Physical Gold

Jim Sinclair’s note from today (on his website).

When Jim says something like this publicly on his website, grooovygirl listens.

Dear Friends,

I still am plagued by the question, WHY?

You make more money from investor accounts than you ever will from large commercials in the same amount of space.

Storage is space times charges which equals revenue. After that it is all computerized billing and confirmation.

With gold climbing steadily higher while showing signs that presage a ballistic move upwards, I have to conclude that there is a problem in the gold market itself stirring below sight that the community has little or no idea about.

We have reviewed all the present and potential economic problems and know them better here than anywhere else.

I told you a long time ago that there are times when the hair stands up on the back of my neck. This is how gamblers in the final analysis know when to hold or fold them. This is what Bert Seligman and Jesse Livermore had that no one since then has had.

The story that small clients are not wanted would not require multiple Brinks trucks. Small coin and bullion deliveries are made by US mail.

What does HSBC know that is the basis for wanting to get rid of good business? It has been reported that HSBC storage internationally has been backing out of the gold business for awhile.

Why?

I smell delivery problems not just from HSBC, but maybe widespread.

I wonder if there might be a problem with authenticity. I wonder if exchanges have ever questioned the authenticity of their warehouse stock.

We live in a soulless, depraved world. Every possible scam has taken place.

Depending on whether the subject is gold or silver, reports indicate scammers are mixing a different ratio of lead/tungsten to match the density of gold or silver and putting it in the inside of the hollowed-out bar. The only way to detect it is by drilling or by gamma ray scanning.

We know coins have been adulterated for years. That is why we do not buy other than from well established coin dealers.

Regards,
Jim

If you have bars, get them checked. If you have coins, don’t worry about it, just make sure they are in a secure location. If you are buying more coins and bars in the future, buy from well established coins dealers at different times. By all means make sure you are getting your main core of physical gold soon, if you haven’t already.

It is possible that whatever is going on will not reach the light of day for a while. Use this time to your advantage.

If you can’t afford gold, buy silver.

Gold was $1216 in over night trading.

Martin Armstrong’s “last” letter

Click here  for Martin Armstrong’s “last letter”. No wait, we did it!!! They are not moving him, he will write more.

This was supposed to be Martin Armstrong’s last letter. Of course, we now have the wonderful news that it will not be! The letter entitled The Sum of All Fears: A Great Depression (11 pages), dated November 26, 2009, is a very good one to read.

Some notes:

Martin uses history to explain what a depression really looks like. I especially like his take on seeing the influence of cycles rather than a direct cause and effect. It is very enlightening.

Some main points, we have moved from a time of immovable assets as a hold of wealth to a time of movable assets as a store of wealth. In other words, look for gold, silver, rare stamps and coins, and fine art to go up in value as many more people start buying these items. They will replace real estate as a store of wealth. Martin’s letter goes into much more detail about why these things will occur and how that will completely restructure the economic and financial systems currently in place.

Martin has mentioned the real estate cycle in his last 3 papers….PAY ATTENTION TO THIS. For a refresher the chart is on page 7. No one, anywhere is mentioning this very important shift. If you have the majority of your net worth in your home, you must understand that this is not sustainable. Most Americans look at their home as always rising in value. Even now that it has lost value, they think it will recover again. It will not. There will be a little gain in 2015, but it will never get to the 2007 level of value again. By 2030, your house will be worth what it was in 1950. Keep in mind that because of hyperinflation, the dollar amount may go up, but that dollar will have lost purchasing power.

The most important line in this letter:

They (the banks) did not create the bull market. They only accelerated a pre-existing trend.

Not only is this true for the real estate boom, it will be true for future booms and busts. The pre-existing trend is there. Make sure you know what it is.

Trading the Gold Market

groovygirl is a long-term investor, but there are things that everyone needs to know about the gold day trading and short-term market moves, even if you are buying and holding long-term.

So, I will mention some of them now.

We are in a new segment of the gold bull market and the computer logarithms that control the day trading movements have changed their input. As a result, they are effecting the gold market in the short-term (both up and down).

This will not effect the long-term movement, but expect volatility up and down in the future. We are in wave 3 up, and it is traditionally the most volatile and the best time to make the largest profit on the way up. Traders know this.

