A reader wrote and asked me, "What if they are trying to get everyone to sell their silver & gold by making prices so low people would sell in fear the price would drop more? What if that was the whole point?" If I am asked that question, clearly I have expressed myself obscurely. I think that IS the point, to punish all those people who bought gold and silver & thereby quash (for a time) competition to the scabrous US dollar. Now you can sneer at me as a natural born fool who believes in conspiracies, but I'm not talking conspiracy. I'm talking US statute (Gold Reserve Act of 1934 & Exchange Stabilization Fund), tons of proof of manipulation by GATA, and finally, self-interest. If YOU were charged with keeping the dollar afloat, would YOU try to gut the competition? Is a pig's little rear pork? Of course you would. And Ben Bernanke is at least as smart as you are. I keep mentioning 1974 - August 1976 because the yankee government followed exactly the same gold & silver smashing policy then. Y'all aren't old enough to remember it, but I am. I'm older than dirt. I was there. The US Treasury held periodic "gold auctions" to wreck the gold market, and sent it down 48%. But listen: after that August low gold rose 8 times into January 1980, and silver over 12 times. This is what I mean when I say they can manipulate "at the margin" and "for a time," but they can't alter the primary trend. They can only bend it for a while. I saw some headline chirping that the Dow was "back above 15,000," implying that all's right with the world. Do these people ever look at a chart? Dow closed today at 15,024.49, up 114.35 or 0.77% while the S&P500 lagged a bit, up 9.94 (0.62%) to to 1,613.20. While this MIGHT (in view of their previous fall) indicate the indices are rallying, it only brings them up to their 20 & 50 day moving averages (which are about the same spot, oddly). To make myself clear, unless some crash alters my outlook, I expect stocks to make yet one higher high, probably later this year, I just don't expect it now. And in corrections, these B-waves or corrective waves against the trend, can be so strong they appear to be the start of a new day. Then they melt just as suddenly. Of course, it makes no never-mind to me either way, since I'm not buying stocks. Dow in Gold & Dow in Silver rose again today, which sent me scurrying back to my long term charts to check how much they had corrected since their 2007 - 2011 fall. For the Dow in Silver, 802.08 oz represents a 61.8% correction. It closed today at 810.69 oz, up 8.51 oz or 1.06% from yesterday. Of that same 2007 - 2011 fall, Dow in Gold has corrected about 40% at today's 12.403 oz close (G$256.38 in gold dollars. Could go to 50% at 13.43 oz. Not spoken here but hovering around in my mind is that a frequently seen correction is 38.2% or 50%. More volatile silver routinely corrects 75%. US dollar index changed little today, down 2.2 basis points to 82.923. Yen lost 0.58% to 101.68 but the euro, just to change things up, rose 0.19% to $1.3037. Trends remain up for the loathsome dollar and down for the scrofulous yen & euro. (By the way, if you want a feeling for the coming demographic disaster in Japan, ponder that last year they sold more adult diapers there than infant diapers. Abortion, too, has its price. Unlike the US & Europe, Japan won't import foreign workers to make up for the population loss.) Gold ended the day down $18.20 (1.48%) at $1,211.40 while silver held its loss to 5.4 cents (0.29%) & ended at 1853.3c. 'Twas one strange day for gold. Most of the forenoon it was flat, oscillating around $1,230. Then about noon New York time in one swoop it fell from $1,231 to $1,210, plump. In the aftermarket it lost another $12 to a low at $1,198.60. Rest of the day it flatlined. Silver refused to let gold drag it down today, odd since silver is usually the more volatile member of the precious metals. Silver didn't undergo that big drop today and played calm most of the day, with a range of 1892c to 1845.7c. This drop is so overdone it's becoming laughable. Bottom of the gold channel now is about $1,175. Silver is sitting on its bottom channel line already. Whether silver & gold have bottomed or will bottom around here, about now would be a perfect time for a surprise rally to gnaw off the shorts' greedy hands. Rest easy, keep your eyes on the horizon. As the great entrepreneur H.L. Hunt used to say, "Never get really elated in victory; when times are tough, never get down." The death on 27 June 363 of the Roman emperor Julian the Apostate brought to an end the pagan revival. His last words were alleged to have been, "Vicisti, Galilaee!" On 27 June 1893 took place the Panic of 1893, which followed the Panic of 1873. Overbuilding railroads & failure of South American investments, notably in Argentina, along with declining agricultural prices, all contributed to the panic. However, it took place within the half century context of the deflation intentionally pursued by large bondholders who took every occasion to purchase legislation from congress which would shrink the US money supply and enhance the value of their bonds. Plus ça change, plus c'est la même chose. The more things change, the more they stay the same.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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