Richard Russell has some strong opinions on how Obama is (mis) handling the Syrian problem below. He also has an opinion on how it will affect gold.
The various factions —
Obama — Why did I ever draw that line in the sand? Now, no matter which way I go, I’m screwed. Besides, it turns out that even the US public is against attacking Syria. The public is afraid that an attack will lead to another Iraq or Vietnam. Everything seems to be piling up against me. I’m toast. So my best move is to try to drag Congress into this damn mess. If Congress doesn’t go along with an attack on Syria (and they won’t), I’m in even worse trouble. Any way I look at it, I can only lose. Maybe this job is too much for me.
Republicans — We will definitely not give Obama the go-ahead that he wants before attacking Syria. We won’t let him off the hook. This is our chance to make Obama look like the wishy-washy loser that he is. Whatever Obama wants, we’re against. We’ll vote “no” on any attack on Syria. Obama’s not going to ease out of his desperate position with our help. Let him cook in his own juices.
Democrats — We’re going to be the losers. Any way it turns out, Obama looks like a sure loser. The Republicans will beat us in Congress. In the end, the public and the world will see Obama as unwilling to take action on his own, and they’ll just think the Democrats are part of the problem. The US public doesn’t want to get involved in Syria, and the final result will be the perception that America is run by an effete bunch of do-nothings with a useless and feeble Democratic President, and a weak and divisive party system, a system that is paralyzed when it comes to taking action.
The public — We’ve had enough of these ridiculous US interventions in costly and useless foreign wars. If we attack Assad in Syria, chances are that it will end up as another disaster for the US. If Obama is afraid to go it alone, so be it, let him take his own medicine. The country is in enough trouble already without an attack on Syria. As for poison gas, what’s the difference, which way people die?
Russia’s Putin – We have a huge Muslim population, which means we have to be very damn careful regarding our stance on Syria. If the US doesn’t like nerve gas, let them do something about it. Russia will remain neutral.
Israel — Whatever the US decides is fine with us. We just want peace.
China — We’re staying out of it. Let the white races kill and bankrupt themselves. China is staying in China.
I can’t believe that after all this bickering and talk, the US will not end up sending Tomahawk missiles into Syria. If Congress fails to back Obama, I think Obama must and will go ahead anyway with an attack on Syria. Obama must attack or absolutely, totally lose face.
Gold is torn between rising, based on a US attack on Syria, and declining, based on a tapering of the Fed’s QE in September. Tapering would mean less Fed-created inflation, while continuing QE would be inflationary and bullish for gold.
Another IF — South African gold miners are about to go on strike. If they do, production of new gold will come to a halt — this in the face of a vanishing supply of physical gold.
– Richard Russell, Dow Theory Letters, September 3, 2013
Today I highlight a very important video link and related comments from Jim Sinclair. The message is clear and of particular importance to our readers that have in excess of $100,000 in a bank account with a to-big-to-fail bank. I urge all of my readers to link onto the video, below. It is well done, factual and prophetic. It is a must watch video!
My Dear Extended Family,
Tomorrow I meet with investors making an effort to protect themselves from the inevitable that this video, the first of its kind, outlines very well.
Seeing this video is a must for those that recognize that I know beforehand the major events that will shape our lives going into 2020. This is the first imperative that I have sent you that is a must see.
The solution offered here is different from the GOTS strategy I discuss at our meeting, and is not the solution for the individual at any level of wealth. What is perfectly outlined is the problem at hand which must be understood and for which you must prepare.
Please do not be complacent on this, the most important of all events, which is going to happen in the “Great Leveling” well before the “2018 – 2020 Great Reset.”
Please watch this video carefully. It is accurate with one exception. That exception is the size of the notional value of OTC derivatives outstanding. The size quoted therein is but 1/2 of the real size.
Remember gold is for savings and fiat currency is for transactions. This knowledge plus GOTS will save you. I am a man on a mission, and that mission is to protect you.
I will be planning trips to DC, Miami and Orlando soon.
–jsmineset.com, September 3, 2013
If you take the video’s message seriously, and I do, then one of the smartest things that you can do is to remove your excess cash from the banking system and park them in physical gold and silver.
Apart from the safety that the precious metals offer, since they are outside of the system and in your possession, and that is no small thing, their performance lately has been outstanding as well.
Gold and silver lost their luster between April and June as they suffered the sharpest quarterly drop in price on record. In the last week of June, gold and silver hit two year lows of $1,192 and $18.61.
Gold fell 34.2 percent from the October 2012 high and silver plunged 48.5 percent.
