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The Problem with GLD and SLV ETFs
Bottom line We are moving deeper into a period where it is wise to distrust all large government, banking and corporate interests as they will ruthlessly act to insure their survival even if it costs you yours. The examples of this grow as each year goes by and likely will for another decade. Be very cautious and you will be rewarded for your caution. Expand your assets classes gold silver palladium, Swiss Francs diversify out of the dollar. A dollar devaluation will likely be seen in the next few years like Roosevelt's in the 30's Except this time no gold need be involved as the dollar is now pure fiat. Simply a Treasury announcement that each 10 dollars you hold is now worth 1 dollar. Presto Chango a 30 Trillion Dollar Debt is now only 3 Trillion. There would be a whole lot of complaining and large holders like China would squeeze the US for extra consideration but the most part "Fait Accompli" would be the phrase of the day (Translation: It is already done)
This is not some political swipe at Obama and crew merely stating
what will likely ensue after this years trillions thrown at the derivative madness in which we find ourselves. Gold and Silver are not Derivatives
These ETF's will prove they are at some point so use them advisedly and only after you have acquired a physical position in Gold and Silver.
Heavy on the Silver until we reach new highs then rebalance as we near the top of the next parabolic move
See Kondratieff Wave for perspective on where we are in the economic cycle remembering that the timing will need to be adjusted as we should have had our top in stocks back in 2000 but gov't tinkering to avoid the business cycle have merely extended it and the length/scope of the time of economic pain
Gold and Silver Are Not Proven Inflation Hedges
And Please don't present Graphs of CPI as being some kind of stable state baseline when the methods by which it is calculated have changed with the designs of the Fiat printers. A commonplace disinformation tactic these days. Recently the CPI was showing a 3.5% inflation yet when calculated by the methods as in 1978 it would have shown over 12% . . . Most Gold Enthusiasts are aware of this so please don't insult our intelligence.
Also Gold and Silver respond to the Real Saving Rates . . . Interest Rates minus the Real Inflation Rate . . . if this is negative then you ar3e losing buying by holding cash. The Smart Money Moves into Gold and The Smartest money moves into Silver as Gold Silver ratio is 77.5 Silver oz to 1 Gold oz
Premiums Paid for 100 Ounce Silver Bars
Also various Precious Metal PM dealers are buying 1000 oz silver bars from the comex and selling them individually. Tulving.com is selling 1000 oz Silver bars at a 7% premium or .69 over spot. Although the US Silver Eagles are going for 6.99 over spot about 70% premium with other silver items having premiums from 25% on up. The Smart money is selling Gold and Buying Silver as you can get almost 80 oz Silver for 1 oz Gold. Trade back when the ratio reaches 40 or 20. At 20 Gold to Silver ratio you would then receive 4 oz Gold for your 80 oz Silver. A nice 400% gain and you got to keep your PM's the whole time.
Gold: War of Attrition
www.fdrs.org/executive...
Gold: War of Attrition
AS far as the recent pullback in Gold it has been very minor relative to all the other commodities. It held it's value more than any other as far as I've seen . . . take a look. Everything has suffered though as a world of margin calls has had millions of investors raising cash to pay off their Margin/debt and of course you need dollars to do that in most transactions around the world . . . especially in Oil, Precious Metals, US treasuries etc Thus the dollar has risen but that flood is ending as is the rise in the dollar!
Survival of the Fittest: Save Haven Investments
Really MArk Anthony do a little research before spread the word that Royalty company's are a weak business model. 1st off they don't borrow a ton of money from banks as they already have it but if they have credit line or have borrowed that is an asset as no one can get financing right now. This dollar rally will be short lived as we have such low rates that money will go seeking a return else where and that right soon. And all these miners whose business models you prefer would waste billions shutting down and later reopening mines while the Royalties company simply wait for their Gold and Silver to start flowing again. Doesn't cost them all that money RGLD has a total of 13 employees I don't know SLW's situation. Your logic here is obviously inverted as to which model is safest and most efficient. I would not doubt if these comnpany are using this difficult environment to add to thier royalty contracts
The Favorable Outlook for Gold
In a world of Floating Currency's the comments of Adrian Ash and James Turk are very apropos. Especially in the current environment of rapid change many could become confused with all the valuation adjustments and relinquish their best positions based on false signals generated by forced liquidations of hedge funds assets. This is a time of opportunity for those with the vision to seize the Day. Made more difficult when misdirectionists cloud the water even further. Be it out of ignorance, ideological blindness or malice.
The Retail Coin and Bar market is one level of the gold and silver market. As such it can function as a barometer for demand for physical gold and silver. An early warning which also pushes people up the ladder to larger scale precious metals , PM, purchases as many who have not been able to satisfy their needs for gold or silver have moved the ladder to futures with the intent of taking delivery or to Bullion dealers who have found the only way to supplly the demand they are 3experiencing is via taking delivery of 1000 oz Comex Silver bars or Comex gold bars and then selling directly to the public. So for all of you who think that a retail PM market with no supply to sell is a non event, please Sell all the Gold and Silver you want they need it or sell on the futures exchanges as the lower the priced is pushed the more powerful the snapback will be and I do love a bargain. I expect that snapback rally within 10 trading days and likely 4 trading days.
Now let's look at Mr Amberger's China rationalizations. First he tells us the VW Jetta is the number 1 selling car. I would imagine at prices over $10,000 per car then he shows us how the Chinese could not possibly buy gold when they average $2000 per year in earnings. Disingenuous. The majority of the people in the US who buy gold are those who make more than the per-capita disposable income. More importantly in China the class divide is quite pronounced as it is in it's infancy in term of capitalist development.
