The Emotional Gold and Silver Investor

You Can’t Eat Gold

When you watch CNBC in the 2000’s they would make comments about gold being a useless relic at around $1,000 an ounce all the way up to $1,600. They would mock gold saying, “you can’t eat it.”  I created this video mocking them mocking gold.

Throughout gold’s history you have always seen the media try and keep you invested in dollar based assets rather than gold and at the same time the professional bankers have been keeping the price of gold suppressed. JP Morgan was fined $920 million and many other banks paid fines and people went to prison for precious metals market rigging.

The JPMorgan case is part of a crackdown by federal prosecutors on illegal spoofing, where traders place bogus orders to move prices up or down and then quickly cancel them before they can be executed. Smith and Nowak used the technique to manipulate gold and silver prices from 2008 to 2016.

Convictions for Smith, Nowak and a third trader who was found guilty in November, Christopher Jordan, capped a string of wins by prosecutors in spoofing cases targeting some of Wall Street’s biggest banks, including Bank of America Corp., Deutsche Bank AG and Morgan Stanley. Two former Deutsche Bank and two former Bank of America traders previously each received one-year sentences.

Source: https://news.bloomberglaw.com/litigation/jpmorgans-most-prolific-spoofer-gets-two-years-in-prison-1

 

Last Friday after gold and silver both hit single digit Daily Sentiment Index (DSI), which historically is always a buying opportunity, silver shot up over $1 in the morning before markets opened and subsequently fell $1.20 on no news of any kind. No dollar push higher. No economic data came out to push it lower. It was pure manipulation as CFA David Brady put it.

This type of move by the professional bankers causes many who have invested in metals to begin to doubt the validity of such an investment. The investor who throws in the towel and sells everything at this point in time is under the impression that metals will never go up.

Gary Savage calls this stage of metal selling the “bloodbath” phase and gives some good advice on how to trade it. Simply, buy the dip!

What is the smart investor doing?

Avi Gilburt over at Elliott Wave Trader has been saying to patiently wait for a bottom in gold and silver and on Friday and Monday I had record days in sales because his buy signals have been closer and closer to a bottom. Twice in the last 10 years Avi was the first one to call and buy gold and silver from me. Each time was at the lows of the day. I can attest to his accuracy in helping investors do what they should always be doing, buy low.” So the smart investor always has some cash waiting for opportunities. The smart investor is buying now.

What most don’t get about the dollar and gold/silver.

While gold and silver have been falling, the dollar has been rising. The DXY hit over 107 this week and with that, one would think the price of silver and gold falling would mean they would buy you less. In fact, gold and silver maintain their purchasing power over time. That’s what most don’t understand. Gold and silver never change. You bury them in your back yard and dig them up 10 years later and guess what? It’s the same gold and silver.

So while the dollar has moved higher, silver, for example, purchasing power has been maintained. With the current spot price of silver being $20.99, and a pre-1965 quarter containing 90% silver, exchanged into dollars, it’s presently worth $3.79. $3.80 if you add in the value of copper.

https://www.coinflation.com/coins/1932-1964-Silver-Washington-Quarter-Value.html

When the dollar begins it’s next leg down, which I calculate to be a minimum of 30%, silver purchasing power will increase by at least that much. Silver just to get to its all-time high would have to more than double from it’s current price. The upside to the price of silver is tremendous right now.

As the price of gold and silver start to move higher over the next few years, you’ll hear those at CNBC and elsewhere continue to mock it while they push the Bitcoin narrative. I’ll go into cryptos in my next book How To Profit In Up and Down Markets but suffice to say, Bitcoin isn’t the answer. And comparing the historical record of silver and gold to any crypto can’t be done. There are some good cryptos out there, but cryptos aren’t insurance for your dollar based portfolio. Gold and silver are, and always have been.

According to the former now passed Dow Theory Letters writer Richard Russell, our government has only one choice to pay off any national debt which both parties never address but vote in another round of spending instead, lifting the debt limit to the present $33.4 trillion: Inflate or Die.

https://www.usdebtclock.org/

Richard Russell had half his net worth in gold. Was he wrong?

While CNBC says you can’t eat gold, one thing is certain; at any point in time you can sell a coin and exchange it for the scrip of the day, whether dollars or something else, and buy more food than what dollars will buy you today. How do I know that? What can a 1965 quarter buy you? 25 cents worth of gas. And not much else.