This morning I was reading the paper, and asked myself why? Apart from my beloved sports page, it’s full of the same old meaningless crap. I turned toward Susan and asked her, “Is there anything in today’s paper that’s fundamentally different from yesterday or tomorrow? “Nothing that I can see,” she replied. Yup, that’s what I think too. We live in a world of soundbites and headlines that have little if any significance beyond the moment.
Take the stock market as an example: On Dec. 3 the Dow shot up 400 to 500 points. Then one day later, Dec. 4, the Dow is down 800 points. How can that be? What happened that would cause a swing of 1,300 points? Hell if I know. It’s all a short-term trader market now. A tweet from Trump or an innuendo from a Fed governor and it’s up or down – for a day or two. Meaningful long-term trends, like the direction of interest rates or the increase in the budget deficit because of Trump’s tax cuts do not seem to matter.
I’ve been following the precious metals market, the stock market and the economy since 1983. I’m always looking for trends and events that will make an actual difference. But lately, regardless of the news, the markets are all focused only on short-term investing. The markets are all under the firm control of hedge fund traders (with an occasional bump form the PPT). The buy/sell decisions are made by computer algorithms, not real people. The traders at JPMorgan and the other bullion banks are long gone. Momentum and moving averages are the rule of the day. This works for the hedge funds and big banks. They make money on small moves both up and down. It’s a trader’s market (the big boys, not the average Joe). The average investor has no chance to compete. The hedge funds and the banks have the capital, they have the information before we do. Think of this: JPMorgan has won on virtually every trade this year. Actually, this goes back for the last 10-years where their trading on COMEX gold and silver always shows a profit. Is that luck? Do you believe in the tooth fairy? Gold, silver, the dollar, the stock market – they bounce around going up, then down, then up and end up going nowhere. It’s been a while since gold has moved below $1,200 or above $1,260 (5%) and the stock market is stuck around 25,000 points (where a move of 1,000 points represents only some 4%). Everything is in lockdown. One day Trump says he’s implementing tariffs, the next day he’s holding off. Then he’ll wait for 90 days. There’s lots of “noise” and the markets react by moving up or down for a day or two, but then they go back to where they were before the “news.” The reason is because the “news” really isn’t news. It’s just fill for a dulled-down readership.
There is one thing that does make sense. It’s a comment that Chris Powel (GATA) made: “There are no markets anymore, just interventions.” That explains what is happening. There are so many land mines to avoid, one wonders how can Wall Street and our government continue to hold things together? Real estate is already falling and so is the bond market. That’s what happens when interest rates rise. Tariffs are inflationary and bad for the economy. So, what’s holding things together? How long will they hold up? It’s, as Chris Powell says, it’s all about market manipulation, and it will continue, until it can’t.
I can give you many reasons why 2019 should be a great year for precious metals. I fully expect it to happen. But first, gold and silver have to break out to the upside. What the metals market needs is a real event; a major bank failure or another war in the middle east or a move to impeach the President, etc.
Lately I have been asking myself, what should I do with extra income, funds that I do not need to continue my lifestyle? The stock market is way too old in the tooth. You make money early in a cycle, not late, when assets are over-valued. (read the article at the end of today’s daily by Steve Sjuggerud). Bonds and real estate do not perform well when interest rates are rising, and that is plain to see. The Fed says they will continue to tighten in 2019 and the bond market and real estate markets are listening. But the stock market shrugs it off. At this point, I like cash and more silver. There is nowhere else for the average guy to go. The trouble is, most American’s under the age of 50 don’t know a thing about gold and silver – except that they haven’t done well in years. They have no concept of what money is, of the role of gold, of the dangers of way too much debt and money creation. All they know is that the stock market is the place to be. For many, this will not end well.
There will come a time (starting in 2019?) when everyone will wish they had more gold and silver, and not just because the price is rising, but because everything else is in the dumpster and, just as we have said for years, gold and silver are the ultimate asset to own in very tough times. I know, you get tired of hearing the same thing over and over, but it is still true. The only thing missing is “the hard times.” If you seriously believe that Trump will “make America great again,” and will grow the economy and the stock market then you do not need gold or silver. When I look at the numbers, I say that is wishful thinking.
