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Two Opposing Viewpoints

311
Sat, Feb 2, 2013 - 11:10am

These ought to spark some spirited discussions over the weekend.

As you know, I'm what's known as a permabull. I'm long and stacking precious metal and nothing will shake my faith and cause me to sell. I'm only looking to add by buying the dips. However, some of you continue to trade so I try to offer honest conjecture about the short-term direction of prices.

To that end, I offer these two, competing views as to where prices may be headed in 2013. First, here's a piece from one of our bullion affiliations, Hard Assets Alliance. Not surprisingly, they fall in the "Turd Category", emphasizing patience and a buy-the-dip mentality. Lots of pretty charts, too.

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A Smart Resolution for 2013

J. Keith Johnson January 11, 2013

Preparing for a new year offers new opportunities in precious metals.

As 2012 slips into memory, many have now embraced the tradition of setting resolutions for the new year. Part of this practice often includes examining the past year or two in an effort to assess where we are today and how that fits in our overall goals.

There are many benefits to examining our past as part of setting goals for the future.

We learn from our mistakes.

Current goals can be adjusted according to milestones we've met, how well we've been able to meet deadlines, and the results of our efforts.

New goals can be established in our effort to grow, mature, and prosper.

But these exercises also help us gain a more precise perspective of the bigger picture. As our perception becomes more accurate, our larger goals can be seen more clearly through the haze of immediacy that sometimes obscures our vision.

For those of us invested in precious metals, such an exercise provides a constant reminder of the reasons we hold them. As an example, consider the past few months. At the close of the year, gold had dropped $127 since its September high of $1,784.50. Clearly, this could cause some distress for gold holders, leaving many to question their reasons for owning the yellow metal.

However, looking back only a couple more months reveals gold's year-end close to be more than $100 higher than July's low of $1,556.25. Furthermore, with total gains of 8.26%, 2012 is gold's third-worst year in the past decade.

"Worst" is obviously relative, though. Stepping back to look at the past ten years reveals that gold's "worst" years weren't actually bad at all.

The fact that 2008 was gold's worst year in the past decade should come as no surprise. The pain that most investors endured that year still remains fresh in our minds. With the DJIA having dropped 33.84% and the S&P 500 losing 38.49%, many saw their portfolios literally cut in half that year. Yet gold gained 4.32% in the face of the worst annual stock performance in decades, rising from $833.75 to $869.75.

We see this repeatedly during times when many other investment options failed to perform well. The second-worst year for gold in the past decade was 2004, when gold climbed from $416.25 to finish the year at $435.60: a 4.65% gain. The DJIA gained 3.15% that year.

An overview of the past ten years certainly adds to perspective. It's also interesting to note that the worst years in the past decade have been election years.

In fact, gold hadn't lost value in any year since 2000, when it dropped from $290.25 to $274.45, a loss of 5.44%. Yet gold still represented a safer position than either the DJIA or S&P 500, which lost 6.18% and 10.14% respectively. In case you missed it, as of the close of 2012, gold has gained value every year for 12 years in a row.

After the last three presidential elections, gold has increased in price admirably. Furthermore, it appears that the middle year between presidential elections tends to be the best for gold owners, with gains of 25% in 2002, 23% in 2006, and 29% in 2010. The exception was 2007, when gold outdistanced 2006 with gains of almost 32% in value.

Looking at the past decade as a whole, consider if you had bought the DJIA or S&P 500 stocks at the beginning of 2003. Each offered some admirable profits of over 50%. However, investors who put the same amount in gold would have realized gains of over 375% during the same time frame.

There's no doubt that the last decade has provided gold with its best streak since its 1980 high. With this in mind, perhaps it's a bit lopsided to limit our analysis to ten years. After all, our exercise is an effort to understand the bigger picture in order to prepare for the future. What if we drop back another ten years?

If one had invested $1,000 in the DJIA at the beginning of 1993, today they would be sitting on about $3,970. If they'd invested $1,000 in the S&P 500, today they'd have enjoyed a 227% gain, turning into $3,270 in their account. But if they'd invested $1,000 in gold, today they'd be sitting on about $5,050 worth.

And this, ultimately, is the big picture. Unless someone is a fantastic trader, nobody's going to get rich quickly with precious metals. However, metals appear likely to keep on keeping on for the foreseeable future.

