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Rick
I have been thinking about your question this morning.
Jim Sinclair once said that if anything happened to him he would recommend his children turn over their funds to Monty Guild to watch for them at Guild Investments in West Los Angeles. Monty lives in Malibu so he gets a good amount of fresh salt air which is, in my opinion, quite conducive to reasonable thinking.
If you want to go it alone on your decision making concerning gold I would strongly suggest following Alf Field’s analysis of the trading cycles of gold.
Alf knows his business and is almost, in my opinion in a league by himself, excluding Sinclair and a few others. You can access his free commentaries at kitco.com concerning how he does it in the commentaries section when they appear. If you check there now I believe there is current commentary available.
Gold is lower today at $916.30 and has made its intermediate bottom already at $845 or so and reamins in a major bull market. No better time to buy it than on sell-offs.
Hope this will be productive for you as Americans are in store for one hell of a shock with their money and wealth in the many months to follow.
One more thing….when we read about gold being lower at $914+/oz it is time to remember the big bigger picture, eh?
Blue-jay, thanks. Perhaps I’ll become 1/3 of a winner if I only jump 1/3 of the way from securities into gold…later to find out how I should have perhaps been 4/3 in gold or not.
Long ago I took your advice for accessing kitco.com and it is my very first go-to page. Everyone reading this should do the same.
I’ll take your recent advice and inform myself further with your direction.
Thanks, Bluejay
Rick
Harry Schultz just sent out an alert warning people to be prepared for the coming international financial storm.
I believe he said, “Get out of U.S. dollars. Put 50% of your funds into governement bonds, not the U.S., but other big countries.” I believe he said the Swiss Franc is the better choice.
“Put about 50% into various gold futures and the rest into good senior gold companies and the rest into oil and special situations.”
I found it odd that he didn’t mention gold coins. I guess the British government going into safety deposit boxes without the owners permission spooked him. What happens first over there usually finds it way over here.
I have lately been reading some business writers who are very concerned with the banks and the investment banks. Saying that we are approaching a time that not everyone will be bailed out.
Everything, excluding our home and some debt on it, that we own is heavily weighed to gold and silver and the related companies that are producing the metals or are looking for them.
Good luck my friend.
BlueJay…I’ve been averaging into a down market with mutual funds. More shares in the broad spectrum while the value is lower; latent effect a better value if/when they do.
Now it’s become an “if” instead of a “when.”
I’ve toyed with the idea of selling low (not high) to instead buy gold. Or gold stocks; against all instinct since selling low is generally just plain dumb and results in losing money.
All sound rules point to holding an existing equity position (hold the nose) all the way through a downturn, since so far history shows how the long-term patient and wise holder of main stream securities ends up with a rebound, instead of a potential loss by bolting.
My gut says, “Hey gut? Buy gold.”
My bank account, and portfolio says, “Woah, not here, we’re going to withstand and with pride will rebound the temptation.”
What, in your opinion, (and if Sinclair had a voice with your answer,) figuring the gold picture-to-immerge, would someone like me do?
The key to making money in stocks is not to get scared out of them. –Peter Lynch
Posted On: Friday, July 04, 2008, 7:25:00 PM EST
In The News Today
Author: Jim Sinclair
Dear Friends,
The problems out there are incalculable. Both the Fed and Treasury know this. That is why we got the show and tell the day before the ECB raised rates.
The damn OTC derivatives gang has killed us all to some degree. Oblivious to the obvious and driven by greed, those criminals are still writing OTC derivatives.
Hang on as the default derivative problem blows sky high when called on to perform.
Could GM be the match that lights the default derivatives fuse? The Financial Big Bang is just around the corner.
Are you prepared?
Regards,
JimPosted On: Tuesday, July 01, 2008, 11:43:00 AM EST
It Is Now!
Author: Jim Sinclair
Dear Friends,
There are two subjects of extreme importance today.
I sent you an email months ago saying, “This Is It.”
1. I am now telling you, “It Is Now.”
Gold is preparing for an assault not on $1000, but for a brief penetration of $1200.
Violent chopping will occur, then off it goes to $1650.This violent chop we have been living in here and now will resolve itself very soon and the take will be seen by history as having occurred in this last formation HERE AND NOW.
2. Where your juniors are concerned please give equal attention to the fundamentals before you make any decision. When beaten down, as they have been, think about gold at $1200 and $1650 coming sooner than anyone expected.
Call the company and respectfully demand to speak to management, not an IR officer. If management is in the country but will not speak to you, put that in the debit column. Allow time for a call back as many other investor may be doing the same thing.
