My wife and I were happy for twenty years. Then we met. Rodney Dangerfield
Precious metals markets have been quiet since our last TDL, so there is no change in our observation that, while they are in Downtrends, they are entering historically underpriced levels. So much so that gold stocks selling for less than a few dollars a share could be regarded as "infinite call options," without an expiration date.
The one story we cannot find anywhere in the press and media in the world is that there is a secret gold bull market in Asia. When Thailand's currency was cut in half, the price of gold doubled, as it did its job, so all TDLrs are advised to maintain a core position in gold as "fire insurance" against a currency calamity spreading out of Asia.
We are also amazed that the press has simply not detected the Uptrends in the silver markets, which is typical of the earliest phases of new bull markets, so buying a "package" of our three favored silver stocks is recommended.
In the chart it can be seen that silver is an Uptrend, but we have been puzzled by the concurrent decline in gold because they normally move together, by The Dines Wolfpack Theory. In recent days gold might be beginning to get in synch with silver's Uptrend.
As we predicted, gold-mining companies everywhere are starting to shelve projects, and beginning to close down. Indeed, many mining companies have nothing to do with football, but they will nonetheless wind up in the hands of a receiver!
Everybody seems to believe that central bankers have made a "sea change" and have turned negative on gold. Our guess is that their capitulation will later be looked back on as near a Major Bottom, believe it or not. Central bankers of the world are making a grave error by eliminating gold and considering it obsolete, not even remotely grasping that Asia's currency crash was caused by currencies unbacked by gold. We think back to 15 Aug 71 when Nixon severed yet another link between gold and the US dollar, which led to 20% interest rates and the soaring inflation of the late 1970s (just like the 1920s, as described in The Invisible Crash). Compare the DJI in the 1970s adjusted for inflation with the DJI in the 1930s, and they are virtually identical, with the same blunder having been made both times. If now the entire world really severs its final links to the reality of gold, something extraordinary will happen. We are standing our ground on the precious metals and believe that patience will be rewarded appropriately. Interestingly, the only gold stock in the world in an Uptrend is favored International Pursuit, which has doubled this month on news of its Mahakam copper/gold prospect in Kalimantan. Their porphyry intrusives could be a much bigger discovery than most appear to realize.
I have long thought that the aging process could be slowed down if it had to work its way through Congress. George Bush