Does that mean they won't pull back more? Absolutely not. They could see a serious pullback before resuming their upward movement. But the multiyear trend continues to be upward.

This is because, overall, the pressures that have moved precious metals over the past ten years are just as present and just as concerning – if not more so – than they've been during modern history. Very little, from a macroeconomic perspective, has improved.

- The dollar continues to shed almost 2% of its value per year, if we accept the Federal Reserve's figures. But if we use the 1990 formula for inflation, it's slightly above 5%.

- Our legislators have found it utterly impossible to balance the country's budget. While there was much media hype over the fiscal cliff, the reality is that nothing really changed. The can continues to get kicked down the road for us to deal with another day.

- Unemployment, at about 8% officially, also continues to rise according to the older formula. According to John Williams of Shadowstats, with all "discouraged workers" included (the unemployed who have given up looking for work), the rate is near 23%.

These are big-picture observations. They are what we need to keep in mind as we consider 2013. And it's these observations that strengthen our resolve to buy and hold physical precious metals for the long haul. With gold's excellent track record and decade-long upward trend, it's proven to be an incredibly enduring means to preserve, and even enhance, personal wealth. Furthermore, the current pullback may offer the best opportunity to initiate or add to your current precious-metals position.

When considering gold as one of your 2013 resolutions, we invite you to look at the Hard Assets Alliance and its SmartMetals account. SmartMetals is an innovative way to buy, sell, and store precious metals – without the hassle, risk, and uncertainty of buying or selling metals through most precious-metals dealers. Check out the free SmartMetals Action Kit for answers to all of your questions.

As you prepare for 2013, be sure you've considered all available options, along with their potential for loss or gain, progress or regress, blessing or adversity. Regardless of your current situation, establishing and building a core position in precious metals is a smart resolution for 2013.

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OK, then. On the flip side, a few weeks ago I received this post from a place called https://www.primevalues.org. They are a "Hard Asset Investment Advisor" and they describe gold as a "sound asset". However, you can tell by reading the piece below that they're not too excited about what lies ahead for 2013 and beyond.

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Gold Crash in 2013 or 2014?

Gold has been in a bull market for over a decade, but now we’re seeing more sideways trading than before and corrections in 2011 and 2012 were much sharper than any other correction during the 2001-2010 period.

Could this be a sign of weakness? A silence before the storm?

Can gold crash?

https://www.primevalues.org/ enumerates several factors that can pull gold’s price down… Here are some of them:

1. The weakening euro, potential euro crash: If this happens, the dollar will gain from it (as he biggest rival of the euro), thus pushing gold down.

2. Gold has failed to reach predicted levels: Prestigious financial institutions have been predicting gold prices of 2,000 $ and even 2,500 $ an ounce for 2012, but gold could barely hold the 1,700 $ level – another sign of weakening.

3. Renowned experts are predicting cheaper gold for 2013: Marc Faber and Jim Rogers are just two of those expecting gold to correct strongly; Faber even talked about sub 1,500 $ gold prices in 2013.

4. In a deflationary scenario gold could become cheaper: Deflation is characterized by lower prices, diminished consumption, as people “sit on their money”, spending less – gold prices could dive, if such a thing happens (and many economists are predicting a “deflationary spiral” for the United States).

5. Weakened investor sentiment: Undoubtedly the investor sentiment has weakened during 2011, 2012 and in early 2013, but not enough to drag gold prices down significantly – if any factor drags gold down lower, investors might lose confidence and this will again undermine short-term and medium-term price increase.

6. Automatic stop-losses ending positions on bearish trends: If gold goes too low, stop-losses will “detonate”, causing a domino-effect – which in turn might cause panic and could bring gold’s prices down (the frequent horizontal oscillations and sharp corrections have recently pushed gold closer to such a scenario happening).

7. Gold price manipulation: Major financial speculators are often manipulating gold’s price downwards (by short-selling a large amount of gold, creating panic among investors, who will then in turn sell their own gold, this way bringing prices even lower) – according to Jim Sinclair, Goldman Sachs is manipulating the prices downwards only to be able to buy up more gold for much cheaper.

And these are only several issues that we have to keep in front of our eyes before investing in gold.

