Yesterday I received two emails from readers who are worried that the Fed will cut back on QE and they wondered if the bull market in gold is over. They have read all the reasons we present why this isn’t so, but this is a tough market to ride out. Oh, the Wall of Worry – it gets to people when their portfolio is losing value. I have personally spent a lot of time and energy explaining the basics to these two but obviously I am not getting through. But as prices continue to retreat, they really don’t want to hear why it’s happening, they have lost faith. I finally said, “Well, if that’s how you feel, you should bail out now and find greener pastures elsewhere!” This is what happens when people look at gold and silver as “investments,” and discount the “insurance” value gold has, as a hedge against a litany of Black Swans that are ready to come forth, unexpected of course, that will re-ignite the bull market. Gold is money. Gold is insurance. Gold is for portfolio diversification. It is a necessary asset class regardless of price. This really is a time to “think in ounces, not in dollars.” The lower the price, the more ounces you can accumulate. Payday is not that far off!
Like it or not, the price of gold and silver are still being controlled by the bullion banks and the hedge funds, who act like a group of destructive locust, leaving a barren waste land behind, as they move from asset class to asset class with every new Fed pronouncement or headline.
You will never convince me that the bull market is over. It’s re-grouping to make a run on new all-time highs. This should play itself out by the fall and meanwhile, for those of you with the inclination, you are getting a chance to buy gold and silver at really attractive prices.
It was disappointing to see that Bo Polny’s “the bottom is in” charts presented in JSMineset were wrong. Technical Analysis works as long as JPMorgan and friends allow it to. There are no working crystal balls in these markets. As long as naked-shorting, huge leverage and friends in high places (CFTC, Comex, JPM, LBMA) are part of the landscape, short-term moves will defy logic. You either understand that the physical off take will ultimately dictate prices – or you don’t. Regardless of what you think, the physicals WILL dictate the price, especially with the central banks on the buy side, as they are now. Hardly a day goes by without another article on the insatiable appetite for gold in India and China.
And now, a look back at an essay by Andy Hoffman – that makes the point, whatever the government does, it will be the worst for America and the best for precious metals. It is still relevant. This is in regard to the new proposed Sales Tax on Internet and telemarketing sales that has passed the Senate and is up before the House for approval. John Boehner says, “No new taxes,” and let’s hope he can muster the votes to shoot this stupid and harmful legislation down, but if not…