-- Posted Friday, 30 September 2011 | | Disqus
Those who have been disheartened by the Recent Brutal Takedowns of Gold and Silver need not be. First consider the cause of the Takedown.
“It is not immediately clear at this juncture who was selling yesterday or why – but the placing of such a huge order into the market when the least number of market participants were active tells you that they were out for dramatic effect. Anyone looking to offload significant amounts of metal at the best possible price would have done so when both London and New York were open. This would have ensured they hit the market when it was most liquid so as to get the best price. Clearly finessing gold into the market was not their motive – they wanted a statement.”
“Gold: Huge Volatility But Where Next?”
Ross Norman, Sharps Pixley, 9/27/11
Just this past Monday, Sept. 26, the Asia Gold Markets peaked up $26 (Dec. contract) when the selling hit. Gold was driven down over $100 by 3 A.M. New York time, clearly the sellers had one goal – not to profit, but to drive the Gold price as far down as possible. Clearly The Cartel* was at work again.
*We encourage those who doubt the scope and power of Overt and Covert Interventions by a Fed-led Cartel of Key Central Bankers and Favored Financial Institutions to read Deepcaster’s December, 2009, Special Alert containing a summary overview of Intervention entitled “Forecasts and December, 2009 Special Alert: Profiting From The Cartel’s Dark Interventions - III” and Deepcaster’s July, 2010 Letter entitled "Profit from a Weakening Cartel; Buy Reco; Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes & T-Bonds" in the ‘Alerts Cache’ and ‘Latest Letter’ Cache at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org, including testimony before the CFTC, for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster’s profitable recommendations displayed at www.deepcaster.com have been facilitated by attention to these “Interventionals.” Attention to The Interventionals facilitated Deepcaster’s recommending five short positions prior to the Fall, 2008 Market Crash all of which were subsequently liquidated profitably.
However, it is clear to us that Precious Metal Partisans should regard this latest takedown as a very positive development in two respects. Not only does it provide a Magnificent Buying Opportunity, but it is also a sign of increasing Cartel Desperation. Gold and Silver are going higher, much higher, over the next few months, and there is little The Cartel can do to stop them.
Consider, for example, the prospective effect of the opening of the Pan-Asia Gold Exchange.
“Get ready for the Pan-Asia Gold Exchange, scheduled to open in June 2012 in Kunming City, Yunnan Province -- the gateway to all of Southeast Asia. This is serious, as the Pan Asian Gold Exchange is a part of China's five-year plan -- which means it is part of China's strategy for dominance in global financial markets and the global economy.
Pan Asia will allow Chinese to speculate in gold futures contracts or buy physical gold through an account with a bank or broker. All 320 million customers of the giant Agricultural Bank of China will simply be able to use their renminbi, the Chinese currency, from their bank accounts to trade gold. Sounds bloody dangerous, doesn't it?
It means that the spot market in gold could be headed for China -- and away from London's Metals Exchange or the Comex in New York. I'd like to know who is going to oversee and regulate all this action. For example, when the Comex raises margin requirements to dampen speculative fervor, will China be governed by that? I doubt it very much…
This is another reason for registering the reality of gold as a trading vehicle, an investment for households, central banks, hedge funds, endowments -- another bullish force powering gold prices higher.”
“The Chinese mean to control the global gold market”
Robert Lenzner, forbes.com, 9/27/11
As well, not just Greece, not just the PIIGS, but a whole variety of major nations are insolvent. Major French and other banks are already experiencing serious bank runs and Inter-bank lending rates are skyrocketing. Real Money, Gold and Silver, always liquid, with no counterparty risk, will be the beneficiaries.
The Cartel’s major remaining gambit is one they have just signaled. The G-20 will unveil its “solution” on or before the G-20 summit in Cannes on Nov. 4. The signs point to a multi-trillion (at least $2 trillion) European bank recapitalization via the EFSF. Of course this massive money printing will be extremely inflationary, diminishing the purchasing power of taxpayers around the world, but likely launching the P.M.’s into the stratosphere.
Perhaps more significant, Central banks continue to buy Gold. Most recently Russia, Thailand, and Bolivia increased their holdings.
All the foregoing is very Gold (and Silver) positive but there is a Dark Side which all investor – citizens must address. With the developing insolvency of (first), the PIIGS and then others, comes the money printing, then the Purchasing Power Degradation, then, increasingly, the masses will be unable to make ends meet, thus galloping unemployment and social chaos is the Dark Prospect. Given this prospect the wise had best have considerable physical Gold and Silver… and the means for self-preservation and self-defense.
So far as gaining from the bullish prospects for Gold and Silver is concerned the challenge of profiting in spite of Cartel Market Manipulation can be best addressed with the following Guidelines for Profit Maximization.
- Buying on Dips, coupled with a Willingness to Tolerate Great Price Volatility
- The Core Holdings of Ones’ Precious Metals Position are best held in one particular form (see our Precious Metal Recommendations) of the Physical Metals, in Personal Possession
- that Well Managed reasonably priced Miners with Substantial Reserves be bought on Dips, and, if one is a Trader, a portion sold near interim highs
- that a portion of One’s Holdings be in a Dividend Paying Precious Metals Fund such as one which we have Recommended, and
- Regarding Silver, since it is also an Industrial Metal, it is especially vulnerable to Slowdown in Economic Activity and (especially for the Shares) Takedowns in the Equities Markets. But given the increasingly tight Physical Market, it is a “buy” on Major Dips.
- Another important Guideline is that Financial and Economic Conditions are such that we do not recommend shorting Gold and Silver, even in advance of a likely Cartel* Takedown attempt, unless one is a highly experienced Trader
We reiterate, finally, that, given the aforementioned Negatives, Systemic Solvency and Hyper-Stagflation Crises are likely already “baked into the cake.” The Fed’s (and Eurozone Bankers) Equities and select other Markets Price boosting via Q.E. (or the prospective multi-Trillion EFSF Bailouts) can not go on forever, and, in any event, Q.E. worsens the Inevitable Crash because it serves only to pile more Debt upon already Unpayable Debt.
In sum, we expect another Systemic Crisis later in 2011 or early 2012 (and may well already have) and Gold, Silver and Food are the place for Investors to be.
Gold and Silver and Essential Food Products and Producers are the most important Means to Profit and Protect regardless of Economic, Financial, or other Market Conditions, when preparing one’s Portfolio for Hyperstagflation and other crises to come.
Consider, concluding Wise words from Marc Faber: “opt out of the fractional reserve system, buy Gold and become your own central Banker”.
Best regards,
Deepcaster
September 29, 2011
DEEPCASTER LLC
www.deepcaster.com
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-- Posted Friday, 30 September 2011 | Digg This Article
| Source: GoldSeek.com
