Posts Tagged ‘Silver’


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Jim Sinclair says ‘relax’, don’t do it – don’t sell your gold!

Some commentators now see gold – and silver – ripe for recovery with the suggestion that like the rise, the subsequent falls may have been too far too fast. Others disagree.

Author: Lawrence Williams
Posted:  Friday , 06 May 2011 

LONDON – 

The correction in the gold price and the sharp plunge in silver had been anticipated by a number of commentators, although the rapidity and depth of the sell-off may not have been expected, but it is interesting now that some of those who called the top are already suggesting that it may be time to move back in.

Notable among these is Peter Grandich of the well respected Grandich Letter who recommended selling gold and silver right at the top and is already telling readers to start climbing back in.  Grandich says: “After literally getting out within minutes of the top in silver and gold and then watching a decline I anticipated could take weeks or months happen in a matter of days, I believe it’s time to go back in and buy back those positions.  I may be 10% too early but we have plenty of room given what we sidestepped.  So I’m now back in fully in gold and silver.”

Looking at what has happened in the past week, gold has lost, from peak to current levels, just under $100 – a fall of around 6% which is not massive in the scheme of things.  Silver though has lost around 30% from its peak.  Momentum had carried it up far faster than was reasonable and at least one commentator had described the silver price surge, and subsequent fall back, as “an accident waiting to happen”.  It had risen too far too fast and to an extent the euphoria so generated had probably been partly responsible for dragging gold up a little faster than expected, or warranted.

In a similar manner, silver’s initial stumble, and then sharp plunge, may have also been a factor in gold losing its lustre. 

But the sell-off hasn’t just been in precious metals.  Revived general doubts about global economic strength have run over into most commodities, with investors scrambling for what they see as a safe haven – but in this respect it has been the dollar they have turned to, rather than gold and there has been a recovery in the dollar index over the past day or so which has been another contributing factor in the precious metals’ decline.

More sober analysis suggests, though, that the dollar is not worthy of a revival as long as the U.S. Fed keeps on pumping money out to the banks, and then supposedly to the U.S. economy as a whole – although there are serious doubts about how much of this government largesse is actually filtering down the line.  History tells us that money printing on this kind of scale eventually has to lead to inflation – indeed to severe inflation.  Perhaps the banks’ sticky fingers have to an extent prevented this from happening so far with the government money finding its way to the investment community and boosting the stock markets rather than the economy as a whole.  – Another bubble waiting to burst?

Indeed all the factors which had led to the rise of gold – we’ll leave silver out of it for the moment because it was speculative fervour largely responsible for that metal’s over the top advance – are still with us, and at some stage the investment community will recognise this and move back into gold as the haven of preference.  Whether that will happen now – or later in the year, remains to be seen.

Long term gold proponent, Jim Sinclair, who has quite a following, advises gold holders to “relax”.  He’s looking for a major upturn in gold as soon as June and is still targeting $5,000 as a longer term objective.  This seems far-fetched – but then people would have said that about $1,000 gold, let alone $1500,  only two or three years ago.

As for silver, will we see another meteoric rise if gold does recover first.  Perhaps too many people got their fingers burnt in the recent rise for a similar surge to happen in the short to medium term, and there could still be ground here for further falls befor the price stabilises and starts to rise again.  Maybe a return to a gold:silver ratio of nearer 45:1 or higher (currently 42.5) may be on the cards before real progress starts to be made again here.

On the bearish side, however, there are those who suggest that the decline in gold and silver may not be done yet.  Technical analyst, Dr Nu Yu, points to a “Three Peaks and a Domed House” chart pattern – I guess this means something to the technical analysis community – suggesting a gold price fall of 17% to around $1290 by June, but offers no further projections beyond then.  His chart is shown below courtesy ofwww.munknee.com.

 

As with economists, so it is with gold analysts.  There are always drastically opposing views.


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Golden future ahead. 

