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My son Andy, his wife and two children arrived late on Thursday.  It will be hectic around here for the next week.  I will try my best to knock out a newsletter every day, but I will minimize my personal comments in today’s letter.

I found Richard Russell’s comments that gold could drop to $1550 but the last two times it did, it rebounded to $1800.  The Cartel still has a lot of “shaking the tree” to do before that occurs.

Jim Sinclair expects the key central banks to up their gold reserves to 15% by 2015.  That would put a lot of pressure on the “physical” market and is the fuel behind his prediction of $3500, minimum.

I like Bill Holter’s comments from yesterday.  He is right.  This time it WILL be different.  2008 was just the opening act and the problems were never solved, just pushed out of sight with phony non-standard GAAP valuations allowed on their balance sheets.  We keep piling debt upon debt and creating money upon money with no regard to consequences.  But there are always consequences.  Gold, if left alone to do its thing, would already be sounding the warning siren.  But that is not allowed.  If gold is not rising, the problems do not exist – except they do.

Check out these two short articles by Kitco News.  It’s hard to be bearish on gold with information like this.  The physical gold market is ON FIRE.

WGC: Central-Bank Net Gold Purchases In 2012 Most Since 1964

WGC: Global Gold Demand Posts Second-Highest Quarter Ever; India Remains Top Consumer In 2012

Although I live in Miami for half of every year, it is not a vacation.  I spend at least six hours a day, and often more, reading and putting together the daily newsletter.  It’s not a chore.  I enjoy it.  We are living in the most exciting period of history since the end of WW2.  If you think that things have changed a lot lately, wait – you ain’t seen nothing yet!

The last vacation I took was 18 months ago.  Every time I plan to take time off, I end up writing.  I guess it’s now in my blood.  Have a nice weekend – everything IS fine in gold and silver land.  Let the hedge funds keep beating each other up.  If you have taken my advice and own physicals, free and clear with no margin, this HFT nonsense will soon be behind us.  The sellers will flip-flop and become the buyers.

See the following sage advice from Jim Sinclair.  He and Richard Russell have been through this before and this is not new to them.  Take their advice.  They are right, you know.

Gold Will Balance The Balance Sheet Of The Transgressors – Jim Sinclair