The questions are simple. Property, finances and costs are the subjects you approach.
As an example, a high cost mining company in Ghana just experienced an increased production cost per ounce of gold as a byproduct of increased electrical costs in the country. Before you push the panic button the question to the company is “What are your total costs per ounce, not cash cost?” Once you have that answer think about gold at $1650.
I will discuss the “why” of all this on http://www.JSMineset.com this evening.
Respectfully yours,
JimJun 3 2008 10:22AM
Gold
What is the biggest mistake you can make with your money in 2008? Ignoring gold, silver and their related inflation hedges can lose you more money than all the other mistakes you can make put together, except for playing the roulette table in Vegas.
Once in a lifetime, there comes a chance to turn a relatively small amount of money into a fortune, and this is one of them. We are in the early stages of a massive multi-year bull market in the metals. The supply-demand situation beggars belief. This is as close to riskless as anything I have ever recommended in 31 years of publishing The Ruff Times. You can put a list of mining stocks on the wall, throw a dart at them, invest in the holes and make a lot of money, in effect creating your personal mutual fund. When the wind blows, even the turkeys fly. Of course you can make lot more money picking the sheep from the goats, and that is what the Ruff Times is for, separating the biggest winners from the holes in the ground surrounded by liars.
A word of caution: all my words of advice are for the long term only. In the short term, gold and silver can do anything, go anywhere. In the last bull market of the ‘70s-‘80s gold went from $120 to $850, but there were discouraging retreats of as much as 30% several times along the way. It was attacked by speculators, central banks, and even Uncle Sam through Jimmy Carter. But gold and silver prevailed, even though chickens bailed out from time to time. I was new to the advice business back then, and even I got scared out once for a little while.
Actually, this is “déjà vu all over again,” as said the master of malapropism, Yogi Berra. It’s an eerie repeat of the 1970s, only more so. All the same factors that drove that historic 1970s bull market are back, only a lot more so; an explosion of money creation by the Federal Reserve that is so great they have even stopped publishing a monthly report on M-3, the most trustworthy measure of changes in the money supply. I guess they no longer know, or don’t want you to know, the embarrassing numbers.
Actually, it’s worse than that. Did you know that the phrase “printing press” no longer means much when it comes to money? Actually, less than five percent of the money is actually minted, printed or coined! The rest of it is in cyberspace, created at the Federal Reserve, or by commercial banks. The amount is beyond comprehension. This process is called “monetary inflation,” and that is what ultimately drives price inflation and drives gold and silver. The more money is created, the higher go the precious metals.
Also, they react to the prospect of war, or actual war itself, and America has never been more threatened by war that will affect us at home than we are now, by terrorism and nuclear proliferation by rogue nations.
History tells us that ever since the invention of Guttenberg’s movable type press, and the subsequent development of paper currency. The average time each currency lasts is 50 to 75 years before the world is littered in dead paper currencies, and until we invent a new one, gold and silver coins reign supreme, but not before they soar to the moon in value. There is not a time in human history when gold and silver have not been considered real wealth and instinctively turned to when paper decorated with ink has become so much confetti.
How long will it take us, and are we near the brink? No one knows. We have become immensely sophisticated at postponing the inevitable. It might be five years, ten years, or twenty-five or fifty years before the inevitable drama plays out. But play out it will.
In the meantime, we will make a bundle in the metals and their derivatives. In fact, they will be a new way for the middle class to in effect print money, and in dollar terms, the metals are going to the moon. $2500 gold or $125 silver anyone? And what about 500% to 2000% profits in the next few years. That is written in cement over the next few years – or in gold or silver.
By Howard Ruff
The Ruff TimesRick
The dollar is 71.25 this morning. It is making a five week low and in position to continue lower in the days ahead.
Your question concerning its correction appears directed at its upward correction. My opinion of its recent strength is feible at best.
Remember, according to James Sinclair, the dollar will hit 52 in the months ahead which will support a gold price of, at least, $1,650. Today’s gold price is $923.50.
Hey Bluejay, what do you make of the “correction” in the dollar?
John Maynard Keyens, in his 1924 tome entitled “Monetary Reform” said,
The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
The only viable form of an
investment that resembles a
derivative in my book is a
Bankers Acceptance which is
listed in the “Money Rates”
section of the WSJ. Nowdays
only the biggest and “best”
bank customers can get them.
bPosted On: Tuesday, April 08, 2008, 7:52:00 PM EST
Overconfidence Always Costs
Author: Jim Sinclair
Dear CIGAs,
The spin of the proper valuation of credit derivatives is that all is well and the problems ended with the Bear rescue. This meltdown process is now called a mortgage subprime problem.
