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The False Myths of Gold & Silver Bulls Promoted by Gold & Silver Bears
For those that think gold and silver bulls are perpetually
long gold and silver no matter the present condition of the PM markets, that is
a patently false notion. In regard to the recent steep silver correction, an
asset that periodically has steep corrections every year (the majority of which
are induced and engineered by corrupt bankers) does not a bubble bursting make.
Personally, I have been a gold and silver bull since 2005 (admittedly a little
late to the party but still far enough ahead of the curve). Since that time, I
have grown to know many precious metals bulls that were bulls for an even longer
period than I. And what I’ve learned is the following. Those among us that
understand the Central Banker effort to transfer wealth to the top 1% of people
in their country through their Ponzi reserve fractional banking schemes, their
constant schemes to devalue fiat money, and their unfair manipulation of stock
markets, have NEVER advocated staying long at all times in all precious metal
assets during the current gold and silver bull. Despite bankers’ allowances for paper gold and paper silver
to be substituted for physical gold and physical silver in their Exchange of
Futures for Physical (EFP) transactions and their clever invention of
unregulated paper derivative commodity products that are hardly backed by any
physical product, gold and silver has rebounded every year from banker attacks
to keep trending higher. And the uptrend is still not only intact but it is intact
and strong.
In fact, among all those I know that have been long-term
gold and silver bulls for at least 6-10 years, all of us adequately manage the
volatile downside engineered manipulation of gold and silver futures quite well
most times with temporary hedging strategies that combine shorting gold and silver,
cashing out, and/or buying puts on mining stocks/ETFs. Yes the intelligent silver/gold bulls
among us will always have core positions in gold/silver whether that core
position consists of just the physical metals, a fraction of the mining shares,
or a combination of both physical and mining shares. But the intelligent silver/gold bulls will also fully expect
banker manufactured price suppression schemes executed against gold and silver
to occur every year without fail as well. However, since we have understood
this global fiat monetary crisis for so long and have accordingly been precious
metal bulls for many years now, due to our cost basis in gold and silver that
remains far below the banker-manufactured steep drops in the price of paper
gold and paper silver, the recent steep drop in silver is rendered nearly
irrelevant (for example, for my newsletter subscribers that have been with me
since the launch of my newsletter, the cost of silver, even after this dip, at
$38 a troy ounce today, is still more than a couple hundred percent above our
cost basis).
For some odd reason, gold and silver bears often assume that
gold and silver bulls are unidirectional traders that always buy gold and buy
silver no matter what direction gold and silver are heading and that they continue
to blindly buy into short-term peaks. This assumption, besides being patently
false, is an assumption with very little merit. Sure, there may be some among
gold and silver bulls that buy heavily into short-term peaks but there are
likely far more investors, from a historical perspective, that have heavily
bought into short-term peaks in major stock market indexes right before they
collapsed than those that have committed the same error with precious metals
markets. Consider this April 23, 2008 article in which I warned of a very
strong possibility of an imminent severe crash in US markets.
Just 18 trading days after I posted the article, the US
markets began a 50% decline, yet the majority of comments that followed my
article reflected very strong bullish sentiment towards the US markets. I
consider myself a gold and silver bull yet have never suffered huge losses even
in years when my newsletter portfolio has been heavily over weighted in
gold/silver mining shares and gold/silver mining shares ended the year heavily
down. For example, in 2008, when stock markets crashed, I managed my Crisis
Investment Opportunities newsletter so that it still returned a small gain
versus the very large 38%+ losses of most global major indexes and the very
substantial -28.56% loss of the PHLX Gold/Silver Sector Index. In the following
year, when the PHLX Gold/Silver Sector Index rebounded significantly and
returned a very substantial +37.55%, I still managed the downward volatile
periods in gold/silver to end the year with an even greater +63.32% return. A couple of weeks ago, on
April 26, 2011, I sent a very comprehensive warning to my Platinum Members. A very brief excerpt of that warning is below:
"I can’t see the bankers letting this opportunity go to
waste, now that they have sold down silver by 10% already…As they say, to catch
a criminal, you have to think like a criminal, so here is what I think will
transpire the rest of this week.
