Friday, April 12, 2013

Gold, Central Bankers, and Blood In the Streets*Updated

If you trade precious metals, this has been a rough year so far.

Gold is trading down 64 dollars this morning close to the 1498 dollar an ounce level. This is the lowest level for gold in two years. Silver is even worse. Silver is at it's worst levels since late 2010. To put it bluntly- any investment gains you have made in precious metals over the last two years- have been officially wiped out.

So what happened?

Did the world suddenly add one hundred million jobs and get solvent? Have deficits and inflation been completely wiped out? Has the U.S. solved all of it's problems? Have central bankers suddenly and everywhere- quit debasing their currencies as we collectively race to the bottom? No of course not. Is the world economy getting better or worse?

What is going on?

It's actually the convergence of several factors. Some of them are natural supply and demand issues although Cyprus selling a few tons of gold should not be that big of a disruption. The world is beginning to realize that growth and growth prospects worldwide are terrible, and the bankers are still driving prices down in the metals any chance they get. Gold is real money. Bankers know this. They can't create actual gold, so they do the next best thing. They manipulate the price of gold with currency and futures. They have an unlimited supply of both and they use them

There is plenty of evidence that central banks everywhere- are gobbling up actual gold supplies just as quickly as they can.

Mining stocks are down 30% this year as well. The miners have absolutely gotten slaughtered over the past few years even as metals prices soared. It is almost- blood in the streets time. In other words- it's almost time to buy.

One of the greatest gifts that I have ever received in my life is the ability to fundamentally examine something without getting emotionally involved. To invest money with out worry and to actually add to my positions if I have arrived early- or accept a loss when I have simply screwed up.

As I write this, CNBC commentators are declaring the death of the gold market and citing collateral sources. At the same time, they are preaching stocks. This is getting good.

There are two things that I absolutely live and die by. When your barber is telling you to buy stocks- it is time to get out. If the barber is committing his money- then you are certainly near the end of the demand stage of any type of fashionable investment. At that point- demand is drying up because everybody is in. Consequently- anytime somebody is predicting the end or death of a market you are nearing a complete washout. All of the sellers, the weak hands, have sold. That is blood in the streets time.

I think you have to seriously examine your investment strategies here. If you have made 100% in equity markets since the 2009 lows- it's time to ask yourself if you really think there are appreciable gains left in this central bank fueled and controlled market and how long can it last? If you had to rotate out- where would you go?

I know I am preaching to the choir. Like you, I am sick of watching manipulated markets and a world that has gone fundamentally insane. It is exasperating and frustrating. But this is the end game. This is where all of the stops get pulled. World governments and bankers are doing everything within their power, in a somewhat unprecedented and synchronized way, to maintain the illusion of healthy economies and balance sheets. They will try everything within their power to maintain control. They are desperately trying to survive and putting their best face forward. The world is swimming in debt and getting worse. Nothing has fundamentally changed.

I am due for a haircut. I might make an appointment next week and see what Katie, my hairstylist, thinks about markets and gold. Maybe she will say that she hates gold. I'll know what to do then.


Dr. Roberts claims here that today's giant losses were planned and orchestrated.



Anonymous said...

I've been invested in PMs since about 2003 and I can honestly say that I am quite scared for the first time! This tells me that it may be a good buying opportunity since I almost never feel this way about PMs. Time will tell but great article and I look forward to hearing what the hairdresser has to say...

Anonymous said...

I know why I own gold, it is an insurance policy. A policy I had hoped I would pass down to my children. The situation is growing worse by the day. All numbers published by the Fed are bullshit and spewed by the presstitutes as truth. Anyone with an IQ above room tempature can see that this is not going to end well. I'm fortunate to have an insurance policy but, I'm sad that I will have to use it. Forget about price the real value is what your metal can provide, food,water,shelter and maybe freedom from oppression.

Anonymous said...

FMITE....I keep trying to catch this falling knife....yesterday I was actually depressed that I bought a few days earlier. I could see the corrupt assholes pushing prices to $1200/oz....I hope I can come up with some more worthless fiat currency to buy it happy dance today. Plus I have a zit on my face...who gets zits at 49!

Anonymous said...

I'll be rooting for you, Brian. Betting against the banksters take some big ones! Those guys scare the hell out me!