Larry Edelson wrote a piece about how gold and silver still have another leg down in price and will be unaffected by the various “printings” by central banks that is in progress. He says that any market that goes up 11 straight years of course is going to have a 1-2 year pullback. He wrote that many of the big investors like Soros, Paulson and Jimmy Rogers “just don’t get it”, he does.
First off, NO market anywhere, EVER that I know of has gone up 11 straight years, never. There is no “precedent” and thus no “chart pattern” that can be looked at to make a forecast. And as for charts, they do not and cannot work in a market that is in obvious manipulation. The “patterns” themselves are painted by the manipulators to create a picture, so analyzing a chart (to gage investor sentiment or future actions) is a laughable quest. To say that investors who use fundamental logic and have been successful for years upon end “don’t get it” is pretty arrogant to say the least.
Then you have the statement that “printing money” will not push metals higher, this is ignoring everything else. “Everything else” as in “why” exactly central banks are printing money. Would they print, or be FORCED to print if everything was really and truly going along smoothly in Stepford-ville? And we must wait for a “crack up” of the banking and financial systems before gold can go higher? Isn’t that exactly what is happening each and every time the Sun now rises? Greece, Cyprus and now Japan? The JGB market (Japanese government bonds, the second largest in the world) has already crashed in just 4 trading days and is threatening to turn the entire banking system into one of insolvency. Another 1 week’s action like the last 4 days would just about do it.
Yes, Mr. Edelson started calling for the precious metals to drop since the beginning of the year. He was correct. But was his “reasoning” for this to happen correct? No matter what anyone says, the events surrounding and in particular April12th and 15th were clearly and most in your face blatantly “operations” designed to crash the price. April 12th on its own was a 5 Sigma event, something that would be expected to happen only once in 4,700 years. The two day event pushed out to 8 standard deviations, something that will happen only once in 1 billion times, a virtual impossibility in nature. In less than 12 trading hours between those 2 days, more than 40% of the world’s global gold production was sold. Who has this amount of gold? No one. Who would sell their gold (even if they had it) in this manner to crash the price? No one. The only possible explanation is the obvious one. The only entity(s) that have both metal and the motive to crash the price is the U.S. Fed and Treasury, they “supposedly” have the metal and surely the motive as gold is a direct competitor to the Dollar.
Now, Larry Edelson made a prediction that has come true but it has evolved for the wrong reasons. His logic is terribly flawed and because it coincided with the most blatant manipulation of any market (maybe in all of history) he was right…for the wrong reasons. I ask you this, were the day traders and those up to their gills in margin back in the 1st quarter of 2000 correct about the equity market and in particular the Internet stocks? Were they right the year before and the year before that? They sure looked correct…but after the fact, those who claimed that Internet companies were empty shells with not even a business plan were really the ones who were correct. Were you better served to stay out of that market or “hope” that some guru would get it right (or be lucky) and “get you out in time”?
THIS is where we are today. As I have said for many years, you cannot “trade” in this market now, when it comes to gold and silver. Governments are broke, the banking system is broke, and brokers are broke. Central banks are printing money because their sovereign treasuries need to borrow increasingly more to keep their doors open. These central banks are also printing to prevent the collapse of currency and equity markets; it is THE only policy option left. Do you know “when” the music will stop? Do I? Does Larry Edelson? Does anyone? No, no one does (except for possibly insiders with the ability to pull the plug).
Here is my point; you cannot trade because you are trading against a rigged market. You cannot be “out” because any moment of any day can be THE moment. “THE MOMENT” being the point in time where everything stops and the ability to actually purchase metal and have it delivered will no longer exist. THIS is coming as sure as the Sun will rise tomorrow; demand drastically exceeds supply and has done so for years. Physical inventories are depleting at the same time that demand has exploded, “when” does the last ounce get delivered? “When” does another exchange like HKMEX default? When does another bank like ABN AMRO default and tell customers “no, you cannot have your gold?” You absolutely MUST be positioned ahead of time because just “one second” late will end up being a “lifetime” too late…YOUR lifetime and lifestyle.
In my opinion, Larry Edelson is doing a disservice to the world. He is suggesting that people “wait” to purchase their metal so that they can get a better price. Even he believes that gold will trade between $5,000-$10,000 in 3 or 4 years, what difference will it make whether you paid $100-$200 “too much?” And these numbers are probably laughably low, they certainly are if Larry’s “financial collapse scenario” (it surely will) occurs. I believe that we will look back in time and the only thing of importance is whether or not we have “ounces” and “how many.” Playing a guessing game, trying to be cute and trying to out-time the Fed and JP Morgan is a very dangerous game to play, especially when it involves your financial survival. I really don’t like the ramifications of trying to be so “right” yet if I’m wrong I’m ruined. A poor “risk reward” if you ask me since the risk is everything, but, that’s just me. Good luck Larry!
P.S. By the way, not even the U.S. Mint believes the COMEX price of gold, they are offering 1/10th ounces of gold at $195 each…$1,950 per ounce,
Call Miles Franklin at 800-822-8080 for current pricing and availability of product.