Silver is back above its 50-day moving average ($14.50). That is positive. The bottom for silver was $13.50 nearly three years ago. Gold is well above its moving average ($1,233.90) and is looking strong. It has moved up $200 from its bottom three years ago. Looking ahead, gold has to clear $1,240 (currently $1,237.50) and silver has to clear $14.70 (currently $14.50) as a first step toward much higher prices. We’re getting close…
Here is an interesting quote from Mike Savage:
“Gold and silver are no one else’s liability. They carry no debt. They have been used as money since biblical times. Many say, “they just sit there”. With gold, that may be true but silver is used in just about every modern convenience we have. Computers, cell phones, solar energy, etc.
Keep in mind that, as gold just “sits there” it is up 97% against the US dollar since 1971 with most of that gain coming in the last 15 years. Gold was $35.00 per ounce in 1971. It is $1225.00 now. It was $250.00 in the year 2000 and $300.00 in 2003.”
And here is another one from Jesse:
“When it comes to gold market manipulation there are three kinds of people: those who let it happen, those who make it happen, and those who can explain what happened.”
Here is an interesting article from one of my favorite people. His logic is always impeccable. I am on his wave length..
As he says, central bank buying has put a “put” on the price of gold. They obviously see the need to add to their gold holdings.
“Both Western and Eastern central banks are now fully supporting gold. Precious metals investors can with total confidence buy and hold physical gold, silver and platinum in the firm knowledge that central banks both in the West and the East will by their actions guarantee that the price can only go up. But the support from West and East is very different. Western central banks have not been friendly to gold for decades as they have significantly reduced their holdings.”
The trend is clear. Gold is flowing from the West to the East. They both can’t be right. One of the two is stupid! And it isn’t the Chinese.
The pattern is clear, gold continues to flow from West to East in big quantities. Countries like China, India, Russia, Thailand and Turkey are unlikely to stop buying gold. All these nations understand the importance of gold and will continue to accumulate most of the gold production in the world.
Where is all this heading?
The demand from East and West combined with panic in the paper gold market, will lead to gold only being available at prices which will be multiples of the current price. Whether that price in today’s money will be $10,000, $50,000 or much more is not worth speculating about. But what is clear is that gold at $1,220 is an absolute bargain.
So please, please, protect yourself and get out of the system while it is still possible!
Egon von Greyerz
EASTERN AND WESTERN CENTRAL BANKS SUPPORT GOLD PRICE
Both Western and Eastern central banks are now fully supporting gold. Precious metals investors can with total confidence buy and hold physical gold, silver and platinum in the firm knowledge that central banks both in the West and the East will by their actions guarantee that the price can only go up. But the support from West and East is very different. Western central banks have not been friendly to gold for decades as they have significantly reduced their holdings.
As the chart below shows, central banks’ total gold holdings went from a peak of 38,000 tonnes in the early 1960s to 30,000 tonnes in 2006. The sellers were almost exclusively Western banks. READ MORE HERE
Over the years I have followed Steve Sjuggerud. He has made a lot of very timely buy recommendations. This is one of those times.
“When an asset falls further than people expect – for longer than people think is possible – they give up on it.
It becomes a “left for dead” asset. And investors want nothing to do with it.
That’s when the greatest opportunities present themselves .”
“Today, we have another extreme in pessimism… This time, it’s in precious metals. And it could mean we have triple-digit upside ahead of us.
The story is the same as it always is… Precious metals have fallen further than people expected, over a longer period of time than they expected.
Silver is just one example of what we’re seeing in the sector”…
Cheap, Hated & at the start of an Uptrend – Why Gold and Silver are a Buy Today
Gold is Cheap, Hated & at the start of an Uptrend
I built my career on three words…
I didn’t think I’d be the kind of guy with a tagline or a catchphrase. But today, I am.
When I speak at conferences, the audience says them with me.
If you don’t know the words yet, you will soon. They’re the guiding philosophy behind how I invest.
I’ve used these three simple words to define three investment rules. These are the three things I always look for when investing. And they’ve shaped my career.
Today, I’ll share my guiding philosophy – and one investment it points to right now.
Let me explain… READ MORE HERE