Wednesday, October 22, 2008

Attention: To All Gold Investors

To holders of gold, gold bugs and hard money enthusiasts:

Your belief in gold as money and gold as an investment in times of economic crisis is about to be severely tested.  Gold will soon collapse from $750 to $600 in a short span of time.  This is both somewhat normal action within a bull market and also a result of extreme market manipulation by the money masters who rule our world.

This phase is know as “capitulation”.  Many former believers in the gold bull will throw in the towel as gold breaks down beneath its most recent low around $740.00 per ounce.  They will come to the conclusion that they were wrong about gold and will take their profits or losses and cash out.  They will rush down to their local coin and bullion dealer and see what they can get for their stash.  I wouldn't recommend being one of them.

Although gold coins and bullion are actually scarce and difficult to obtain in the real world at this time, the electronic market (known as COMEX) is highly manipulated.  It is not a free market.   Therefore the deep pockets can sell short the gold market electronically to drive the price down.  Their goal is to drive all gold holders out of the market and scoop up all the physical gold for themselves.  When gold does bottom in the $600-550 zone sometime in the next month, most holders of gold will have sold out, clearing the decks for a rapid reversal.  The resulting surge will happen so fast that most will not react fast enough to get back on the bull and will be left holding rapidly depreciating dollars as the hyperinflationary stage sets in.

This is a brief characterization of the situation and not an in depth exploration of the many forces that are producing this situation.  Would that I had the time to explain this in detail.  But here are a few charts which will  illustrate my point if you are adept at interpreting them.

Could I be wrong?  Sure.  Gold COULD bottom right here and rebound sharply, particularly since the US dollar is due for a major selloff, which would be bullish for gold.  However, the damage to the gold bull market is real and in general markets under these conditions need a full clearing of the decks and a total shaking out of the weak hands for the bull to resume its uptrend.

Your Friend in Freedom,

Steven Vincent

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1 comment:

Anonymous said...

Last week when I checked COMEX and silver was around $7.45 I decided to go over to ebay and see what physical in your hand silver was going for.
I watched a couple 10oz bars. The ending price was about $150.00 on all of them. More then double the COMEX price. Coin dealers can not keep Gold and silver in stock. Some say for every gold or silver item they have there's five buyers. You would think that this would raise prices through the roof.

I think those of us who are collectors and buyers of physically held gold and silver, and have any disposable income, are looking to buy. The dollar has gone up but not for the reasons the talking heads are claiming. Those who decide to dump gold and silver for FRN's will feel the pain of their actions in the near future.