1-800-822-8080 Contact Us

Gold is up $16.60 (3 A.M. New York time) and silver is up $0.59. The usual resistance that the metals face in London at this time is missing. It will be interesting to see what the Cartel does when the NY market opens for business on Monday morning. I am getting the Champaign bottle out, about to celebrate Jim Sinclair’s prediction of $1650 gold made many, many years ago. Will it be this week?

There is a great deal of commentary (four articles on Kitco alone) suggesting that the fuel behind the rise in gold and silver is the stalled budget talks. Anyone with half a brain knows that this will get resolved. If in fact the traders that move the metals are that shortsighted, it demonstrates the “short-term” mentality of the funds and traders out there. I think in terms of the big-picture. All of this short-term noise is what confuses investors. The issue isn’t whether the US will default – of course we won’t. Quite the opposite, the truth is that we will continue kicking the can down the road, adding to the national debt and further debasing the US dollar. Our politicians are hopeless! They will not face the music now, by balancing the budget. They would rather put it off and add trillions to our national debt, making it even more painful to deal with a few years from now.

Martin Armstrong expects the bull market (in gold) to last until at least 2020. If he is correct, that means the bull market is only half way there. If you do the math, and the rate of increase is the same during the last half of the bull market as it was during the first half (2001 – 2011) then gold will top $10,000 an ounce.

As you can see from the 10 Year Gold chart, the gain over the last three years is very linear and as any bull market moves toward the blow-off stage (we’re not there yet) the rise goes vertical. Nearly half of the total gain in the bull market of the 70s took place in the final six months.

A friend of mine has several million bucks sitting on the sidelines, earning practically nothing, and he doesn’t own a single ounce of gold. After a few conversations with me, a month ago, he got interested in making a substantial purchase. At the time gold was at $1510. He asked me to call him when it dropped to $1500. I called him when it hit $1495 and told him he should make the move now. Remember, he ASKED ME TO CALL HIM when gold hit $1500. As is so often the case, he is still waiting to make a move – and at this very moment gold is $1616.20. Gold is UP 8%, and he does nothing. It will take him three or four years in a money market (where his funds are sitting now) to earn what he would have made in the last four weeks. This is not uncommon. I can’t tell you how many times people have told me that they would purchase gold or silver when it dropped to a certain number, and when their target was reached, they never followed through. What is it about gold that frightens newcomers into the market? What will it take? $2000 gold? $3000 gold? I thought that when gold passed its old high of $850, the floodgates would open. I was pretty sure that when gold hit $1000 the public would finally decide to participate. Here we are with gold comfortably over $1600 and the public would rather ride it out in cash or CDs.

Our politicians are playing Russian Roulette with our dollar and most Americans sit idly by in cash instead of precious metals. Go figure!