Indeuuuud!
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Don’t get me wrong, silver will pull back almost immediately here. And gold should have a nice refrain as well. But all the Glenn Beck modalities aside, let’s not lose sight of the big picture here.
Don’t let the closet commie Keynesians who are currently plaguing the Fly ward you away from the nose in front of your face. It seems there are those who would hew to the belief that the sovrereignity of our currency will remain, unmolested by the tenets of common sense or basic economics. In the words of Lewis Carroll — “Callou Callay, oh frapjous day!’
Nothing to worry about here right?
But then, there’s that old bogey “empiricism,” creeping up to spoil their party once again. One example?
Does this indicate an overbought investment? Well, sure. For the last ten years now. In fact, that’s why perhaps the silver sister has finally begun catching up, and the ratio between the two has begun shrinking.
But there’s still quite a bit of room to go:
Even silver looks a bit overbought right now, doesn’t it? Yes, in fact, I may take some of my leverage off early this week as a result. That means I’ll likely sell some of the AGQ I re-purchased in the $93 and $96 ranges, and maybe even sell my SLW December $25 calls as well.
It’s not like I’m going to sell any of my core positions. That would be foolish, given the disposition of our currency. The DX-Y chart is what you should be watching, rather than the ephemeral explanations of the “cake and eat it” economics students who’ve recently appeared like noxious mushrooms on these internets.
Don’t let their quibbles with Glenn Beck or any other broadcast polemicist stay you from your review of the empirical data. The dollar will bounce, likely at $74 or so. But that gato will be expired before you can cash your small beer change.
Friends, the dollar is the Dallas Cowboys of the currency world. It may have another touchdown or two in its future, but those brief triumphs will be wreathed by tragedy.
Indubitably.
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I still like EGO, if you’re looking for a latter day saint. Also, IAG is probably a pullback look.
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Indeud.
Who Dat?!
Wassup with Chilly Breesio? Is he back now?
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One tends to think that the advantages conferred by the wonders of comparative advantage can only go so far. Then again, if the creditor has built industrial capacity well beyond the means of the debtor – for years to come – perhaps the advantage will not reverse as quickly as 99.9% of investors imagine it will. How ironic that the creditor keeps a giant stash of the debtor’s bills as a defense mechanism for their own over-diluted currency.
While I would love to have a trade-weighted dollar index for futures trading, we are stuck with the DXY, a mess from the seventies. Nonetheless, in order for the hated USD to tank, then the euro, pound, loonie and yen must soar. Europe, what a great investment: nobody needs political union to make a multi-country currency stick through a sovereign solvency crisis. Great Britain, I so love their manufactured products and all that unlimited North sea oil they have too. Canada, no property/commodity bubbles there. Japan, the future is so bright I gotta wear shades. Need I mention the Swedish meatballs and Swiss cheese? Not really.
For my purposes, it doesn’t matter which fiat crappency circles the bowl first. If you notice, gold and silver have begun to break from the correlative relationship.
The dollar index is back over $77 this morning, for example, while gold and silver remain steadily close to their highs.
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From Barrons story on CIO of Guggenheim Partners:
> Ultimately, though, the supply of money that is being created by the Fed is creating an imbalance between the number of dollars in circulation and the value of assets. Either asset prices across the board will have to adjust upward in a dramatic way or we will have to find a way to shift the definition of money in a way so that it doesn’t appear that, essentially, our currency has been debased. That occurred back in the 1940s with the establishment of the Bretton Woods system that linked all the currencies together and then ultimately made the dollar exchangeable into gold for central banks. Something like that or akin to the Bretton Woods system is a possibility. Policy makers are putting out a lot of feelers for the IMF [International Monetary Fund] to become involved and create a solution to end the competitive currency devaluation that is going on today. When the Fed faces its ultimate crisis of removing all of this liquidity, it will force a change in the paradigm of money. It is hard to predict exactly how that will work. But it certainly makes the paper money that we are using today look like a fool’s game in the end, and that’s why there is so much demand now for hard assets such as precious metals, art and collectibles. <
IMF? As in global currency? Isn't that what Beck is alluding to ultimately?
Sure, but let’s not lose sight of who the IMF actually is.
It’s just us in Europhag clothing.
Makes no matter… eventually the developing world will get some balls and demand an end to this trading of their labour for Whimpey Hamburger chits.
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“it will force a change in the paradigm of money… It is hard to predict exactly how that will work.”
shit man the IMF rich kids have been talking up a carbon credit backed currency for a couple of years now…
No surprises there. They throw the gold bone out there to distract ya’ll. And it works.
The retail investor was a net seller of pm’s last week,. Buyers on dips have been bigger players.
Shorts have not increased their positions even with the pm increases.
Jake – taking any profits on SLW before earnings today?
Yes, but just on my calls.
No need to be piggish.
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That photo looks spookily like one of my old bosses. Hilarious!
Did you used to work for Karl Lagerfeld in the fashion & design industry?
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A dutch expat, who had been doing various gigs for Conoco International all over the world for about 35 years. He was rich beyond belief and just working for fun. Loved PM, and was 1/5 owner of the largest corn farm in Wisconsin. Despite all that, and his idiosyncratic garb, he was not a friendly person, nor easy to work for.