Sent from a wireless device.

Begin forwarded message:

 Mexican Central Bank buys almost 100t of gold (FT.com)

By Jack Farchy in LondonPublished: May 4 2011 11:35 | Last updated: May 4 2011

 

The central bank of Mexico bought nearly 100 tonnes of gold in February and March, the latest emerging market country to turn to bullion as a means of diversifying away from the faltering dollar.The purchase is one of the largest by a central bank in recent history. The gold, worth $4.6bn at current prices, is equivalent to about 3.5 per cent of annual mined output.- The central bank has not been publicly announced the move, but has reported it both on its own balance sheet, posted online, and to the International Monetary Fund’s statistics on international reserves.Central banks became net buyers of gold last year after two decades of heavy selling, a dramatic reversal that has helped propel the price of bullion to a series of record highs.On Wednesday morning, gold was trading at $1,535 a troy ounce, down from the nominal record of $1,575.79 touched on Monday.Mexico follows other booming emerging market economies, including China, India and Russia, which have all made large additions to their gold reserves in recent years.Matthew Turner, precious metals strategist at Mitsubishi, the Japanese trading house, said the purchase “seems to confirm there’s an appetite now among emerging economies with large forex reserves to add to their gold reserves. Gold is seen as one way in which to diversify away from the dollar- or euro-denominated assets.”The dollar has plunged 10 per cent since January against the world’s major currencies and is trading near an all-time low. Robert Zoellick, president of the World Bank, has suggested that gold should form part of a  new international monetary system.China announced in 2009 that it had bought 454 tonnes of gold over the previous six years; India bought 200 tonnes of gold directly from the International Monetary Fund in October 2009; and Russia has bought just less than 400 tonnes on the open market over the past five years.However Mexico’s buying in February and March, which amounted to 93.3 tonnes of gold, is one of the most rapid programmes of accumulation on record. Apart from India’s off-market purchase in 2009, the 78.5 tonnes bought in March is the largest monthly purchase by a central bank in at least a decade, according to data from the World Gold Council.The Bank of Mexico could not be reached for comment on Wednesday morning.


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Gold falls, silver drops 4 pct after bin Laden death

NEW YORK (Reuters) – Gold fell from a record high on Monday and silver notched its biggest one-day loss in seven weeks after the killing of Osama bin Laden sapped the safe-haven premium out of precious metals.


Silver bounced off early lows after falling as much as 11 percent, as speculators scaled back their bullish bets on increased futures margins and a technical overhang after a 170 percent rally over the last 12 months to a record high last week.
Gold initially rose to a record high for a fourth consecutive session, but news of the al Qaeda leader's killing by U.S. forces sent gold down almost 2 percent. The CBOE gold volatility index, a gauge of bullion investor anxiety, posted its biggest-ever two-session gain since its inception in September last year.
"People are pulling out of gold and going back into the equity market, as the news had a de-risking effect on the geopolitical environment," said Steven Faber, analyst at Haber Trilix Advisors, which manages $2 billion in assets.
Investor buying later lifted bullion off its lows after data showed U.S. manufacturing activity slowed in April for a second straight month but input prices reached their highest level in nearly three years.
Spot gold was down 0.4 percent at $1,558.09 an ounce by 2:26 p.m. EDT (1826 GMT), after hitting a record high for a fourth straight session at $1,575.79. U.S. June gold futures settled up 70 cents at $1,557.10 after ranging from $1,540.30 to $1,577.40.

