Thursday, May 10, 2012


                              I Bet He Loves To Trade Gold Too

It takes a brave soul to be long gold these days; you got the “Lemmings in Asia” throwing in the proverbial towel, a disintegrating Europe that sells everything, and of course the ever present Central Planners along with the JPM prop desk.

However, Vampire Squid [GS] is telling their Muppets that this is the time to buy gold.

Here’s my question: Is the recommendation for real, in order to really enrich clients, or is it a ploy to be on the sell side when the Muppets take their advice? Based on past history you would be better off running quickly from The Squid.

But has anything really changed to warrant a lower price in gold sub $1600? Me thinks not. As hard as it might be to get gold back over $1800, it might be even more difficult to get it lower than the $1550 area. Governments all over the world have the printing presses going full tilt, debasing currency on a monthly basis that 5 years ago you would have thought literally impossible.

I think you have to give gold the benefit of the doubt [buy breaks and be long sub $1600], up until the time it breaks [if it ever does] the $1550 area. It may be a tough hold, but fiat creation is everywhere and not going away. Anybody that thinks Europe or the U.S. will opt for “austerity” is nuts: they will print money until the revolution forces a change.

A definitive break of this area [by more than $10 or $20] and I think gold has some real problems going forward; not the least of which would be it would be lower on the year. What would real panic selling look like? You’ll find out if it goes lower on the year.

Have a good day everyone.


No comments:

Post a Comment