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Gold Price Close Today : $787.10
Change: -10.40 or -1.3%
Silver Price Close Today : $11.64
Change: -35 cents or -2.9%
US Dollar Index Today: 79.52
Change: 0.12 or 0.2%
The time a long-term bull like me capitulates to a correction is about the
time the correction has ended. I look at the charts and there is no logic to
them, neither gold nor silver. Where's the bottom for a collapsing market? Go
back a long ways to old triangles and see if any apex is a candidate. Look
for long term, very long term, uptrend lines. I remain in the same quandary,
because I cannot accept that the silver and gold bull market have ended.
First, not enough time has elapsed - the bulls should run at least another
7-8 years. Second, the chief driver of the bull -- inflating fiat national
currencies -- favours silver and gold as strongly as ever.
Look at the US dollar, & tell me what has fundamentally changed? The
government has huge fiscal deficits, the country runs huge balance of
payments deficits, the economy is falling into re/depression, which trips all
the institutional "circuit breakers" installed since the Great
Depression to ramp up inflation whenever any downturn strikes, the
Administration wallows in an Iraqi war that's lasted longer than World War
II, has a war in Afghanistan (which ate both the Russians and the British
before them), and is trying to start a war with Russia. And now the geniuses
in Washington have added Fannie & Freddie's half a trillion in debt,
adding 50% to its own debt at one fell swoop. Brilliant. Stunning.
Now, explain to this pore ol' natcheral born fool exactly WHAT has changed to
strengthen the dollar? Its exchange rates have risen? Sharply? Welcome to the
world of bear market rallies, short, sudden, punishing to the shorts. Explain
to me also how a system bred and built to inflate, driven by politics which
demands ever more inflation, will suddenly deflate? Not possible. And even if
debt begins massively collapsing, politics (which runs the system) will force
them to inflate and hyperinflate, even dropping bills out of Bernanke's
helicopters.
Okay, for those of you who invested in silver and gold since March, think
about this. Yes, your silver and gold may have dropped, but how have they
done against stocks? They buy about the same piece of the Dow as they did in
the spring, and stocks haven't made any great headway against metals.
O, be patient! Veritas filia temporis -- truth is the daughter of time. Gold
could drop to $750, even $720, silver to $10, or they might turn 'round tomorrow,
but which would you rather hold? Ben Bernanke's IOU, or silver and gold?
Which do you trust more? I may be lunatic, but nobody ever went broke betting
against the US government's fiscal trustworthiness, at least, not since 1913
(and actually, long before that).
Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.
Franklin Sanders
www.the-moneychanger.com
Reprinted with permission from The Moneychanger.
Franklin Sanders lives on a farm in Middle Tennessee by choice, deals in
physical gold & silver, and has been writing and publishing The
Moneychanger for nearly 26 years. In 1993 he wrote Silver Bonanza for
Jim Blanchard. Last year he published "Why Silver Will Outperform Gold
400% and & The Professional Trading Secrets That Will Make the Most of
Your Silver & Gold Investments," still available at www.the-moneychanger.com/order/publications.phtml.
You can sign up for Mr. Sanders' free daily e-mail
commentary on gold & silver at www.the-moneychanger.com, and download your
free portfolio calculator to keep up with your gold and silver investments.
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