If I were a banker, silver at $50 absolutely mortified me and gold over
$1,500 further mortified me. If I were a banker, I knew that if I didn’t cap
the rise yesterday, there was going to be no way out from the huge short
positions I hold in gold that expire in June and the huge short positions I hold
in silver that expire in May and July. Thus, my best plan, and probably only
hope, to exit those gold and silver short positions, is to attack gold and
silver right now. Furthermore, if I were a banker, I would also take down
mining shares as much as I could right now to keep people from investing in
them in the future, especially with all the talk about the underperformance of
the mining shares’ performance when compared to the metals. Drag down the
mining shares now and that should keep people out of the mining shares for a
while.”
After I issued that warning, silver dropped more than 27% in
the next 7 trading days, and as I predicted, the mining shares were hit hard as the Amex HUI Gold Bugs index shed more than 9.38% and the PHLX
Gold/Silver Sector Index shed more than 9.59% over the next 8 trading days.
Foreseeing this activity, in preparation for the annual banker attack against
gold and silver, I employed extremely tight trailing-stop-losses in my
newsletter that moved many of our mining shares into cash at near 52-week tops and
we also shorted silver on a short-term play and exited this position one day
prior to a very significant silver rebound for a short-term 37% gain. In
addition, during the severe silver pullback, my private consultation clients
recently employed GLD ETF puts that we deployed for two days only and then exited
at about 60% profits and many of my Platinum clients recently exited a very significant
position of silver shorts last week at 125% to 135% gains in just a few
days. While true that it is impossible to perfectly catch the tops and bottoms
of steep corrections in gold and silver often manufactured by bankers, by
understanding banker manipulation schemes of PAPER gold and silver derivative products
that they execute specifically to scare people away from investing in gold and
silver and to benefit the shorts they hold against gold and silver, it is very possible to avoid the bulk of these huge corrections that
happen every year and even use them to your advantage.
Those that refuse to acknowledge the heavy intervention of
bankers into gold and silver markets seem to be among those investors that are
caught off guard every year by steep gold and silver corrections. At
SmartKnowledgeU, we have been able to consistently outperform the gold/silver
sector every year quite significantly even though we tend to be very heavily
concentrated in gold and silver from year to year because we have intensely
studied and understand banker manipulation schemes executed against silver and
gold. From launch of my newsletter in June 2007 until April 28, 2011, my
newsletter has cumulatively returned, in a tax-deferred account, 221.73% with
very low turnover as compared to the +59.08% return of the PHLX Gold/Silver
Sector Index during the comparable investment period. I know that there will
always remain people that I will never ever be able to convince of the
existence of banker take down schemes executed against gold and silver
primarily with the use of paper gold and paper silver derivative products. While we would ideally prefer to end these banker manipulation schemes that create great price distortions
in gold and silver to the downside (yes, gold and silver bears, they create
downward price distortions!), and we certainly have put in our fair amount of
work in exposing these schemes for six years running now, if we can’t prevent
them, we certainly will ensure to our best ability that they don’t hurt us.
Central Banks execute these takedowns primarily in the fake
and bogus paper market because they do NOT want to sell any of their REAL
PHYSICAL PRECIOUS METALS as reflected by the fact that they became net
accumulators of physical gold in 2010 and remain net accumulators of gold in
2011 after two decades of being net sellers. This divergence between the price of paper PMs and the
actions of Central Banks is precisely the reason why Silver Eagles and Silver
Maple Leafs continued to sell for anywhere between an 8% to 12% premium above
the paper price of silver all throughout the recent banker executed take down
in the paper silver markets.
If banker manipulation of gold/silver didn’t form such
well-developed predictive patterns and if I didn’t know that I can always depend
on “regulators” like the CFTC, the CME and the SEC to aid and abet
these take down schemes, there would be no way in the world that my newsletter
could have outperformed the PHLX Gold/Silver Sector Index by more than 162.65%
in an investment time span of less than four years. To say that I’ve been heavily concentrated in PMs for five
years now and that I’ve been able to outperform the PHLX Gold/Silver Sector
Index significantly every year based upon pure luck rather than accepting that
my outperformance is based upon my knowledge of banker manipulation schemes executed
against gold and silver would seem to be more apropos of a conspiracy theory
than the opposite side of that equation.
