Yesterday gold closed at exactly $1,400. A lot of people in our industry make a big deal over this number. Actually, it’s irrelevant. I’ve been writing about gold through every “even number” from $300 to $1,900. Believe me, $1,400 is no big deal, but the hedge funds have decided to put up a fight here, and their computer-generated sale of contracts (paper gold) is geared to stop gold from rising, right here, at $1,400. They will eventually retreat and the same thing will happen all over again at a higher number, certainly at $1,500, $1,600 and up. None of the numbers have any special meaning. A big deal will be made of the first penetration of $2,000. This is a BIG psychological number and it also represents a new all-time high. But in the big picture, it won’t be any more important than $3,000 or any other number, and trust me, the numbers will get bigger and bigger.
Around the time I went to bed, gold was rising and moving toward $1,410. But when I came down stairs to my office and checked the price on Kitco, gold was $1,397. The funds are playing their silly games….
Look at the red, green and blue lines on the left side of the graph. This is when the computer programs click in and make sure gold is pushed below $1,400 on the way into the Comex opening. Andy Hoffman writes about this every day and it frustrates him. You might ask yourself the question, “Why is it so important to the Gold Cartel to hold gold down?” What are they afraid of? The answer to the question that I favor is that gold is the voice of truth in a world full of lies, smoke and mirrors. When gold is rising, people ask, “What’s wrong?” Is inflation returning? Is the dollar losing prominence? Gold is a lot of “anti’s” – it is anti-Fed, it is anti-fiat currencies, it is anti-government over spending. Gold is the voice of reason that shouts, “What the hell is going on here?”
The people “in (temporary) charge” have but two choices. They can introduce the policy that fixes the problems, the things that makes gold go UP, or they can try and silence the “voice” that is causing them embarrassment by pushing the price DOWN. In the midst of this, $1,400 is not important; it is just another stepping stone that people use to measure gold’s immediate, short-term performance. The chart (above) should get you thinking – why do they fight so hard to hold gold down? It’s not the price that is important, it is the REASON that the Gold Cartel (Fed, JPMorgan and bullion bank friends, and the disruptive hedge funds that throw billions of dollars at everything in sight in their quest to make a profit, all short-term motivated of course) fights its rise every step of the way that is important.
Don’t lose sight of the forest for the trees. This short-term, daily noise is not important (unless you are forced to sell for cash needs now). If you want to better understand gold, look to the people who are BUYING the PHYSICAL metal NOW. They understand what is happening. And they are anything but fools, or short-term motivated. A majority of them reside in the Far East; China, Russia, India and I’ll throw in Arab wealth to the mix as well. The voices that try and convince you that the bull market in gold is dead mostly reside on Wall Street. To them, long-term is their next cup of coffee or dose of Viagra. They make their money TRADING stocks and bonds. They want you to buy their products and they can’t make any money on gold or silver – outside of blatantly manipulating the price, always to the short side. That said, their biggest profits in gold and silver will come on the long-side, but that is a story not yet told. It is coming to a theatre near you in the next two or three years.
Stock up now, and don’t worry if the price might go down from here – it might. But when you look back in a few years from the lofty heights gold and silver will occupy, you will realize just how cheap they were in 2013 at these prices.
Backwoods Jack was giving me a little heat the other day because they made their last purchase at $1,650. “We’re down almost $300,” he said.
“Oh are you?” I replied. “You started buying gold at $300 so the way I figure, you are UP over $1,000!”
It’s all about perspective, and the perspective is stuck on $1,400 for now. It doesn’t mean a thing.
Today is a very special day. My son Andy and his wife Zhanna move into their new dream house, and believe me, it is quite something to behold. Susan and I built our dream house eight years ago. Now is Andy’s time. He and Zhanna used the same builder and designer that Susan and I used in 2005. His house is much like ours, but it is one and a half times larger. Of course ours was built for just the two of us and his has to accommodate a family of five. It is a tribute to over 20-years of Andy’s hard work and excellence. He started from scratch and did it all on his own! Congratulations, Andy! You are the best! No one deserves this more than you do. You have been the driving force for the last 10 years that has elevated Miles Franklin to a position of prominence and respect in our industry. I never would have done it without you. And yes, I will help you unpack the hundreds of boxes of “stuff” you are moving into the new house today. I am as thrilled for you as I possibly could be and want to share today with you.
Andy’s clients who need to get hold of him for the rest of the week can still reach him. The cell phone is a marvelous thing (unless it’s in the hands of your grandchildren, who never seem to put the damn thing down, even at meals). Andy will take your calls (if he isn’t available you can call the main office and speak with his assistant, Laura). In fact, why don’t you call him and place an order! He can use all the business he can get – he went so far over budget that he is a nervous wreck.
When he started building his house, 18-months ago, I told him that (1) you will spend far, far more than you are planning to spend and (2) it will take you much longer than you think to finish building your new home. Of course, he didn’t believe me. I went through it eight years earlier and that’s just the way it is. Well, it took a year longer than he expected, when they first broke ground, and it cost him twice what he budgeted for it. But what a house! What a guy! Andy and I both came from very modest beginnings – yes, the American Dream is still alive and well. Do the right things at the right time for the right reasons and treat people with respect and integrity and good things do happen. Miles Franklin is the proof that large trees do grow from small acorns.