-- Posted Wednesday, 17 January 2007 | Digg This Article
Introduction
In the first part of this trilogy, I reinforced the concept that “nothing occurs in a vacuum”. It was presented by design in those terms, because too often we as investors, analysts, or simply citizens are myopic in our vision of controversial issues. Most complex financial, political, geopolitical and social issues are interconnected. However, we usually see only what we want to see and believe what we choose to believe. It is truly a natural human phenomenon not to connect the dots.
I would suggest that we delve a bit deeper into any issue or relationship, especially ones that concern finances and politics. Only when we peel back the layers of the rose or the onion to reveal the quintessential core, do we arrive at the truth. The more comprehensively (and intellectually) we understand the “big picture” components of our global geopolitical-economic situations and how they are all interconnected, the better prepared we will be to make more astute investment decisions going forward. Naturally, we as US citizens should implement a more inquisitive posture in terms of what we are being told and what we ultimately accept as truth.
Truth
Peter Spina has adopted the slogan, “In Gold there is Truth” for www.goldseek.com. There is brilliance in its simplicity and its message. There is a reason he chose that particular phrase to represent his company. I can only assume he is suggesting that because one cannot manipulate physical gold, e.g. create it out of thin air; and given the fact that gold has been used as a storehouse of value, for the past 5000 years, there is a fundamental basis of truth from which we may depart.
This is all about cause and effect and it is our duty as Americans to dig deep for the truth. If we are not being told the truth, we should hold accountable those who would perpetuate the fraud. FYI: we are not being told the truth. Perhaps we are being told shades of the truth? Then again, perhaps it is all about spin, agendas, and posturing (SAP), leaving us to decipher. In truth, this is how the government, special interest groups, multinational corporations, and larger organizations communicate with the American people.
What do you believe the ultimate end result will be when any group of citizens is exposed to such an agenda over time? When the truth is constantly being compromised, the end result is one of erosion. Take this concept one step further and when it pertains to the US Bill of Rights and our US Constitution, our entire way of life is being put into jeopardy.
We live in an age of almost instantaneous communication which can be a good thing or a bad thing depending upon how we use the information. The problem with instantaneous is that it doesn’t allow us time to think things through and if we have to do things on a moments notice, invariably mistakes will be made. Perhaps it’s better to take our time and look at the issues from as many different angles as necessary in order to make prudent decisions. When others are pressuring us to “act now!” for whatever reason, it is the only raison d'être I need to take pause.
The Dance
The “dance”, is a topic I’ve mentioned in the past. The Dance is a threesome; perhaps soon to become a foursome. The partners would include, Oil, the US Dollar (and especially its relationship to the Euro), Gold (and the PM complex), and soon to be included, the Grain complex. We need to understand the relationships between these entities and the people I mention below will offer you perspectives from which you make your own deductions. Suffice to say, we live not so much in interesting times, as extremely dangerous ones. Please take note, because from this platform, all aware Americans need to stand up and be counted. In order to stand up and be counted, we need to know and truly understand how we want to be counted; i.e. represented. In order to be properly represented we need to know what we stand for on an individual by individual basis. The ever evolving relationship between oil, gold, the dollar, and investors is “The Dance.”
I need to quickly mention that gold and oil have been traditionally linked and since the price of oil has retraced considerably over these past three or four months, it is only natural to consider that gold is going to be under some pressure. But I don’t believe oil is going to be kept under wraps for extended periods of time because countries, especially developing ones, do not appreciate losing hundreds of millions of dollars of revenue due to the abnormally low pricing of their natural resources. Oil is currently being used as a political weapon—on both sides of the fence. It is a well know fact that as oil demand becomes greater and greater the supply is diminishing. I shall leave the conclusions to you. But do consider that Asia now wants a piece of the Western lifestyle and that alone will cause a greater demand for oil; even as it simultaneously contributes to global warming. So when oil reverses and begins to move back up, gold will follow suit.
