Tuesday, September 27, 2011
I’ve had several people comment on or more apt “freak out” over the steep decline in the price of silver in the past few trading days. Despite the fact I have warned the readers of this blog that the precious metals are a most volatile market (and highly leveraged and manipulated) the precious metals have been in an 11 year bull market that is nowhere near its conclusion. In fact, it has barely started and will take off with great earnest in one solid direction (up) once the average individual gets the scam that paper money really is, and that the green in one’s wallet is as worthless as expired lottery tickets. This day of reckoning is most likely much closer than any of us think, and it will be then that many who are now ‘freaking out’ will be extremely grateful they acted when they did.
When markets are volatile, is when people need to use sound judgment and reasoning, and not act on raw emotions. For instance, those who emailed me yesterday when silver dropped to $27 and change are silent now that silver is above $32. I know that I was looking for more money over the weekend, hoping to get a purchase order in before the market did what it did, and unfortunately, was unable to get my hands onto enough to get me more. However, I do know through very reliable sources that many of the dealers are short of metal now, as the buying has been very intense. The smart money is buying on dips as in the past few trading sessions, and it takes that much more of the metal off the markets, which only hastens the ‘day of reckoning’ that is soon to visit places like the CRIMEX and the bad people as in the money powers.
So for the sake of sanity, I will run through some information for those who are in ‘freak out mode’ and it will give one a framework in which to place days like the past few, in a proper context. So here are some questions one can ponder in order to assess the current happenings.
Q: What happens when an individual, corporation, or country chronically spends more than they take in? A: they go broke and default due to unsustainable spending and debts that cannot be repaid.
Q: What has more value, an item that is limited, and its number reduced on a daily basis, or something that can be created at will and can be increased at will? A: the item that is limited and decreasing in availability.
Q: Which form of money has been universally used successfully over nearly all of recorded human history? Is it: a) paper money, or b) precious metals? A: b precious metals have over a 6,000 year history and only in the last 40 years has it been removed from the monetary system of the whole world.
Q: Has any country, in the history of the world ever defaulted when using precious metals as money? A: no, none recorded in human history. However, there are numerous incidences in which gold and silver coins were debased using other metals, and this caused economic crashes in these cases.
Q: Has any country in the history of the world ever defaulted when using paper currency as money? A: yes. In EVERY RECORDED CASE paper money has failed.
Q: Which is our government making more of: a) paper money, or b) precious metals? A: a) paper money. Precious metals can’t be made.
Q: Which is harder to come by, paper money that takes little effort to print, or precious metals that must be discovered, mined, refined, coined and delivered? A: precious metals.
Q: Can you eat gold and silver if you’re hungry? A: no, but you can’t eat a $100 bill salad either.
Q: When food is scarce, what will be a medium of exchange that most will accept as payment is it: a) paper money in ever increasing denominations or b) precious metals, which has held its value for time immemorial? A: b) by far.
Q: Where then, is the safest place to store my wealth or put for the security of me and my family in times of inflation or hyper inflation: a) precious metals or b) paper money and treasury bonds? A: precious metals because they cannot be printed or counterfeited.
These are some of the questions that ought to help someone who is experiencing doubts about his purchases of precious metals, or is contemplating purchases. Many commentators are claiming the fall had to do with the technical charts showing an overbought position, and as a result, the price of the precious metals needed to come down. However, these same people are not commenting on the technical charts that have shown an oversold condition in which the dollar ought to be rising but has been steadily dropping for over five years.
The fundamentals of both precious metals and the dollar have not budged one inch. The dollar will continue in free fall because we are printing and spending more dollars than what exist, and this is an unsustainable position to be in. The precious metals will continue going up because they are finite, and have represented money from the dawn of time. Soon, both gold and silver will take its rightful place in the world's markets, and then it will be seen as what it truly is: precious metals.
Finally, I'm attaching a link to a video that everyone ought to see. This trader is admitting a crash is coming, but even more incredible is his admission that governments don't run the world, but the money powers, specifically Goldman Sachs.