Among the long-term investors in gold and silver that view
physical gold and physical silver as a store of value and that don’t trade
gold/silver as the speculative commodity it is not, these huge sell-offs do not
cause weeping and gnashing of teeth among a great many gold/silver bulls as the gold/silver bears often erroneously
presume. Just because we are gold/silver bulls does not mean we are perpetual
gold/silver cheerleaders every hour of every day of every year. That would be foolish, especially in
light of our acknowledgement of banker price suppression schemes executed
against gold and silver through paper markets. In fact any gold/silver bull
that has done his or her homework should fully understood the banker
manipulation game of gold and silver and understand when and how to hedge for
these occurrences to preserve capital for the next ride up. True gold/silver bulls understand that
we can use this volatility to sell high and buy back low at least once a year
if not a couple of times a year. As far as the latest “hit” on silver, I would
fathom that the US Federal Reserve had a very large role in colluding with the
CME to raise silver margins and that they helped direct the latest takedown in
silver specifically to bail-out the enormous bullion bank short positions in
silver that would have been impossible to unwind had it not been for the most
recent episode of “today in banker
take downs of precious metals” (especially given the lack of physical silver
backing the bullion banks’ short positions).
Don’t ever forget that on July 24, 1998, former Federal
Reserve Chairman Alan Greenspan, in testimony before the House Banking
Committee, when informed of the huge gold short derivative positions held by
bullion banks that could potentially bankrupt them if gold moved upward,
stated: "Central Banks stand ready to lease gold in increasing quantities
should the price [of gold] rise." Now that central banks are net
accumulators of physical gold and want to hold on to their gold, people should
realize that Central Banks, with the help of corrupt regulators that are really
allies of banks, “stand ready to raise margins at a ridiculous pace and with
ridiculous frequency should the price of gold or silver rise.”
P.S. I’ve been working on two short books that further
expose the anti-gold and anti-silver promulgated banker propaganda and will be
releasing them online soon at a very nominal cost. I plan to donate 100% of the profits from the sales of these
two books to charitable causes and the provision of microloans to help people
in developing countries. I will provide more details upon the release of these
two short books, so please stay tuned for further information.
About the author: JS Kim is the Chief Investment Strategist
for SmartKnowledgeU, a fiercely independent investment research, education,
& consulting firm that helps clients position themselves properly to profit
from the ongoing global monetary crisis being executed by the world's Central
Banks.
»
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Wow, this dude uses "I" as much as POTUS.
Stay 50 in gold and 50 in silver. The gold will allow you to sleep at night, the silver might make you rich.
Well said. When we do go to another type of Gold backed currency I want both as a hedge.
Good article...so what about a bit of "showing off his blue ribbons". Author is a capitalist, caveat emptor.
His salient points were well taken. Most traders do take profits or even go short the pms at particular moments in a long term bull market. Some long term holders of pms do not. Seems pretty straightforward to me.
I liked his evidence he put up regarding the banks trying to keep the rise of pms under control, until they can load up at lower prices. Nothing earth shattering but well documented and real.
What he does with the profits from his coming books...I don't give a shiite. It has become culturally popular to announce that profits from books/products will go to widows, orphans, green movements, minke whales, feckin' polar bears, and now I guess micro lending in 3rd world to "help people". Not against helping people, but why even mention this? Do what you want with your $ without telling everyone what a cool Facebook shiitehead you are.
The bull is far from over with so many idiots on board.
Silver is the best storage/increase potential of buying power in my opinion. I do not have any special "love" for silver. It just makes sense to me when the FED, the debt and the government are beyond obscene.
This FED is gonna bury us in money and inflation, before the even consider slowing down the economy with a raise in rates. They insist to push on a rope. And have not the integrity nor disposition to admit failing policy of epic proportions. Nixon, going unbacked dollars, doomed us via an uncontrolled Congress and President and private FED to "print" us into oblivion. And they will, eventually.
Stocks, Bonds, Land, metals etc. all have there time in history. When the currancy crisis and debt are addressed responsibly, I'll consider switching into another asset class.
Safe bets the stock guys will still be in stocks and still talking their books.