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It’s Getting Plain Silly: MF Global Hikes Silver Margin To 175% Of CME, Or Over 10% Of Contract

Tyler Durden's picture

Now it’s just getting plain silly. Following two margin hikes by the CME, one for 9% and one for 10% this week, now MF Global, run by former Goldman CEO Jon Corzine has joined the fray, and has hiked its silver margin to $25,397. As a reminder, the latest CME margin is $14,513, or about 6% of the contract value of $241,750 assuming a silver price of $48.35. So MF Global’s is 175% of the CME! It is obvious that everyone is now hell bent on destroying the parabolic move higher in gold and silver, which is happening for a very good reason: deranged money printing. Although, as yesterday, we very much doubt MF Global, or anyone else for that matter will hike ES margins any time soon. After all, doing anything to stop the Weimar rallyTM in its tracks is treason of the highest degree under Bernanke’s dictatorship and is punishable appropriately. In the meantime, can the exchange just make margin trading in commodities illegal and move to all cash? At least that way all the weak momo hands can be relegated to chasing Netflix and other bubbles, making their eventual pop all the more memorable.
h/t @gptrading

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Excellent piece on the silver run. 

Facts on Silver

Bob Moriarty
Archives
Apr 25, 2011

For those who missed my piece of March 25, 2011, here is the link. I asked the question, “Is Silver Topping?” I may have been right about silver topping, only time will tell. For certain I was dead wrong about the timing and the price. Silver has rocketed from $38 and change when I wrote the piece to over $47 now.
But lots of people get lots of things wrong about silver. So here are some facts.
1. Silver is going parabolic.
According to Jim Rogers all parabolic moves end badly. I have seen similar charts in all kinds of commodities and they always correct. Parabolic charts mark tops. So when silver bugs start suggesting, “This time it’s different” I know better.
Study the chart below. Ignore the commodity. When charts go parabolic, it ends badly. I was an investor in the 1970s in both gold and silver. I started buying gold at $35 and silver around $5 an ounce. I sold out all my silver in January of 1980 a week too early at $35 as it rocketed to $50.25 an ounce at the open on January 21, 1980. It went parabolic and basically that’s all you need to know.