The equity participants have signed on to this lie, as demonstrated by the demand for financial shares.
The risk in this overconfident spin is that it is blatantly wrong and risking exposure.
That exposure lies in the almost unreported and not discussed Fitch downgrade of a significant issuer of credit default derivatives in the municipal bonds.
It does not take a brain surgeon to understand the principles of credit default derivatives cannot in any manner meet their responsibilities should more than one significant failure take place.
Already the trend towards such a potential event occurring is moving east from California and west from the Sunbelt.
Now that Fitch has announced a major two-step downgrade, it puts tremendous pressure on the other rating agencies as they maintain double and triple AAA ratings for the debt of the remaining issuers of default swap derivatives.
Yesterday the shares of Washington Mutual rallied from an injection of $5 billion. This injection was meant to assist in the giving of a better mark to model cartoon value for their inventory of derivatives.
Today they needed $7 billion. The truth is no one really knows what anyone needs as the offending financial vehicles have no market in real terms. Of course the silly stock buyers turned around and became sellers.
The huge risk is in declaring the problem SOLVED while it has the equivalent risk of sitting atop a barrel of black powder while smoking a large cigar.
The potential back blast is that the SOLVED situation goes up in smoke.
Risks like this are not new. Last week al-Sadr beat the pants off the Iraq military even when air strikes had been called in. That was not supposed to happen. The US was sure it would not happen but it did.
You can bury the Iraq super-embarrassment, but not the $45 trillion in default derivative swaps looking like an accident about to happen.
Better spin would have been closer to the truth. Saying the problem still exists but is being controlled presently raises hopes that it will be entirely contained, but that is not the case.
Tight rope walking might pass in combat situations but is ill considered when used in the financial world where there is no patriot to save the day. There is no flag to wave and the motivation is to screw the other before being screwed yourself and take off running at any event.
I see the danger has been heightened by the extreme level of spin. This time I feel they are pushing a strategy that has so far functioned to the limit.
That may be the first major mistake in “Operation White Noise.”
The lock up in the credit market is not behind us.
Insolvency is the manifest and the alarm is capital requirement changes.
That does not repair the system. It makes it weaker.
That does not repair the system. It creates more danger.
That does not protect investors but instead puts them in the path of serious harm. This grandstand spin play is overconfident and in that sense the most risky move yet.
We wish the Fed well, however CONSEQENCES are not being considered and that is extremely dangerous.
Consequences cannot be avoided but they can be accelerated. Problems in the credit default derivative arena will occur.
Then what?
CONSEQUENCES
THIS is it! Are you prepared?
Ownership of gold is the first level of protection.
There is near to frantic drilling activity in my area, Sutter Buttes and surroundings for natural gas by one or more
companies. I presume it’s the
same elsewhere.Gold $917.20 – $13.70
Silver $17.24 – $0.64
Gold/Silver Ratio 53.31
Gold/XAU 5.24Barron’s magazine for this week has a lead article of the bubble in commodity prices. This is more of the same from the anti-gold community to force down commodity prices along with indirectly pushing down base metals and precious metals.
On Friday the German banks spoke of the Bundesbank selling some of their gold holdings to shore up bank financial difficulties but the Bundesbank denied they would sell gold. The Bundesbank still continues to release a few tons here and there for local coinage.
Reports in the past have spoken of the Bundesbank leasing out or swaping out most of their reserves. The Bundesbank originally had the second largest gold holding behind the US holdings which have been, also, suspected of not being there anymore.
With the article in Barron’s, this is considered to be just another propaganda push to sway the public away from precious metals indirectly and back into the stock market.
When these negative articles are published they are joined with fierce bullion bank selling of gold in the paper market, at the COMEX in New York.
Although it had been suspected that gold may have hit a low at $914 some days it continued lower to the $905 area where support surfaced.
After reviewing a recent article by Alf Field concerning gold’s trading habits since this bull cycle started in 2001, it became apparent that gold has a little further to decline before a meaningful turnaround takes place.
Alf is forcasting a 16% to 18% retracement from the recent $1033 high. 16% equals $867.72 with an 18% fall equalling a price on gold of $847.06
The good news is that Mr. Field is looking for a price on gold of $1250 at the extent of the next rally.
Once gold is established over the magical $1000 area in the months ahead the whole psychology of investing in junior and exploration gold stocks will significantly change for the better.