Why 2013-2014 is the most likely period for a gold price crash? First of all: Watch the charts and see the “humps” with sharp corrections and uncertainty reflected in sideways trading. In addition: The euro crisis is deepening and the worse the euro’s situation gets, the stronger the dollar will get (another fiat currency that will have a short-lived period of strength). The dollar will get stronger (and gold cheaper), as forex speculators and investors will rush to the dollar from the euro.

Nevertheless, gold is a sound asset with intrinsic value. But it’s only good until people believe in it.

There are forces pushing it up and there are forces dragging gold down. When the latter will prevail, gold will crash.

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So there you have it. What do you think? Who's right? Could they both be right? I look forward to reading your comments on the matter.

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  311 Comments

ag1969 · Feb 3, 2013 - 9:05pm

I have not had a drop of alcohol in 17 years... and I am Irish! No drugs, no meetings, just a new way of thinking. It works for me. 

So an Irish drunk has been unemployed for several years, and finally one day his wife says, "Paddy, you have to get a job or I am leaving!"

So he goes through all the help wanted ads for several days and finally lands a job interview. He gets stewed the night before the interview, wakes up late and jumps in his car and speeds to the interview. He gets into the parking lot, he is already a minute late, and he can't find a parking spot. 

After several trips around the parking lot, Paddy stops, closes his eyes, and prays to God, "God, please, please let me find a parking spot. If I don't find one, I will lose my wife, my kids... Please God? I will quit drinking, I will go to church every Sunday, just please let me find a spot!?

Lo and behold, when Paddy opens his eyes there is a parking spot wide open directly in front of him.

He looks up and says, "Never mind God, I found one!"

lickspitler · Feb 3, 2013 - 9:08pm

i hear you..... JPM lighting manipulation.

stacking in the dark dude

Sad-descent · Feb 3, 2013 - 9:11pm

So can we blame the power outage at the SB on Blythe and how many monkeys got fried in the process?

Kcap · Feb 3, 2013 - 9:15pm

Sure...sure....

Kcap

philipat · Feb 3, 2013 - 9:25pm

I applaud your honesty, which cannot have been easy.

Big Pharma certainly likes treatments for Mental Illness in the "Developed"world because the market is "Unsatisfied" so they can get good prices and the conditions tend to be viewed as "Chronic" so long-term medication will be prescribed, encouraged by free trips to Medical Congresses in Rio etc. Good for business. Antibiotics, for instance, only get prescribed for a single one-week course. This explains why there are no new antibiotics in the face of a growing problem with resistance to almost all existing classes of antibiotics. And why there are so many new drugs targeted at mental illnesses.

Dyna mo hum · Feb 3, 2013 - 9:34pm

San Francisco's lights have come back on.

El Gordo · Feb 3, 2013 - 9:38pm
Mr. Fix · Feb 3, 2013 - 9:39pm

Since I have been researching, and brewing my own colloidal silver, (much thanks to what I've learned here),

 I am reasonably confident that I have found an extraordinarily viable alternative to pharmaceutical antibiotics.

 And, I can make as much as I want, anytime I want, and it seems to work as a preventative as well.

 A well-educated consumer a can easily find a better way than dealing with "big pharmaceuticals".

SteveW Puck Smith · Feb 3, 2013 - 9:53pm

"If a mental illness has a physical locus, like brain lesions, defective neurons or damaged receptors, it is not a mental illness, it is a physical condition cased by trauma or disease."

So my assertion that mental illness reflects the range of human biological variability (in terms of the affinity of receptors for their ligands or of the pathways that control the molar quantities of these ligands and/or their agonists) has a physical basis and so according to your definition would not constitute a mental illness?

Kcap · Feb 3, 2013 - 9:55pm

Just some friendly words of support and advice...

Keep a bottle of 5000 p.p.m. on hand from https://silverproteinmild.com

This is the purest I have found and it will defeat almost ANY pathogen...including cancer cells in vitro.

In a dire situation, this could save your life if needed.

Kcap

UraniumSprings · Feb 3, 2013 - 10:06pm

For those who stack Mountain House freeze dried food in #10 cans, the biggest sale of the year is about to start:

https://www.readymaderesources.com/cart/storable-food-units/mountain-house-free-shipping-25-35-off-until-february-18th/cat_201.html

These guys are not the only ones selling Mountain House at a discount, but I like them because they offer free shipping for cases, and the ability to mix-and-match any 6 cans to make a case.

philipat · Feb 3, 2013 - 10:11pm

Many "Mental Illnesses" are associated with imbalances of trans-synaptic neurotransmitters. To the extent that this involves real "Physical" chemical imbalance, then yes, the condition COULD be described as a "Physical"condition. The fact is, they are not so described and tend to be named in association with symptoms or behavioural traits.