But that all changed by the middle of July. Gold is up a strong 20 percent and silver has rallied by 32 percent. This remarkable performance continues even in the face of the Fed’s sustained tapering threats
During this time frame, the silver/gold ratio dropped from 67 to 1 to 58.6 to 1. Just a while ago, it took 67 ounces of silver to buy one ounce of gold. Now it only takes 58 ounces of silver to buy one ounce of gold. The ratio could easily fall further to 55 to 1 or lower. Gold is doing great, but silver has outperformed gold by 13.4 percent!
Most of the western demand for silver is investor-based. Smaller, “retail” investors are among silver’s most loyal enthusiasts. The US Mint’s sales of silver coins are running at record pace this year, with sales up to late August of 33 million ounces (1,026 tonnes). That already equals the level of all of 2012.
Since gold has been weighed down by import restrictions from India, traditionally its largest consumer, Indian silver imports picked up the slack.
According to research at Thomson Reuters GFMS in Mumbai, India’s total silver imports have more than doubled from last year, reaching nearly 3,000 tonnes in the first half of 2013 compared with 1,900 tonnes in all of 2012.
Even though the bail-in problems could still be a few years away, a black swan event, like an escalating war in Syria with Russia joining into the fray – or an Israeli attack on Iran’s nuclear facilities (both likely) – or less than a vote of confidence to the dollar at the upcoming G-20 summit later this week could light the fuse. It is in times like these when one should be prudent, and being prudent means that one should be early.
And what a great time to move dollars out of the problematic banking system and into gold and silver. They are the best performing assets for the last two months. An even more bullish case for gold is in play now that the South African gold mining industry is experiencing a strike that will shut down most of the gold production (from the number two gold produced in the world) and the strike is expected to last until Christmas, or longer and China is buying up all the gold in sight. It’s always about supply/demand. Supply will be way down and demand is way up. Shortages will act like a strong wind to gold’s sails.
The odds of a meaningful cutback, or “taper” in the Fed’s QE programs are low, and if the Fed does make the mistake and decides to cut back, even a little, although the immediate and short-term affect on gold could be negative, it won’t last for long. If the Fed does taper, interest rates will rise, and the housing market, the bond market, the stock market and the economy will scream for more liquidity. And they will get it, and gold will then really be off to the races. What was a short-term drag on gold will quickly turn into a medium-term accelerator.
I honestly expect gold and silver to perform extremely well for the rest of the year and into the spring, even if there is a mild Fed-induced pullback; but I give them more credit than foolishly tanking the economy.
Gold won’t hit any strong resistance until it bumps up against $1550. That should put silver at $27 or $28. With gains like this in our sights, and the threat of bail-ins to our deposits in our banking system a guaranteed event, the choice is a simple one.
The video makes it perfectly clear; it is not a matter of if, it is only a matter of when. It will happen. And one of the events that is certain to trigger it is rising interest rates. The leverage in that market is severe. The derivative exposure is enormous. Any cutback by the Fed could ignite the problems. And if the Fed doesn’t taper, the dollar will face strong international pressure to devalue. The emerging nations, China, India and Russia, plus Iran and Venezuela would like nothing more than to declaw the dollar.
The dollar is NOT strong. The Japanese yen, the British Pound, and the emerging market’s currencies are all so weak that the dollar only looks stable. It is an illusion. The dollar excess is causing the rise in commodities – gold, silver, oil, grains, everything is going up in dollars and this is causing hardships all over the developed world. Arab Spring is mostly about not being able to afford food and gas. A hungry stomach is what leads the masses into the streets. It’s not about politics; it’s about feeding your family.
Forget about the hit gold and silver took earlier in the year. It was a manipulated masterpiece engineered by Goldman Sachs and JPMorgan. Yes, they made a fortune trading the metals down while behind the scenes they were going long (JPMorgan on the Comex and Goldman Sachs in GLD). But the fundamentals that propelled gold and silver up to that point never changed; in fact they are stronger now than they were before. The bull market is NOT dead. It is very much alive and well and it is the dollar that is in a precarious position – and the banks are too.
Think this through very clearly. I don’t want to remind you six months from now what a great trade this was for those who understood the message and acted on it. And the truth is, very few of our readers will act. They will sit on the sidelines and think about it and watch the market and only after the price has risen a lot from these levels will they feel safe enough to get back in, gingerly. That’s what happens when we get burned by 34 percent and 48 percent. But remember, gold has already recaptured over half the loss and silver around one third of the drop. Those are impressive gains in such a short period of time.
Let’s play a game – let’s pretend it’s September 2010. Gold is $1,200. One year later gold is $1,900. It can happen again. It may already be starting. Soon, the excitement will start to build. I expect that Miles Franklin will have a BIG fourth quarter. And we want you to be a part of it with us. We make a percent or two and you stand to make double or much more. We love it when you make money. Now is the time to plant the seeds.