½ years, and to make the
correct INVESTMENT options during periods of LIMBO, which is what the Cartel has tried to inflict on us since gold first broke
above $1,900/oz two weeks ago.
Remember, we have only spent a few WEEKS above $1,800/oz in gold’s HISTORY, and not more than a MONTH OR
TWO above $40/oz silver. These are the EARLY STAGES
of the Precious Metals bull, the time when 99% of the public STILL is not
aware of it, and equally importantly when INVESTABLE SUPPLY remains for the
taking (remember, gold and silver WILL go “no offer” at sometime in the future).
Use these periods to ACCUMULATE positions in the
Precious Metals sector, making sure you have a core position in the metal, of
course. Moreover, Gold mining stocks are trading at essentially all-time low
multiples of earnings and reserves, so when you see a particularly hard SMASH
of the sector, take a good hard look at the equities, making sure to do
INTENSE DUE DILIGENCE before committing your capital.
I strongly believe gold will be above $2,000/oz later this fall, and when it pierces that hallowed
level, please make sure to take heed of the advice given in this RANT!
Finally, I wanted to end this missive with a piece of
potentially good news, one I had forgotten over the summer. Bart Chilton of
the CFTC, the “lone wolf” who earlier this year declared his
belief that COMEX silver prices are manipulated, stated that if the CFTC has
made no official conclusions regarding its ongoing, 2+ year investigation
into this matter, he will personally make a public statement on the topic by
the “third week of September”, i.e. next week.
Hopefully, this will be a positive catalyst for the
group (as was his first silver manipulation announcement), even better if it
occurs on my BIRTHDAY on the 22nd!
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