Many Minds are Better than One
The group that I will once again be introducing to you today, if taken as a group, lends credence to the idea that ten heads are better than one. That might also be construed as two heads are better than one or 200 heads are better than one. I don’t recall anyone in these groups as trying to pressure us into anything and for me that instills confidence.
I know that many gold and silver investors believe we’re off to a rough start in 2007. I know that many of us are impatient having waited for “our time” for what seems forever. This Precious Metals Sector is going to be a pitched battle; it always has been and I don’t see any reason it is going to change, especially at this point of the game. The good news is that in my opinion, we still have a long ways to go before a blow off phase is reached in this sector. Regardless of how it plays out in the short term, your possession of physical coins or bullion will ultimately be of benefit to you. Quality junior mining companies will also be of benefit to you because of the leverage they present. Combined they can offer a win-win situation.
Most of us in this group tend to lean strongly towards gold and silver; but we should also appreciate the strength of investing in uranium and other base metals such as copper. There is one more thing I’d like to stress today. We know that currently we have a primary trend that is appreciating in the PM Complex but we had best keep our minds open as to where the next primary trend will evolve and in what sector. Nothing is static in the financial realm and we had best not remain that way either.
The Pitched Battle in Graph Form
Bill Murphy from LeMetropole Café put up “the chart” on January 10, 2007 but the same basic look of this chart could have been posted on hundreds of different occasions. The chart depicts gold going into New York from Overseas 
trading many dollars higher, and then like John Madden (football commentator-coach) used to say “Boom!”! We see the gold chart going heads down in a sharp, bungee drop that leaves all gold aficionados muttering under their breath. Bill is as frustrated as the rest of us, if not more so, because he has been documenting these shenanigans for close to seven years and has been on the front lines of the fray. This is a good thing for you and me because if you want your finger on the pulse of gold and the gold markets, Lemetropole Café is for you. The cost is minimal for a letter that offers you an enormous amount of information on a daily basis. Even if you don’t believe that the gold market is even slightly “nudged” in one direction or the other, there is plenty of information to occupy your time.
Lemetropole Café and many others argue that the physical market pushes the PM prices upwards while the derivative markets (futures) come in directly thereafter and pushes it down. It is much easier to manipulate the derivative sector as opposed to the physical price. I’m fond of quoting Bill Buckler of The-Privateer who has stated for many years that gold is a political metal. With the decoupling of all fiat currencies from the PM complex, gold has become even more political.
Understanding the Rudimentary Financial and Geopolitical Arguments
There are many different perspectives to this one topic and it is important to understand the rudimentary arguments from all sides so that one may draw their own conclusions as to how this issue will play out.
However, I agree with those who believe that the Wall Street Crowd and the Dollar crowd are on a collision course with reality and therefore we once again refer you to Newton’s third law of Motion detailed in the first section of this trilogy. Is it really that simple? Of course not, but realize that we are inundated with the positive financial news while receiving virtually no negative news. Once again, the major media is in the center of the storm and their primary objective is to sell advertising.
Look at it this way, follow the trail of the question backwards towards the source and you’ll most likely discover the spring of truth lies buried in the side of a hidden political cliff that is protected by stacks and stacks of money. Seldom in this day and age does the truth jump up and slap us in the face. It’s all about agendas, spin, and deciphering. Who or what gains to benefit? Who is going to make the most dollars—and I mean that most figuratively and literally! Who stands to gain the least? Where do we stand as individuals in the mix?
Also, consider the idea of capital flows. 2007 Outlook For A Key Resource Economy was penned by Neil Charnock (www.goldoz.com.au) on January 10, 2007 and it was quite excellent. I encourage you to read it. Two points in that piece jump out at me. One is that global liquidity is currently massive and that, of course, fits in with the idea that fiat currencies ultimately are abused to the point where they are basically worthless. The other is that if we follow the path to where this liquidity is parked, we’ll discover where the big boys are putting their money. This is only constructive as a frame of reference.
We’ve got to push aside the noise of the media and listen to the music of the markets. We need to understand the needs of the special interests, and the reasoning behind questionable government statistics and endeavor to do some independent thinking.
