On
July 25th, I provided a warning that gold
and silver prices were NOT too expensive despite the
propaganda of the commercial investment industry to the contrary,
specifically for three reasons I outlined in the above linked article. We
have just witnessed gold’s price move higher by $98 an ounce and
silver’s price move higher by $0.64 an ounce in about one week’s time.
With
everyone mesmerized in the past week with the issue of whether or not the
credit rating agencies would downgrade the US’s rating, I tweeted the
following this past July 29th:
“think that a deal to raise debt ceiling
will be announced before deadline. but in the end,
whether it happens or not is really irrelevant.”
“for debt ceiling to be raised or not is
like choosing b/w being on a sinking rubber raft or the sinking Titanic. both
outcomes will be same”
“only timeline for crisis will change because
no problems will have been solved whether debt ceiling is raised or not. that is the key point.”
Frankly,
I really didn’t care whether the US credit rating was downgraded
because in my mind, it should’ve been downgraded at least 5 years ago
and I knew that any subsequent downgrade, if it happened, would not reflect
the true state of the disaster that is the banker/US government kleptocracy. I knew that the fundamentals supporting gold
and silver would not be changed by the outcome of this credit rating
downgrade and that gold, regardless if the bankers and the CME colluded in
the future to knock down prices by raising margins and forcing longs to
liquidate, as they did with silver recently, would still recover strongly in
the future no matter how far they were able to take prices down in their
bogus-run futures markets in London and New York.
Commercial
investment advisers consistently dole out some of the worst financial advice
I have ever encountered. Why? I believe sometimes advisers at huge firms want
to do what’s best for their clients but this often conflicts with their
corporate directive, which is to feed the corporation’s bottom line. So
even now, though there is a very high probability in my opinion, that the GLD
and SLV ETF are fraudulent funds, commercial investment advisers continue to
shuttle their clients that want exposure to gold and silver into these
vehicles (read
here for more on this).
Secondly,
financial advisers can almost never contradict the top investment strategists
of their company. For example, Robin Bew, chief
economist at HSBC Bank, predicts gold will fall to $1390 by year-end and to
$1000 by 2013. If the Chief Economist at your firm is predicting a
substantial drop in gold prices, then as an adviser at this firm, you
can’t very well advise your clients to buy mining stocks on the falling
gold prediction of your Chief Economist, even if you believe they will go on
a monumental run in the second half of this year.
One
thing I truly believe, however, as you can see in the below graph (note: the below graph is from the end
of last week), is that this current correction in gold and silver
mining stocks have made them supremely cheap again and that the best-in-class
mining stocks, when this correction ends, will offer some of the best returns
of any asset class for the remainder of 2011 given the obvious and deliberate
devaluation Central Bankers are inflicting upon the US dollar and the Euro.
Again,
one has to remember that concentration does not equal risk though the
commercial investment industry really wants all their clients to believe this
rubbish concept. Secondly, corrections in gold and silver, though they are
very frequently sold by the commercial investment industry as the
“bursting of the precious metals bubble”, are just that –
corrections, and additionally buying opportunities to accumulate more
physical, when they happen. If one truly understands the fraudulent nature of
today’s fractional reserve banking system, one would realize that
concentrated strategies are the ONLY strategies that have led to wealth
preservation, wealth growth and risk reduction in the past few years. Not
owning a single ounce of physical gold and physical silver in this
environment is absolute insanity (and remember if
you own the GLD and the SLV, you DO NOT own a single ounce of physical gold
or physical silver). Recall last week’s conversation below to know that
politicians and bankers will lie to you much more frequently than they will
ever tell you the truth.
Fox Business Reporter Peter Barnes: “Is there a risk that the United
States could lose its AAA credit rating? Yes or no?”
US Treasury Secretary
Timothy Geithner: “No
risk of that.”
Barnes: “No risk?”
Geithner:
“No risk.”
After
all, former US Federal Vice Chairman and current Princeton University
economics professor Alan Blinder, in perhaps what was one of the most
misanthropic statements of all time, condescendingly stated, “The LAST DUTY of a Central Banker is to tell the
public the truth.” (emphasis
mine). At SmartKnowledgeU, we have seen this
disaster coming since 2006 and have literally been urging our clients for six
years now to buy physical gold and physical silver. For those that have
concentrated their investments in gold and silver the last 6 years, the
rewards have been tremendous, even through the
disaster of 2008. Still, it certainly is not too late to benefit from gold
and silver investments right now though the Commercial Investment and Banking
industry may be trying to convince you otherwise.
At
SmartKnowledgeU, we believe that this current
correction in mining stocks will offer the last buying opportunity of the
year and that any future correction in gold and silver that may happen before
the end of the summer (if it even happens) will also offer the last buying
opportunity of the year. And whether QE3 happens or not, this is irrelevant
to investing in gold and silver assets. It is our firm belief, QE3 or not,
that gold and silver will provide far superior returns to any global stock
market for the remainder of this year and in future years as well.
J.S. Kim
SmartKnowledgeU
JS Kim is the Managing Director and
Founder of SmartKnowledgeU, a fiercely independent investment consulting
and research firm that devises investment strategies to protect Main Street
from the fraud of Wall Street.
Article originally published
on SmartknowledgeU here
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