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Everything’s relative, I guess, including pain. Today’s revisit to the recent lows (and no, we’re not there yet) is not as painful as, say — a bloody compound tibial fracture jutting messily out of one’s shin. That said, it sure has been a frustrating six months, hasn’t it? And yet, if you look at all the major charts, it looks like at this late point in the cycle, the worst we are going to get is a revisit to the end of February lows, which — not insignificantly– were at the 200-week exponential moving averages for most gold and silver stocks. Royal Gold (RGLD) is still my favorite here, but you’d have to be crazy not to take advantage of the yielding plays available through NEM, AEM, and even ABX — and those are large caps you’d never see me recommending in a “normal” market.
But this isn’t normal. There’s a concerted, global (read Big 8) effort to devalue currencies — and therefore reprice debt — the world over. The only way those central banks can get away with this kind of routine, and save their debauched systems, is to get it done under cover of a “deflationary” scenario. The easiest path to that is to keep their foot on the less liquid large commodity and precious metal markets. This whole American Earl Revolution is a God-send to the central bankers, because it’s bringing supply on line in a period of global currency inflation. Ask yourself why oil prices have remained so stubbornly high, however, despite the onlining of so much new supply in the world’s greatest petroleum consumer.
How much longer can this kind of thing go on? Until the little guy cries “uncle” as loud as Soc Gen just did? Given that I was expecting a retest, and the large volume bars we saw at the late February lows, I am thinking this week and maybe the next will be the final washout. I’m still holding tight to my remaining cash, however. Like in late February of 2009, I don’t expect these prices to hang around for very long once the next cycle takes flight. That said, I think there will be ample time to take part once the bull trend resumes.
Best to you all, and Go Cards!
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PS — this retrace is also an excellent time to buy some physical, if you’ve been holding off, including 100 oz silver bars and nice liquid gold coins like Maple Leafs or Eagles.
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Thanks for a great post as always. Waiting to add to some metal names myself and appreciate your insights and expertise. BitCoin chart much more constructive here.
Long: 1/3 position EXK
Long: 1/3 position ANV (Ouch, I was a big seller at 37$)
I think that’s prudent as far as ‘toe in the water.’ But why not pick IP quality names first? Are those just for the bounce?
I can’t help but think how RGLD at these prices reminds me of UPS at $39 in early 2009.
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Here comes $1554. Don’t be surprised if we undercut it.
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Thanks for the post Jake. Just holding SLV and GDX LEAPS at this point and that’s painful enough.
Hello.
The central banks (US/Japan/UK/China) cannot get away with it.
They have no way out, rising inflation will kill the economy, but they can’t sit by and watch deflation win the day. (exception is the ECB, just letting nature takes it course).
Troubled times are not far ahead, then we will reap some rewards from the miners.
As for physical, gold is heading for a permanent move higher, thanks to the Euro’s set-up. I recommend reading Another/FOA for perspective.
I said it before and I say it again – stay away form gold and silver stocks.
Multi year bear market is here.
You need to change your name, Birdman.
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Too bad RGLD tanked again. I was enjoying the March recovery.
From what I see the only demand level i’d take is $19.75, unless it were to see buyers stacking up sooner of course.
You mean “RGLD=$19.75” ?
Thanks Kong.
$62.03= 200 week EMA.
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Best regards Jake, thank you for taking the time to post.
Slightly offside whine-
They deflate commodities and precious metals, yet house prices are supported.
Who will buy that lovely vinyl sided imitation mini mcmansion in the ordinary middle class neighborhood when it inflates to $ 750,000 not too long from now?
I don’t see this housing reflation as sustainable.
“Fool me once….”
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somebody please tell that to the jerkoffs in brooklyn. 8 bids, 8 losses to “all cash” buyers.
L’ville, here we come!
New York is not America, it’s an international city.
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This is the only song that I can think of to play today..
Thinking of you, Jake
Jeezus frickin Christ..they are trying to kill you!!
http://youtu.be/3p_xAToFzck