Larry Edelson wrote a piece about how gold and silver still have another leg down in price and will be unaffected by the various “printings” by central banks that is in progress. He says that any market that goes up 11 straight years of course is going to have a 1-2 year pullback. He wrote that many of the big investors like Soros, Paulson and Jimmy Rogers “just don’t get it”, he does.
First off, NO market anywhere, EVER that I know of has gone up 11 straight years, never. There is no “precedent” and thus no “chart pattern” that can be looked at to make a forecast. And as for charts, they do not and cannot work in a market that is in obvious manipulation. The “patterns” themselves are painted by the manipulators to create a picture, so analyzing a chart (to gage investor sentiment or future actions) is a laughable quest. To say that investors who use fundamental logic and have been successful for years upon end “don’t get it” is pretty arrogant to say the least.
Then you have the statement that “printing money” will not push metals higher, this is ignoring everything else. “Everything else” as in “why” exactly central banks are printing money. Would they print, or be FORCED to print if everything was really and truly going along smoothly in Stepford-ville? And we must wait for a “crack up” of the banking and financial systems before gold can go higher? Isn’t that exactly what is happening each and every time the Sun now rises? Greece, Cyprus and now Japan? The JGB market (Japanese government bonds, the second largest in the world) has already crashed in just 4 trading days and is threatening to turn the entire banking system into one of insolvency. Another 1 week’s action like the last 4 days would just about do it.
Yes, Mr. Edelson started calling for the precious metals to drop since the beginning of the year. He was correct. But was his “reasoning” for this to happen correct? No matter what anyone says, the events surrounding and in particular April12th and 15th were clearly and most in your face blatantly “operations” designed to crash the price. April 12th on its own was a 5 Sigma event, something that would be expected to happen only once in 4,700 years. The two day event pushed out to 8 standard deviations, something that will happen only once in 1 billion times, a virtual impossibility in nature. In less than 12 trading hours between those 2 days, more than 40% of the world’s global gold production was sold. Who has this amount of gold? No one. Who would sell their gold (even if they had it) in this manner to crash the price? No one. The only possible explanation is the obvious one. The only entity(s) that have both metal and the motive to crash the price is the U.S. Fed and Treasury, they “supposedly” have the metal and surely the motive as gold is a direct competitor to the Dollar.
Now, Larry Edelson made a prediction that has come true but it has evolved for the wrong reasons. His logic is terribly flawed and because it coincided with the most blatant manipulation of any market (maybe in all of history) he was right…for the wrong reasons. I ask you this, were the day traders and those up to their gills in margin back in the 1st quarter of 2000 correct about the equity market and in particular the Internet stocks? Were they right the year before and the year before that? They sure looked correct…but after the fact, those who claimed that Internet companies were empty shells with not even a business plan were really the ones who were correct. Were you better served to stay out of that market or “hope” that some guru would get it right (or be lucky) and “get you out in time”?
THIS is where we are today. As I have said for many years, you cannot “trade” in this market now, when it comes to gold and silver. Governments are broke, the banking system is broke, and brokers are broke. Central banks are printing money because their sovereign treasuries need to borrow increasingly more to keep their doors open. These central banks are also printing to prevent the collapse of currency and equity markets; it is THE only policy option left. Do you know “when” the music will stop? Do I? Does Larry Edelson? Does anyone? No, no one does (except for possibly insiders with the ability to pull the plug).
Here is my point; you cannot trade because you are trading against a rigged market. You cannot be “out” because any moment of any day can be THE moment. “THE MOMENT” being the point in time where everything stops and the ability to actually purchase metal and have it delivered will no longer exist. THIS is coming as sure as the Sun will rise tomorrow; demand drastically exceeds supply and has done so for years. Physical inventories are depleting at the same time that demand has exploded, “when” does the last ounce get delivered? “When” does another exchange like HKMEX default? When does another bank like ABN AMRO default and tell customers “no, you cannot have your gold?” You absolutely MUST be positioned ahead of time because just “one second” late will end up being a “lifetime” too late…YOUR lifetime and lifestyle.
