“The fact that sovereign debt is among the last to fail does not mean that it will not fail. This is the truth investors are just now beginning to realize. As their faith in the banker’s paper scheme collapses, the price of Gold will exponentially rise. That Gold has risen for ten successive years is a sign that confidence in the banker’s confidence game is waning. When the public finally catches on, and it will, the handwriting on the wall will be clear for all to see as will the bloodbath in financial markets.” -Darryl Schoon (the pyramid at work, gold the anchor) (excerpt from Jim Willie)
All of the Western world save for maybe Australia and Canada is swimming in debt. So I do not know how anyone can feel good about what is occurring. It seems almost impossible to think that this paper money regime that we have been on for the last forty years is not in the very end game.-Bill Fleckenstein
There is no floor to the fiat currencies as they keep printing them. So there is no ceiling for Gold either. People will lose more money in bonds than in stocks. Gold is the one place there is not a bubble because Gold is reflecting the loss of purchasing power of fiat currencies. Gold is money. Everything else is a poor substitute. -Peter Schiff
Happy Holiday to all of you, our cherished readers. I’ll be back again on Tuesday.
On Thursday, gold, silver, the dollar, platinum and palladium were as placid as I can remember. I was about to write that with a long three-day weekend coming up, not to expect much on Friday. When I checked the markets at 4:30 A.M. I took a double take – Gold was UP $27.90 to $1853.30 and silver was UP $0.71 to $42.21. Even more remarkable, (see chart below) the rise took place when the London gold market came on line. If you pay close attention to what I have to say, and to what Ranting Andy Hoffman has to say, that is precisely the time when the Cartel takes gold DOWN. If gold is moving up strongly coming into New York, the bullion banks must be very concerned about what lies ahead next week.
Ed Steer also commented on this unlikely occurrence, “It remains to be seen whether these gains will be allowed to stand, or whether a not-for-profit seller shows up. But charts like these are ones I’ve not seen before…and it’s entirely possible that JPMorgan and friends are really on the run this time, as this price action looks like panic short covering to me. We’ll have to see what the rest of Friday’s trading action brings…but it could prove memorable.”
Traders are awaiting Friday morning’s U.S. jobs report. A weak non-farm payrolls growth figure would put pressure on the U.S. stock market and boost gold prices. The average estimate on the non-farm payrolls figure is a rise of 80,000 workers in August. What do you think the odds are that the “boys” got an early look at the numbers and that they are horrible? And, if so, it will be against that backdrop that President Obama faces the voters on Thursday with his speech on jobs creation. Good luck Pres. You are gonna need it.
All of my instincts shout that this fall will be one for the books – if you own gold and silver. (If you still don’t, and you are reading this daily, why don’t you?)
I had lunch on Thursday with an old friend. We get together for lunch at least once a year and discuss the economy and gold. My friend is 85 and has been a mentor of mine for a long time. He is retired and a former VP at Cargill who was in charge of their Latin American trading division. He is very sharp, very informed and very well plugged in.
Yesterday marked a turning point in our discussions. He said, “David, you have been right about gold all along.” In the past, he has been more bullish on the US dollar and more passive on gold. He continued, “My son has a wonderful business program that he can program to get just about any result he wants.”
My friend has his money with a very exclusive Minneapolis money manager and has used their firm for more than a decade. He asked his son to compare the results of his portfolio with gold for the past 10 years. His very well managed stock portfolio returned, on average, 12.1% per year. Most people would be thrilled with that kind of performance. I jumped in and said “I bet gold did better.”
He replied, “Let me finish.” “Gold,” he said, “averaged over 20%.”
The result did not surprise me but it sure did surprise him. I suggested that he should either move 10% to 15% of his managed money into physical gold, or if he was uncomfortable owning the physical metal to check out the Central Fund of Canada or the gold or silver fund offered by Sprott (but NOT GLD or SLV). He wrote down the symbols. This is the first time in a decade that he took my views on gold and silver seriously. The times, they are a changing! I always felt that the bull market in gold would get real traction when conservative Wall Street investors (like my friend) opened their mind and their wallet to gold. It is starting to happen.