Jim Sinclair gave a summary of the next move in gold and the USDollar. He agrees with Martin Armstrong and Alf Fields and others. Check out my blog roll for his website link. The bolded items are my comments.
Jim says that the bull gold market will be Alf Fields’ price in Martin Armstrong’s timing.
The punch line: gold will begin its third wave up in June. This wave will top at least $3500. Bolded items (and red updates) are groovygirl’s comments.
From Jim Sinclair Predictions:1. Gold reacts as currency support for the dollar enters mid June to a slow decline (that is the official definition of a strong dollar policy, really). Gold is now trading as a secure currency, not a commodity. This is a completely different type of investor/investment.
2. End of 2nd week going into the beginning of the 3rd week of June Gold launches towards $1000 and this time through the neckline of the reverse head and shoulders formation. Update August 24, 2009…we are still going sideways, battling deflation, trend to change soon. Wait for it….wait for it. Update October 13, 2009…looks like gold is moving up along the trend line again. We will have to fall below $800 to break this trend upward. Conversely, the dollar index is moving downward, it will have to move above .86 to break the downward trendline.
3. Gold rises to $1224 where it hesitates. Update Dec 9, 2009: we are experiencing the hesitation, not a break in trend. Don’t panic.
4. The OTC derivative market takes on the dollar as short sellers into dollar support.
5. This OTC derivative currency short position builds.
6. It is the US dollar where Armstrong will get his WATERFALL. Martin has predicted a waterfall effect. This means a quick plunge, never to return. The US Dollar is soon to be toast. Get out NOW. This drop will be so quick, that you will not have time to move investments out of the dollar when it is clear you should do so. Especially, if all your assets are dominated in dollars. Update Dec. 9, 2009: John Williams of shadowstats.com is saying the same thing from another perspective when he predicts a hyperinflationary depression by 2015.
7. The main selling (for the dollar) takes place when Israel makes a major miscalculation. The timing for Israel is 2011. Update: October 13, 2009….we are experiencing extreme pressure on the dollar right now, but not a waterfall..yet until closer to 2015.
8. Hyperinflation is always and will continue to be a currency event. The government will continue to print money and a hyperinflationary depression will occur in the US. Timing for the start is 2011-2012. Update Dec. 9, 2009 John Williams is saying a start of the major decline in the dollar in 2012, but the extreme hyperinflationary period will be closer to 2015.
9. Hyperinflation will be a product of the upcoming massive OTC derivative short dollar raid.Should I be correct in the gold price action going into late June, it will fit Armstrong’s criterion for a move to $5000.Alf’s work permits an over-run of the gold price to $3500 in the major 3rd phase, indicating overruns into the major 5th. Translation….Martin is predicting a major move in gold to $5000. If he is correct, Alf Fields’ prediction of $10,000 per ounce before the bull market is over (during the 5th wave) is completely conceivable. Update October 13, 2009…we are firmly in gold’s 3rd wave and would have to break below $800 to break this trend. Update Dec. 9, 2009: continued confirmation of Martin’s timing (2015) and Alf’s numbers ($10,000).
Do not think you will make a huge ROI on gold and silver. Gold and silver will be so ridiculously high, because the dollar will be crushed, never to return to its value of today. It will throw all the global fiat currencies of the world on edge.
The rules of investing are totally different from they have been the last 25 years. This is a world-wide currency crisis, a systematic breakdown. Your focus is to PRESERVE capital, especially if your investments are in USDollars. I can not stress this point enough.
Thanks for sharing your views. Any insight on what would happen if one were to continue to hold gold-related entities such as GDX, GLD, CEF throughout a hyperinflationary depression?
Comment by RK — May 27, 2009 @ 8:21 pm
Jim Sinclair, Alf Fields, and some others are of the opinion that gold (and gold related investments) will never go down again after their high of $10,000. As they will be incorporated into the new global reserve currency formula. However, no one will commit to this, as it is very hard to predict how the G20 will work all this out. Martin Armstrong has not really said anything one way or another.
I am planning on holding some gold, no matter what. My thought is that if there is a currency crisis or instability, gold and silver are always popular. And a hyperinflationary depression is definitely unstable. But the allocations of the rest of the investments may change depending on the turn of events. We will have to keep a lookout.
It could be that laws will be created that would make it unprofitable to hold gold over time. Or the gold paper market (ETFs, like GLD) could implode, just as the paper derrivative market did.
I highly recommend holding some gold or related investments outside of the US. Maybe in a few different countries and banking networks. You just never know when a banking system or country is going to implode nowadays. I would also recommend not to have all your gold-related investments in paper, hold some of the physical metal. If gold is too expensive, hold silver.
Thank you for your question.
Comment by totallygroovygirlfriday — May 28, 2009 @ 7:38 am
If you haven’t already looked into it, I would suggest bullionvault.com as an easy way to hold bullion outside the U.S. Also look into MERKX (hard currency fund in stable countries pursuing “sound” monetary policy).
What are your thoughts about the safety of holding physical metal in a bank deposit box? Love your blog, thanks.