Those investors who want to buy at new all time highs almost always are the same investors who want to sell at all time lows. Naturally as a guy running a metals site, I think $46 silver is wonderful for all my readers that I was telling to buy at $4 and $6 and $10 and $20. Is silver a good buy today? No, it’s a good sale… to those who insist on buying at tops.
2. The actual ratio of silver to gold in the earth’s crust is not 16 to 1.
It’s more like between 20 or 26 or 64 to one. This is not an absolute fact, these are opinions from experts but no experts conclude the ratio is 16-1. Go to Wikipedia and do the math for yourself.
What happens on the web is that one guy starts a rumor saying there are tens of thousands of gold-plated tungsten bars out there. Some other fool adds a few “facts” to the rumor and all of a sudden hundreds of sites are writing about fake gold bars.
Alas, years later not a single tungsten bar has showed up. It was rubbish and anyone who understood anything about metalworking would understand that technically it would be very hard to do. All 400 ounce gold bars are tracked and if by some strange process someone managed to counterfeit one, he would be caught at once. But you can sell a lot of subscriptions to those who pay to have their fantasies catered to.
It doesn’t matter how many people claim the ratio of silver to gold is 16-1, it simply isn’t true.
3. There is no shortage of silver. There never has been a shortage of silver. Until the laws of supply and demand are repealed, there never will be a shortage of silver.
The first person I ever read that claimed there was a shortage of silver was Ted Butler. He claimed in May that according to his figures the world was going to totally run out of silver by December. This was on the Kitco forum. I wrote and told him he was dead wrong, there were billions of ounces of silver above ground. His response was that according to his numbers, we would be out of silver bullion and that would drive the price of silver all by itself to between $50 and $100 an ounce. In a vacuum. Without gold going up or oil or anything else going up because of inflation. Silver was that rare.
My retort was that with billions of ounces around, prices would soon turn Grannie’s silver service into silver bullion. He insisted I didn’t know what I was talking about; he was the silver “GURU.” The exchange took place in May of 2001 and by December of 2001 I had correctly called the bottom in silver while he was insisting that it would be $50 an ounce. One of us was dead right.
But then he was also the guy claiming that silver was the most critical war material and if we ever go into a war, that would drive silver prices to between $50 and $100 an ounce and it was so rare that you should, “never, never, ever sell silver.” With the US engaged in three different wars at the same time, you would think that silver would be $300 an ounce. It’s not.
My question is, “If you were smart enough to buy 100 ounces of silver at $4 an ounce, a 5000-year low in real terms, how much profit have you made if silver goes to $50 or $100 or $300 and you never, never, ever sell? The answer, of course, and ignored by all the silver “GURUS” is that if you buy low and don’t sell ever, you don’t make any profit. That may be the dumbest investment advice I have ever heard.
Silver is a commodity like any other. If you are smart enough to buy it cheap and you are smart enough to sell it when it gets expensive, you will profit. If you want to buy at all time highs, good luck with that.
There are 19 billion ounces of silver above ground today. People talking about silver “bullion” inventories are being misleading. Silver is silver is silver and it only takes a day to turn a few 200 year-old-tea pots into a boring 1000 ounce “bullion” bar.
Just how accurate is the 19 billion ounce figure? We can figure that out with simple logic. I think the figure accepted by more people for total silver production ever would be about 45 billion ounces. A favorite argument of the permabulls is that silver is consumed, not recycled. Let’s think about that. Silver is used in computers, iPhones, aircraft, and lots of commercial purposes where it isn’t recycled. But that use of silver wasn’t common until perhaps 1960. Silver before that time was recycled. Yes, silver coins did wear but they didn’t wear out, they might lose 20% of their original weight.
If 45 billion ounces were produced, it’s more logical that a good percentage of it is still around. I was in my coin dealer’s shop a week ago. He bought 2800 ounces of silver on Saturday. Not a bar of bullion in the bunch but 2800 ounces of real silver in other forms. The numbers on silver are not hard numbers; we simply don’t know how much silver is around. But we do know there is a lot of silver and with the exception of a short period between the end of November of 1979 and January 21 of 1980, a mere six weeks later, silver has been well under $10 an ounce on average for the last 40 years. How rational is $46 silver? Not very.
I’d guess most silver mines have cash costs between $3 and $10. A market price of $46 an ounce will suck silver out of grannies’ closets and out of the ground at the same time. Every silver refinery in the world is running at capacity right now, if you want silver, there is a lot of it around.
4. The most illogical thinking and worst use of “facts” is common among the silver uberbulls and the parrots that follow them.
Someone just posted the most incredible theory on the validity of SLV. That’s the silver ETF that has been trashed for years by a small group of uberbulls with an agenda. One of their supporters came up with a brilliant argument. Since we don’t really know and can’t prove that SLV actually has all the physical silver, the proof that it is a scam is when they deny it being a scam. Read that carefully. The proof that it is a scam is when they deny it.
So, apparently, if you ask the people behind SLV if it is a scam and they admit it, that means we know it’s a scam since they admitted it. And if you ask the people behind the SLV if it is a scam and they deny it, that also means it is a scam because the proof is when they deny it.
I think that’s circular logic. No matter what the people behind SLV say, it’s a scam.
I have said in the past I have reservations about ETFs and I think investors should be aware of those reservations. If we have a total economic collapse and the financial system freezes, all ETFs could be frozen or worse for months. That includes Sprott’s paper silver, the CEF and SLV and all ETFs of all sorts. What happened in Argentina could happen in the US, it could happen all over the world. It’s entirely possible that all banks close for a good period of time, after all they are insolvent now and have been since September of 2008. But a financial freeze would affect all forms of paper silver including Sprott’s silver trust.