In my opinion, Larry Edelson is doing a disservice to the world. He is suggesting that people “wait” to purchase their metal so that they can get a better price. Even he believes that gold will trade between $5,000-$10,000 in 3 or 4 years, what difference will it make whether you paid $100-$200 “too much?” And these numbers are probably laughably low, they certainly are if Larry’s “financial collapse scenario” (it surely will) occurs. I believe that we will look back in time and the only thing of importance is whether or not we have “ounces” and “how many.” Playing a guessing game, trying to be cute and trying to out-time the Fed and JP Morgan is a very dangerous game to play, especially when it involves your financial survival. I really don’t like the ramifications of trying to be so “right” yet if I’m wrong I’m ruined. A poor “risk reward” if you ask me since the risk is everything, but, that’s just me. Good luck Larry!
P.S. By the way, not even the U.S. Mint believes the COMEX price of gold, they are offering 1/10th ounces of gold at $195 each…$1,950 per ounce,
US Mint Resumes Selling One-Tenth Ounce Gold Coins… At A 40% Premium To Spot
Call Miles Franklin at 800-822-8080 for current pricing and availability of product.
Spot on! SPOT ON!!! When the paper market crashes (when the value of the dollar tanks) and the physical market starts to skyrocket who will sell you their gold? No one in his right mind, that’s who. Get it now while the, “gettin’s good.”
At the risk of sounding like a broken record (for those of you who remember vinyl) do the logic: The United States Government has made a lot of promises to a lot of people it cannot keep. It cannot tax the private sector enough to keep up with its obligations, i.e. to keep the promises the Political Class has made to win election. Thus its only recourse is to borrow or print, and borrowing is tough when no one is any longer willing to lend to you… which leaves printing as their only option.
OK, so do you believe this, “recovery” by printing is actually sustainable? Not if you have half a brain and your eyes are open you don’t.
Remember the collapse of the Soviet Union? If not certainly you are old enough to remember the financial collapse here in 2008. Recall how these things happen virtually overnight. Personally, I honestly believe time is running out to get out of paper dollars unscathed. Procrastination at this point in time is dangerous to say the least. But then, that’s just how I see it…
Bill,
I’m in your camp that charts are meaningless in a 100% rigged market.
I stopped listening to Larry Edelson (aka – Mr. Pimple On The Ass of Society) years ago.
In my opinion his advice is very flawed! I guess if you are strictly a gold investor and only a short term minded person, then maybe he might get some followers, but I sure won’t be one of them.
If you are in gold and/or silver for insurance aainst the paper ponzi scheme presently in place, then you’ll buy at any price and cost average as you go along.
Since none of us knows when the ponzi scheme will collapse (in the next few minutes or in the next few years) we had better be like the Boy Scouts and “Be Prepared” at all times.
Thanks on your timely and accurate information.
Hmmm….I wonder where all this Larry bashing comes from? Is it because, as Armstrong points out, the permabulls have a vested interest in having people buy all the time? People like Turk and others who sell precious metals or own mines…Larry has been right for all the right reasons! He has always said, as has Armstrong, as long as there is demand for dollars why should it fall. Yes it’s as flawed as all the others but its still seen as the best looking horse in the glue factory and until the moves out of the euro and yen etc, are exhausted you will see dollar strength, those are the factors the gold permabulls don’t seem to get! Larry has always said to maintain your core position, I have and I have some dry powder incase the price drops. There are other far more savvy and experienced in the real world than Sinclair, Turk etc. who are bulls but also not so myopic, Rick Rule would be one of the best, if not the best. He advocates keeping some capital aside, especially if you have a core position, and he expects the market to capitulate to the downside too.
By many standards I’m far overweight the metals although I bought many years ago so I’m not worried about a decline. I want to add more but don’t need too , I will if we get another descent pullback as Larry, Armstrong and Rule seem to think will happen. They are far more accurate and logical than the permabulls and their track record shows it.