Comment by RK — May 28, 2009 @ 10:48 pm
I am very familiar with bullionvault.com and I recommend it. I do not know about MERKX, but I will do some research, sounds like a good option at first glance. In my opinion, a local bank safety deposit box is a good option. I would not put all my physical metal in one place or one bank. If the US government should want to buy gold again for a fixed price, as they did in 1933, the bank would hand it over. I think that is unlikely, but always possible in uncertain times. If your bank implodes, you may not have access to your box in a timely manner. Thanks for your appreciation!
Comment by totallygroovygirlfriday — May 29, 2009 @ 2:36 am
I looked into MERKX. It is a mutual fund, with the associated fees, etc. I am not a big fan of mutual funds, mainly because I think I can get a better return on my own, without the fees.
I think it would be a place to put a portion of investment. I would rather own the actual currency and not have to pay fees. In addition, there have been some interesting things happening this last downturn (2007-2009)…funds delaying or refusing client sell orders. I believe that there will more volitity, not less, so I now consider any mutual fund NOT as liquid as it was 4 years ago.
However, if you don’t want to bother about what currencies to buy and can handle the risks involved, this mutual fund looks pretty good, as it is said to be a hedge against the dollar. I am sure that there will be many more like it in the future. In some cases people have the majority of their savings in a 401K (which I am not a big fan of either) that has limited choices to hedge against the dollar. This fund could be a portion of those allocations.
Comment by totallygroovygirlfriday — May 29, 2009 @ 7:59 am
Hey girl, keep up the good work..
I do NOT own physical gold yet, but I’m wondering how would one sell the physical gold bullions on the market 2-3 years later? Would it be as easy to sell gold as buying them?
Oviously, I can’t sell the gold to the internet web gold brokers. Wouldn’t they have to actually see and inspect the gold first to buy them back from me?
Thanks and sorry if this is a dumb question.
I normally don’t post comments but I do stop by here almost everyday.
Comment by John75 — May 29, 2009 @ 10:26 am
Thanks John75! No dumb questions!
Yes, it will be easy to sell gold and silver in 2-3 years. You can sell gold bars or coins to goldandsilver.com or other internet dealers right now if you wanted. Of course, people are more interested in buying at the moment. People are selling gold coins on Ebay. Your local coin dealer or pawn shop will also buy your gold/silver coins or bars in the future. When buying metal now, keep it sealed with any documentation with it. It may make it easier in the future for selling. You will be able to FedEx metal to any internet dealer. There will probably be a small cost to weigh, but that is what goes on right now. Coin dealers are running about $75.00 per ounce, that’s minor at $975. Precious metals, especially the physical metal will be worth so much money that if you want to sell, dealers will be lining up to help you out.
Just a note, right now, the law is that coin dealers must file a form with the government, if they are buying more than $5,000 in gold from you (not sure if that includes silver too). So, if you sell in the future, you may want to sell less than $5,000 at a time. Otherwise, there is no paperwork required. That could change
There is a video at goldandsilver.com about how to buy and sell gold/silver.
Comment by totallygroovygirlfriday — May 29, 2009 @ 12:19 pm
Hi Groovygirl, that limit is actually $10,000 (IRS form 8300) and applies to all transactions in cash.
Comment by RK — May 29, 2009 @ 10:02 pm
Thanks for the update, that’s a better amount. I think that this an area that we will have to keep an eye on. The more popular precious metals get, the longer the IRS paper trail will become.
Comment by totallygroovygirlfriday — May 30, 2009 @ 5:29 am
Thanks for the blog Groovy Girl. I study cycles and am aware of Martin Armstrong. I wonder if there is a way to be sure to receive his latest work? I check Scribd now and again looking for Martin’s work but am not sure I find his latest articles. Can you suggest a way to know when he come out with new articles?
Randy
Comment by Randy — June 16, 2009 @ 1:38 pm
Randy,
I have the same question that you do.
These are the sites I troll looking for the latest letter:
http://princetoneconomics.blogspot.com, scroll down to the right for a list of links.
Scribd (as you suggested)
http://jsmineset.com (Jim Sinclair’s website). If there is letter with information about gold, he links to it.
Armstrong usually puts out a letter every 2 weeks, so that’s when I start trolling again. However, some of the letters are about his legal case and not economics.
I signed up for email notification, but I have not received anything through that channel. It is my understanding that you may send comments to him at armstrongeconomics@gmail.com. This is the email I used to request notification of letters, but no repsonse.
If you come across anything more reliable, please pass it along.
I think as gold makes a move, his articles will circle around the internet at a faster pace.
Groovy Girl
Comment by totallygroovygirlfriday — June 16, 2009 @ 2:08 pm
Love your blog Groovy girl , I have about 50% physical metal , and had bought a bunch of gold mining stocks and some oil commodities . Then I learned about the 1.7 trillion Alt-A and ARM mortgages which will have to be dealt with in 2010-11, on top of the commercial real estate bubble . I noticed my 15% sell/stop wasn’t enough with some of the stocks , ( they sold ), and I just decided to sell the rest of them . With low volume trading and high volatility, I just don’t know about mining stocks . When the dollar tanks , won’t the stock market drop and the value of gold mining stocks drop also ? Where should I put the rest of my money ? Should I do say 80% bullion , maybe through bullionvault with my 401K ?