I'm seeing a lot of straw man anti-bull comments here in the days since the margin-ilization scheme was unleashed. Why not more empathy since this was an obvious manipulation intended to keep the price from reaching its true supply and demand level? Like, "Dude, I tried to warn you about that bitch." I would be interested to know among those who cheerleaded for low $30 prices in recent weeks whether they believe the big banks should be allowed to fraudulently manipulate the price indefinitely--and if so, what good does that do anyone but them? I see no basis for ridiculing those who hoped that true price discovery was coming sooner rather than later. Massive naked short-selling should never be tolerated by a capitalist free market. The fact that it is, tells us clearly that we do not have a free market. Who applauds that? Those of us who want to see the real price arrive at the market sooner rather than later are inevitably torn--we will gladly accept the fortunate opportunity to acquire at artifically suppressed prices, but we know that this opportunity only exists at the detriment of the greater economy and that it results in the devaluation of our future income dollars (we cannot trade our future salaries for silver, and we can fully expect that income will fall ever further behind prices for many years to come). What we should all want is true silver price discovery based on actual supply and demand, and a stable price (i.e. no hyper-printing press). We will get the former before the latter. History will show that the greatest fools were those who tried to fool the world in the face of thousands of years of human history--that unbacked counterfeit-ready paper, centrally controlled, can serve as a store of value for exchange of goods and services.
Of course, if you're trying to tell us that this is normal price action and has nothing whatsoever to do with banker manipulation, then that's great as it lets us know we can save time by skipping right over your comments.
I'm sure some these guys are paid trolls. Some of the others are just assholes who don't care about being right longer term, but about their 15 minutes of fame.
I find them to be intellectually bankrupt more than anything else.
My dealer has them for 44.90 US and thats for singles
Why all the constant donations to developing worlds? Last I checked, and isn't this the crux of the article, we have a nation of devastated cities and towns. How about investing in mircoloan programs for some business in Detroit?
Does anyone know what is up with PAL? it is down 17-18% when searching for seeking alpha which used to have info on metals and palladium i came accross this
http://satwavespro.com/2011/04/25/deer-consumer-products-suing-seeking-a...
any thoughts about this? I did not realize seeking alpha had been captured too.
any thoughts on what is going on with PAL? And will the price of physical palladium follow suite?
http://www.kitco.com/charts/livesilver.html
as silver continues its march back to $50.. and beyond.. I have trouble caring about whatever manipulation the evil pigmen / bankers can dream up.
We have a REAL disconnect between the paper market and the physical market..
http://www.amazon.com/s/ref=pd_lpo_k2_dp_sr_sq_top?ie=UTF8&keywords=2011%20silver%20eagle&index=blended&pf_rd_p=486539851&pf_rd_s=lpo-top-stripe-1&pf_rd_t=201&pf_rd_i=B004HGRYIY&pf_rd_m=ATVPDKIKX0DER&pf_rd_r=1TPTNFKSZK4Y97H4T4JS
all eagles are above $50.. no not proofs.. an yes in bulk, monster boxes are ALL above $50 per oz.
Now I could source and site real prices all day, but the faux fix of manipulation that did NOTHING but make me realize the disconnect in a way that even I can Not! ignore!
Paper, is cheap..
Metal is not so cheap..
Sheep may not understand this fact, the sheep may even care Not! to understand the facts at all.. but I dont have to take care of the sheep, I have me and mine and whoever else I can outside of that is secondary.
Good Luck! and God Bless You ALL!
Got some for $45 and was kinda pissed (better than 50+ I suppose), but have to keep the eye on the long-term ball.
We have a REAL disconnect between the paper market and the physical market..
BS, there's no disconnect between paper and physical. Prices on Amazon and Ebay are only barometers of how many suckers are in this world. Go to any major bullion dealer (apmex, bullionbank, kitco, tulving, etc.) and it's spot plus normal premium. Yes, premiums are rising, but they're rising as a percentage of the spot price.
on Tue, 05/10/2011 - 11:39
#1259312
We have a REAL disconnect between the paper market and the physical market..
BS, there's no disconnect between paper and physical. Prices on Amazon and Ebay are only barometers of how many suckers are in this world. Go to any major bullion dealer (apmex, bullionbank, kitco, tulving, etc.) and it's spot plus normal premium. Yes, premiums are rising, but they're rising as a percentage of the spot price.
************************************************************
Only $7.79 per coin over spot!