During the time period directly ahead the hedge funds will be covering their naked short positions and will be going long this group. It is also suspected that the rich reservoirs of venture capital money will be finding their way into these recent laggards of the group.
The immediate time period ahead may be the last opportunity for the informed to move into juniors along with the exploration companies.
If history repeats itself the real big winners will be in the exploration sector.
During the last big push in prices gold advanced 53%, Silver 80% and platinum and palladium 82% each. The big gold stocks advanced during this same period just over 25%.
The Gold/XAU Ratio currently at 5.24 has the ability to trade down to the 3 level which would make the Index worth 417 with gold at $1250 or 667 if gold hit $2000 ahead into the future combined with intense public participation.
Currently the XAU Index at 175.36 is down 4.91 and looking into the future with significantly higher gold prices, we could see the strong possibilities of the stocks in the XAU, plus generally all gold stocks, moving higher from over 200% upwards to 400%.
A side note here is there will be some precious metal exploration stocks that will be higher in the multiples of 10’s and 20’s. You could hold five or ten of these explorers and with just one catching fire, with the rest just up nomimally, could still make you very rich.
Lower prices will always present opportunities within existing bull markets. Over the next few months opportunities galore will be ever present as gold is expected to be soft.
Good luck!
Gold $923.70
Silver $17.12
Gold/Silver Ratio 53.95
Gold/XAU Ratio 5.28The following are some excerpts from a February 12, 2003 article by Jim Sinclair.
Sell-Off Today(by $30 to $352) Did Not Alter Structure Of Long-Term Bull Market.
The recent sell-off from the high in gold has not, in my opinion, altered the structure of this long-term bull market in gold.
Gold has always, and will continue to be, a market with supply/demand skirmishes between titanic forces and vested interests in the resulting price.
The almost straight up action of gold, followed by a similiar reaction, has all the earmarks of a forced short cover. The word in the marketplace is that we have just witnessed our first derivatives unwrap and market cover.
I expect this reaction to end either at the low today or $340-$343 or the next Fibonacci support level($332.50) outlined in the chart below.
As Harry Schultz said recently: “We have two choices when we experience such declines. To be disappointed with the market or as the Asian/Islamic interests see it: as an opportunity.”
Gold $908.50
Silver $16.83
Gold/Silver Ratio 53.98
Gold/XAU Ratio 5.28Another informative article has just appeared on the jsmineset.com website entitled, “The Financial Destruction Of The Average Man.”
Isn’t it strange that the caliber of this type of information and the editorial content never makes it to our newspapers and TV?
In the below entry on the second to the last line the year 2001 should read 2011, sorry.
Gold $919.20
Silver $17.21
Gold/Silver Ratio 53.41
Gold/XAU Ratio 5.34The week-ends are usually good times when the markets are closed to do some thinking.
The Gold/Silver Ratio hit an intra-day high of 56 last week while closing at 53.41. This means for every ounce of gold you can trade it for 53.41 ounces of silver. The 52 to 56 area is a chart location of major resistance.
During periods of wide swings based on extremes in buying and selling pressure support levels and resistance levels just get overrun at times. The major trend is towards gold buying less and less silver in the many months ahead. This means one thing, silver is expected to apppreciate on a percentage basis better than gold but gold will always be the crown jewel, not silver, for security purposes.
The Gold/XAU Ratio with Friday’s close stands at 5.34. This means, being above 5.00 on the scale, that gold stocks are very inexpensive compared to gold’s last price. The Philadelphia Gold & Silver Index price is divided into gold’s price to get the Index figure.
Index followers bought gold stocks last week and will continue buying them next week. When the Index approaches the 3.0 level these same players will start to take their profits. That’s the way it works.
The Philadelphia Gold & Silver Index(XAU) closed out the week at 172.01. The Index high this year has been 209.27. The Index is spiraling lower and approaching a massive area of support in the 150.00 to 160.00 area. This area was significant resistance for 20 years from 1987 to 2007. Based on very strong fundamentals for gold continuing higher, a major buying opportunity is close at hand for the gold shares as we approach major support.
During bull markets it is senseless in calling tops but more appropriate in acknowledging areas for entry or reentry based upon sound long term support logic on the charts.
A Tuesday, March 11, 2008, the following significant article was written by Mr. Jim Sinclair.
Federal Reserve Action Announces New Loan System To Member Banks.
The Federal Reserve action today formalizes what has been the policy of the fed from almost day one of the visibility of the credit and default derivative meltdown and credit market lockup.