The only correct thing in your criticism of Larry, if it is indeed correct, was if he did say Rodgers et. al. ” Don’t get it”….that would be arrogant. But perhaps, as someone once said, “it ain’t arrogant if you are right” lets wait and see shall we before we lay judgement on some one who has been right as many times as the permabulls have been wrong.
Fact, demand for Dollars has been waning for 10+ years. Glue factory?…why even enter the space if they are all dead horses? Edelson poo poohed Silver for 10 years and was wrong. What he wrote was arrogant and I/we wrote on Edelson because his logic is flawed. Gold and Silver went “down” simply because in the paper markets nearly half of 1 year’s global production was sold in less than 12 trading hours. HE could not have known that this manipulative operation was “coming” as it turned out to be an 8 Sigma event. If “so much” Gold was actually “sold”…then where is it? Why are there shortages everywhere you look? Why has DEMAND increased so much? Before you say that “low prices brought out the demand” you need to address “why” the prices dropped in the first place…surely not because of an increase in supply or decrease in demand. The fact is, when all is said and done “printing” lowers the value of a currency and makes Gold, Silver or even a cup of coffee more expensive in that currency…simple “supply and demand” which Edelson says is “suspended” because he knows better.
The reason they enter that space is because capital flows are in the trillions and there are only a few markets able to absorb that kind of money. Gold and silver just won’t hack it, sorry, we’d all like it to happen but it probably won’t, not to the degree must permabulls are talking about, and I’m a gold and silver bull! After watching Sinclair, Turk etc. crash and burn you have to realise it doesn’t matter a hoot about your convictions or opinions the market rules, so who understands these markets best? How could Edelson know about this massive drop you ask? Well I don’t know but he did warn about it! How does Armstrong make such incredible predictions years out? I see you will be in the Liberty. Symposium with armstrong, i hope you listen to what he has to say, he has an incredible depth to his analysis, here is what he says on his blog
“Gold is currently falling in dollars demonstrating (1) there is no pent up inflation and (2) it is capital fleeing into the dollar (bonds & stocks). BEFORE you will see a bull market resume in gold, sorry – you have to wait for the currency to catch up. If you are brainwashed and constantly presume the dollar will collapse any moment because the Fed increased the money supply, I suggest you are married to the mental conditioning you have been subjected to, have a closed mind, and will lose your shirt insisting you are right when the markets are proving you wrong. Gold declined in a basket of currencies, which is why it fell into 1999. This is about surviving – not punishing the world for its sins. Don’t worry. A rising dollar will cause far more damage than rising gold. Gold is a ting, tiny, fraction of the world economy. The capital flows are in trillions of dollars. Even 500,000 contracts at $1500 would be $75 billion. It is way too small of a market to harbor all the refugee cash in the world. That is bond and stocks – the only markets capable of absorbing trillions of dollars.”
Live and learn, don’t get married to ideas or gurus, insisting you are right when the market proves you wrong….wise words….
wrong. Yes Gold and Silver are tiny markets and cannot absorb $ trillions AT THESE PRICES… And yes, most every permabull is wrong regarding price projections, nearly every single one is FAR TOO LOW.
SOME of those fiat currencies will surely go to gold and silver, just as they will go to other commodities, land, art etc. but the gold market is way to small for any sizeable transfer, especially in the trillions, you have to be reasonable here.
Again you seem so eager to point out how wrong Edelson is when he is right but I presume you don’t hold Sinclairs amazing forecast of $1650 gold 10 years earlier to the same standards. Because unless you are saying the manipulations were only in the last year how could Sinclairs forecast also be called correct given the blatant manipulations over that period of time. Was Sinclair also right for all the wrong reasons?
All I’m saying is lets have some fair and balanced discussion instead of all this one sided stuff.
Sinclairs call was impressive, just as was Edelsons.
