Key Points To Take Home On Today’s Gold Market

Posted at 12:38 AM (CST) by & filed under General Editorial.

Dear Comrades in Golden Arms,

I was there and considered by some to have been the largest gold trader from 1968 to March 1980. I recall every day of it like it was yesterday.


  1. I do not believe that gold has registered its all-time high by a long shot.
  2. I do not accept the recent decline from above $1900 as a gold bear market.
  3. I believe all accepted tools for market timing will fail in the long term super bull market.
  4. I believe the recent long decline to be but a reaction in the giant bull gold market.
  5. Into a new New Normal, all previous relationships between gold and anything will not apply.
  6. The basic motivator of new gold prices to come finds it basis in the physical gold market, not in the paper gold market.
  7. The 1% are not stupid or in the main would not have the positions that they have if market jerks.
  8. Knowing without any doubt what is about to occur, they have been for 8 years cleaning out the physical market.
  9. China and Russia are not gold speculators, but know exactly what is about to occur, having made it a policy to accumulate gold on a continuing basis.
  10. Like China and Russia, the right time to buy gold and therefore silver is when you have spare cash to do it.
  11. The demand for physical gold will eventually overcome the physical market, forcing deliveries to be taken on all the world’s paper markets and demanded in the forgotten large OTC derivatives of gold, written naked.
  12. The sign that this is taking place will be the ever increasing margin requirement of paper gold until it hits 100%.
  13. At that point the paper exchange is no longer a paper exchange but rather a physical exchange because physical gold supply will trade at a large premium to paper gold.
  14. This is the point in time when the question will be asked what is the value of a metals contract that cannot perform, the paper gold contracts.
  15. The answer to a non-performing contract is that its value is zero.
  16. Paper gold will trade down to the value of the paper it is written on, zero.
  17. At that time the value of physical gold will be whatever the major owners of physical wish it to be.
  18. The value of gold producing companies still functioning will be determined by their over the ground stored physical at full gold value and its underground gold at a modest discount to the stockpiled gold.
  19. Very few gold miners can grasp that concept. Investors do not have a clue.
  20. Talking heads seem to be getting a hint that something has changed in gold but have no clue as to why.
  21. This transmutation of what gold is, is happening right now, not some time in the future.
  22. The gold market is reflecting this in this minor recovery, making all fishing line market movements a great buy while gambleholic traders still can sell modestly into Rhino horn moves up.
  23. I do not think trading is correct because the final change will come overnight. You will go to sleep in one financial market and wake up the next day in the new New Normal financial world where gold, not paper, is King.
  24. The 1% makes this one of the first choices of assets to own on their decision tree.
  25. This explains the strange action of gold with the manipulators to the dirty work of their masters.
  26. As the paper price of gold is capped, the 1% are the major buyers on the physical metals, mostly direct from refiners and producers.
  27. This means that trillions of paper dollars need to be covered.
  28. The USDX may well be the most useless indicators of the value of the dollar.
  29. The value is not to be registered against other fiat currency, but rather in buying gold versus gold.
  30. As such, the USDX falls out of its traditional relationship to gold. This also reduces the SDR to a joke.
  31. Therefore the 1% is on the bull side of gold in the physical market while the Banksters have been on the short side of the gold price via paper.
  32. Time is running out for the short of paper gold to be a riskless trade with the Federal Reserve at its back. The intrinsic value of the silver and gold contract is zero and zero cannot fulfill the contract obligation of the paper gold contract. That is how the paper metals exchanges go boom. Therefore zero value for a delivery month on paper gold or silver is zero profit to the short of gold and silver paper contracts.
  33. All those long gold anything will have the wind at their back for a long and deserved change.

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Best Regards,