Do not let volatility derail your long-term investment plans. Right now wave 3 will trade between $700 and $3500. So, don’t panic unless it goes lower than $700 and don’t call a high until it hits $3500. We will have a correction in wave 4, but in groovygirl’s opinion that is just a time to buy more, not sell. The length of this wave 3 is something I am not sure of. It could crest a year from now or 3 years from now. It depends on the loss of confidence in the USdollar. Martin Armstrong is the master timer, so I am looking to him for clues. The Fed could keep this charade going for another 2 years, we just don’t know when the average investors’ confidence will break and panic sets in en masse. Note: the gold prices I mentioned are based on Elliott Wave theory for the long term at this time and could change in the future, by that I mean go higher in wave 3. We will have to see how things play out. These are the prices I am using for my current investment plans.

Here is an article from zerohedge (.) com explaining the new day trading side of gold. Click here.

Other new issues effecting the gold market:

There is not enough physical gold to meet the paper gold markets outstanding amounts. At some point the physical gold price will break from the paper gold price. At that point you will not be able to buy physical gold, so do it now. I don’t know if this break will happen in wave 3 or wave 5, but it will happen.

Countries are buying new gold and bringing their gold bars into vaults in their home country. This is a signal to the market that gold is valued by governments and they expect a global currency crisis at some point in the future. Note: there are rumors, but no official announcement, that China plans to double its gold holdings within 3-5 years. Every emerging country will do the same. This is very bullish for physical gold.

Silver will go through the same process as gold, but not necessarily in tandem.

Gold hit $1,200 on some charts over night. Some say Gold is over bought, it is. So is the DOW. There is a flood of liquidity circling the global looking for investments. What “should” happen is now subjective on the up side and the down side. Physical Gold is your protection in the coming currency collapse, not an investment for a return or trading.

Side musing: Click here for a very interesting article from zerohedge (.) com entitled, Is the FED Facing Margin Calls from European Banks? The attachment with the article contains evidence that the AIG bailout (with your future tax dollars) was to save European Banks and their credit derivative chain around the world and connection with Dubai default. We are all connected now. There is a case that AIG will have to be bailed out again…..or not. If not, quick implosion of global debt. If so, slow implosion of debt. There is NO fix to this global situation, the end result of debt implosion will be the same. It is extremely unstable because even the “powers that be” do not how these private derivative contracts are globally connected. Distance yourself and your money from the systems that are currently in place.

Holiday crash update

Max has a good video sum-up of the Thanksgiving Dubai announcement. Click here.

The Dubai government has announced that they will set up a fund to help the Dubai company. This is a distraction. They will use this fund to do just what Max says…..sell assets cheap to insider investors and let the debt implode and all the world-wide credit derivatives associated with these investments die a slow death.

Another opinion from Jim Sinclair’s website….click here.

The most interesting part of this announcement…..timing. Wednesday night was the beginning of a US holiday, and thus most of the global trading volume was low. It was also a regional holiday so the people were distracted as well. The censorship of US and EU newspapers in Dubai over the holiday is also interesting.

This is part of the greatest wealth transfer in history. Implode the indebted investment, screw the investor, buy the real assets cheap. This pattern will continue until the global debt to asset ratio is sustainable again. Look for more of the same.

When it is all over, the very rich will be ultra rich and the rest will be poor. The US will be bankrupt. This will happen in your lifetime, probably within a decade. This will not be announced, there will be no national warning. It will not be covered by the media, it will be denied. Disinformation and distraction will be the core of the news hour.

Protect your investments and savings now, if you have not already done so.

Side musing: Martin Armstrong’s fight, click here. Warren Pollock’s thoughts on Martin Armstrong’s situation and other thoughts (take from it what you will). Click here.

Side musing update: Monday afternoon, November 30, 2009: it looks like the email/fax/attorney campaign worked. Martin Armstrong will not be moved to another prison at this time. Click here for the latest update.

 

Martin Armstrong latest predictions…..

………have to be true.

They have hit a nerve somewhere.

They are trying to move Mr. Armstrong where he can not issue his letters anymore. Click here.

Here is a link to Nathan’s blog for more detail. This is very concerning.

Words have power, truth has power.

Update: Monday, November 30, 2009: it looks like the email/fax/attorney campaign worked. Martin Armstrong will not be moved to another prison at this time. Click here for the latest update.