What is occurring is THE MONETIZATION OF BANKRUPTCY.
The predictable result of monetizing bankruptcy is a significant increase in inflation and a sharply lower dollar.
The action speaks negatively for the 30 year US Treasury bonds.
Waht needs to be understood is that there are more than $20 trillion dollars worth of credit and default derivatives out there.
The next key point is that nominal value of this $20 trillion of credit and default derivatives becomes full value when the derivative fails to perform.
This comes on a modest capital injection into a bond guarantee company that facilitates pinning a tin AAA debt rating heart on them; something that is a total fallacy.
The problem at the heart of the deteriorating credit lockup situation is OTC credit and default derivatives that have failed to perform.
The inviting conclusion then is that $200 billion is as (a) pimple on the ass of an elephant.
Nobody in his or her right mind wishes to see what is coming in 2011. It approaches the ?Day After? and ?Mad Max? in a financial sense.
The only protection is hard assets of any type, shares or kind, and the Federal Reserve Gold Certificate Ratio, modernized and revitalized.
This time gold is not going to crater after achieving its max market valuation. That nullifies every top caller from $248 to middle-late 2001 without exception as well as those now so inclined. This will make mining companies very attractive businesses.
Martin
Thanks for the update.
The number one concern of the Fed is to not let the “daisy chain” of derivatives break.
If it did, the economy and the public would be sucked into a bottomless black pit of financial ruin.
As Mr. Jim Sinclair has said, there is no practical solution to the derivatives meltdown.
The Fed will try and instill confidence, while this continues, but putting bandages on a major crash victum that is slowly bleeding to death will not work.
We must protect ourselves. The only answer is to hold gold until such time that the anticipated financial wipeout has run its course.
I read that now other investmt
bankers, ie Soldman Sachs, etal
are now allowed to borrow from
the FED. Res.Gold $937.20 -$44.10
Silver $18.37 -$ 1.30
Gold/Silver Ratio 51.20
Gold/XAU Ratio 5.22Not too long ago Mr. James Sinclair stated that $100 swings in the gold price could become a reality. At gold $937.20 versus a high of $1033 Sunday night in Asia, we’re almost there.
Gold is a tiny market compared to other markets. When you have so many players all stepping in at the same time, volatility is the result. Does this change anything? Absolutely not, gold is going forward.
At the heart of the problem is the Federal Reserve. As they run around plugging this financial hole and the many more expected to follow, they are ruining our money. They are making it worth less and less. This is an indirect form of taxation on the people that many just don’t comprehend. The people just blame it on inflation but where does inflation come from? Inflation comes from the increase in money supply which the Fed is injecting unrelentlessly into the system just to save the fat greedy cats on Wall Street.
How did we ever come to this point? It was allowed to happen by the regulators. They did not ever choose to regulate or even control in the least, derivatives. Why? Because the amount of money made just alone on commissions for brokerage houses was just too good to be true for the Wall Street players and what is good for Wall Street, should be good for us all too, right? WRONG!! What the regulators were supporting by their inaction to safeguard the people was greed using an untested financial tool, derivatives. Now Americans must pay for the mess.
Mr. Alf Field recently submitted to kitco.com an article entitled “Till Debt us do Part” dealing with derivatives and the Fed. The following are some excerpts:
“The problem with drivatives is that these are individuals transactions between 2 or more parties. Often the transactions are arbitraged onwards to several other players. Everyone in the chain relies on all other parties to meet their obligations. If one party in the chain goes bankrupt, it can cause a domino like collapse of all the other parties in the chain – if the bankrupt party is a large player in derivatives. They are all “inter-connected.”
“Bear Stearns is known to be a big player in the derivatives markets and must have a major counter party to many transactions with JP Morgan, given Morgan’s huge derivatives positions. Hence Bear Stearns had to be rescued because of “inter-connectivity;” to prevent a melt down in the derivatives market. It can hardly be a coincidence that the bail out was routed through J P Morgan.”
“Let us be clear about where this will end. It will end with the Fed and/or the US Governemnt owning or guaranteeing all the bad debts and losses from sources in order to preserve the existing system. It has serious implications for the value of the US Dollar, the international monetary system and for inflation. The vast quantity of new liquidity that needs to be created will almost certainly result in runaway inflation.”
Today is a value shopping day for gold and other precious metals and the companies that produce these metals along with those that own properties that contain them.
While the anti-gold forces use funds that are guaranteed in one manner or another by our citizens to depress gold, they are on the other hand jacking up the money supply to increasingly historical levels which will support hyperinflation and financially ruin the common man.