The Dutch are odd. (my wife is part Dutch).
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Mine too. 🙂
Beware, lest ye be treated to the infamous “Dutch Oven” one of these fine evenings.
Indeud!
“The dollar is losing its relevance especially with the emergence of Asia economies, so a more neutral benchmark may be required. Gold, amid all the recent uncertainty, is proving its worth,” said ANZ’s senior commodity analyst Mark Pervan.
Full Article:
IMF Chief Bruits Possible Return to Gold Standard.
Odd, no?
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Not shocking at all. Just a long time coming. Manipulate gold exchange for decades out of London, rob the US of all the gold in Ft. Knox. Whoever it is that controls most of the gold (Redshield legacy), obviously wants to capitalize on that by buying the assets of the world with their currency on this go-round, at relatively low prices (for them). I don’ tthink its a trend one can individually fight no matter how much one loathes it. But a small fry can still benefit from it by seeing everything driven toward gold in advance, and capitalizing on it (or at least preserving some of their wealth) in such a manner.
Odd, no?
Not really … ties all these stories we’ve been seeing together … kind of a trial balloon to get some response from those who care, right?
Unlikely we go back to a pure gold standard but if we did, I wonder where the POG would be set and would gummits recall all outstanding gold once again? Maybe silver is the better option for investment being that it’s industrial use prevents it’s recall by the govt.
Buy gold coins at coin shops annonymously with cash. If gold standard comes back, gov’t will DEFINATELY confiscate gold again (especially including gold in safety deposit boxes, and ETF’s).
Is there no way to file bogus police reports that show your bullion was stolen (NOT in an attempt to get an insurance claim paid out)?
Odyssey Marine Exploration has spent the last five years or so on a rampage, salvaging all the remaining, massive GOLD ship wrecks around the world — sometimes pissing off govts (Spain) that wanted to claim these prizes off their coasts.
John Edwards (remember the 2008 election?) owns a stake in Odyssey. Rumor has it that George Soros (co-owner of the DTC, a branch of the Federal Reserve) may also have a stakes among other heavy hitters.
I was hearing rumors five years ago about Soros wanting to bring back the gold standard, but do it using DIGITAL GOLD. Meaning, you transact in credits backed by gold (supposedly).
The goal seems to be to put all gold ownership in the hands of the elites. Then let the peons run wild with their perpetually diluted fiat currency that is backed by uncounted gold.
I forget when the last physical inventory of Ft. Knox was done, but it was not recent, i.e. years ago.
Don’t worry though, our government would let us know if anything had been removed.
If only I could invest in these things: http://news.discovery.com/tech/rocketman-jet-wingsuit.html
Jake,
Here’s where I am now: gld, slw, paas, ssri, anv, exk, iag, rgld, and mvg at approximately 28% of port. I plan to keep adding on pull backs possibly going as high as 50% of port.
Three questions: (a) would you add to iag on a pull-back given the recent earnings report, (b) would you diversify into additional pms in and effort to increase the port’s percentage, and (c) if so which additional pms would you select.
as a short term trader I just got rid of all the EXK i bought at 5.05. will add on a pullback
I agree that EXK will probably pull back here, but Jake has finally convinced me to just decide on a core of holdings and ride through the dips, although I’ve played it both ways and managed to come out ahead.
Update, through massive use of willpower, I sold all of my SLW calls and nearly 40% of my SLW equity at between $34.22-34.98 today.
I am not kidding about the willpower thing… I nearly threw up selling the stuff.
I also sold 25% of my EXK position, which had gotten quite egregious as well. Also, 33% of my PAAS position.
If SLW has a selloff , they will all likely sell off a bit.
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Lock in those gains, son.
Doh!
Wade Phillips got imax’d!
Dollar up and Pm’s up..hmmmm.
yes.. spreading the inflation around. some inflation soup for everyone. inflation while it’s hot.
i’m thinking long the dollah here. i might lose my shirt but i like the contrarian thesis behind it.
At what price do you think I should accumulate more silver, after the next downturn? My TA system is down, due to a HD failure.
Thanks!
Taco
Lol Jake…
I sold 25% of my EXK at 6.05….I immediately regretted it… I did not get as good prices as you did, but seeing that you made the same decision makes me happier
Also sold large portions of my SLW & PAAS at EOD..
It’s been a fantastic run! And many more to come 🙂
Chivo
Also sold some ENTR… I think it still goes up but I had a lot of it
big it up for the SLW massive!!
REZPEK. BO!
What’s REZPEK .BO?
Smoke a bowl. It will come to ya…
BO!
Bo.. Bo.. Bo… (echo, echo, … )
Holy shit, silver’s day has come.
Pretty ridiculous, ain’t it?
Even PAAS had good numbers, and I sold a third of that today as well.
Ah well, more where that came from.
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Don’t blink for too long on the silver pullback. It may jump to 30 tomorrow.
Physical short squeeze may be on.
That would be nice. Man, if it hits about $32, I can sell half and completely cover the debt related to my purchase.
Jake,
Catching up on your bloggery, as bidness has kept me hopping.
I wanted to take a second to say the final few lines of this post had me grinning from ear-to-ear. The skewering of the Dallas Cowboys, plus Indubitably is an impossible combo to resist. Well done.
Sláinte!
Mad Willie