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I called Trader David R this morning.  I was thinking of him.  Susan and I watched 60 Minutes last night, and sat through the segment on the tragedy that took place at Sandy Hook Elementary School.  David R lives in Newtown CT.  He knows families who lost a child.  His daughter went to school with these kids.  He knows the first responder, the ex-Marine who went through the bodies, looking for a pulse.  He has lived all over the world, but came back to Newton, because he thought it was “safe.”  What is safe now a days?

We talked about what would it take as a wake-up call for Americans?  He said, “A loaf of bread is $4.  A gallon of gas is $4.00.  A gallon of milk is $4.00.  And so is heating oil.”  Walmart’s first quarter numbers were the worst in seven years.  The food stamps are not buying nearly as much as they used to.  When the tens of millions of Americans on welfare and unemployment can’t afford to eat or find affordable living accommodations, then the s— hits the fan.

If you wait for the government to take care of you, you will regret it.  There is hope, but you have to take the bull by the horns.  Buy gold and silver while they are still cheap.  Get out of debt.  Be politically active and see if you can make a difference – but at least you can make a difference for you and your family.  Politically speaking, things may have to get worse before they get better.  People are not fed up yet, not enough to do something about it.

We sent him Larry Edelson’s recent commentary and I was interested in what a REAL gold and silver trader though about his comments.  If you haven’t read his recent missive (and it’s not worth reprinting here), Larry said:

Gold should head much lower, first to the $1,480 level, then even lower to below $1,400. Silver should plunge as low as $20 in the weeks ahead.

David R is extremely bullish on gold.  He’s been successfully trading it for the last two decades.  Sure, it could go down a little from here, ($1,550 is still a key point on his chart) but gold, as he pointed out, is “a play on interest rates.”  That is what he was taught in 1995 and it is still true today.  He commented on the huge draw down of physical gold on the Comex last week – a sure sign that big money is accumulating physical gold now.  Ted Butler pointed out the same thing.  David R expects gold to start gathering momentum when the price moves to $1,750 and people finally become believers.  Now, it’s just a small group (like us) who are forward thinking that are buyers.  He is telling all of his trading pals to short everything, oil, equities, everything, against gold.  He is not nearly as bullish on silver.

David R sent me a copy of Andy Smith’s speech, presented last weekend at the Dubai Precious Metals Conference.  It’s very interesting.  Here is the link:

Gold and the Great Inflations – Andy Smith

Disclaimer: The link above contains content not suitable for all readers.

Yesterday I wrote that we “could” fix our problems if we made some changes.  After I submitted my article, I read a review of David Stockman’s latest book.  Stockman suggested the same changes I mentioned, plus a few more.  Clive Crook, who reviewed Stockman’s book, ridiculed the book.  He put Stockman in the same category as Ron Paul.  You see, the problems aren’t the problems – it’s that most people will not even consider the changes necessary to fix the problems.  How bad will things have to get before people come to their senses?