We gave you a heads-up on this recently.  This should not come as a surprise.  Courtesy of Ed Steer…

I had an e-mail from Joshua Gibbons yesterday—and it was all about Tulving.  This is what he had to say:  “The Tulving Company has ceased operations as of this morning. They are no longer answering the phones, and I have heard from a reliable source that employees have been told to go home.”  Here’s the link to Joshua’s webpage on Tulving Company—and he has more to say there.

–Casey Research, March 4, 2014

The following is from a Q&A with Larry Edelson from the March 3 Money and Markets newsletter:

Q: Some are predicting $50,000 gold. Do you agree?

A: Absolutely not. To get to $50,000 gold, the world would have to go back to the dark ages. That is not likely to happen unless the powers-that-be are stupid enough to try and back the world’s monetary system with gold.

Ironically, that would be exceptionally deflationary, and cause a massive global depression that would make the 1930s depression look like a walk in the park.

And there isn’t one single government on the planet that would want to back its money with gold, China included.

Gold can and will get to $5,000. Maybe even $7,500. But $50,000? No, that’s the stuff of crackpots and conspiracy theorists and nothing more.

–Money and Markets, March 3, 2014

Do I believe that gold will reach $50,000/oz.?  Is this just more nonsense from “conspiracy theorists and crackpots?  Before I answer that, I am going to give you a few facts, and then I will let you answer the question.

The Federal Reserve came into being in 1913.  At the time, gold was $20/oz.

Gold is currently $1,333.10, near the bottom end of its price during the last three years.  Gold has increased nearly 67 times in the last century.  We also know according to the US Inflation Calculator that the US dollar has lost 96% of its purchasing power during that period as well.

At gold’s current price of $1,333.10, gold would have to increase by 37.5 times to reach that “crackpot” price of $50,000.

So let me see if I’ve got this one right.  Gold has already increased 67 times (a low number – it would have been 95 times when gold was $1,900 two and a half years ago).  That’s roughly TWICE the increase that would occur for gold to reach $50,000 in the future.

Gold has already increased 31 times since August 1971, when President Nixon defaulted on our promise to redeem gold at $35/oz.  Actually gold had risen (the dollar had fallen) to $42.22 when he removed the dollar from the Gold Standard.  Even in this shorter 43-year period, gold has risen the equivalent of what it would have to rise in the future to reach $50,000.

Does this sound impossible to you?  Do you think the reasons that Larry gives that this won’t happen is because the governments of the world are too smart to let it happen?  Too wise to allow another Great Depression?  Would never back their currency in gold?  Do you agree with Larry’s arsenal of reasons WHY this would never happen?  I don’t.

There is ample evidence that China is accumulating vast amounts of gold now, and has been for years, precisely so they can back the Yuan with gold.  When the Yuan replaces the dollar as the world’s “reserve currency,” and/or when the dollar loses its valued Petro Dollar standard, both the price of gold and the value of the dollar will change dramatically.  The flight out of the dollar will be epic and swift.  How many dollars would you pay for an ounce of gold if you wanted out of the dollar at all cost?

And what do you think the price of gold would be if it turns out, as many people think, that the US no longer has (most) its gold?  NO U.S. gold??  Why then no audit at Ft. Knox since 1953, 50 years ago.  To state with certainty that the U.S. does have all of its (the people’s) gold is a “crackpot” view.  Yes, if the gold is gone, $50,000/oz. may not be enough to get it back.

O.K., this is all just guesswork, and I can leave it go at that, but what does get me angry is when Edelson has the nerve to imply that Jim Sinclair is one of those conspiracy nuts and crackpots.  That takes balls!  Jim Sinclair didn’t predict that gold WOULD hit $50,000 but he did say it COULD and presented the circumstances in which it would occur.

Larry does offer a service for people who wish to gamble, who wish to trade a manipulated market and who are probably not aware of his earlier comments on silver, circa 2000/2001.  When silver was selling for around $4 – $4.50/oz., Larry said, according to a good friend of mine who owns a large precious metals firm and has been around since the mid 70s, “There is more silver than cockroaches.”  He warned people not to get involved – and then silver moved up to over $45.  I don’t recall the statement, but I know my source didn’t make this up.  In any case, Larry’s track record is not perfect – whose is?

All of which brings me to one of my pet peeves and the Larry Edelson’s of the world exemplify it.  The worst thing that ever happened to my industry is that it evolved into an “investment” that was to be traded; bought low, sold high, leveraged, timed, treated like all the other financial asset classes.  Take it from me – it is not that at all.  Gold and silver are not investments (though many of you have made a lot of money with these items and will prosper in the future as well).  Gold and silver are money, money that the government and Federal Reserve cannot print into oblivion.  If you think that it is a strong word, well in the last century the dollar has lost up to 98% of its purchasing power, so I don’t think I’m exaggerating here.  The trick is to view gold and silver as a buy and hold asset, as an insurance policy against on-going currency debasement and especially to own it in the physical form only and not in paper (as in a contract or ETF).  I have been preaching that since 1983.  I know you “can’t take it with you,” but you won’t end up waiting in line at a soup kitchen or out on the street if you assets are real gold and silver in your possession.

So for those of you who wish to follow Edelson’s trading regimen, and are happy to settle for ETFs and contracts and time the market – good luck.  I wish you well.  And I do agree with Larry that gold is headed to $5,000 or even $10,000, but I am not trading it on the way up and down and I will not mock people who say gold could hit $50,000.  Larry laughed at people who said silver was a good investment back in 2001 – and he was wrong then too.  And it’s just plain wrong and disrespectful to insinuate that Jim Sinclair is a crackpot and a conspiracy buff.  There!  I got that off my chest.