This is a great price for a sealed box of backdated Silver Eagles! Unopened "Mint Sealed... view more
2008 Silver American Eagle 500-Coin Monster Box (Sealed)
http://www.apmex.com/Category/1206/Silver_American_Eagles_Sealed_Monster_Boxes.aspx
Everything is over $50 per oz in bulk form.
and the dealers in town, here.. are out! that would encompass 3 counties are dry! well, lets be honest.. not all are dry but I am not paying $60 per oz for bulk pricing.
Palm Beach
Ft. Lauderdale
Miami
and if we are dry or sky high.. well, everyone in South FL is Not! stupid.
Cherry pick much? That's a box of old eagles. Monster boxes of 2011 eagles are $5.29 over spot at APMEX. You can get them from Tulving for $3.99 over spot.
Let's remember that the mint charges a two dollar premium to the dealers. So, in effect, you have $3.29 and $1.99 over spot on monster boxes. Point being, there's plenty of silver to be had for under $50.00.
If you buy one eagle from APMEX, you'll pay roughly $7.00 over spot. A seven dollar premium on $38.50 spot is about eighteen percent. Same as two dollar premiums back when silver was ten bucks an ounce.
Feel free to believe there's a divergence if you want though.
Idiot Savant, This supports your comment. The ignorant are being taken advantage of. (btw, I am ignorant at time also).
Price comparisons of 2010 America the Beautiful Five Ounce Silver Uncirculated Coin - Hot Springs National Park, Arkansas (NP1)
US Mint: $279.95 + $4.95 Shipping
Ebay: Range $400 to $600 (then add shipping)
Amazon: $350.00 (Included in a set of bullion coins, NOT uncirculated)
I guess some people just don't understand that:
1. There are two grades of these particular coins, bullion and uncirculated
2. There is no 5 oz Proof being produced.
3. The uncirculated is currently being sold at the USMint (the source)
4. The uncirculated Hot Springs National Park coin is the first in a series to be released (4/28/2011).
5. All the bullion coins have been released to the dealers and the are not sold to the public through the US Mint.
6. 5 oz uncirculated Yellowstone National Park will be released on 5/17/2011.
US Mint 2011 Scheduled Products Listing:
http://catalog.usmint.gov/webapp/wcs/stores/servlet/ProdschedView?storeI...
That's not entirely true. Some of the premiums are higher now that they were when silver was @ $49.
Does anyone remember "Conspiracy Theory" broadcast on AM radio back in the early '70's in the Bay area? Specifically, the theory of the plane crash at Chicago's Midway? That was an 'aha' moment for me on the 'power' of the PTB. Today, I have little trouble swollowing the WTC takedown to bury some phony Treasuries or this little silver 'correction'. Nothing is impossible when it comes to the gov't.
Here is something else: No, we would NEVER do that to our own people! Right? Wrong. We have no problem sending our soldiers into war to spew depleted uranium all over the planet causing genetic devastation. We have no problem outsourcing our entire economy and leaving towns and cities crumbling with social structures failing at every turn. We have no problem forcing millions onto food stamps through our policies and protection of the top 10%. So why is it so hard to swallow that the US government was complicit in the WTC takedown? We engage in clandestine self-serving operations all over.... why not here? Do we really think that our almighty "father" the president cares about the masses? It is the best delusion ever and because it seems so unthinkable, it becomes so possible for them. Who wanted to believe that priests could be perpetrators of decades of sexual child abuse? It is the perfect cover. And like good sheep, most just eagerly suck it up and believe every spoon fed word.
Wow...this guy really impressed me with showing how he bought before the rallies and sold before the dips (he must be a genius, I need to subscribe to his newsletter) /sarc.
Maybe the noobs to PMs need this kind of article, but those of us that have been "perpetually long" don't need it. I have been long silver since I was 12 (coin collecting), 23 years of buying cheap silver has been great. Those times are gone forever, my lowest cost per oz of .999 is $4.75 averaging around $11.
I was completely impressed too, that mogul rider called all those tops and bottoms. I have been buying, trading, collecting and putting away, PM since I recieved my first eagle from my father in 1975. The real dumbass is the one that thinks he can call all the tops and bottoms.
SO when do you sell? Never?
That is a fool's game boy. You've been listening to RYNEX and the other pumpers too much.
I sold at 49, bought at 34, sold yesterday at 38.