Our only hope is to buy gold and the companies that own it in the ground.
Historically, with the Gold/XAU Ratio at 5.22, the Index is screaming buy me!
Historically, the buy area is above 5.00 and the sell area is at around 3.00.
Gold may be down $44.10 today but it is also the day of opportunity along with any other days like this that follow during this current spell of weakness.
Gold $919.10
Silver $17.49
Gold/Silver Ratio 51.46
Gold/XAU Ratio 5.16Gold continues lower tonight in Asian markets.
It appears since the Bear Stearns collapse that the anti-gold boys are pulling out all the stops to teach the gold enthusiasts a good lesson.
Earlier this evening the metal hit a low of $914.50 and currently is pushing higher at $925.10.
The Gold/Silver Ratio is at an important resistance area of 52.00 on its chart. This appears significant and gold may have already hit its low on this move.
Gold’s abrupt weakness should be a lesson in understanding the freight that the anti-gold people had late Sunday night seeing gold above the $1000 mark and the following publicity that followed on Monday.
Well, what better way to inform the public that it was just a fluke than by gold hitting the skids directly afterwards?
Come on boys, do you really think that you can control a limited precious metal like gold while you flood the system with unlimited depreciating dollars??? Give us a break, please.
Gold continuing strong from its low with a last sale of $928.50.
Show them the gold,just got off mining nerds and they have nothing on the 16 to 1 so i had to write them to tell them about this company.I did find another mine you can invest in close by; Bullion River to go along with the few others in this State Emgold & Sutter both Canadian outfits and their is a few more.
Get more pictures of the gold you are able to get out of this mine & the people that look at these websites will become more interested in the mine,just look at that sixty pound chunk of quartz with 300 ounces of gold in it now that is impressive when most mines are just looking for 1/4 ounce per ton to make a living.
Show them the goldGold $1007.10
Silver $20.11
Gold/Silver Ratio 50.08
Gold/XAU Ratio 4.99The following was posted at 12:05pm today on the jsmineset website by Mr. Jim Sinclair:
M3 Camouflaging Attempts To Hide System Falling Over
Dear Friends,
The action of the Federal Reserve in declaring their lending on any collateral (which means no collateral in real value terms) to investment banks only instititionalizes what the Fed has been doing since all this started.
The most recent change in rates is an attempt to camouflage the enormous increase in the M3 that is inherent in the action to bailout an entire system now falling over.
I credit the Fed with making the situation obscure but the problem is going to continue to accelerate. There is no practical solution.
Gold last night ran to $1033 then settled back to the key number of $1024 where it sat until Washington woke up at 6:30am. $1000 to $1050 is an area that (they) will try unsuccessfully to restrain gold.
Gold is going to $1650.
When a commodity improves 655% the companies owning the commodity can only reflect that bull market, regardless of how hard any fund or funds try to stop it. Any such company with significant internal development will outperform.
Stay calm. Gold is headed to $1650 and I am almost certain that is much too conservative.
Regards,
JimGold $1027.90 +$25.40
Shocking News
J.P. Morgan To Buy Bear Stearns For $2 A Share.
Bear Stearns(BSC-NYSE) closed Friday at $30 down $27 for the day. BSC made a high earlier this year of $159.36. Late last year the stock made an all-time high of somewhere in the neighborhood of about $175.
Bear Stearns’ collapse can be tied directly to the fallout in the housing market, specifically the sub-prime market.
Now, people might believe that we are in the midst of a serious financial meltdown in this country which will be systemic.
No wonder gold is running, people are starting to get scared.
As Mr. James Sinclair has said:
THIS IS IT
Gold $1021.00 +$18.50
Gold $1014.90
Big push tonight in Asian markets.
Rick
Bill Murphy of GATA has lawyers working in an attempt to force the Treasury to allow an audit of our gold inventory at Fort Knox plus other holding areas.
The person to verify is a bonded and reputable CPA firm, not any government agency but is that possible? No way Jose!
They’ll cite some conflict to national security which they seem to always come up with in order to hide suspicious activities.Is the voice of the people really heard by its governments concerning the governments finances or stewardship of our gold? The English people were polled as to Gordon Brown’s plan to sell a significant portion of Britain’s gold some years back and the vote was 5-2 against. Did that stop Gordon? No. Some people have said that he is a puppet of the Fed and Treasury.
So, being realistic, it should continue to be just another very interesting conspiracy theory open for debate.
As to your question “where is everybody?,” I believe they are up in Ontario and Quebec and other parts of the world where mining is supported by local government sudsidies.