The CEF fund and the SLV have done more to improve the price of silver and gold than any other single action in the last 50 years. Silver bugs should be grateful SLV holds 366 million ounces of silver instead they are whining and posting simply absurd articles totally lacking in either facts or logic.
When someone posts something that ridiculous and lacking in logic, you may safely presume they don’t know what they are talking about. That’s real common when people write about silver and it’s going to cost investors a whole lot of money.
The daily bullish consensus on silver is 96% as of Wednesday the 20th of April. On January 21st of 1980, the very day of the top, the bullish consensus was 94%. How many of the silver uberbulls are suggesting that maybe the record high bullish consensus is suggesting a very dangerous time to start buying? The answer is damned few because they have an agenda and their agenda doesn’t involve them knowing what they are talking about. As long as they tell investors what they want to hear, they will be very popular.
5. There cannot be a run on Comex. The rules do not allow the chance for a run.
For years I have watched as each time silver runs up, certain people start spreading rumors that silver is in such shortage that there will be a run on Comex. The only problem with the rumor is that it can’t possibly happen. There cannot be a run on Comex. I repeat, there cannot be a run on Comex.
Part of the reason for the rumor is that most investors confuse the purpose of the exchanges. The purpose of the exchanges is not to exchange commodities. The purpose of the exchanges is to determine price. But certainly the possibility of a run on an exchange is possible so early on the exchanges adopted rules that called for cash settlement if necessary.
Most people don’t know this because they don’t read the small print but if you have a savings account, the bank has the right to withhold payment for up to 90 days. And all mortgages are essentially 90 notes at their heart. That’s right, the bank can demand full payment within 90 days if they wish and during the 1930s that’s how thousands of Americans lost their homes even when they were paying their mortgage.
I don’t write the rules and you don’t write the rules and they are what they are if you like it or not. There cannot be a run on silver, it’s impossible. So anyone writing about it is spreading disinformation. Of course anyone who ever passed a Series 7 exam know this but you will never hear the silver uberbulls mention it. I wonder why.
There are three guys in the mining business that are so smart and have such great track records that for 70% of investors in metals, they should buy into their mutual funds and stop trying to outsmart the market by picking stocks. The top three guys in the industry are Ken Gerbino, Eric Sprott and Frank Holmes. If you like metals and shares in resource stocks, stop trying to be so smart yourself, it’s difficult work. Hand your money to them to invest in one of their funds and you will do just fine.
That said, Eric Sprott seems to have done something that hasn’t happened to the market since the days of Johnny Carson. You have to be getting on in age to remember it but back in 1973 Johnny Carson started a toilet paper shortage that lasted a month. He was making a joke. He said that there was a toilet paper shortage. The next day, millions of rolls of toilet paper flew off the shelves of every store in the US and by noon there was no toilet paper to be had. It was nothing but a joke.
Don’t let anyone convince you that supply and demand doesn’t work. They do work and that’s far more important for you to know than belief in some mysterious manipulation conspiracy theory. I’ve heard all the stories and know all the arguments. No one in history has made a cent from a belief in market manipulation.
If gold has gone up 4100% since 1950, higher than any other commodity, anyone manipulating it down has done a piss poor job. And who cares if 4 guys have sold more silver short than exists in the known universe? Those are all interesting theories but that’s all they are. If you don’t buy low and sell high, you can’t make money. End of story.
Eric Sprott started his own paper silver fund called the Sprott Physical Silver Trust. It’s still paper silver like SLV or the CEF fund. It has some unique features, not benefits but features. He has done a brilliant job of promoting it.
Recently he purchased $300 million dollars more physical silver to put in the closed fund. As a result of his excellent promotion, as of last Wednesday, silver was selling for $46. If you bought the CEF silver fund, you paid $47.88 for silver. If you bought SLV, you paid $46 with no premium but if you bought PSLV, the Sprott Silver Trust, you paid an incredible $57.73 an ounce for silver.
I’d say that Eric Sprott buying $300 million dollars more silver lately was incredible timing. He pocketed probably $60 million in profit. Is Eric Sprott bullish on silver? I’d say so. He has 60 million reasons to be bullish. He can buy at the exact top of silver and watch a 25% decline and still make money.
How wise was it for investors to pay a 25% premium for silver? I’d like to believe my readers are smart enough to figure that out for themselves. Eric Sprott is both brilliant and rich but paying 25% over spot is not wise investing.
The Hunt Brothers investing in silver drove silver to $50.25 an ounce for a few minutes on January 21, 1980. I think it would be fair to credit the silver boom of 2011 to Eric Sprott. He’s not really saying anything new about silver, though, Ted Butler was claiming that we were about to run out of silver 10 years ago and claiming that silver was the most manipulated of all metals long before Eric Sprott bought his first ounce of silver for a fund. But Eric Sprott adds credibility. But we weren’t running out of silver ten years ago. We aren’t running out of silver now.
One of two things is going to happen. Either we are at a top and silver is about to crash both hard and long, or the world’s financial system is about to fall apart. I have been an advocate of a total financial crash for a lot longer than most writers. I was writing about the dangers of derivatives in 2002 when they were 15% of what they are now.
But I don’t believe the world’s financial system is going to crash next week. As in January of 1980, the silver bulls are going to be the ones losing money. You can’t profit if you don’t sell and all the permabulls are screaming “Buy, buy, buy.” As they will at every top. Buying at record high prices is rarely profitable. But perhaps this time it really is different.
Here’s what all potential investors in silver need to know.

