Dried Out and Ready
LT #1 and I had a wonderful time at the U2 show Saturday night. I have a question for you, though. When was the last time you voluntarily stood in the rain? I did it for over 2 hours Saturday night and had a blast. Soaked and cold but happy. How The Edge managed to play in the downpour I have no idea. How Larry was able to keep metronomic time while soaking wet is a mystery.
Onto the task at hand. Another day with no "bipartisan deal" on the debt ceiling. Yawn. I do find it interesting, however, that every little headline or rumor is seized upon by The Cartel and the WOPRs and the PMs fall sharply. To me, there are three very important things for you to keep in mind:
1) The open interest numbers, particularly in silver, are still so low that it's going to be very difficult for a cascade/waterfall to develop. Unlike late April, silver contracts now reside in what are, primarily, very strong hands.
2) At the end of the day, the debt ceiling is going higher, probably to the tune of $2T or so. Again, from where will that money be coming??? Sure there will be some borrowing from willing lenders but the vast percentage will be from continuing QE.
3) We are headed into August and the typical, very strong seasonality of the PMs.
All of these combine to create a great atmosphere to buy the dips. Not every dip will be met with substantial FUBMs as there will be days when the EE will win. However, in the end, any metal bought today is going to worth substantially more in fiat by Labor Day. They will be worth even more by Halloween. They will likely be even higher still by Thanksgiving.
So, the next time the PMs drop sharply on some manufactured "news", don't panic. Just calmly step to the plate, point to the cheap seats and then park one right up The Cartel's batooty. TF