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Gold Price Close Today: 892.70
Change: 46.10 or 5.4%
Silver Price Close Today: 12.648
Change: 1.028 or 8.8%
Mercy! What a nut house we live in. The gold price today rose as high as
US$920 and the silver price up to $12.98, then about 14:30 Eastern time they
crashed and stocks rallied. The gold price dropped as low as $838 and the
silver price to $11.90, after closing at $12.648 and $892.70.
Stocks ended with a big up day. Well, wait, that's not quite true. The Dow
rose 406.45 points on the day, but that's after losing 900 points over two
days this week. Point is, the Dow managed to climb over 11,000 to close at
11,016.11. US Dollar index rose a ponderous 11 basis points to 78.24.
Lo, what worked this alchemical change upon the market so suddenly? This is
where the nut house comes in. US Treasury secretary Hank "the
Honker" Paulson met with congress and spoke about a plan "to deal
with bad debt similar to the creation of the Resolution Trust Corporation in
1989 that resolved the US savings and loan crisis." That caused the
market to rally. Now get this: there is no plan. There was no deal. No
resolution is in order. Hank the Honker merely "spoke about" a
plan. Spider webs. Er spinnt. Yet stocks were looking for an excuse to rally.
Yesterday 1,200 stocks made new lows, and any day when 1,000 or more stocks
make new lows always points out a bottom.
Welcome, O victims, to the brave new world of the government run economy! If
the US economy were a filling station (in Oregon, where somebody pumps your
gas) and Ben Bernanke and Hank Paulson were the gas pumpers, they'd be
wearing green denim jackets with the slogan across the back, "Makin' the
world safe for Big Business!"
Friends, for the next little while you are going to get volatility and yet
more volatility, so put down that wastebasket, stop puking, and tighten your
belt.
Yesterday the gold price staged its largest one day rise in history, US$70.10
up 11% and the silver price rose $1.15, then another 36 cents in the
aftermarket, up 15%. Today gold rose 46.10, a number right up there with
all-time big moves, with a range of US$93! (920.20 high to 827 low). Right
now in the aftermarket they're trading US857.70 and $11.92. I have no doubt
that we saw the silver and gold lows on Tuesday. But volatility hasn't ended
yet.
The Nice Government Men needed not only to resuscitate stocks, they must also
goose the dollar and slam silver and gold. They will launch an attack on
silver and gold, and that right soon. It may, probably will, drive them down,
but not for long. Why? Well, answer that with another question: why did gold
rise US$70.10 in one day? Did anything happen around that time to send it
running? Well, matter of fact, without benefit of congress or constitution,
the Federal Reserve bank (a private corporation) and the US Treasury
secretary nationalised AIG, taking a 79.9% ownership interest and fronting
AIG $85 billion bucks. That, with the other bailouts -- Bear Stearns, Fannie,
Freddie, Countryside, etc. -- proved to somebody that the NGM will inflate
the dollar to bail out its buddies, & the rest of the country, and the
dollar, be damned.
Cry, O, cry for what they have done, and what will come! You may hold on to
value by holding silver and gold, but the misery will spread so wide and far
that owning them will be a bittersweet pleasure.
Buy silver and gold. The NGM have plainly telegraphed what they will do:
inflate the dollar to nothingness. Yes, volatility and turmoil will reign in
the short term, but just keep your eyes on the long term: the dollar's death.
Besides, ask yourself which you had rather hold, physical silver and gold in
your hand, or bank deposits? Brokerage balances? US bonds? US dollars? Euros?
To me, the answer is clear.
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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