05/01/2016 Gold, silver and the miners rallied strongly last week, up 4.9%, 5.1% and 14.3% (GDX). The gold-silver ratio closed at 72.4, about the same level as the previous week. The dollar index fell through resistance to 93, and the Fed’s April 27 policy statement was dovish, both supporting the rally. The metals and miners are now seriously overbought and at risk of a 25-30% correction if they continue to ramp higher without working off the overbought condition. After last week’s strength, a mild pullback this week would be healthy. We will be holding our positions for now but looking to trim a bit over the next few weeks if the overbought condition continues. While a 25-30% correction would cause pain to longs and especially to recent buyers, it would present an ideal buying opportunity as the bull continues.
Guns are what you talk about to avoid having to talk about Islamist terrorism. “Instead of debating the antiterror policy of the past seven years, we’re all arguing over gun control. Then again, if you were Mr. Obama or Mrs. Clinton, isn’t this the debate you’d prefer?” William McGurn, WSJ (image: Getty)
Why would anyone want a firearm? “Self defense, Locke wrote in his Two Treatises of Government, is a part of the law of nature and in consequence cannot be denied the community, even against the king himself.” Charles C.W. Cooke, National Review
Gold: Barbarous Relic
Cash or Gold? You decide.Watch full-screen.
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"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my Country. Corporations have been enthroned, an era of corruption in high places will follow, and the money power of the Country will endeavor to prolong its reign by working upon the prejudices of the People, until the wealth is aggregated in a few hands, and the Republic is destroyed." — Abraham Lincoln, Nov. 21, 1864
The Fed Sets Another Trap
"In these days of froth, the persistence of extraordinary policy accommodation in a financial system flooded with liquidity poses a great danger. Indeed, that could well be the lesson of recent equity- and currency-market volatility and, of course, plummeting oil prices. With so much dry kindling, it will not take much to spark the next conflagration." --Stephen S Roach, Dec 23, 2014
The Fed’s balance sheet is a pile of tinder, but it hasn’t been lit … inflation will eventually have to rise.
Where will the price of gold be in 5 years? Greenspan: “Higher.” How much? Greenspan: “Measurably.” (New Orleans Investment Conference, Oct 25, 2014)
Mercenary Musings: "We should always be cognizant that gold is the only real money and its true value is never subject to the decrees, fiats, machinations, whims, let alone the dreams, fantasies and whimsies of elected and/or autocratic national governments." — Micky Fulp
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TradersGame ebook guide for long-term precious metals investors:
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How to Buy Gold and Silver Today (to Preserve your Assets Tomorrow)
A Balanced Portfolio
Bullion market specialist Jerry White suggests a balanced precious metals portfolio — based on an investor’s risk tolerance and other factors — and analyzes the benefits and costs of each investment product, from junior mining stocks and gold coins to bullion bars and platinum group metals. For gold novices and experienced investors alike. White is a former trading manager of a major bullion house, director of broker Brody, White & Co., exec of a Comex depository and consultant to Comex, major refiners and coin wholesalers. PDF: $19.99, 85pp
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Why deflation is unlikely (Apr 30, 2015) “We are living with a situation that is highly vulnerable to an exogenous shock... Meanwhile, the prices of gold and silver reflect the deflationary view to the exclusion of the likely outcome.” —Alistair Macleod, GoldMoney
They’re Coming for your Cash "It might sound like a conspiracy theory spun by right-wing crazies. But judging by the increasing desperation of governments to reboot the world economy, it just might happen. ’It’ is the recall or confiscation of cash, i.e., dollars, euros, pounds, etc., in physical form. And a key justification that those calling for this radical measure cite is that it reinforces the ability of central banks to impose negative interest rates. . . If you don’t already own some gold in fully allocated form, now would be a good time to consider buying some." — Mark Nestmann