I’m not going to even dignify the employment report by commenting on it. I mentioned to a colleague that analyzing, discussing and debating the merits of the Government economic reports has the same merits of discussing the difference in smell between dog shit and pig shit. If you like to have serious discussions animal scatology, have at it. These shit-stains who get on CNBC and Bloomberg and tear their hair out over these numbers are complete clowns.
I got an email from a long-time friend and investor who is at wit’s end about what to make of this market. The friend/investor is contemplating giving up on the sector. I thought my response was worthy of public inspection:
I don’t know what to say anymore. This investment is not a meaningful part of your net worth and you’ve hung in this long so you may as well stick around and see the trade/investment/thesis to its ultimate unfolding. The cost of having a seat at the table compared to the potential upside is small now, especially since you’ve already put your chips on the table.
In the back of my mind (going back to 2003/2004) I’ve always been worried that they might do to gold eventually what they did to it in late 1974 when they took it from $200 back down to $100 by early 1976. Please note that the end of 1974 is when gold futures trading was first introduced to our system. That was right before it made its run from $100 to $850. Hell, percentage-wise this move since 2011 isn’t as severe as the one in 1974-1976 at this point. And back then the eastern hemisphere wasn’t a factor other than India and the U.S. was just getting started on inflating its debt-ridden, fraudulent fiat paper money system.
We’re at the end of this fraudulent system and I honestly believe they are trying to shake the system of as much wealth as they can and put it in their own pockets before it collapses. That especially includes gold and silver – real money. But that part of the strategy is already back-firing because the US mint sold the most amount of gold eagles in Sept that it had sold all year except in January, which is always the highest sales month, and it sold – between Sept 30 and Oct 1 – more silver eagles than it sold in the entire months of July and August. That’s your indicator that the strategy to fleece the population of the gold and silver we can get our hands on is backfiring. Note: we can’t get our hands on the US Treasury gold because it ain’t there anymore – ask Germany.
In fact, I would argue that the rush by the public into the metals that we’ve envisioned since 2001 is now starting. No one believes the bullshit coming from DC anymore – today’s employment report is exemplary of that – and I think the people who have cash to invest are starting to go physical.
We are talking with a potential client who is moving several hundred thousand dollars of he and his wife’s money into bullion. They are leaving the stock and bond markets. See the silver eagle sales statistic. That’s not an outlier population statistic. Unlike 2008, when the public was dumping their coins, people are rushing to buy. I spoke to a coin dealer in Littleton 3 weeks ago and he can’t keep silver eagles in stock.
If they can take gold and silver down to where both started in 2000, it means that our system is being incinerated and you probably don’t want to be in this country – or most places for that matter. If/when that happens, paper money or real money won’t do you any good anyway. Probably should have a cyanide pill around for that scenario.