Comment by Elizabeth — October 31, 2009 @ 9:41 pm
Elizabeth,
I am not a financial advisor, so I can not offer advice. However, I will ask you some questions that I would ask myself if I were in your shoes. First and foremost is…..when will you need your investment back…..6 months, 2 years, 5 years, 15 years? Any money needed for the next 2 years, should be in short term (6 month) treasuries or bonds. If you will not need your money until at least 5 years from now, then purchasing mining stocks (even if they go down), will probably recover by that time. We are looking at another leg down in the market in 2010-2011. Gold may go down as well during that time, but it will need to break below $700-750 to break the trend. Expect another leg down like 2008, when every type of investment took a hit.
Now, if you are more interested in capital preservation than anything else, buillion is your best bet. Physical metal, then treasuries, then paper products (like stocks). I also recommend holding physical metal with at least 3 different companies. Never put all your money in one place and in one investment. I would also buy some silver, not just gold.
So, the questions you should ask yourself are:
When do I need access to my investment?
Is capital preservation a priority or how much risk do I want?
How many people stand between my investment and me? For instance, your 401k is twice removed….your 401k investment company and bullionvault.
Do I have my investments with several different institutions in case one of them goes down? Will I be OK in the short term and the long term, if one of them goes down?
When the dollar goes down, stocks go up, but the true value or purchasing power of the stocks may stay the same or be lower. Mining stocks and commodity stocks will do well in the long term, but in the short term, expect the unexpected in all stocks.
Thank you for reading, Elizabeth. I send my congrats to you for taking the steps to perserve your savings.
groovygirl
Comment by totallygroovygirlfriday — November 2, 2009 @ 8:41 am
Hey groovy girl,
Regarding bank safe deposit box storage, I was a bit jolted by your mention that if the US government should want to buy gold again for a fixed price, as they did in 1933, the bank would hand it over. I thought that safe deposit box contents are private and that no one but the depositor knows what’s in the box. Am I naive and if so how would my bank know which of its customers are harboring the “barbarous relic?” And even then, how would a bank be legally obliged to breach its fiduciary responsiblities with its depositors? Thanks in advance.
Comment by Anthony — December 7, 2009 @ 1:12 pm
Anthony,
A bank safety deposit box is an option, but in groovygirl’s opinion, not the best option. The Patriot Act changed EVERYTHING about banking. Here is a link to a very interesting article. Click here. The banker is now an extension of the gov. The laws are all in place, they just haven’t used them enough to upset the average joe.
If the state or government can not contact you (cough), think you are dead, box fees are not up to date, or think you are a terrorist, they can not only drill open, but seize what is in the box without your knowledge. (California is currently involved in a class action lawsuit where the state was going to banks and if they didn’t have current contact information for box holders, the state opened and sold the contents, because they needed the funds). This was just the state, not the Feds. If you have your gold at a private storage facility, you at least can try and sue them for breach of contract, if something is missing.
Most of the newer laws are part of the Patriot Act/Homeland Security Act, and it includes deposit boxes. It is possible that the FED will never open your box, but there are several laws, old and new, that allows them to do it. If you have a safety deposit box in a bank, check the contents at least every year. Pay your annual fee, make sure the bank has your current contact info, and get a receipt. DO NOT have all your gold and silver in one place in one bank. Don’t have anything in your safety deposit box that you can not live without if the bank was “closed” for a period of time. Of all non-home storage facilities for gold and silver, a private bank box is the least safe, and a private vault company, like Brink’s, is the better option.
Another problem with a deposit box….you may say to the bank, I had 50 gold pieces and now I have only 4. It is your word against theirs. At Brink’s, you have a certified listing of your holdings, audited by at least 2 people. Some private vaults have videos of routine audits. There is none of that at a bank vault. A bank safe deposit box is NOT insured from theft or damage. You must get your own insurance, usually it can be part of your homeowner’s policy, talk to your agent.
Since the Patriot Act/Homeland Security Act, every bank in America does not have “legally obligated fiduciary responsibilities to its depositors”, it does exactly what the State or Feds tell it to do. Of course, the banks do not advertise this. You have to read the Patriot/Homeland Security Act and do the research. I have no doubt that if the US gov asked for your gold, a law would be in place for the bank to empty your deposit box without warning. Right now with the Patriot Act/Homeland Security Act all they would have to do is link owning gold to a national emergency and it would be gone.
Having stated all this, I think the chance of the US grabbing your gold is unlikely. Not too many people own the physical metal and they are not likely to in the future. The gov and GS can and are trying to inflate/control the gold paper market to have control over the price on the upside. A default on the gold paper market at some point is much more likely.
Never have all your investments in one form, in one place.
In my opinion, a bank box is good for copies of important docs, instructions in case of your death (make sure your next of kin is on the signature list), and maybe SOME coins. No cash, as it is illegal to keep cash in a US bank box.
All aspects of the banking system in the US have changed and no one understands this shift.
Thanks for reading.
groovygirl
Comment by totallygroovygirlfriday — December 7, 2009 @ 3:44 pm