Regarding India . . . India is a nation of very astute precious metals investor. Traditionally they purchase 25% of the world gold production. Mr Amberger makes the point that gold buying in India has fallen by 50% by using a Sound-Byte? A Sound-Byte? Oh a sound-byte by the president of the Ahmedabad Jewelers' Association, Shanti Patel . . . hmmm he has no axe to grind, no conflict of interest, nothing to gain by talking down that which he needs to carry on his chosen profession. Come on Amberger give me some real information. There is so much salient info not included in this sound-byte about Mr Patel individual arena of the Indian Gold and Silver market as to make in the info less than useful. But then he uses that disinformation to prosecute his case for ever lower prices.
"But the deferral of buying in India means only one thing:
Prospective buyers expect prices to fall even further! "
Mr Amberger if that deferral is taking place to whatever degree then there are numerous other potential meaning. Odds are very good that the experienced intelligent Indian PM investors are doing exactly what I have done. Selling their Gold and Getting 80 to 90 oz of Silver in return. If they are doing it right now then they would get 78 oz's. Simple fact is when gold and Silver reach their lows the Gold Silver ratio reaches it's highs. The smart investor trades his Gold for Silver. Once the PM market has another parabolic move to new highs the ratio should be in the 40's at a minimum though I believe this time it will get into the 20's or lower as physical silver stockpiles continue to dwindle. Anyway a very nice way to quadruple your gold holding all the while retaining the currency insurance provided by Holding Physical Precious Metals.
Here is a nice article on Indian Silver Sales "Pay Attention to Indian Silver Buying Spree" published on Seeking Alpha 2 days before this one seekingalpha.com/artic...
To loosely quote mark mchugh "You're like the guy on the beach right before the Tsunami hits who says. "Look there is no water!" "
You may have some good advice to give in your service but not to me as I see to many holes in your logic. I'm looking for gold and Silver to find support maybe this coming week but definitely in November
Gold in a Credit Crisis
Yes, Gold and Silver will rally incredibly but once the job is done regarding US debt and the Amero Union they will crank up interest rates in a economically painful replay of Paul Volcker's years as FED chairman. Inflation will be capped and you should sell your Gold, Silver, Mining Stocks, Resource Stocks and Buy Stocks and Bonds at major lows. Though one would need to review how far along the BRIC nations have come in their Quest to match the current US a middle class way of life if they still have a long way to go then perhaps the resource sector has a ways to go unlike the early eighties. So we might see Stocks and Bonds bottom but Resources/Commodities could still have legs for further gains. Remember history merely rhymes . . .
More On Rising Dollar, Declining Gold
I'm short Gold and Silver Futures but to sell your Physical Gold and Silver at this time is not wise as you could easily wake to find a "Banking Holiday" with all US Dollars cut in half so as to lower the US DEbt by half or perhaps even more. This would be akin to Nixon closing the Gold Window in 72 or Roosevelt seizing US Gold and then raising the price up to $35 an oz from below $20. Physical Gold & Silver are your portfolio's Currency Insurance. Would you cancel your Flood Insurance just because you made it to the Eye of the Hurricane? No , especially when it is becoming increasingly hard to find such insurance. The physical markets for Gold and Silver are over 90% sold out at this time. Nobody is selling at these prices they are only buying. All demand and no supply make it hard to acquire these assets. So it is a sellers market you may get a premium over the paper price but you could easily find you'll never reacquire in this price range.
Play games with the paper, Hold on to your physical it may be all the life raft you have
Time For Gold Again
Solarfun Down Despite Reporting a Strong Quarter
Perhaps higher Energy Prices due to Gustaf or Hannah could be a near term catalyst for that upsurge. We will soon see.
Also Dicki careful on AUY that high Volume low at 9.25 will exert a magnetic pull on the Stock Price. If it test's that level with low volume buy with both hands. PM's are my first Love. Take a look at the gold chart Gold has Parabolic tops in Springs of Even years quite often. I'm expecting consolidation over the next year.
How to Explain Fiat Currency to Silverbugs
How to Explain Fiat Currency to Silverbugs
Not a very sophisticated misdirection there Otto but perhaps you could get a job spreading falsehoods for one the Presidential Campaigns running a paper shredder.
Potash One Will Be Top Performer in Agriculture Bull Market
However KCLOF or KCL.TO could well rally back to it's highs long before that as it is a highly undervalued stock based on it in the ground holding of Potash. Assets which will continue to rise as the BRIC nations continue to develop their Middle Classes. Investors with an eye toward the Agricultural Production choke points will see this stock as a true Diamond in the rough as it has large, relatively rare, potash assets. The Solution Mining detailed in this article points towards those assets being appropriately priced much faster than normal mining assets which will take this stock to exciting multiples of it's current price. Of course, all of that is outside the likely scenario that one of the major's such as MOS or POT buy up these assets on the cheap by buying out KCL and what better time then when it and the entire sector have sold off. Often in Commodity Stocks it is buyouts and mergers which kick off a new bull leg so only those who were already in get the benefit.
Technically KCL.TO made it's highs with high volume at 6.25 KCL has made it lows on low volume and is now beginning to rally. Today's strong action may be largely related to this article as numerous new holders are buying in which could signal the rally back to the high is on in this small stock. Or it could be a blip like late July's rally and subsequent sell off either way it is a bargain. I'll add little more next week as I continue to Scale in to this promising stock.
stockcharts.com/h-sc/u...
The Smart Money build their positions at the lows and hold only to take profits at the highs though I will keep a core position in this stock or subsequent owner for years to come.
Inflation: It Could Be Worse - A Lot Worse