The State Energy and Natural Resources Committee of the Senate is currently considering changing the 1872 Mining Law or abolishing it, all together.
What has been voted on by Congress already is to levy an 8% royalty mining tax on new mines and a 4% royalty tax on current operating mines in the country. What do you think that will do to start up operations and the existing maginal mines combined with a 30% mining cost inflation factor in place?
I don’t believe that in this environment of spiraling mining costs a Senate approval of the proposed mining law changes would effect our company as much as others in California.
I see it effecting more the Idaho-Maryland reactivation in Grass Valley along with Sutter Gold Mines’ expected feasibility study following their completion of drilling
just north of Jackson along Highway 49.Our operation currently mines high grade gold for the jewelry industry along with other small amounts of ore to be poured into dore bars. As everyone knows our high grade sells for many times its gold content. So, I think our position is quite different than the other two.
We might, if the proposed legislation is passed by the Senate(with no presidential veto), be subjected to paying only a royalty on the gold content, but not on the actual sales price premium. This makes us much different but still, we are in a state that has not yet established itself as a proponent for its mining industry.
Hopefully, we will soon receive positive news from the board concerning a financing package.
Bluejay, I value your input, so two questions tonight:
First, there has been some speculation as to whether the reserves in Fort Knox are still there. On the surface, it seems like great fodder for conspiriacy theory. Beneath that, we’re all left with a speculative question….a subprime overwriting would seem like cupcake in comparison. Who’s to verify?
Next…small cap or no cap, Allegany sure seems like a steal for a speculating developer. It is a sleeping giant. So where is everybody?
Given today’s potential return, it would be difficult tie the recent court debacles to future risk.
Gold $1002.50
Silver $20.67
Gold/Silver Ratio 4.86
Gold/Silver Ratio 48.50On March 12, 2008 David Vaughn in his article, “Gold Rules” carried this quote from Boris Sobolev who writes for resoursestockguide.com:
“Instead of trying to guess tops and bottoms, the best strategy is to continue to accumulate bullion as well as shares of junior producers, exploration and development companies on weakness. Gold(‘s) price is going much higher in the coming years and the prices of undervalued junior stocks are going to explode as they become targets for acquisition. A few short years down the road, the trepidations experienced today by investors in small cap gold stocks will look quite silly.”
Dick
You are correct in this respect.
But considering the real impact from mining cost inflation which I’m sure is running at over 30% now, what is the “real benefit” of not pulling the gold out of the ground??
Every day that is wasted in not receiving funding for the purchase of equipment and doing the necessary development work of our proposed project effects the value of our gold inventory in the ground until such time that gold outpaces the current inflationary spiral.
Eureka!
Whatever hasn’t been discovered is worth more!
Gold $959.70
Silver $19.30
Gold/Silver Ratio 49.72
Gold/XAU Ratio 4.84In case you haven’t been told yet by the media, the price of silver is exploding.
It wasn’t too long ago that mention was made here of an important breakout to the upside on the silver price at $15.50. The price now is $19.30.
Does anyone get the feeling that smart people are turning in their dollars for precious metals as the country’s financial meltdown picks up steam?
The Gold/Silver ratio had been heavy on the chart at 53.00 and now gravity is taking over. If the ratio breaks 45 all hell will break loose for silver to the upside.
Gold $958.20
Silver $19.25
Gold/Silver Index 49.73
Gold/XAU Ratio 4.83Our country is being run by a bunch of morons and we will pay the price in the end.
The following are a few excerpts from Mr. Jim Sinclair’s jsmineset.com’s website tonight.
Bernanke And His Talking Head Fan Club
The talking heads noted Bernanke’s repitition of the word risk more times in today’s presentation than any other since he became chairman.
Outside of one exception, I have never heard such rank stupidity in all my life. The worst part is these photo opportunities gangs really think what they say is intelligent.
With this thinking leading the USA by running the economic show there is a chance we will repeat a large percent of the Weimar experiment.
—————————-
Today’s biggest huh?
Regulators lifted the caps on Fanny and Freddy(Mac) so they could buy more mortgages. Fanny and Freddie are both the slowest train wreck in market history.
Both are loaded with failed derivatives which they have been trying to evaluate for more than 18 months. They are both losing big money and they have just gotten permission to go deeper and deeper into the OTC derivative and debt hole.
God help us all.
Gold $940.10
Silver $17.84
Gold/Silver Ratio
Gold/XAU RatioJust a reminder, as gold is making new highs this evening expect the anti-gold establishment to start bad mouthing it again.