The Path Always begins with Knowledge
The path begins with knowledge and that is the gift I hope to offer you. Some of it comes in an expensive format especially if you subscribe to all the letters I’m recommending. Some of the recommendations are “free” such as www.goldseek.com and www.jsmineset.com (Jim Sinclair’s site) and other letters can run into the hundreds of dollars for a year’s subscription. Expensive is relative, especially if you do well with some of the recommendations.
I think that Richard Russell charges about $250.00 per year and Bill Buckler charges $150 US per year. These are two letters I wouldn’t want to be without and they don’t offer any specific recommendations
The venerable Richard Russell has often spoken to the idea that it is necessary to get in front of the Primary Trend and hang on for dear life as the trend meanders towards its ultimate ”blow off” completion. He will tell us that “the bull” has but one job and that is to buck off as many investors as possible while “the bear” will sucker in as many investors as possible in order to deplete them of their resources. Mr. Russell has such a loyal following because he tells it like it is and has done so for a good long time. Many of us are in his debt.
But the real gift to you (and to me) is a list of talented writers, analysts, and websites whose brain trust if accepted en toto will assist us in understanding not only the precious metals complex but also the corresponding landscape as would affect everything from the global geopolitical scene to the general stock markets. In other words, if you read and understand what most of these folks are saying, you are going to be a more astute investor because you are going to have a better understanding of what investing is all about and as importantly you will have a better understanding of what the world is all about. Since nothing occurs in a vacuum, it is imperative that we understand how the world is interconnected.
Bill Buckler of the-privateer, pens a geopolitical letter, and it is another one I wouldn’t want to be without. However, I will freely admit that reading Bill’s commentary is like going to the dentist. You know you should, but you need to brace yourself and read it when you feel strong enough to stomach the truth. The truth is not always pleasant; actually in this day and age, the truth is seldom pleasant. But that cannot be an excuse to ignore it.
The point that sometimes becomes lost in the quest for the next great money making stock is that gold and silver are simply real money and the dollar and the Euro and the other fiat currencies are not. Realize that it once again goes back to what is money (a medium of exchange) and what constitutes real wealth (gold and silver—along with Uranium and Oil). But we can’t store Barrels of Oil or Uranium in our back yard so we best stick with gold and silver.
One question that I get asked more than any other is “when will this manipulation of the gold price end?” I don’t know. But I am beginning to believe that the global geopolitical problems are so serious that at some point there might be a systemic financial implosion, not unlike that which hit Argentina approximately ten years ago. If and when that kind of scenario would occur, you can be pretty certain that the landscape and the financial environment which allows this house of cards to continue will be taken down much as a hurricane would blow those same cards towards forever.
We need to understand that investing in gold and silver ultimately transcends the proprietary investment needs of the individual. Many people understand that “honest” money is the foundation of a country’s strength and that “funny” money and mountains and mountains of it, become a symbol of an Empire Lost.
I must have hit a sensitive spot in the first part of this trilogy “Old Dogs can Learn New Tricks” because I received some very rewarding and positive responses to that article. To all that wrote in, I will answer each of you as soon as possible. It was extremely gratifying to hear from so many of you; in fact, it was inspiration for an adjunct to this column to be titled “The Real Face of America”. I’d like to post some of the responses and comments that were sent in but of course, all names will be with held unless otherwise requested.
The Gift of Knowledge
The Top Three in no particular order followed by the next seven in no particular order. If you’re serious about investing in the gold sector, while understanding why nothing occurs in a vacuum, then by all means consider utilizing this group en toto—as a package entity. Some of these guys write every day and some write once a week. Some write when the spirit moves them. This talented group of people all want one thing—they want you to be able to think independently. No one is trying to spin something down your throat. That’s the difference between integrity and hype. Hype is visible from a mile away and Integrity is visible from 100 miles away. It’s that simple. These people have integrity.
