My Dear Extended Family:
It was Friday evening in London when I wrote this piece after excusing myself from the GATA conference festivities to report back to you.
I will be back at my post in the AM on Saturday ready for the battle ahead, assuring you in the process that victory is ours.
Allow me simply to summarize what exists in the gold market at the present time.
1. There are no signs whatsoever of a top in the gold price.
2. When $1,650 was selected mathematically based on probabilities it was simply the first level off the bottom that might have offered a top. It has not.
3. The key number in the gold market is $1,764.
4. As gold approaches that number you can anticipate furious but very short price reactions.
5. Thursday and early today you may have witnessed the last great attempt of the Short Cabal to discredit gold shares.
6. Various member of the voluntary Short of Gold Shares Cabal are quietly looking towards the exit.
7. There are quite a few hedge funds now seeking quality gold share positions where the leverage might exceed the percentage leverage left in gold itself.
8. Dean Harry Schultz said that I should call him when gold trades at $2,400.
9. Stay near your phone my dear friend of more than 45 years, Dean Harry.
10. Alf Fields, a man a great integrity, went silent two years ago because he did not want to publish short term interim highs that might have lost gold positions for the less than fleet of foot. Before Alf went quiet he spoke of $3,000 plus. I believe Alf to be the man to watch, if he will speak.
11. The compromise crafted by the US Senate and House by which the debt ceiling was raised is the event that has broken confidence in US financial management internationally. History books will point that out as the low point of judgment in this entire drama.
12. As long as the good Lord permits me, I will be by your side. My job is not to pontificate but to identify resources for you. Every trade has two events. One is in and the other may be diversification. I dedicate myself to seeing that clearly for you. A virtual reserve currency is coming. You will not be able to own or trade that virtual reserve currency as you have been able with the dollar. Gold will be attached to that virtual reserve currency via a broad measure of world liquidity. It will be something akin to a planetary measure of liquidity as M3 was in the past for the dollar. That linkage, which is not convertibility, will translate into price, but no central bank of any nation will need to add to or delete from their then reserves.
The Goldmans of the world will invent OTC derivatives and maybe even a listed second derivative to speculate on word liquidity via the gold price. There will be no 1980 type collapse in the gold price. Over valuation which occurs in all bull markets might be by 20%. This will result in producing gold mining shares becoming the utilities of 2016 onward.