Over the weekend I received an email from Trader David R. He does not expect to see QE3 prior to the election. Jim Sinclair and others feel it must be instituted in the next few months, in order to have any positive affect leading into the election. Which will it be? What makes this market so difficult, short-term, is that there are logical but opposite views in so many areas that affect the price of gold. No one knows what will happen short-term, but if you adjust your time-horizon to after the election, it becomes much easier.
The most important four-year period, since the end of WWII, is right around the corner. The period of 2013-2017, led by either Obama or Romney, will determine if you come out with your wealth intact. I’m betting on gold, not the dollar. Frankly, I don’t think gold will be much affected regardless of who ends up in office although Obama will be good for our business as deficits will continue to go sky high. Gold is going much, much higher regardless of who wins.
What concerns me goes beyond finances. I expect the next four years will be a period dominated by increasing envy, jealousy and anger as the “have-nots” focus in on the “haves”. It will be worse if the current administration holds onto power. The “tax the rich” and “Wall Street” demonstrations are just the tip of the iceberg. The movement is gaining traction in France, which will probably go Socialist and already there are cries of more taxes on the rich over there. Who are the rich? Why they are anyone who has more than you do. In this country it looks like anyone earning over $250,000 a year fits the definition. That ain’t chump change, but it is a far cry from what I would call rich. It’s just middle class these days. More and more it is becoming a case of either you are wealthy or you are poor. The middle is shrinking fast. Gold and silver give the common man a chance to move up the ladder. It won’t take a huge stake in precious metals to lift one’s net worth in a hurry. But if you have to live on Social Security and/or a fixed dollar pension your lifestyle will be challenged.
Here is Trader David R’s email:
The problem now is that we are in an election year…. with Mitt Romney now the Republican choice, we are not going to see QE3 ahead of the elections. The President cannot afford to have higher commodity prices and weaker USD ahead of the election, especially against a businessman like Mitt who will expose this Ponzi scheme. The Open Interest in gold, is now under 400k, which we have not seen since September 2009. The market is not long anymore and the longs that are involved on GLD are long-term bulls and will not sell. You now have to keep an eye on the bond market. As bonds continue to rally I think gold will stay here and move toward 1700.
This new $430 billion IMF loan to Europe is made up of $76 Billion from USTaxpayers…. I don’t see this in the news, but people probably don’t realize that USA finances 17.8% of the IMF. More printing for more bailouts….. this is going to get ugly within the next 2.5 years !
Link To IMF Story :
I usually insert Jim Sinclair’s comments in his section, later on in the daily, but here he lends credibility to the price suppression of gold and silver and links to an interview with Harvey Organ that I think you should all listen to:
April 22, 2012, at 4:23 pm
by Jim Sinclair
Jim Sinclair’s Commentary
This is a scenario that you need to know about because it cannot be wholly discounted as a possibility.
Harvey Organ: Get Physical Gold & Silver!
Friday, April 20, 2012, 6:10 pm, by Adam Taggart
Harvey Organ has been analyzing the bullion markets closely for decades. The quality and accuracy of his work is respected enough to have earned him an invitation to testify before the CFTC on position limits for precious metals back in 2010.
And he minces no words: Gold and silver prices are suppressed. With extreme prejudice.
In this detailed interview, Harvey explains to Chris the mechanics of how he sees this manipulation occurring, why he predicts this fraudulent pricing scheme will collapse soon, and why it’s critical to be holding physical (vs. paper) bullion when it does.
The real suppression of the metals started in 1988. That’s when the leasing game started and was invented by J.P. Morgan.
These guys would go around to the mining companies and say, “Listen, I’m going to pay you for your gold in the ground and I will sell it. You just pay me as you bring it out.” So that was cheap financing to the miners. Barrick, the biggest mining company of them all, went in on this and it financed a lot of Nevada projects.
Once the leasing game came, the actual selling, the extra selling, suppressed the price. In the first five years, it started at maybe three hundred to four hundred tons. It didn’t start to get really bad until probably ’97-’98 with the Long Term Capital affair. And that’s when the leasing started to become around maybe 1,000 tons of gold. And it hasn’t stopped.