To the extent that drugs CAN help to restore a normal balance of such chemicals in the brain, they can be effective in some cases and MAY be of benefit for long-term use. That is NOT to say they should be used indiscriminately because many of these drugs have extremely unpleasant side-effects and need very careful monitoring especially when used long-term. There have been many scientific reports of violent and/or suicidal behaviour associated with some classes of these drugs, especially the "SSRI" class.

AgAuthaChristie Kcap · Feb 3, 2013 - 10:12pm

Why are you recommending guzzling silver solution? Aren't you the guy who thinks illness is something you can overcome with thoughts?

Gold Buffalo · Feb 3, 2013 - 10:21pm
Kcap · Feb 3, 2013 - 10:24pm

Of course. 

But no one is perfect as executing everything all the time. There are so many factors involved and just because its possible doesn't make is probable for most. C'mon, you can do better than that.

Sometimes people can't find their way out of a mental rut, therefore they won't find their way out of a physical rut. The type of thing I talk about takes years of practice, focus and determination to hone the ability to "get there" in todays world. I struggle with it myself. I am no expert, who is, we're human, however I know it to be true first hand and I know second-hand from a few others as well.

I just can't stand it when Jedi's come in here and profess like they know what they are talking about. ANYONE protecting pharma drugs and vaccines is part of the problem.

Kcap

SteveW · Feb 3, 2013 - 10:30pm

Had an epidemic of whooping cough last year. Guess the herd isn't as immunized as it used to be.

Kcap · Feb 3, 2013 - 10:39pm

Just showing your ignorance.

We didn't have toxic chemtrail stew decades ago.

Kcap

Mr. Fix · Feb 3, 2013 - 10:44pm

Thank you for that link, I was unaware that a solution could be made that strong.

 I am still refining my techniques, and will need to purchase a meter that can determine how many parts per million by concoctions actually have, but I can tell you that I can make something considerably stronger than can be purchased at Mrs. Greens for $25 for a 4 ounce bottle.

 Despite what seems to be a virtual plague of both respiratory illnesses, such as pneumonia, and flu symptoms

 that seem to be reaching epidemic stage at my daughter's high school,

 my daughter, wife, and myself are all still perfectly healthy,

 and we have been using my “concoction” since a couple days after Christmas.

Since then, it would appear that the colloidal silver is responsible for curing one case of pneumonia, one case of the flu, urinary tract infection, acne, and at least a couple of cysts.

 So far, we have found no adverse side effects.

 I will probably not be purchasing any store-bought colloidal silver in the future,

 as my “home brew” seems to be doing the job quite well.

 I think being able to create your own colloidal silver is vitally important for any survivalist plan. 

 Several times, I have found myself using additional distilled water to dilute my mix, so that it is more palatable to the taste buds, and after reading your link, I have now become curious as to how many parts per million I was actually making.

 I have since shortened my brew time, so that I do not have to dilute it, but at least in theory, I should be able to re-create the products at your link.

· Feb 3, 2013 - 10:53pm

Seems like Blythe & the Monkeys are even holding the 49ers down--Can't let a miner win at any cost!

AgAuthaChristie Kcap · Feb 3, 2013 - 11:11pm

"There are so many factors involved and just because its possible doesn't make is probable for most. C'mon, you can do better than that."

If what you are saying is that using the powers of your mind to successfully ward of illness is not probable for most then why begrudge all these people mainstream medicine? 

Antibiotics work better than silver solution. This is why when they were discovered they immediately dumped less effective means of fighting off infection like silver compresses and began to use antibiotics almost exclusively. In fact the improvement was so dramatic they called the first antibiotics "miracle drugs". Survival rates for post op infections and things like pneumonia went through the roof. Gone were the days when you could die from an infection you got cutting yourself shaving. These drugs changed the world wherever they were available.

Recognizing the mundane fact that Big Pharma has a financial interest in peddling drugs is one thing. It does cause some problems but it shouldnt make you turn your back on a century of human progress. People live longer now than they ever have. Part of this is improved nutrition and a large part of it is pharmaceutical. 

