Oh what a World, what a World…
It’s funny how much damage a splash of cold water can do, isn’t it? Especially when that splash of cold water is reality and the witch is fiat currency. You are very, very lucky because I do not have to rant on about this for 2 pages here because I already told people this was going to happen in March of 2007, when I warned that rising oil prices were indicating a serious issue with fiat currencies and would eventually undo our then-indestructable rally. The title of that post was “Are We Heading for an Economic Tornado?”
The Dow was just above 12,000 at the time but, to an old fundamentalist like me, it seemed a little pricey and my dire warning at the end of the article sounds more like a recap of the last 3 years now when I said:
If we manage to topple the entire house of cards that is commodity pricing, perhaps we won’t need sub-prime mortgages to buy ourselves affordable housing at realistic interest rates. There is certainly a storm brewing as a vacuum of money has been left in our heartland as the Broker/Commodity/Financial triumvirate has funneled $6T away from you and the things you enjoy (consumer goods) to force you to spend it to maintain the things you need (cars, tractors, appliances). They’ve created a storm that threatens to tear the global economy apart.
As I’ve said many times, I don’t have the power to fix things (but, if appointed dictator for life, I will serve) – I can only tell you what’s going to happen and how to profit from it. At the time we were buyers of gold, looking to ward off a probable slide in the dollar and what looked like inevitable inflation. Now we are sellers of gold because, in this post-crash Gobal economy – who can afford it? Sure speculators can afford it but just like houses or oil (or tulips for that matter) – eventually they have to find a real buyer. Did you know gold demand is plunging in Asia? What? They didn’t tell you that in any of the 100 TV commercials? I am shocked…
Actually, I can tell you the easiest way to time the gold market – count the number of commercials from people who want to buy your gold vs the people who want to sell you gold. If the buyers outnumber the sellers, then you should be buying. If the sellers outnumber the buyers, then you should be selling. These…
