Don’t Bet Against Gold or Silver

By Greg Hunter’s USAWatchdog.com 

You have to respect the power of the Federal Reserve when just a statement can turn the entire stock market around in a day.  Yesterday, the Fed admitted the economy was not good and in a statement said, “. . .downside risks to the economic outlook have increased.”  Because the economy is tanking, the Fed promised to keep a key interest rate at near 0% for “. . . at least through mid-2013.”  The Fed is essentially handing out free money at negative interest rates for 2 years.  The Fed also seemed to signal that a third round of quantitative easing (QE3 or money printing) was being considered.  The Fed statement went on to say, “The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability.  It will continue to assess the economic outlook in light of incoming information and is prepared to employ these tools as appropriate.”  (Click here to read the complete Fed statement, released 8/9/11.)   With interest rates near 0%, the only “tool” left with any torquing power for the economy is money printing.  The buck will be burned.

The stock market loved the announcement, but anyone holding dollars was left with a sinking feeling.  Bloomberg reported yesterday, “The dollar tumbled the most in at least 40 years against the Swiss franc after the Federal Reserve pledged to keep its key interest rate at a record low . . . The greenback declined versus the majority of its most- traded peers as the Fed said growth was “considerably slower” than it expected and it’s prepared to use a range of policy tools to boost the economy.”  (Click here for the complete Bloomberg story.)   

The gold market has been hitting one new all-time high after another because of past, present and future money printing.  I think big money is panicking into the gold market for safety.  Sure, the Treasury market is the biggest and most liquid on earth, but how safe is it when the U.S can print trillions of dollars at will to pay its bills?

It is not the small investor that’s causing $50 a day spikes in the gold price.  Hedge funds, sovereign wealth funds and central banks are the ones doing the buying and shooting the gold market higher.  Recently, South Korea bought 35 tons of gold, and Mexico bought 93 tons of the yellow metal.  Why don’t these countries just hold Treasuries in reserve?  In the past few years, India, China and Russia have all been adding to their gold reserves.   EU nations have stopped selling their gold, and with the sovereign debt crisis in Euroland, who could blame them.  Italy and Spain are teetering on collapse.  Don’t be surprised if the European Central Bank prints money and bails them out too.

On this side of the pond, America just got hit with its first downgrade in history because of record debt and zero political will to solve the problem.  It is really a downgrade of the dollar.  The mountain of debt and insolvency Europe and the U.S. face is monumental and historic.  Is there any wonder why gold is rising in all fiat currencies?  It is hard to imagine how anyone could think gold (and silver for that matter) is in a bubble.  Yet, I received this comment on the USAWatchdog.com site yesterday from a reader named Morris who told me, “You have normalcy bias towards the PM markets. You weirdly believe what others are preaching just because they say so??? That is hogwash. As you have said, we are in unprecedented times and previous correct predictions by all of your so-called experts -  – including past history of PM’s performance is 100% meaningless…do you not get this Mr. Hunter????? Do you not understand that all history to date is BS as what is happening now will re-write all of history!! What do I mean? Gold/Silver will be controlled and manipulated to no end and your sources have no clue on what/where they will go. THEY WILL NOT go to the numbers you or your experts predict. . .”  Sure the gold and silver markets are manipulated, and so is the stock market.  It has been propped up by the Fed with QE2 and, soon, QE3.

I answered Morris by saying, “You say I have flawed analysis but offer no real analysis of your own. I quote the people who put their capital at risk and have a track record of being correct.”  (Click here and scroll to the bottom of “Brace for Impact” for the complete comment and answer.)  

One of the people I have quoted is Jim Sinclair (JSMineset.com).  He is one of the world’s very best experts in all things gold.  He has a track record of correct calls going back to the 1970’s.  (I noted his monster calls in a post titled “Print More Money.” Scroll to the end of the post.)  Sinclair has been bullish on gold since the current bull market started in 2001.  He says, “The ultimate protection for yourself is to own gold and be your own central bank.”   I find that logic hard to dismiss with a systemic solvency crisis facing the world today.  (Click here for more from Sinclair.)

