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Precious Metals
Market Timing |
RONALD L.ROSEN
rrosen5@tampabay.rr.com
May 2008 |
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“Time is more important than price; when time is up price will reverse.”
W.D.Gann
"I sincerely believe... that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale." --Thomas Jefferson to John Taylor, 1816. ME 15:23
"I... place economy among the first and most important of republican virtues, and public debt as the greatest of the dangers to be feared." --Thomas Jefferson to William Plumer, 1816. ME 15:46
"Then I say, the earth belongs to each of these generations during its course, fully and in its own right. The second generation receives it clear of the debts and incumbrances of the first, the third of the second, and so on. For if the first could charge it with a debt, then the earth would belong to the dead and not to the living generation. Then, no generation can contract debts greater than may be paid during the course of its own existence." --Thomas Jefferson to James Madison, 1789. ME 7:455, Papers 15:393
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The end has never been in doubt. Those of our leaders who have ignored history for their own benefit or out of complete ignorance and stupidity have condemned the rest of us to a fate that was preordained. Lies, corruption, and outright thievery will never endure. Removal of the monumental financial cancer that has been created by the greatest “Military-Industrial Complex” that ever existed will bring the greatest pain to the uninformed and unaware. My wish for eternity is that the pain we are about to receive seeks out its creators and lands on them. However, the pain belongs to us. It is our obligation and duty never to be tempted by the evils offered that promise something for nothing. The laws of life do not permit this. They never have and they do not now. The academic geniuses that inhabit Wall Street know only one thing when collapse is imminent. The thing they know best is how to get to the exit before the rest of us, including their customers and closest allies and friends in Congress, the White House, and elsewhere. The true oath of office for not only politicians but also Wall Street inhabitants, from top to bottom, is: “When in danger, it’s every man for himself.”
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EXAMPLES OF PRIOR ATTEMPTS AT FIAT MONEY SYSTEMS
“20 BC - Roman Empire - After a highly successful period of empire building, Augustus, ordered mines in Spain and France to be mined 24 hours a day to support his tremendous infrastructure costs. Money was increased faster than production, however, creating inflation. He cut back on coinage, but later his stepson put coinage into government coffers which was eventually abused by emperors that followed him including: Caligula, Claudius, and Nero. Their lavish spending on consumption, (sound familiar?) wiped out most of Rome’s riches when Nero got the idea to debase the currency in 64 AD by putting less silver into coins. This allowed the emperor to continue his lavish spending, building increasingly large trade deficits with Rome’s colonies, and causing the wealthy to either hide their wealth or flee from the confiscating government.
This did not have a happy ending as we now know.
910 AD – China experiments with paper money - It takes several hundred years but the system is abandoned due to unacceptable levels of inflation as money printing exceeded production.
1500's - Spain gathered gold from Mexico and the new world, becoming the richest nation in the world. Instead of developing their own economy they sent gold to trade partners in a consumption orgy not dissimilar to the US today. Then they went on a military rampage to extinguish pirates, (terrorists?) in an imperialistic march into other lands, dropping any distinction between terrorists, (I mean pirates) and the countries that harbor them. Their excessive consumption ran through their gold hoard, so they turned to financing the war with debt, bankrupting them.
1716 - John Law convinced France to use paper money and declared all taxes must be paid with it to gain acceptance. The idea snowballed and paper money became more desired than coin. It led to excessive printing, additional money-making schemes and fraud. Exaggerated values coinciding with money printing eventually blew up the system.
1791 - The French Government again tries its hand with a paper currency. The Government confiscated land from aristocrats and issued “assignats” which paid interest against the properties. Land was auctioned off in exchange for these notes, inflation rose to 13,000% by 1795. Napoleon ended the revolution and replaced the “assignats” with the gold franc, which set off over a century of prosperity for France. In the 1930’s Socialists came to power and brought the Bank of France fully into the Government. They quickly removed gold backing of the currency and made the franc a managed fiat currency. In only 12 years the currency lost 99% of its value.
1853 - Argentina went on a gold standard and thrived for close to 100 years. A central bank was created in 1932, beginning a long downfall. Juan Peron took charge in a 1943 coup and depleted reserves causing trade to fall. Argentina continued on this path of paper money, falling from the eighth largest economy to a mere shadow of its former self, which it has not recovered from as of today.
1862 - Abraham Lincoln passed the Legal Tender Act allowing the Government to issue paper money, backed by nothing but government promises. A huge inflation transpired that caused the practice to fall out of favor until the Federal Reserve System was put in place in 1913.
1923 - Weimar Republic - After World War I, Germany, crippled from its loss in the war, was held accountable for its war reparations. The country was destitute so found no other choice but to simply print the money in massive quantities to pay the reparations. The result was the plundering of the entire middle class, wiping out all value of savings, and paving the way for Hitler in front of an angry public.
THE U. S. DOLLAR WENT OFF THE GOLD STANDARD IN STAGES
1934 - President Roosevelt revalued gold from its official price of $20.67 to $35 an ounce in an attempt to print more money, with the hope that this would lift us out of the depression.
1944 - The Bretton Woods Agreement was made to treat the dollar as a substitute for gold, since a dollar was defined as 1/35th of an ounce of gold, which was pegged at $35 per ounce. The door was opened worldwide to print money; foreign nations could print if they had gold or US dollars.
1971 - President Nixon closed the gold window, ending convertibility of dollars to gold. This came about because the US was printing too many dollars and living beyond its means. Foreign nations led by France, recognized this and began demanding payment in gold, breaking the system as the US experienced a major gold drain.”
Richard J. Greene CFA
“Never, never, never believe any war will be smooth and easy, or that anyone who embarks on the strange voyage can measure the tides and hurricanes he will encounter. The statesman who yields to war fever must realize that once the signal is given, he is no longer the master of policy but the slave of unforeseeable and uncontrollable events.”
Sir Winston Churchill
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Excerpt From the January 25, 2008 Precious Metals Market Timing Letter
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Gold May 9, 2008
Now that gold has not only tested the $850 level but declined to the $846.50 level before it bounced back, what shall we do?
GOLD WEEKLY CHART MAY 9, 2008
BUY
NOW IS THE TIME TO BUY NOT ONLY GOLD BUT ALSO SILVER.
GOLD DAILY CHART
SILVER DAILY CHART
If you are an investor or an active trader who would like to utilize prompt and precise trading information that includes Delta Turning Points and the work of Alistair Gilbert and Ron Rosen
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Stay well,
Ron Rosen & Alistair Gilbert
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Disclaimer: The contents of this letter represent the opinions of Ronald L. Rosen. Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Ronald L. Rosen is not a registered investment advisor. Information and analysis above are derived from sources and using methods believed to be reliable, but Ronald L. Rosen cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions.
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