By: John Fisher
Yesterday was a GREAT day for those who hold precious metals. When the gold and silver markets fall as hard and as fast as they did yesterday, that almost invariably foretells of higher highs ahead. Plus, we get a great buying opportunity at the same time! Double bonus
We must ignore the noise in the marketplace – of which there was plenty yesterday. There was a lot of talk in the news about deflation. Deflation is always the catalyst for the coming hyperinflation. Therefore it is today’s financial market deflation talk that is the very reason why you should own gold.
The continued slowdown in housing, business, consumer spending, et al will put the government in a panic. They will abandon any remaining austerity and bow to the whining populace and their own November election prospects.
As the day wore on yesterday, the financial news decided gold was down because there was no longer any chance of serious debt problems for Greece, Spain, Italy, Portugal or Italy. Their reason was that the Spanish debt offerings went so well, even in the face of potential rating agency downgrades announced yesterday.
The major gold bullion banks piled on the short position at the Comex commodity exchange, sending a wave of panic through those traders who deploy mass amounts of leverage, taking gold down hard.
Today was not a top in the gold market. Rather, it was an attempt by the commercial short traders who hold huge positions to cover their positions, to force those with long positions to liquidate and to shake out the weak-handed physical bullion holders. And, it worked.
Volatility is only going to get worse. I am sure you will see gold move as much as $300 in a single day at some point in the future.
Gold will certainly trade at $1,650 and most likely much, much higher.
As it becomes impossible for business and governments to select the right currencies, gold becomes more attractive as the asset of last resort as it has always been in the past. Gold will end up being the final refuge asset of the Western world.
Many times after days like today, the market will have “purged” itself and will subsequently turn around and run past its previous highs. Let’s watch and see if that’s the case.
On a final note, the following list comes from James Turk, a highly respected gold trader and mine owner. Please take a moment to contemplate what each of the following points means to you. They provide a sound reminder as to why you have bought insurance in the form of gold and silver:
- Gold is a currency with no liabilities attached.
- Gold is not subject to counter party risk.
- Gold is competition to paper currency.
- Gold is not a commodity.
- Gold is a barometer of fear.
- Gold is a barometer of confidence in Government.
- Gold is insurance.
- Insurance is not something to trade.
- Gold is completely private.
- Gold is money when money fails.
- Hyperinflation is a currency event, not an economic event.
- Hyperinflation is a currency event described as a loss of confidence in the currency.
- Gold in your hand eliminates counter-party risk.
- Gold is the high ground when the global tsunami hits.
- Gold removes financial agents between you and your assets.
All Things Considered – John’s Commentary
Remember two things:
- We are in Stage 2 of the 3 stage bull market in metals. Stage 2 climbs a “Wall of Worry”, as evidenced today.
- Bull markets are called “bull markets” because the bull does everything in his power to throw you off. As in the rodeo, you have to hold on as hard as you can until the buzzer sounds – then leap off! We are a long way from the buzzer, and I’ll let you know when we get there, because I’ll be getting off as well.
Action to take: At these levels, add to your positions if you have the available resources. This is an excellent buying opportunity. If you have been waiting, now is the time.
What to buy: Gold – very low premium Austrian 100 Coronas, US Arts Medallions and Mexican Onza’s. I also just found a great buy on gold Canadian Maple Leaf coins. Silver – 90% pre-1965 silver coin is very inexpensive. Circulated silver dollars (Peace and Morgan) are also cheap at present.
Quote of the day: “Gold is not necessary. I have no interest in gold. We will build a solid state, without an ounce of gold behind it. Anyone who sells above the set prices, let him be marched off to a concentration camp. That’s the bastion of money.” – Adolf Hitler
Adolf Hitler, fascist & dictator (1889-1945). Hitler had a contempt for gold and wrongly believed that the authority and military might of a state could confer legitimacy on its currency.