Another trusted expert is fund manager Eric Sprott of Sprott Asset Management.  Sprott has one of the top performing funds during the last 10 years.  He, too, has been riding the current gold and silver bull market since the beginning.  He says both metals will go way up in price in the future.  Sprott says, “Gold was the investment of the last decade and silver is going to be the investment of this decade.”  Sprott has invested hundreds of millions of dollars into physical silver.  He contends supply demand fundamentals are very favorable, and silver is still relatively cheap.  Sprott isn’t worried about silver lagging the soaring gold price. In a recent interview with GoldMoney.com, Sprott said, “You just see things developing in the market that could make it (silver) explode at any time.”  Sprott does not give an exact time frame but says, “All I know is you can safely own it.  Go to sleep at night . . . and you’ll be a big winner. . .”  Sprott interview on GoldMoney.com is below:

I wouldn’t bet against Sinclair and Sprott, or gold and silver in 2011 and beyond!

Comments
  1. Roderick Pagnossin

    Gold represents freedom.

    This is why people get upset when gold is talked about. These people are fearful of self reliance and feel they would not be able to survive if government lost its power.

    That is what this is about. Governmnet has provided a blueprint for them with a paper money system. These people get panic stricken at the thought of government failure. Even though that failure is in front of them daily they want to cling to hope. That’s all there is to paper money now.. hope that it does not vanish in the night.

    All magic tricks rely on illusion.

    The strength of the paper dollar has been lost but thru smoke and mirrors an illusion of stabiltiy has been created.

    Those who have done what Alan Greenspan testified is happening around the world are one step ahead of the fearful dollar holder. Alan Greenspan before Congress was asked why gold was going up. He said paper dollars are going to gold now and there is nothing that can be done to stop it.

    • joe

      The “dollar” is iconic around the world. When people think of financial might and military might, they think of the USA. The dollar bill with George’s face on it is (in a sense) a symbol of all that we are and stand for as a nation. That’s why the islamic terrorists hit the WTC in 2001…it was a symbol of the greatness of our nation.

      People now see the dollar and are fearful of its decline because it symbolically represents what we were. Most still have their heads in the sand and naively believe it will never fall. All the while, the Fed is printing money and dropping it from helicopters and the dems and repubs are spending it like there is no tomorrow. Even those that feel prepared are scared for the sake of their children and their future.

      Our founding fathers rightly understood that our form of government could not stand if its leaders were unethical, and that is where we are today. Does anyone really believe the world would be experiencing the level of chaos it is today if we had ethical leaders with sound minds? Back in WWII, the world looked to the USA for leadership; today there is no country to look to. And unfortunately, it will not end well…

      • Greg

        Joe,
        Good analysis. Thank you for giving it here!!
        Greg

  2. Sam

    Dear Greg,

    And not a word on the recent Al Gore meltdown… ;-D

    Seriously, when I was watching Fox Business yesterday when they read the Fed announcement, I started laughing when the rally fell, and gold rose, appreciatively (although I was shocked at the market’s rapid turnaround!).

    However, what is so weird is what was going on locally. In the Puget Sound area of Washington state, there is a heavy government presence, especially the military. Yesterday and today there are usually at lot of people at the Costco, big box, and grocery stores (mostly government hausfrauen), but what was so strange was that there was HARDLY ANYONE OUT (I haven’t seen anything like that since I lived in California during the riots of 1992). My guess is that some of these government “workers” took a part of that fat raise BHO gave them in 2010 and invested into the market, when it was around 11,000. No doubt many of these novices were also burning up the phone lines in the past few days, screeching for their money to be taken out forthwith. And I’m going to bust a gut laughing when I see these “money mavens” hitting the coin dealers buying gold (that’s right losers, buy high sell low). I pretty much know that they’ll skip silver, because “the real money’s in gold.” To some extant. Anyone who’s read the Bible knows that gold is WEALTH STORAGE, silver is for TRADE. When the ball’s over, I’d love to see these people try to buy a loaf of bread with a Krugerrand.

    That’s when bears like me make money. Yum, fresh kill!

    • Greg

      Sam,
      I don’t care about Gore because what he says and does is unimportant at this juncture. I think you will have plenty of fresh meat to eat for awhile. I do agree with your views on gold and silver. Spot on my friend!! Thank you for the reporting from the Pacific Northwest!!
      Greg

      • Sam

        Just kidding about Algore, Greg. Your peers seem to be more focused on him than the issue at hand.