Sorry to say, but
a) bond prices have been going up for longer than 11 years; the were lowest in the early 80ies (with interest rates ~ +15%) and rising more or less steadily (interest rates lower and lower) to ~ current levels (ZIRP ~ a top).
b) TA and charts do work even in maniuplated markets, since price movement is what the algos follow and paint both at the same time
c) as a gold bull i’m also disappointed at the current developments, but lets face it, long stocks / short paper gold and silver would have been the much better trade as of late, and now getting back long bullion along with the above while trends last. would and could haves are no good, so I’m just holding on to my stack and trying to add on, since I’m convinced that downside price movements are now limited whereas the coming up-move is not.
d) so IMHO there’s no point in calling out people who were right, for right or wrong reasons. if you’re trading, then a differences of 100 or 200 does make a difference, if you’re a safer and safe in PMs, it does not.
just my 2 oz.
x
Sorry but bonds have had 2 or 3 down years in the last 11, Gold has not. Charts are painted to “show” a picture by those painting and at “the finish line” your buy price will make no difference. If you are trading…it IS paper and nothing else, a bad strategy as I have tried to say. I guess…different horses for different courses.
you need to fact check your gold price. the $195 price for 1/10 gold eagles refers to the proof coins not the regular bullion sold thru regular dealers. Zero Hedge did the same thing about 3 years ago with Silver Eagles. they reported a big premium to spot but it was also for the poof coins. overall I go with most of your outlook but when you get basic facts wrong it detracts from the message.
yes you are correct, 1/10th Eagles are a 12% premium, these were “proofs” which was not stated in the article. At least they are being produced now after the hiatus.
Guess Larry has a right to be arrogant.
Larry Edelson has recommended having a core bullion position,not to be sold .He recommended not buying new bullion after the first of year he also recommended new readers wait till after this correction. he recently recommended buying small amount and anticipates a call for buying more soon.He is now also calling for silver palladium and platinum buying soon. He has a many year track record and will have to face his error if he is wrong about the other “big names” Obviously if gold runs up again you guys won’t be wrong either. and yes there is risk in waiting (why I kept my core position as he recommended.) and yes I am sweating it as the world is a mess.He is less bearish than Elliott wave and his work and Elliott wave seem to be the best thought out resources available,in MY opinion. but I love your work too and keep it in my head as I am wading back in to rebuild position. I do not understand your and company’s need to denigrate others state your point and we will see who is right. JR
yes exactly…”new readers” were told to wait. Wait to buy your homeowners insurance even though you know for a fact that your house will burn down…you just don’t know when. …and if it were not for 1,000 tons of unbacked paper Gold hitting the market the price would be far higher and confidence may well have already broken. Like I said, right about price for the wrong reason. Elliot wave as in Prechter? The guy who has called for $200 Gold all the way along since 2001? We do not denigrate because they “disagree”, we feel that anyone who impedes buyers is not doing them any favors at this point because ANY day can be THE day.
By the way, HE doesn’t have to face his “error” if he is wrong…people who did not purchase based on him scaring them away will “face his error” for the rest of their lives.
I do agree that the large position dumping affected the gold price,but I don’t agree that is the only reason. Elliott wave has not called for 200 dollar gold since 2001. they believe in deflation first then inflation . With stock markets,commodities, etc headed down we will see who is right. As I said I do think having gold is always right.but using some timing might not always be wrong
. Many of us don’t have a lot and timing to get more could make a big difference in our lives.I respect why you feel that could be disastrous, but Edelson only recommended this to a few for a short period and obviously felt confident in his view. JR
Prechter has been Mr. $200 Gold for as long as I can remember. Edelson says to have a core position…but what about the people who have none? They should wait until he gives the A OK>? …And what if the system implodes in the meantime? Please, don’t tell me that he knows “when” because no one does…and it IS going to happen. “Large position dumping”? Please, NO ONE on the planet with the exception of the Chinese and Germans (maybe and they can’t get it back from the Fed) have this amount of Gold…ya think it might have affected…”E”ffected the price? Wake up and smell reality. 2 years too early? Or even 20 years too early? How about 2 seconds too late? How would that work out with what is coming? Just remember this, “some” will be infinite amounts more than none when the time comes.