1. The Privateer: Bill Buckler/ Also publishes a weekly gold letter. Spring for the entire package because this low-key proponent of the truth assists us in ascertaining how the world is interconnected on many different levels. I think it is one of the best geopolitical letters being published and it is easy to read because of the format. www.the-privateer.com Subscribe to it! That is all I’m going to say because after all, it is number one on my list.
2. Dow Theory Letters: Richard Russell—Does Richard really need an introduction? For general information regarding subscriptions and signup please contact staff@dowtheoryletters.com He’s 83 years young (but he looks about 63!), writes just about every day—5 or six days a week in addition to the monthly newsletter. He focuses mostly on the stock markets but covers Gold as well. He also covers life as do most of these talented people and Heaven knows we can all use a lesson in life now and then.
3. Lemetropole Café: Bill Murphy: “Uncle Bill” as I’ve called him for the past five years is smart, dedicated, and a bit controversial. Helped to start GATA or the Gold Anti Trust Action Committee. There is not a better letter out there if you want to know about the day to day machinations of the gold and precious metals markets. There is geo-political commentary and insights by key subscribers. Bill writes five or six days a week. I need to reiterate that this letter gives you a heavy dose of what is going on in the day to day operations of gold—the pulse of gold. www.lemetropolecafe.com/
4. Freemarket Gold & Money Report : A Commentary on Precious Metals and Monetary Matters by James Turk; www.fgmr.com Here is another person who needs little introduction. The title says it all. General Commentary along with recommendations. After talking with James, I believe his real focus is on GoldMoney, “the best way to buy gold on line”. But his letter is excellent and I highly recommend it.
5. Trader Tracks: Stocks and Bonds, Futures and Commodities–Roger Wiegand; Many people will like this letter because of the no nonsense alerts and recommendations. I like the man and what he represents. Personally, I’m not a big trader because I don’t have the temperament for it. But Rog offers some excellent insights which support my supposition that nothing occurs in a vacuum. He elaborates on the causes and effects of the market. Email traderrog@comcast.net. Works with Jay Taylor who I also highly recommend so I’m going to group them together. Jay’s service has been around for 25 years and his weekly commentaries are worth the price of admission. Jay Taylor’s Gold and Technology Stocks www.mining stocks.com I think that Jay and Rog make a great team and I see a lot of selfless interaction between the two. Jay by his own admission needs to scale back a bit, but focus on his commentary and you won’t go wrong. He’s not afraid to bring his faith into his business but does it in moderation.
6. Jim Sinclair: Jim has a huge following and for good reason. Back in the 70’s he was known as “Mr. Gold”. Jim has a wonderful site and offers everything from geopolitical commentary to lessons in life and politics. Besides that, he has a great dog—a bulldog I do believe. I think the dog knows more than I do just through osmosis and being around Jim. http://www.jsmineset.com/ I know of no one who has spent more of their own money to educate the public. He offers CD’s in Technical analysis and also is President of Tanzanian Royalty Exploration, a gold exploration company out of Africa. He manages to keep them all separate. He’s a class act; affiliates himself with class people like Dan Norini out of Houston, Texas. In my mind these are people who are doing their part to literally save our Republic by putting their money where their mouths are. Don’t take this one for free without “giving back” some little thing which helps the cause. And yes I know the argument that it is a slick way of marketing TRE. I know what it costs to run a web site and it ain’t cheap. Try doing it with no income and then voice your concerns. By the way, know a lovely Filipino lady with a Bulldog and it has a degree in accounting—Think we could pair them up? I mean the two dogs, people! Gold and accounting—There has to be a future there somewhere!?
7. Jim Willie: the Golden Jackass. Peter highlights this analyst on the site from time to time. I like the way this guy thinks—I do not have a subscription so I cannot elaborate on much more that what is available on Goldseek. About GoldenJackass.com. The Golden Jackass website is designed to inform and instruct in the complex ways of gold, currencies, bonds, interest rates, stocks, commodities, futures, derivatives and the world economy, with no respect shown for inept bankers and economists, whose policies and practices contribute toward the slow motion degradation, if not destruction, of the financial world. The one thing I know about Jim is that he does not suffer fools lightly and for that alone—he deserves your consideration
8 Mogambu Guru: Based out of Bill Bonner’s Group, The Daily Reckoning—the man is both intelligent and hilarious, even over the top at times, but his idea is to teach economics 101 through humor and does a pretty darn good job of it. It’s free! Don’t let his “aw shucks” I’m just the lideo de visage (French for “village idiot”) fool you for a moment. This guy is one bright dude and deserves your attention.