  3. Dev

    Hi Greg, we must ignore the Moriss’ of the world. They don’t have a clue; they never have and never will. They will be financially destroyed because they don’t seek the truth which is what you, Jim, Eric, etc. try to do. God Bless and keep up the great work.

  4. brian

    I think the gravity of what is coming is beginning to seep into the minds of many.

    The dollar value of gold is completely irrelevant, and thats why gold soars, because it is for the day when there is no dollar to compare it to.

    When economic chaos comes and prices for exchange are thrown into flux, most valuable of all will be your ability to get along with other people and contribute to a real community, for just as it is historical fact that gold has always held value so to is it historical fact that everyone relies on someone else for support and sustenance in this world–that reality forms the foundation of any economy.

  5. Art Barnes

    Greg, I wouldn’t bet against PM’s going long either, just as I wouldn’t bet against the Government, the politicians, the elite, and the Fed will continue the same O’ same O’ and crash the dollar. Where is our Speaker of the House yelling about the Fed’s QE3 trial balloon statment yesterday, what about the others, only Ron Paul saw the sedition of the Fed or at least the only one who acknowledged it. Bet the bank on gold and bet the farm on the sedition of our politicians to sell us out.

  6. Hoppe

    The technicians I follow ( not gold bugs) expect physical gold to be at 3500 to 3700 per ounce as measured in US dollars, within two years.

    Here is the problem for many. There is a huge amount of investors holding gold ETF’s. Some of these such as GLD have been accused of accounting irregularities and have admitted using their physical bullion holdings to back a derivative type transaction in ways the average investor would never dream of. Sound familiar? It sounds to me much like what was happening in the mortgage market 5 years ago.

    Holding physical bullion is definitely the way to go, but most working people with retirement accounts will not, cannot, give up their jobs to cash out and buy bullion. They are in a tough spot.

    My simple research has led me to believe there are some slightly better alternatives to GLD, such as SGOL and the Central fund of Canada, but this type of research is above my reach.

    Perhaps you or someone in the investment community, with a good rep, like Peter Schiff would write something definitive on this for your column.

    • Greg

      Hoppe,
      I’ll put this out here for the group but the best way to invest in PM’s is to hold a core position in physical metal. If you have to cash out and pay tax and penalty then so be it. I hope you get the answer you need. Thank you for supporting this site.
      Greg

      • Hoppe

        Unfortunately for most, cashing out and paying a penalty requires quitting your job and joining the ranks of unemployed.

        • Greg

          Hoppe,
          You are right but you total savings should never be in just one place (401-K) I never saved all my money in one place. The sad fact is some people are just going to get killed financially speaking.

        • bwmck

          Hoppe,
          I commiserate with you, but it can be done-I did it. I just couldn’t bear watching my hard-earned savings lose value. I quit my job in order to roll over the 401k into a PM IRA, then I found a new job-that was 3 years ago. The rise in dollar value of the rollover is admirable. This is not without problems as now I have a PM IRA-it’s still an IRA and as such is still at risk-at some point I will need to withdraw and pay the taxes..
          We relocated since for other reasons (another job quit). It’s been 1 year and I’m still searching. The rise in PMs has helped with expenses during this time. It’s about being one’s own central bank, to quote Jim Sinclair. Good luck.
          Bwmck

  7. nm

    Greg:

    Can you explain what’s going on with Bank of America “selling” $73 billion worth of toxic assets to fannie Mae?

    • Greg

      NM,
      It is another in a long line of government back door bailouts to try to keep the B of A from declaring bankruptcy. That is the short answer.
      Greg

  8. BrianH

    Greg, Another great article – well done. Don’t listen to idiot armchair critics like “Morris”. Don’t let the turkeys get you down. I look forward to your inspired commentary every day. Please stick with it. We need a voice such as yours. Cheers, Brian from Australia.

    • Greg

      Thank you BrianH for your comment and support!!!
      Greg

  9. Davis

    Ugly Reality Sets Back In … And It didn’t Take Very Long.

    Simplistic analogies absent causative details are not an answer to anything, just as endless partisan finger pointing are part of the problem not a solution.