Polio used to be an absolutely terrifying disease destroying and ending millions of lives worldwide. Now it is virtually nonexistant in advanced countries because they carried out aggressive vaccination programs.

Dont throw the baby out with the bathwater.

· Feb 4, 2013 - 12:11am

Can't believe no one has mentioned this yet. A breakthrough on attempt #8

Mr. Fix · Feb 4, 2013 - 12:15am

Too bad about your 49ers.wink

Strongsidejedi · Feb 4, 2013 - 12:28am

@ Turd,

As usual, those California 49'ers came close but couldn't get ahead. :)

Reminds me of my forays into various mining stocks.... came close but couldn't get ahead.

For any who are interested in the Yukon and Alaska Gold Rush of the 1890's, we found a really great version of California's Gold with Huell Howser this afternoon. Huell went on a visit to Skagway, Alaska and he walks through town talking with rangers, locals, and visitors. It's great fun and very educational too. Those Alaskan miners went through hell to get a few ounces of gold.

https://blogs.chapman.edu/huell-howser-archives/2003/09/07/skagway-101-a...

Urban Roman · Feb 4, 2013 - 12:45am

Bitcoin looks like it has support at the former resistance level of 20. I wonder when it will pass Silver?

ClinkinKY ag1969 · Feb 4, 2013 - 12:47am

...want to hear my prediction for PMs. Nah, me neitherwink

--------------------------------------

Turd must be pissed....

Submitted by ag1969 on February 3, 2013 - 8:51pm.

Didn't he say he was taking the niners?

---------------------------------------------------------

Dear Mrs. Ferguson...

Submitted by ClinkinKY on February 1, 2013 - 10:37am. Hat Tip! 5

...while you're here...can I get any free samples, or at least coupons, for some frozen yogurt?wink

ps-Please try to reach TF and tell him to "take the points".

SIlverbee · Feb 4, 2013 - 3:02am

I assume this is because all those that genuinely what to hedge using forward contracts their PM production or sell PHYS have moved on to HK or Shanghai from COMEX. Does anyone know if the activity there is more lively and reflects the missing action on the COMEX?

PS How do we know which is the main active thread? 

SIlverbee · Feb 4, 2013 - 4:33am

Firstly you will hear what I am about to write in the future and it will seem new but I am for the record putting it in words here.

The original US downgrade was a cock up IMO. Think about it, why not earlier or why not more downgrades since, the grounds for downgrading are not distinctly different. I think the initial warning or whatever you want to call it got out of hand and the PTB were too slow to get to the ratings agencies. There has been a larger than normal gap between the last DG and now.

In Europe they have effectively said they are going to ignore the ratings agencies. The ESM specifically states this.

If all the countries are downgraded where do the institutions that invest in bonds go? They are banned from non AAA rated bonds. But if all are not AAA rated, then the money needs to go somewhere and since the governments need these investors I am sure a deal will be done somewhere to agree on a lower rating as acceptable.

A movement has taken place amongst sovereigns to reign in the agencies. Egan Jones the only big, independent agency has been muzzled by trumpted up charges. Also the US agencies seem keener to DG non US countrie/banks and the Europe agencies keener to DG non Europe ones.

Also the Ratings Agency market needs to be considered an oligopoly. This is evident in the few large agencies and the interdependencies of their calls. For example if one downgrades a country the others are called into question. So either they all do or they all don’t. Game theory is inherently part of this behaviour. Whilst it is harder to maintain tacit collusion with larger numbers of agencies it is still possible and if they were `managed’ as US and non US it would make the behaviour easier to manage.

So here it is. If the PTB don’t want a DG of the US they won’t get one as a US agency will not go it alone as the fear of reprisals and loss of collisional benefits would result. Therefore it will either be all agencies at once or not at all.

Remember the agencies have stated what would constitute grounds for a DG but with wiggle room. As long as the US circumvents or used the wiggle room or down right kicks the can the ratings agencies can/will never DG.

philipat · Feb 4, 2013 - 4:45am

Sadly, I have to agree. What a FUBAR system we have. Nothing makes sense or is what it seems any longer.

lickspitler · Feb 4, 2013 - 6:06am

yep that's rite just keep stackin bitches 

s1lverbullet · Feb 4, 2013 - 7:24am

What he said ^^^

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