Your insurance trade is nothing more than a scam perpetrated by schills. They are trading you are holding.
Who is the dumbass? YOU!
When you hit your target - sell. The insurance of society's collapse is noise to keep you locked while the pros milk the cow.
Buying options, selling options, buying SLV, sellign SLV blah blah blah. These schills are trading around your physical positions all the while screaming trolls so they lock you into a dead trade. They are profiting while you are losing.
Watch the responses - that'll tell you the BS that is flying around here
You traders always buy at the top and sell at the bottom. I envy you guys
If you bought silver with no leverage in 2003 and never sold, how are you losing?
I trade paper to buy PM's,you trade PM's to buy ipads and Obama chia pets.My net cost on physical PM's purchases is Zero,beat that.
those obama chia pets are awesome though......cha cha cha chia!
I want to become a platinum member.
Apparently this guy has never dealt with the rabid nazi ZH longs. PM's can ONLY go up, dontcha know?
Apparently this guy has dealt with pinhead shorts on ZH. Whoever bought Silver in their lifetime bought in the access market Easter Sunday nite above $49,dontcha know?
"Hedging" of PMs by shorting miners explains the underpricing of mining stocks. The sector is too small to absorb it without distortion. This could result in some serious squeezes. Why not a pure hedge with futures?
Here's the latest price list for gold and silver in Germany.
For reasons of global comparison.
http://www.geiger-edelmetalle.de/
http://www.proaurum.de/edelmetallshop/silber/muenzen_anlage.jsp?action=s...
http://www.westgold.de/html/prizeList.php
Buy USO, GLD, and SLV and sleep well. You don't have to trade i and out ...just look at their long term trend. They match the 8% inflation per year we see in the economy (except for RE which will plunge for years).
Larry Summers repeatedly said the only way out of this recession is to lower the value of the dollar to increases exports. Oil, gold and silver reflect his policy.
GL!
q p
U
USO is a massive scam. They only trade in derivatives and was supposed to track the price of WTI. It started of tracking WTI for the first month and is now at $40 while WTI is $103.
Is this post an infomercial?
I consider my physical holdings to be perpetually long positions. I just wish I could get perpetually long more silver.
Perpetual will take you to pearly gates where silver is a currency they don't accept...So bring your sights down to finite limits unless you are in perpetual motion in perpetual land already.
I know I can't take it with me, and I only collect what I can afford to collect. Kind of like the fellows that collect trains, wives, or scotch. Makes me feel all fuzzy inside knowing I will leave both kinds of value for the kiddies, when I am called to the gates, where I will exchange my kind works for entry.
With the recent (temporary) dip in silver. Has anyone seen suppliers of silver coins dropping their prices for delivery at all? Please let me know, just acquiring some more physical.
I bought last night and paid $39.98/oz for 50 oz.
From what source?
All I heard the whole way up was that only fools ever hedge (let alone sell) the pimple, but now that we're in the midst of an "irrelevant plunge" it turns out that the bulls have wisely sidestepped the entire debacle. Amazing.
Thta's cause the pumping schills and pumping trolls baited the fish hooks, the fish bought and the rest of the pump and dump is history.
You spew this kind of shit and expect people to respect your point of view?
Try a little balance yourself. Here's something Urban Redneck posted yesterday. Tell me we are shills and trolls when gold and silver are way below in comparison to total debt and inflation adjusted levels. What's your analysis on this?
"Price of gold as of last Thursday per the old pricing method (and without the requested $2T raise in debt capacity)-
When the price of gold was floated on December 31, 1974 the US Debt stood at $492.67 billion and the price of gold was $195.50/oz. As of May 5, 2011 US Debt stood at $14,321.67 billion. So if the US borrowing limit were still defined by the price of gold, the price of gold would have rise to $5,683.14 today."
Fresh out of those....will a toaster do?
when do i get my steak knives?
Mythical bricks on the yellow RIC road.
http://tradewithdave.com/?p=6291
Dave Harrison
www.tradewithdave.com
Your editorial reads like the type of advertorial seen at the tops of markets, written by hucksters. Please publish your 1,2, and 5 year track record in a table form, with charts and I may consider subscribing. Aside from the obvious self agrandizement, I find your world view to be consistent with many of the readers of ZH. I hope you post more often, sans the promotion.