  1. The chart of silver has gone parabolic. Parabolic charts mark tops no matter what the commodity.
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  2. The bullish consensus on silver is at a record high. Record high bullish consensus on any commodity is common at tops.
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  3. When the most credible guys in an industry start explaining why supply and demand don’t really work, it’s a top. With 19 billion ounces of silver above ground we aren’t about to run out any time soon.
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  4. When guys start writing about silver that didn’t have a clue as to what it was or what it was used for at the bottom, you are at a top. I’m astonished at both the ignorance and the arrogance of the newly invented silver “Gurus.”
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  5. When the smartest guys in an industry start telling you, “This time it’s different,” it’s not. It’s just a top.
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Bob Moriarty
President: 321gold


>below are some excerpts from Jim Rogers interview:

Dollar will be debased; gold and silver to hit new highs

Chinese economy:

There is some overheating and inflation

setback in urban, coastal real estate is under way

China has been overbuilding ever since I have been visiting. There is at least eventual demand for much of it, but that does not preclude some bankruptcies in the future.

Europe:

I think we are getting closer and closer to the point where someone in Europe is going to have to take some losses, whether it's the banks or the countries, but somebody has to acknowledge that they are bankrupt.

Following is an interview that The Daily Bell had with Jim Rogers:

Jim Rogers: Dollar will be debased; gold and silver to hit new highs
05 April 2011 | http://www.commodityonline.com

Daily Bell: We've interviewed you before. Thanks for spending some time with us once again. Let's jump right in. What do you think of the Chinese economy these days?

Jim Rogers: There is some overheating and inflation, which they are wisely trying to cool – especially in urban, coastal real estate. They have huge reserves so will suffer less than others in any coming downturn.

Daily Bell: Is price inflation more or less of a problem?

Jim Rogers: More. At least they acknowledge inflation and are attacking it. Some countries still try denying there is inflation worldwide. The US is even pouring gasoline on these inflationary trends with more money printing instead of trying to extinguish the problem.

Daily Bell: Is China headed for a setback as you suggested last time we spoke?

Jim Rogers: Did I say a setback or a setback in real estate speculation? I think you will find it was the latter. Yes, the setback in urban, coastal real estate is under way.

Daily Bell: They are allowing the yuan to float upward. Good move?

Jim Rogers: Yes, but I would make it freely convertible faster than they are.

Daily Bell: Will that squeeze price inflation?

Jim Rogers: It will help.

Daily Bell: Why so many empty cities and malls in China? Does the government have plans to move rural folk into cities en masse?