    The fact remains when the Dems took over Congress in 2006 and the White House in 2008 they thought they had carte blanch to undertake and endless stream of spending in pursuit of their utopian socialist dependency dreams. With their secure super majorities in both houses, they added nearly $5,000,000,000,000 to an already insurmountable debt, made an already dismal unemployment number worse and in essence kicked the crutches out from under an already hobbling economy with a new and endless sea of stealth taxes on business via the cancerous growth of regulations. Many of which exist for no other purposes than to exercise government control and justify the existence of a new raft of Federal bureaucrats.

    With all these facts laid squarely at their feet, both the public and the markets reacted. Firstly global markets contracted under a tide of inflation and uncertainty. Secondly the voters (the very same ones who were praised as paragons of wisdom and virtue for putting the Dems in power) resoundingly threw them out of the House and greatly diminished their numbers in the Senate. Now these same voters are subject ridicule and derision as ignorant and partisan because they got slapped in the face by the consequence of their folly of electing these arrogant fools and elected a different bunch of arrogant fools.

    The Dems have seen what they thought was going to be decades of dominance (can you hear me Mr. Carville?) snatched away in but an instant, and they are desperately thrashing about to find a scape goat to blame, anyone to blame but themselves for their own folly.

    Now the new bunch of arrogant fools have co-operated with the old bunch of arrogant fools and added another $2,400,000,000 to the aforementioned insurmountable debt and again the markets react with further contraction and flight to hard assets and we get the same game played again. Both bunches seek to blame anyone but themselves for the consequences of their folly.

    After the schizophrenic reaction on the DJIA to the FEDs announcement that zero interest rates will continue, money moved out of bonds, where low interest plus inflation means a net loss, and into dividend paying stocks. But then it only took until this morning for the ugly reality to set back in and the markets are again sinking like a stone. Gold is again reaching new highs and has even surpassed platinum in price. The Italian stock market has been shut down in a vain attempt to stem the exit of cash. The Dow again invokes rule 48, for the second day in a row. The Swiss Franc continues to soar against both the Dollar and the Euro.

    But fret not the arrogant fools of both parties will continue to delude themselves (and try to convince the voters of their delusions) that there is a “political solution” to a systemic problem of economic and monetary misalignment. Sadly the partisan hacks on both sides of the aisle will buy into it and make of themselves just as big a bunch of fools as those in Washington.

    • Greg

      Thank you Davis for adding content to this post. Yes it is ugly and this is only the beginning.
      Greg

  10. james

    i would like to share my controled crash.
    i feel the need to give my plan to fix the nation,and in doing so reinstall the constitutional republic we have lost to the oliegarchy.

    first ron paul is scoffed at by all the members of the house execpt the tea party.

    he didnt vote for most of the programs in place.

    i suppose this will be scoffed at also.

    controled crash . is what we need now. the fed has run out of options. the gov has ran out of ideas.

    1= end the fed=saveing well over 1.5 trillon in interest. this will put the control of whats left of our money in the hands of congress.

    restructure the jobs by deregulating small bissness/ self employed.this is and always has been the back bone of the nation.

    self empolyed pays no taxes…neither any other people . the tax rev comes from comerical bissness only.

    flat rate tax the comerical tax. closeing the loop holes.

    reminder-this is a controled crash.

    2=free the hands of the general population. grow what you want where you want.have cows,chickens,. this is your right tolife liberty and happiness. this would also reinvigerate the free interprise system and istablish better free , and FAIR trade.

    i truely believe americans can compete with any country in the world if freed to do so.

    3= close down tsa= saving trillions over the next ten yrs. close the F D A. there useless,our food in no safer under there money blinded eyes.

    bring all troops home around the world. we have a military for defence, and not to control the world. the milatery industrial complex is what started our crash and should be dismanteled TODAY. our soilders should be gaurding our borders..with orders to shoot to kill invaders. no mater who they be. we have a leagal system if they want to enter this country. thats another artical in itself. we have nuclear wepons(keep in mind)

    4= last but not least place the responsibilty wher it should be. pay the parents to teach kids! if you cannot teach your kids,send them to others that can. do your own research. homeschool works best. we spend too much paying for the upkeep of schools. pay home schools 1/2 the price. do away with bussing.gass hog polueters. no federal prisons, and allow states to run the prison system however they chiose.

    if you disagree with any of my ideas…remember this is a controled crash designed to minimize the damage.