It wasn’t long ago that an article in the Wall Street Journal attacked gold’s price on Monday, November 12, 2007.
The story was entitled, “Gold Record Is Distant Prospect.”
The story was staged in an attempt to hold gold back from bettering its indirectly stated January 1980 high of $873.
Melainie Burton brought up the fact that gold is a far cry from its inflation adjusted record which she states is $2,250. Whose inflation index was she using?
No mention in the article that western central banks have been dumping gold into the market for years.
In a concerted effort of attack on gold the metal’s price fell the following Monday to $816.80. Again, be prepared for continuing propaganda as gold has broken above recent highs and is positioning itself for an assault at the $1,000 level.
The financial health of our company would be significantly enhanced if these fiat crazed publications along with government employees had done what they were hired to do rather than depressing the price of gold and recklessly ruining the true value of people’s investments in gold and gold companies.
More than our wealth being compromised by a puppetmaster is the sad fact that Russia’s, China’s and India’s people are being afforded the opportunity to import gold at discount values. These people are holding it in the form of jewelry and central bank reserves, the very same gold that used to be at Fort Knox.
The gold at Fort Knox is no longer there. If it is, then send in an independent auditor!
Gold $943.80
Silver $17.80
Gold/Silver Ratio 53.06
Gold/XAU Ratio 4.98Gold is currently making another all time higher.
This is what a major bull market is all about, continuing higher prices into the future.
You could make the point that our gold in the ground has risen in value too but so has inflation. The bottom line is how much money will it take to produce an ounce of gold and at what price can that ounce be marketed? In the future, inflation will increase and so should the gold price.
In our life time we will see prices of $200 a barrel for oil and possibly, $300 according to a money manager at Sprott Asset Management Group in Toronto.
The cost inflation basis for mining expenses is exploding. In 2006 they were up nearly 30% for North American miners. I can’t imagine their being lower for 2007 and going into the future.
It continues to make sense in owning gold coins as hyperinflation appears ready to rise its ugly head.
Remember what happened during the Weimar Republic and some of the stories concerning the public’s inability to mentally cope with daily price adjustments concerning the purchase of their necessities.
Going forward whether it be in the mining business or your own personal lifes, the realistic inflation factor needs to be given serious consideration. Believing the CPI figures will only get you into trouble.
The CPI figures are falsified to keep the moral inflation adjusted checks from becoming reality for the many millions of Social Security recepients.
The real rate of inflation may be in the 18% to 20% category. If the Social Security check amounts are being raised based only on the government’s skewed CPI Index of 3% or 4%, who is getting screwed?
Gold $909.40
Silver $16.77
Gold/Silver Ratio 54.23
Gold/XAU Ratio 4.93More propaganda from the news papers, this time from USA TODAY. The negative jab to gold was presented in the article, “Striking gold online is easy, but buyers beware.”
The writer, Matt Krantz, in the USA edition for Monday morning says, “While it(gold) may be used as a hedge in times of trouble, gold, historically, hasn’t been a good investment, and many financial advisors don’t advise holding much, if any. But I understand the animal of investing speculation, and it’s hard to resist piling into an asset when it’s rising and everything else is sinking.”
All this was in response to an unidentified source for the question, Is there a way to monitor the price of gold online? A simple answer would have been yes, go to http://www.kitco.com but instead the question was used as an opportunity to attack gold in the press once more.
Mr. Krantz professes to be an expert in “animal spirits of investing speculation.” What’s that suppose to mean?
It appears that Mr. Krantz knows very little of monetary history of which gold is the center piece as he attributes its growing strength to animal spirits when he should have been more responsible.
Echoing Bluejay tonight:
I call on the principal board member to chime in here. (Am I also refering to the principal share holder, I think.)
If I’m wrong in my facts on who’s “who”, PLEASE correct me and retract this entry from the forum page.!!!
Out here in the flat-lands of the Sacramento Valley, I dream of an assault on the veins of our mine. It seems like a win-win situation is for a major share-holder to step to the plate, invest in development.
My brain tells me it’s not Mike, since he’s stuck his neck out most likely beyond his means, and in defense of this posture. I, for one, am behind his defense of the mine, and will stand with him all the way on the legal front and all the way into development. Everyone who’s read the Forum knows this.
The big X-factor is for the entity waiting to jump in with an extremely promising outcome, to jump now…essentially investing equity in the value underground. Who best, than someone to embrace their own value?
I wish it were me. If I could, I would.
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