Thursday, September 22, 2011

Buy When There Is Blood in the Streets*Updated

Silver and gold are getting their collective asses kicked today. Particularly silver. Nearly 10% off. Gold is in the low 1700's.

A few months ago, I told readers that I was waiting for the stock market collapse. Sometime around June when QE2 hadn't happened. Last week the market ramped up thinking that the banking genius was going to unveil a little something extra instead of Operation Twist. Of course I expected to see commodities and all asset classes drop which always occurs in big stock market swoons and why is not the point of this piece. It happens every time.

If you have a little cash earning absolutely nothing thanks to the great stagflation- now might be the time to start dipping your toe in the physical metals pool. Average in. If Mr. Market keeps dropping you don't want to over pay. Keep your purchase sizes small. Ounces, maybe ten ounces max. That way you can sell a little without filling out one of those Obamacare forms at the end of the year.

Buying when prices are down is very difficult for momentum investors like myself. You have to remember that the banks are fighting rising precious metals prices like their lives depend on it. Because they do. The world is swimming in debt- fiat currency is a bust everywhere but mostly Europe right now- and the last store of value is precious metals.

Today I am just going to buy 20-25 ounces of silver. Mainly because it is down the most and paper manipulated the most.. Maybe an ounce of gold.

Fundamentally, nothing has changed except the interest on the world wide debt accumulates.

I can't be positive but 2008, round DEUX might be just beginning and I don't want to miss the precious metals sale, starting today.

1512 MST update. I bought one gold kruggerand and 20 ounces of silver today. The man next to me bought every ounce of gold in the display case except mine. About 15-20 ounces. Honest.

Mike Krieger's summary on world currencies racing to the bottom and the gold angle. From ZeroHedge: See, once again things aren’t as simple as they may seem.  Gold is not falling, emerging market currencies have just been devalued.  This is what might be expected within the current macro environment of general fiat currency death as the globe enters a recession within a depression.  Things are going to be very, very choppy and I would be extremely cautious in all markets but physical precious metals should absolutely be accumulated on weakness.  The system has already blown up and while that makes thing extra volatile and confusing, as JP Morgan said in 1912 “gold is money, everything else is credit.”  It shall be seen to be true again.


Anonymous said...

Brian, am I reading the sgnals correctly? The G-20 are shoring up the banks in Europe providing liquidity of dollars. Will some or all these dollars make it into circulation? If so, won't we be in for some big time inflation?

Brian said...

We are on the verge of some of the greatest inflation the world has ever known. How it spills onto us I am not sure. Currently we are the best of the worst. How long can that last?

This I know. They banks are still in charge. They will not go quietly...they will fight to the bitter end. That fight has begun this week...this worldwide insolvency fiasco is unprecedented. Hard to see anything but rampant inflation after they fire everything they have at this...