    feel free to corect my spelling.but not my constitution.

    jay

    • Greg

      Jay,
      I am sure plenty of people would agree with your plan. Thank you.
      Greg

  11. John

    Your response to Morris’s comment is appropriate. We hear the same style of rebuttal from our politicians nowadays, long on criticism and excuses, short on facts and substance, like spoiled children. I was listening to a rebuttal this morning from someone defending Obama’s policies, and since they could not defend them, they said the person being critical of the policies is racist. It’s amazing what people will say in their ignorance, but ignorance usually displays itself in the form of personal attack versus measured production of fact and knowledge that can be argued on a reasonable basis. Love your site, and if I disagree with you, I would rather argue the facts rather than call you names.

    • Greg

      Thank you John,
      Greg

  12. Steve

    When the margin rates for gold and silver are essentially 3.8% and 3.25% respectively (i.e. $6,500 for the retail investor on 100 oz and 5000 oz contracts respectively), how accurate do you really think these precious metal spot prices are? Since physical goods trade based upon this, it seems to me that pure speculators and very weak hands/swing traders are presently controling these prices.

    These margin requirements were essentially what the margin requirements were for stocks prior to the crash of ’29. So if $68 controls an ounce of gold and $1.30 controls an ounce of silver, it is difficult to believe we looking at valid prices but rather at prices based upon derivative gamblers playing against an ignorant public.

  13. Brad

    Greg:

    In regards to the gentleman’s email that you posted, I’m not sure he understands the definition of normalcy bias.  What is “normal” about $1700.00 gold?

    I feel the individuals with normalcy bias, by definition, are the ones that walk around speaking of how the U.S. and global markets have never failed and therefore, will never fail regardless of how poorly we treat them just because it has never happened before in their lifetime.  As it was so elegantly
    put to me, unfortunately nowhere is it written that the United States of
    America goes on forever.

    I have included the definition below. For a full explanation please refer to: http://dictionary.sensagent.com/normalcy+bias/en-en/

    Keep up the good work.

    Definition:

    The normalcy bias refers to an extreme mental state people enter when facing a disaster. It causes people to underestimate both the possibility of a disaster occurring and also its possible effects. This often results in situations where people fail to adequately prepare for a disaster, and on a larger scale, the failure of the government to include the populace in its disaster preparations. The assumption that is made in the case of the normalcy bias is that since a disaster never has occurred that it never will occur. It also results in the inability of people to cope with a disaster once it occurs. People with a normalcy bias have difficulties reacting to something they have not experienced before. People also tend to interpret warnings in the most optimistic way possible, seizing on any ambiguities to infer a less serious situation.

    • Greg

      Thank you Brad I am going to use your line and up the price to $1800.
      Greg

  14. Mitch Bupp

    it is easy to explain why to buy gold and silver …… hold a dollar bill … it will never be valued for more than a “dollar” and it can only loose buying power as inflation eats up the value

    Then hold a silver Eagle …… this monetary unit will increase as inflation eats away the “dollars” value the value of your gold and silver will increase with inflation and it is used as a hedge against inflation …..

    In my opinion, the FED doesn’t view inflation as a problem because they do not see the dollars value tied to commodities like gold for example. They see the dollar as a unit priced by the exchange value of the dollar against other currencies in world market. That is why they don’t think that inflation will be a major issue …… The world ponzi continues and it is propped up from inside with other “national ponzi currency”
    This a self-fulfilling ponzi funded by other ponzi to the infinity …..

    • Greg

      Thank you Mitch for the comments and the promotion!!!

  15. Mitch Bupp

    HI, everybody, tune into http://www.fmtalk1011.com tomorrow morning (8/11) at 7:30 AM to listen to Greg on the Brad and Britt Show. Hey Greg, How about a list of your scheduled appearances and or past interviews so we can listen in? nothing like a little vertical marketing ….

  16. ONTIME

    It’s impossible to deny gold is currency, countries like the russkies and the PRC are both stocking up on their gold supply and dumping their paper money. I am not one to want to hold gold but if you see the gold standard coming back into use then it’s best to put your portfolio in order and hedge your bets and doubts. Right now gold is climbing like crazy and there are few stocks that can come close to this performance, bunker up and make your stand, times are going to get rough.