Jim Rogers: That is a bit exaggerated. China has been overbuilding ever since I have been visiting. There is at least eventual demand for much of it, but that does not preclude some bankruptcies in the future.

Daily Bell: Is such centralized planning good for the economy?

Jim Rogers: No. Centralized planning is rarely, if ever, good for the economy. But the kind of construction you are describing is at the provincial level – not the national level.

Daily Bell: The Chinese government is worried about unrest given what is occurring in the Middle East. Should they be?

Jim Rogers: We all should be. There is going to be more social unrest worldwide including the US. More governments will fall. More countries will fail.

Daily Bell: Are they still on track to be the world's biggest economy over the next decade?

Jim Rogers: Perhaps not that soon, but eventually.

Daily Bell: Any thoughts on Japan? Why haven't they been able to get the economy moving after 30 years? Will the earthquake finally jump-start the economy or is that an erroneous application of the broken-windows fallacy?

Jim Rogers: It has been 20 years. They refused to let people fail and go bankrupt. They constantly propped up zombie companies. The earthquake will help some sectors for a while, but there are serious demographic and debt problems down the road.

Daily Bell: The Japanese were going to buy PIGS bonds. What will happen now? Does that only leave China?

Jim Rogers: Obviously the Japanese have other things on their mind right now. I think we are getting closer and closer to the point where someone in Europe is going to have to take some losses, whether it's the banks or the countries, but somebody has to acknowledge that they are bankrupt. The thing that the world needs is for somebody to acknowledge reality and start taking haircuts.

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Welcome to the Mania!
Submitted by Jeff Clark of Casey Research
With gold punching the $1,300 mark, thoughts of what a gold mania will be like crossed my mind. If we’re right about the future of precious metals, a gold rush of historic proportions lies ahead of us. Have you thought about how a mania might affect you? Not like this, you haven’t…

You log on to your brokerage account for the third time that day and see your precious metal portfolio has doubled from last week. Gold and silver stocks have been screaming upward for weeks. Everyone around you is panicking from runaway inflation and desperate to get their hands on any form of gold or silver. It’s exhilarating and frightening in the same breath. Welcome to the mania.

Daily gains of 20% in gold and silver producers become common, even expected. Valuations have been thrown out the window – this is no time for models and charts and analysis. It’s not greed; it’s survival. Get what you can, while you can. Investors clamor to buy any stock with the word “gold” in its title. Fear of being left behind is palpable.

The shares of junior exploration companies have gone ballistic. They double and triple in days, then double and triple again. Many have already risen ten-fold. You have several up 10,000%. No end is in sight. Your portfolio swells bigger every day. Your life is changing right in front of you at warp speed.

Every business program touts the latest hot gold or silver stock. It’s all they can talk about. Headlines blare anything about precious metals, no matter how trivial. Weekly news magazines and talk-radio hosts dispense free stock picks. CNBC and Bloomberg battle to be first with the latest news. Each tick in the price of gold and silver flashes on screen, and interruptions offering the latest prediction seem to happen every fifteen minutes. Breathy reporters yell above the noise on the trade floor about insane volume, and computers that can’t keep up. Entire programs are devoted to predicting the next winner. You watch to see if some of your stocks are named. You can’t help it.

The only thing growing faster than your portfolio is the number of new “gold experts.” It’s a bull market in bull.

You can feel the crazed mass psychology all around you. Your co-workers know you bought gold some time ago and pepper you with questions seemingly every hour, interrupting your work. They ask if you heard about the latest pick from Fox Business. They want to know where you buy gold, who has the best price, and, by the way, how do I know if my gold is real? They all look at you differently now. Women smile at you in the hallway. You worry someone may follow you home.

Your relatives once teased you but now hound you with questions at family get-togethers – what stocks do you own? What’s that gold newsletter telling you? Where can I keep my bullion? You don’t want to be the life of the party, but they force it – it’s all anyone wants to talk about. Your brother tells you he dumped his broker and is trading full-time. Another relative shoves his account statement in front of you and wants advice. You sense someone will ask for a loan. You don’t know what to tell people. The attention is discomforting, and you feel the urge to escape.

