Dennis Gartman says, “Back to gold, leave silver for the young and foolish.” Well, I have been accused of being foolish, but it’s getting harder and harder to make a case that I am young, at age 71. Great for 71, but not exactly a spring chicken.
(50th high school reunion in 2009)
Back to Dennis Gartman’s opening quote, “Leaving silver for the young and foolish.” What I mean by that is I disagree with Dennis Gartman. Owning or buying silver at these prices is anything but foolish. I own a lot of silver, and with the silver/gold ratio sitting around a decade-long low of 66 to 1, a strong case can and should be made for buying silver over gold, at THESE prices. Since the price swings, but my ounces remain the same, my portfolio ration varies with the swings. Ideally, I like to be one to one, gold and silver. Due to silver’s low price now, the ratio is much higher favoring gold, but that will change as silver’s silver/gold ratio moves back toward more normal levels.
So what do you think has changed in the last three days – that would cause gold to drop $18?
Absolutely nothing. It is worth at least as much today as it was yesterday. Bernanke’s speech, last week, that indicated prolonged QE was the match that lit the fuse, on the way up. He hasn’t recanted (of course, they can’t cut back without tanking the economy and most financial markets). This is just the Cartel at work and the hedge funds picking each other’s pockets for short-term profits.
Now if there was actually a reason for gold to fall, one could be concerned. This is the game they play with “paper” on Comex. Believe me, there is no drop off in physical demand and every day now is a day closer to the total divorce of the two markets.
New physical bourses (exchanges) have already been created in China (Pan Asia Gold Exchange) and South Korea – physical being the operative word here.
Comex will go to CASH when they can no longer make deliveries in a timely fashion. If you believe Sinclair, and who knows more about this market than he does (53 years experience, appointed by Paul Volcker to liquidate the Hunt brothers silver in the early 80s), than this event is rapidly approaching. So when the prices drops like yesterday morning, for no particular reason, your purchases are being subsidized! (Assuming you are willing to take the risk that this IS a good entry point!)
The Chinese, Russians and Indians are not stupid or reckless with their investments, and they can’t get enough gold at these prices. And meanwhile, most Americans sit idly by, in a trance induced by Wall Street, thinking that the stock market is the answer. Risk doesn’t come from buying an asset that has bottomed and is unappreciated (like gold and silver); it’s buying an asset near the top and is promoted by Wall Street (like the stock market). Don’t take my word for it; it’s been that way ever since Rothschild said, “Buy when there is blood in the streets.”
Even that “know-nothing about gold” Wall Street mouthpiece, Dennis Gartman is recommending gold (see opening quote). I don’t know if that’s a good thing or not, but at least he is finally coming around.
In today’s newsletter I offer a wonderful article by Robert Ringer, and it has absolutely nothing to do with precious metals, but it is fabulous and important. A big thank you to our dear friend Ken M. for sending this to us!
Make sure to read Jim Willie’s section today! He usually publishes around 100 pages, once a month. He kindly allows to me reprint a few pages, which is really hard to do because he has so much to offer that it’s like dating one or two girls from a beauty pageant. There are no bad choices. Please do read his section.
I have greatly reduced the amount of information in the daily and hopefully you will be able to justify taking it all in. And, as I am apt to do, even added a bit of humor and non-financial but worthwhile information. It will only take you five or ten minutes to get through it all. Be my guest.