  17. Bob

    Nothing wrong with a crash now an then. Like the old man said don’t quit a job in tell you line up a better one. A beaver don’t know which way a tree going to fall but he still can build a house. Being smart depends on the moment. peace lol

    • Greg

      BoB,
      You are correct.
      Greg

  18. Peter Brady

    Hello Greg,

    I just wanted to comment and thank you for your excellent analysis. I’ve been following the work of James Sinclair since 2003, and jsmineset is how I’ve recently become exposed to your work. I couldn’t agree more with your recent posts.

    It’s amazing to me how many of my family members and close friends have failed to see what is happening, and dip their toes into the PM market. And this is after me pleading with them back in ’03, ’04, ’05, etc. I’ve since given up hope, and focused on getting my immediate family into the lifeboats and hopefully safe from the impending upheaval in the US.

    I also wanted to applaud your courage for posting the WTC 7 link. What really happened on 9/11 is another topic that the masses have refused to fully understand and acknowledge. The system is broken in many serious ways, and I believe these problems won’t be resolved until the masses either wake up from their slumber, or the system completely collapses under the weight of the rampant greed, corruption, and fraud.

    Anyway, thank you for your efforts! Here’s my prediction… James Sinclair will become a “rock” star in 2012, if he’s not already. ;)

    Cheers!

    • Greg

      Peter,
      I think you are right on target and thank you for your kind words and support.
      Greg

  19. Morris

    Greg –

    I am happy that I stimulated you enough to add me into a post…or shall I say that I am happy that I made you think outside of your world and possibly into the real world. Ok – maybe a jab from my side, but all in good nature as I really like your style! And as you have said, people can disagree.

    I just don’t happen to subscribe to your PM ideas on where gold/silver will go or your school of thought that only the so-called experts know what is going on. I see that same line of thinking in the MSM and hate it. What I am trying to get through to you is the fact that we are in uncharted waters and every single “expert” cannot chart the future – as it is truly for the first time going into an abyss. And as far as quoting historical PM data, again meaningless for the same reason.

    With your logic, I have to backup every point I make by linking to a so-called expert or MSM article in order for my points to be valid. Are you serious? Come on Greg – get with the program man. Are you really that naive that you hide behind your statement that ‘I don’t source my statements’. Are you really serious? We are in this financial mess because people like you want everything sourced from so-called experts.

    And I say so-called experts for the following reason…What happens when a prediction doesn’t materialize? They move onto something else of have reasons why it didn’t, but that is my point…you have to rely on COMMON SENSE going forward and I am not sure where yours is. Is it tied to your inner circle that may/may not know what they are talking about or is it tied to the MSM or is it tied to your fear of hearing anything other than your own point of view. Will you even post this comment or out of fear…trash it?

    You said in one of your posts that before the year is out, something bad will happen…and if it doesn’t will you come up with a million reasons? Or will you attach yourself to an event – even if it wasn’t the event you had in mind and say ‘See I was right’??

    And BTW, I think it would be helpful if your readers saw my entire post and not just a snippet:

    Greg…

    You appear to be such a smart guy, but I have come to the conclusion that you are seriously flawed in your analysis on just about everything precious metals related (not news wise though) and here is why…

    I also hope you take my following points as constructive criticism as that is what it is intended to be. I am a straight shooter and don’t ever BS anyone – as that is how I want to be treated too!!

    Here goes:
    1-) You have normalcy bias towards the PM markets. You weirdly believe what others are preaching just because they say so??? That is hogwash. As you have said, we are in unprecedented times and previous correct predictions by all of your so-called experts – – including past history of PM’s performance is 100% meaningless…do you not get this Mr. Hunter????? Do you not understand that all history to date is BS as what is happening now will re-write all of history!! What do I mean? Gold/Silver will be controlled and manipulated to no end and your sources have no clue on what/where they will go. THEY WILL NOT go to the numbers you or your experts predict…read above before you say history or someones track record say otherwise.

    2-) Where do you get your PM facts from specifically? Your friends in the industry that continue the fallacy of prices going to the moon – when they are basing everything on history…again read above.

    3-) I am not saying that PM’s won’t go up, but I can guarantee you this…just when you think PM’s will shoot to the moon – – they will be controlled and come back down – as big business and the wealthy don’t want the masses to wake up.

