Your call for Gold to rise from approx $1075 to $1300 in the time frame you predicted was excellent.
However, your reason was, rates are going higher.And,THAT is exactly the opposite of the precious metal markets perception.
Negative I rates is what spooked the markets, and as that idea gets floated, it could prove to be the cause of more disruption.
We shall see, but great call.
Here is a bold prediction and the reason--
I have been saying for a while, the Fed will invoke negative I rates.
Now, they are spreading the rumor to get you used to it.
It will happen and here's why;
Negative I rates are the ONLY way for developed countries with HUGE debt to dig their way out of debt.
IF you are coerced into buying T Bills from the USA because it's the safest place to put funds, and have to PAY for that privlege, that's how they dig out of debt. RAISING rates causes the opposite effect.
Chew on that for a while, and chew on this;
Negative I rates could cause a flight to Gold and silver. And streamers will have a HUGE benefit.
If you think you know which country and which central bank is selling (or buying), you're naive. And that is me being nice to you.
Now further discussion.
One of the Fed's primary goals was to create a wealth effect, by propping up the stock market. It accomplished that in part by maintaining the ZIRP, thus keeping the dollar weak and creating the perfect environment for markets. It propped up earnings in many companies AND coerced many people out of Bonds, CDs and into the market to achieve a return on capital.
That game is coming to an end.
ZIRP policies create bubbles,and a major bubble is about to burst.
IF you have $100 and you cannot put it in a bank, because you will either get ZERO return or worse, have to PAY to keep it in the bank, people will redeem paper currency for REAL currency. Putting it in the stock market will soon have the effect of reducing your principle.So, it's back into safety of gold and silver.
Everything that everybody figured on 5 years ago,is about to happen.....and it's all about timing.
AG is slowly on it's way to $50 + +
And AU is slowly on it's way to $2000 + +
Maybe one more side step and then BAM.
Many bugs think THAT is when the price of AG and AU will go parabolic.
Currently,there is NO hoarding. If you try to acquire rounds, silver dollars, bars, gold coins, etc there's all you want out there. Why?
Because middle America doesn't have a pot to pizz in.
The average citizen or non-citizen in the US cannot produce $1000 cash let alone a stash of silver or gold.
BUT, when a mistake is made, (and we are on the cusp of a major mistake), instead of hoarding, you will see "trading in" or "redeeming" silver for fiat. THAT's when the game begins. The mistake will be to continue QE and maintain ZIRP or negative I rates.
Businesses, local service businesses,such as a local repair facility, restaurants, grocers.....they will seek REAL money.
I give it 2-3 years.....give or take.....but it's about to happen.
If the Nigerian's are buying, it's because their currency is being devalued.
If the Najarian's are buying calls it's usually at the top and too late,and looking for YOU to buy what they are selling.
I ask many people what will negative I rates do to the real estate, bond, and equity markets. Most answer, they really don't know because it'snot been done before, in recent times. They all agree,it present an unusual test, an experiment with unknown results. Some confusion.Some discomfort.
All probably a springboard for safety havens.
A year ago I said we'd be going to negative I rates,
Does anybody really understand what's going on here?
First, the Govt.changes the data that goes into Unemployment and CPI and all measurements of inflation.
So, regardless of what is really happening they tell you unemployment is extremely low.
Regardless of what it costs to clothe, feed and house your family,
there is NO inflation ....Ahem ahem.
Now, they pay nothing on savings and nothing of treasury bills, and shortly,they will charge depositors to park large sums of money and get away with it because THEY MUST! They cannot afford to raise I rates with 18 Trillion in debt.
Thus far, the rest of the world allows this to happen and still makes the DOLLAR the safest currency. The 64000 question is--Who will blink and WHEN will that change? It won't go on forever.
Tick toc..............getting closer to armageddon.
The markets are whacked.
Yes, maybe. But keep in mind, GDX is NOT an investment. It's used primarily as a hedge.
Weeklies are "sold" to get approx 1.5%income due to the volatility.
That's an annual return of 75% if the ETF stays the same.
And for those who hold it, if they sell options, they can still make money when it goes down.
I don't see it falling off a cliff, but could go into the high $85-89 in the next few days.
are going to exit. Obviously not at once, but it's become clear to them, even Carl, $216 PPS is NOT in the cards.
This could be nasty.