At first it was exciting, then breathtaking. Now it’s scary. You’re drowning in obscene profits but are becoming increasingly anxious about how long it can last. Worry replaces excitement. You don’t know if you should sell or hold on. Nobody knows what to do. But the next day, your portfolio screams higher and you feel overwhelmed once again.

You grab the local paper and read the town’s bullion shop had a break-in last night. They hired a security company and have posted several guards outside and inside the store. Premiums have skyrocketed, but lines still form every day. The proprietor hands out tickets when locals arrive: your number will be called when it’s your turn… the wait will be long… please have your order ready… yesterday we ran out of stock at 11am.

You begin to worry about the security of your own stash of bullion – those clever hiding spots don’t feel quite as secure as you first thought they’d be. Is the bank safe deposit box really secure? Shouldn’t they hire a security guard? Should I move some of it elsewhere? Is there anywhere truly safe? You find yourself checking gun prices online.

And it’s all happening because the dollar is crashing and inflation has scourged every part of life. You curse at those who said this couldn’t happen and mock past assurances from government. Cash is a hot potato, and spending it before it loses more purchasing power is a daily priority. Everyone is clamoring to get something that can’t lose value, but mostly gold and silver.

Your wife calls and says the $100 you gave her that morning isn’t enough to buy groceries for dinner. Prices change often on everything. She urges you to get some bread and milk before the stores raises the price again. You suddenly remember you’re low on gas and make plans to leave work early to beat others to the filling station. Restaurants and small businesses post prices on a chalkboard and update them throughout the day. Employers scramble to work out an “inflation adjustment” for salaries. 

On your way home, the radio broadcaster reports the government has convened an emergency summit of all heads of state. They’re working urgently on the problem, and all other agendas have been tabled. Outside experts have been called in. We’re going to solve this rampant flood of inflation for the American people, they say. In your gut you know there’s nothing they can do.

You change the channel and hear about the spike in arrests of U.S. citizens at the Canadian border. Scads of people are caught trying to sneak bullion and stock certificates out of the country – from airports to rail stations. Violence at borders has escalated, and stories of bloodshed are getting common. The White House ordered heightened security at all U.S. borders, with the media reporting it can take days to cross. Foreign governments offer meaningless help, others mock U.S. leaders for their shortsightedness. Their countries are suffering, too.

You think about the gains in your portfolio and wince at the taxes you’ll pay when you sell. Nothing has been indexed to inflation, so everyone has been pushed into higher tax brackets. Citizens are furious with government. Agencies have been swarmed with bitter taxpayers and revolting benefit recipients. One government office was set on fire. A riot erupted in Washington, D.C. last week and martial law was temporarily declared. It’s too dangerous to travel anywhere.

As crazy as things are, it’s hard not to smile. You’re in the middle of a mania. Your life has changed permanently. You’re part of the new rich. You can quit work, live off your investments. Your wife is ecstatic, and you both feel as if it’s your second honeymoon. Your kids are amazed and gaze at you with the same awe they did when they were children.

You’re thankful you bought gold and silver before the mania, along with precious metal stocks. You daydream of where you might go, what you might buy. New options open up daily. You realize you’ll need to meet with your accountant, maybe hire a second one to protect your sudden wealth. You wonder what you’ll invest in next. You ponder what charities are worthwhile. Better meet with the attorney to redraft the will.

As night settles and your house quiets, you log on to your brokerage account one last time. Even though you’re ready for it, your mouth drops when you see your account balance. It is truly overwhelming. You think of others who own gold and silver stocks and wonder if any have sold yet. Has Doug Casey exited?

You stare at the blinking screen, hand on the mouse, the cursor hovering on the sell button…

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