    So Greg please…wake up to this reality and stop with your normalcy bias of what history says and what so-called experts say…as it is meaningless in uncharted waters.

    Got it now??

    Morris

    • Greg

      Morris,
      No I do not get it. Please tell me how you can say “I can guarantee you this…just when you think PM’s will shoot to the moon– – they will be controlled and come back down.” What fact or metric are you using (other than your own unsupported opinion) to back up this conclusion? Yes, the market will have violent swings in BOTH directions but the overarching trend is up. Remember I do not give trading or market timing advise. I tell people to hold physical gold and silver coins as a core position in their portfolio. Furthermore, I made a prediction that something bad would happen before the end of the year and MY PREDICTION WAS CORRECT. I do not have to apologise for it or make excuses. It happened. I based my calculation on the economic and political factors happening in the western world. The problems of solvency are so big that is was an easy call. As far as “normalcy bias” is concerned, I feel you do not know what that term means. What is “normal” about $1800 gold? I got that line from a reader named Brad. Here’s his comment to me about your comment and I agree with him: “Greg:

      In regards to the gentleman’s email that you posted, I’m not sure he understands the definition of normalcy bias. What is “normal” about $1700.00 gold? (Now more than $1,800)

      I feel the individuals with normalcy bias, by definition, are the ones that walk around speaking of how the U.S. and global markets have never failed and therefore, will never fail regardless of how poorly we treat them just because it has never happened before in their lifetime. As it was so elegantly
      put to me, unfortunately nowhere is it written that the United States of
      America goes on forever.

      I have included the definition below. For a full explanation please refer to: http://dictionary.sensagent.com/normalcy+bias/en-en/

      Keep up the good work.

      Definition:

      The normalcy bias refers to an extreme mental state people enter when facing a disaster. It causes people to underestimate both the possibility of a disaster occurring and also its possible effects. This often results in situations where people fail to adequately prepare for a disaster, and on a larger scale, the failure of the government to include the populace in its disaster preparations. The assumption that is made in the case of the normalcy bias is that since a disaster never has occurred that it never will occur. It also results in the inability of people to cope with a disaster once it occurs. People with a normalcy bias have difficulties reacting to something they have not experienced before. People also tend to interpret warnings in the most optimistic way possible, seizing on any ambiguities to infer a less serious situation.”

      Morris thank you for your comment. Good men can disagree.
      Greg

      • carmen

        In fact WS does a very healthy task manipulating the PM price, otherwise it would go to the roof.

  20. nm

    Greg:

    Could you or anyone else explain this pricing to me (i’m looking to buy gold coins and want to calculate who charges the lowest commissions)

    Spot Price: $1,796.40
    Premium: $62.87
    Commission: $17.96
    Your Cost: $1,877.24

    What is the premium price? and how do they determine the commission price?

    • Greg

      NM,
      There have always been premiums on coins. It is roughly 6 or 7 percent over spot. However, when things get tight and supplies get exhausted the premiums go up. Expect premiums to go up before supplies are exhausted.
      Greg

    • zippythepinhead

      Go to http://www.goldshark.com where you can compare companies for the best prices on bullion from the top dealers. Gainesville coins or Bullion Direct usually have the lowest premiums esp when purchased in bulk. Hope that helps.

  21. Norm Ezzie

    Greg,I think for the 1st time in history….Gold is higher than plantinum! I think America is in for hard lesson on global-economic’s! Imagine in our lifetime we may all die broke!

    • Greg

      Thank you Norm.
      Greg

  22. David Conrad

    Greg, because of your advice I have more than once bought gold and silver. And because of your advice I have had huge returns by doing so.

    Thanks, Greg! Keep up the excellent work!

    • Greg

      Thank you Dave!!!! I love it when my good friends do well!!!!!!!!
      Greg

  23. James T

    Greg, I guess the question and concern would be, How would gold be valued against a new currency if and when it comes to that. Who would determine that value? The IMF. How fair do you think they would be?

    • Greg

      James T,
      I frankly do not know but you’ll be better off holding gold than Federal Reserve Notes–that’s for sure!! Thank you for the comment.
      Greg

  24. Jan

    Greg,
    I have been reading your sight for about a year now. I was slow to move to PM’s. When the University of Texas purchased a billion dollars worth of gold, I there was something to this new insurance. Many nations have stopped selling their gold and become active buyers.