9 Websites: Of course my favorite is www.goldseek.com but then I’m a bit prejudiced. I’ve worked with Peter and I’ve learned to appreciate what it takes to maintain integrity when moose pasture salesman are offering their best pitch to you for a whole bunch of dough. I see Goldseek as being innovative, constantly trying to be the best while simultaneously minding the needs of its readers. There really are only four or five high quality Resource Sites on the Web, and to my way of thinking Goldseek, is one of the best; especially from an editorial point of view. Peter is always trying out new ideas and has become a bit of a trendsetter with such things as GoldSeek Radio.
10 Chris Mullen writes a closing Report for the Resource Markets for Goldseek.com and he only gets better with time. It too is without financial cost, http://www.gold-seeker.com/ Chris is a bright guy and more and more people are discovering his work. He posts many of the articles for Goldseek and has certainly saved my bacon on the technological front on more than one occasion. I would also be remiss if I didn’t mention Peter Spina and Julian Phillips who co-author the Gold Forecaster. Yes, of course he’s my compatriot, but I mention this letter because I simply believe it too is getting better and more efficient with every passing month. Subscribe and you receive the benefit of Peter’s TA (technical analysis) and Julian’s international South African perspective. They are a good team and the recommendations have been most profitable. If I’m not mistaken they do offer a trial issue or two.
11 Richard Mayberry: Early Warning Report: http://www.richardmaybury.com/ Richard has been around for many years. He is an expert on the US military, the reasons for international conflict, and how individuals can prepare themselves for interruptions in their daily lives. I felt he needed to be included not only for his acumen in these matters but also because he has been prophetic in terms of how this present conflict in Iraq has evolved.
Now just so you know, I receive not a dime in commissions or referral fees and I realize that there are many more excellent letters and websites where truth can be found; I simply cannot list them all. I didn’t discuss fees because I’ll let you contact these people directly. You might mention that you heard about them through my column and receive a complimentary copy depending upon their policies. I will say that I’d recommend choosing five of the paid subscriptions and blend them in with Jim Sinclair’s website along with Goldseek. You might even check in with my column from time to time. The idea is to acquire a diverse blend of viewpoints. If you are looking for a quality broker or two specializing in resource stocks, drop me a note and I shall offer you the names of one or two.
The information taken as a group is what makes it so valuable. Yes, I’m certain there are dozens of other quality newsletters. I have to mention Lew Rockwell.com as another exceptional Web Site and please consider purchasing your physical gold and silver from Camino Coin 1.800.348.8001; the same company that Ron Paul from Texas helped to launch.
Burt and George are the “go to” guys, but don’t even mention my name because they’ll charge you double. But seriously, these are good guys and they are honest as the day is long.
There are still people like this in the world—they are called “Old School”! I wish we had more of them.
Remember, if you’d like to be on my Email list, please send me your email address, physical address, and any comments or information you might wish to pass along. You’ll be the first to know what is happening in terms of my own choices of companies. You’ll also receive a few select company CD’s from time to time.
Incidentally, Ron Paul has announced that he is throwing his hat in the ring for President of the United States. I’ll have more to say on this a bit later and I know many of you are familiar with his writings. This has sparked my imagination. I might be able to wrangle a one on one interview with him. If you have any specific questions you’d like him to address, by all means, send me an email.
The next article is the one where I’m be discussing some of the resource companies I perceive as doing well this year. Then I’m going to initiate a monthly coverage of each of them so as to keep you in the loop.
Until Next time,
D. Stewart Armstrong
consulting@seacoastpub.com
-- Posted Wednesday, 17 January 2007 | Digg This Article