Holiday crash

There are very dangerous things happening in the financial world right now. Monday morning will be interesting.

Wednesday evening: Dubai (the country) wants 6 mos to pay their next debt payment and makes the suggestion they might default. This could be a way to get better terms, because of the timing of this announcement. Don’t know, but same effect on the market right now.

Panic on the Thanksgiving holiday in any market that is open around the world.

Greek stock market plunges 7%

London FSTE suspends trades for 3 hours.

Dollar is up, dollar is down.

Gold moves in both directions.

Today, NYSE issues rule 48 (the don’t panic rule). More here. As the US stock futures are in free fall on the holiday weekend.

I will watch this over the weekend….Monday is going to be VERY INTERESTING.

We are in the K-wave winter cycle trying to be controled by governments, debt implosion is and will be a roller coaster ride.

Gold price

Gold and silver prices looked nice this week, didn’t they?

Happy Thanksgiving!

The Dollar Bubble

The National Inflation Association has produced a 30-minute video entitled The Dollar Bubble.

Click here for the link.

Although this video is a little on the doom and gloom side including “scary” background music, it has some very good points. If you are not sure how and why the decline in the USDollar is happening and how it might affect the economy as a whole and you as an individual, this is a good starting point.

Although I don’t think civilization will cease, hyper-inflation in prices will happen in this country and it will affect everyone’s standard of living. It will cause an economic depression that will last quite a while, wiping out the middle class in the process. We are in the beginning stages of this period, we are not in a recovery.

I also think this 2-minute video by Warren Pollock puts everything into perspective about what to focus on. It is very easy to get distracted by all the issues and problems in this country. These issues have value, but in groovygirl’s opinion (and Mr. Pollock’s), are trumped by the systemic economic collapse (happening now) and how we might prepare for it.

Click here for Warren’s link Core Items vs. Noise.

I have said this before in another post. Make sure you are putting your limited energy and resources into proactive solutions not reactive solutions. Moving in the proactive direction requires education about the true situation, a plan, and the working out of that plan.

FED’s printing press still running full speed

Click here for the full article analysis.

The FED has publicly and secretly injected $268 billion in the economy in the last 2 months.

This says to groovygirl that there is a secret crisis happening NOW that the FED is trying to print its way out. Whether their plan works or not in the short-term, this confirms a flood of dollars at some point coming back to haunt the FED and destroy the middle class’s savings. The dollar will continue to lose money long-term.

If we are in a recovery, there would be no reason to print so much. We are NOT in a recovery, but a “cover-up”. I find it interesting that all of the F-TV talking heads have nothing to say about this major financial development. Of course, they haven’t covered the bogus changes in the accounting rules to bury toxic debts either.

An uninformed investor will lose his investment.

Martin Armstrong’s latest letter:A Forecast for Real Estate

Click here for Martin Armstrong’s latest letter dated November 15, 2009 entitled A Forecast for Real Estate. (12 pages)

Excellent read. If you are a home owner or plan to be one, read this real estate prediction of Martin Armstrong and his cycle theory. Homes as investments need to be view differently in the next 20 years than they did in the last 20 years.

We are in a 26 year decline in real estate as an investment class.

 

Therefore, houses should no longer be looked at as a place to store one’s wealth for the next 26 years. Prices (in inflation-adjusted terms) will be declining during this period and will not “keep up” with inflation as well as gold or possibly stocks.

 

Therefore, if you want to purchase a house, look at it as a sustainable place to live for the next 20 years and only from that perspective. This has definite value for survival and living, but not an investment. Energy/water prices will go up, so having the ability to modify your own house has value, but don’t expect to get money out of your house to make those additions. The value will not rise as it did between 2000-2007.

 

It looks like the real estate market will turn upward in 2012, but will peak and take a hard slow decline in 2015 until 2023.

  

Just things to think about for the timing of purchasing or selling.

 

If you have most of your “retirement savings” in your home, do not rely on that as your only retirement funding. Start saving now in other investments.

 

Some real estate categories that may fair better…commercial real estate bought cheap and with a small or no mortgage where rents will keep up with inflation. And land/farms, bought cheap with little mortgage where commodities can be produced that will keep up with inflation.

 

At the end of this cycle (2030), it will be time to look at real estate as a possible investment again. This will be the beginning of the “spring” cycle of the K-wave.