All hail the punisher! Gold bullion beat the dollar to a pulp, again, last night! The price chart looks like the entire New York Yankees baseball team took gold baseball bats to a dollar bug terrorist in the interrogation room! The bottom line, sadly, is that Elmer Fudd Public Investor is now being devalued, all the way to the breadline.
For the risk capital I manage professionally, here’s how I sit, and have for a while. I’m approximately 3% in silver, 23% in cash, 20% in GDX, and 54% in… the gold bullion punisher!
As you look at your own accounts this morning, are you in supreme party mode? The answer is…. you better be!
Click here now to view the gold punisher writing your personal Declaration of Independence! 1776 was a year you all know, politically. Now, 1776 is set to become a price you all know, marking your financial independence from the Gman and his toilet paper!
I put absolutely no annotations on that chart. On rare occasions, we need to stand and salute the punisher, as she punishes the debt-a-holics and price chasers. Today is one such day, of great celebration!
The bottom line is that in an epic crisis, you need epic amounts of gold bullion. You need cash to manage the debt implosions like occur like meteors smashing into your account planet. You need some silver and gold stocks to manage the massive inflation and interest rate spikes that come, later, in this crisis.
Greed and fear dominate the market actions of 99% of the participants at any given time, but most investors spend more time reading newspapers and company reports than they spend looking in the mirror, which explains their generally ridiculous long term performance.
While the gold bullion punisher shows you a small touch of her infinite financial power this morning, sadly, silver bugs don’t look much different than the dollar bugs today. What went wrong?
The picture is quickly becoming fairly gruesome, and silver bugs seem set to join team “I’m 100% invested in gold juniors with no bullion, because I’m a greed machine!”, in the demoralization zone.
You need to “man up” and face reality, whenever your analysis of a situation goes all wrong. Telling stories about birds in the bush and tomorrows that never come just isn’t going to cut it, if you are a silver bug.
Click this man up on silver chart now to get a grip on reality. While gold soars $50 an ounce, silver is down on the day! Silver bugs clicking this chart will feel I can only term “unmitigated horror”. How can silver be down, while gold blasts into outer price space?
Because the 1970s crisis of the dollar against gold was a peanut compared to this current quadrillion dollar OTC derivatives garbage dump-fuelled crisis, everything is magnified in price, and in time.
Claude “the fraud?” Trichet has joined Ben “Dr. Pinocchio” Bernanke in the massive game to devalue paper currency and debt. He’s buying government bonds willy nilly with electronically photocopied euros, and perhaps dollars as well, loaned to him by Dr. Pinocchio, off-book.
It takes time for massive inflation to occur, as a result of this madness. That inflation will occur, and bond markets will implode. Rates will skyrocket.
Unfortunately for gold stock worshippers, silver bugs, and other commodity bugs, the time required for that inflation to happen is vastly greater than the time required in the 1970s and the 1930s. There are massive debt bombs yet to implode.
It is very possible that OTC derivatives linked to bonds are the driver of what I believe is a “near at hand” gold parabola. Still, until professional money managers see actual inflation and rate spikes that are frightening, you are not going to see an institutional money panic into gold stocks or silver.
I personally own much more silver than the 3% number for the risk capital I manage, but gold bullion still forms the foundation of my crisis portfolio. You need “patience beyond patience” to enjoy the fruits of your gold stock, silver bullion, and other commodity labours. The inflation you seek is not here. It will be. Don’t compound a mistake of being far too early on the play with another one. One of liquidation in failure. You can endure the gold-related assets gulag, or face the financial blast furnace, alongside the rest of the dollar bugs.
I told you all not to fool around with stock market crash season, particularly after the Dow has rallied strongly for several years. Most listened.
Those who didn’t look like charcoal. Crash season for the stock market is August, September, and October, seasonally. Many analysts, who told you to sell and short the Dow in the 8000-6500 area lows in Oct 2008 to Mar 2009, actually were issuing buy signals right as I screamed, “danger, crash season, stay away!”
What could happen from here is some kind of rebound rally, followed by a real crash in the September-October timeframe. I consider the action of the past couple of weeks more of a blip down, a modest correction of a massive up move, rather than a crash.
Click here now to view the absolutely horrific Dow monthly chart. The oscillators look like they are going over Niagara Falls in a barrel made out of toilet paper. In terms of time, the public can’t take much more agony. It’s been 11 years of horror since the markets topped out, and these price chasers can’t stand the pain any more. They want out, and they want out now!
The banksters stand there laughing, asking each other, “how little yield do you think we can pay these idiots on bonds, and they’ll still buy them in a frenzy?” The answer is found on a page in the “bizarre and surreal” handbook. The answer is that the public will accept a negative yield to escape the stock market gulag, and that’s exactly what they are being handed by the banksters, in real money terms.
The bottom line for the public is, “out of the gulag and into the blast furnace”. Incomprehensible pain is coming to these failed investors.
If you bought nothing into Dow 6500, you should not be playing bottom caller now. You will fail, and probably much worse than you can imagine. Gold stocks have held up phenomenally well, considering the forced selling related to margin calls on SP500 futures trades. I posted a listing of non-stop Goldman Sachs buys on one juniors situation on my juniors site yesterday. The banksters are buying gold stocks as weak hands bail, and the only question is, are you onside?
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Written between 4am-7am. 5-6 issues per week. Emailed at aprox 9am daily.
Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario L6H 2M8 Canada
Risks, Disclaimers, Legal
Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:
Are You Prepared?