    I will give credit where credit is due, these people are a lot smarter than I am and there is a reason they are buyhing gold. I will just tag along.

  25. Michael

    It’s certainly interesting reading the different points of view on these important subjects. One of the things I like most about Greg is his evenhanded and well researched approach. In my opinion, Greg is talking to and reading all the right people. He brings a depth of understanding with the ability to translate it into meaningful action that is helpful to us laymen. Understanding past history as related by those who have truly and successfully lived it, is an important consideration for navigating one’s future path.

    I believe Morris stepped over the edge with his “guarantees”, but I can’t disagree totally with a point of view that says “the only rule now is that there are no rules”. In a lot of respects, it certainly seems to be a new world.

    We all have a difficult job in these interesting times as we try to make the right decisions for our families and future generations. I think it would be foolhardy for anyone to totally disregard history.
    My choice is a balanced approach. I’ll listen to the expert’s reasoning and predictions while trying to avoid the over the top cheerleaders. I’ll temper that with the “the only rule is that there are no rules” concept. Then I will do a personal “gut check”. The “gut check” has always worked for me as long as I did all my homework first. Give it a try.

    What? No spellcheck?

    • Greg

      Michael,
      Thank you for weighing in with your perspective. I checked your spelling and you were perfect!
      Greg

  26. nm

    Greg & Zippy:

    Thanks for the information. I had another question about the quality of the gold. I was looking at the American Eagle and Canadian Maple Leaf.

    The Canadian Maple leaf is .999% gold while the American Eagle contains 91.67% gold, 3% silver, and 5.44% copper.

    Does this make a difference if any?

    • Greg

      NM,
      To some it does but to most it does not. There is the exact same amount of gold in both coins. I live in America so I like Eagles but Maple Leafs are very good coins too. Read my post on “How to Buy Gold and Silver” by clicking the black box under my photo.
      Greg

  27. Will Swanson

    Greg, I don’t understand why the PM haters have to continually “straighten” us out concerning PMs. I don’t fool with them or even try to get them to see my point of view. I’m content to live with my choices. It reminds me of teenagers, who when they do something wrong want everyone to fall in with them because they know they are wrong but don’t want to be left alone when it’s time to pay the piper. They don’t want to have gold or silver and they don’t want anyone else to have it either, I guess!!

    • Greg

      Thank you Will.
      Greg

  28. Silver17

    Hi Greg,

    I was impressed by your video featured on Kitco last week. I have invested in silver and some gold for a little while. My question is if in a currency crisis, would it be better to hold gold in smaller denominations for survival purposes. Such as 1/10 or 1/4 of ounce? I’ve been purchasing gold in smaller denominations according to my budget. I know I’m paying a higher premium doing this, but holding it for the long haul doesn’t matter to me. I just want to own silver and gold to protect my two children. Is this a good way to own some gold for survival purposes? How in the world can someone make change for a ounce of gold? I own .999 silver rounds, Am Eagles,Canandian Maples,Philharmonica, Englehard and Johnson Matthey 1 oz, 5 oz and 10 oz silver bars and bags of pre-65 junk silver are part of my PM investments.

    Finally, in your Kitco video, you stated that gold is still cheap. I agree even though gold is passed some average Americans mortgage payment!

    My million dollar question is Greg how much silver and gold should a family of four or five own if there’s a deflation or hyperinflation crisis?

    • Greg

      Silver17,
      That is a very difficult question to answer because I do not know what kind of a lifestyle you are maintaining. My guess is $500,000 in today’s money is the minimum for a comfortable life. As this progresses the buying power of your assets will rise 5 to 10 times. You will be the only person in your neighborhood with real money and that could be dangerous so be careful. That said, it sounds like you have done your homework and you might concentrate on food and other things that will be in short supply in a hyperinflationary environment. A friend of mine even stocked up on medicine and motor oil. Those are just some ideas.
      Greg

  29. Silver17

    Greg thank you for your answer.

  30. Francisco Almeida - BRAZIL

    .
    Here is what Steve Forbes says on gold :

    http://www.youtube.com/watch?v=geKh7G-jKRE

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