As we transition along into what I think could be a good bull phase over the next year or two, I’ll remain sensitive to who was appropriately cautious/bearish when called for along the way of the 4-7 year (depending on how you look at it) bear market and who displayed perma pom poms. Maybe it will even become a series called The Golden Pompoms. I would not mind repeatedly posting the pic below, after all.
If we go bull there would likely be new entrants into the sector and some may need Bullshit Detectors in the form of we who have been around the block. Here I admit to you that when I was a newly hatched gold lunatic in 2002 I thought very highly of Jim Sinclair, Richard Russell and others who proved to have been err, less than ideal at being other than bullish on gold.
I have not read the author linked below for a long while because I get creeped out by a writing style that treats “gold enthusiasts” like they are children, waves perma pom poms and continually focuses on inflation and the Chindia love trade as a driver of gold and especially gold stocks.
But this morning I took a look and would like to respond to this week’s bullet points, not all of which are wrong. Nobody is wrong all the time, but I have never seen an article by the author admitting being wrong on anything (and we all are because in this realm there are no experts). Just uninterrupted bullish concentration (err, cheer leading) on the gold sector all through the bear market and now, into what could be a new bull market.
FYI I first became aware of Stuart when a 100% gold and gold stock focused NFTRH subscriber informed me he was quitting in favor of Stuart’s service. This was around the beginning of the gold bear market and I was no longer able to write bullish. Others were, obviously.
1. Where are the populist government leaders who are cutting their outrageous government debts?
2. The answer, unfortunately, is that they do not exist.
3. Citizens riot in France over insane fuel taxes, central bankers resign in India, markets crash in America, and England’s citizens watch their Brexit turn into an overpriced wet noodle.
4. None of this fazes the world’s populist leaders. They believe they alone can fix what debt broke… with more debt!
Same story adapted to the more fiscally stimulative populist crowd. Modern developed societies have used debt as THE accelerator ever since gold was completely removed from the monetary system. Populist or Elitist, that is for political types to argue over. It’s all doomed eventually.
5. Please click here now. Double-click to enlarge. In the middle of all the mayhem and madness, the uncrowned queen of the world, gold bullion, sits cooler than a cucumber. Gold is showcasing a nice steady uptrend on this medium-term price chart.
I really hate it when people give gold cute nicknames (disclaimer: I have been known to call it “the relic” and “old yeller”). It’s a substance mined out of the earth and it is used for jewelry, lightly in industry and especially to mark value in a corrupt financial system. Period. “Queen of the world”… Jesus Christ.
6. Please click here now. Heavyweight analysts at JP Morgan, Goldman, Wells Fargo, and other big banks are bullish on gold now, but many amateur analysts and investors are worried (with some sounding outright terrified) that gold is going lower.
Well, I agree with you about the worried little guys. They have been a good contrary indicator. But speaking of contrary indicators, JPM, Goldman and WF are to be tuned out. It’s nearly meaningless.
8. There’s also a real possibility that Trump piles on more destructive tariffs by March. If that happens, it would occur just as Chinese New Year gold buying really accelerates.
9. In that scenario, gold could surge towards the key $1400 area and the US stock market would likely crash like it did in 1929.
Trump is capable of anything. He could pile on the tariffs, but let’s not cheer lead destructive policy for the sake of cheer leading gold. He could also buckle under the pressure of all the industries he is impairing and cease and desist.
Sure gold could go to 1400. But why assign one discrete scenario to that possibility? US stocks would “likely” crash like 1929? Very possible, and we have some downside targets (more on that this weekend). Likely? You don’t control the market, sir. It has eaten crash callers for breakfast, lunch and dinner… regurgitated them and eaten them again.
10. Please click here now. Double-click to enlarge. Investors must keep their eye on the big picture, which is all about the growth of the Chindian love trade and the rise of inflation, especially in the West.
11. A new pillar of gold bullion demand could also emerge now that India’s populist leader (Modi) has essentially taken control of the nation’s central bank. A fresh survey shows that 90% of Indian households see substantially higher inflation coming in 2019. That survey was done before the nation’s top central banker resigned yesterday!
Here we go. A long-term chart of gold somehow correlates to Chindian Love and the rise of inflation in the west. Without further ado…
Central Bank buying is not fundamental to gold. For every buyer a seller. Enough with the mysteries of India and China. If they want to buy they want to buy cheap rather than as marked up by inflation touts.
12.The world’s populist leaders want interest rates to stop rising so their governments can borrow even more money and waste it on silly “people helper” programs.
13. Some of the populist leaders want to buy more bombs, some want more welfare programs, but what they all have in common is they want to spend more, and more, and more! This is highly inflationary.
14. Please click here now. While many amateur gold analysts have talked about their fear of lower prices, I’ve urged investors to focus on the epic upside breakout taking place on the world’s most important gold mining company. That company is: Barrick.
15. Junior gold and silver stock enthusiasts can expect to see their stocks begin to follow the Barrick leader. It’s already happening with many of the CDNX-listed stocks, and this morning’s pre-market “super surge” in Barrick’s price is going to start the next major wave higher for most of the junior miners.
16. What seals the deal? Answer: A weekly close above $14 for Barrick. I expect it to happen this week and investors who waste time reading the fears of the gold bears risk missing out on years of upside price action. The bottom line:
17. This is not the start of a gold bull market. It’s the start of a bull era that will last a hundred years.
Okay, now we’re hitting stride. Fiscal inflators are tied in with debt and inflation and… drum roll please >>>>>> gold stocks!
I happen to own Barrick, but if the world goes inflationary – as for example, in 2003-2007 – gold stocks would be an extreme SELL one day as their currently attractive valuations (per the macro fundamentals) erode.
“A bull era that will last a hundred years”? Did the bear market teach you nothing Mr. “Drop dead gorgeous bull wedge” on GDX posted in the 18s just before it dumped out of the wedge and tanked to new bear market lows near 12? Jesus double Christ.
20. Ray Dalio is head of the world’s largest hedge fund (Bridgewater). Ray predicts an “inflationary depression” will envelop America within about two years. I think it takes three to four years, but given the danger, does the time frame really matter? The timing of a hurricane doesn’t change the fact that people need to get out of its way.
21. On that note, please click here now. Just as most big bank analysts are positive about gold now, they have increasingly negative forecasts for the US dollar.
22. The policies of the world’s “spendaholic” populist leaders are extremely inflationary. The bank analysts know that’s bad news for dollar bugs and great news for gold stock investors.
23. Please click here now. Double-click to enlarge this magnificent GDX price chart. My short term www.guswinger.com swing trading service has caught all the key swings in the GDX base formation, reducing boredom while making investors richer! I focus on NUGT and DUST for the short term moves and unleveraged GDX for the home run plays!
24. We booked solid profits yesterday as GDX edged towards the important $20.50 price zone. After a brief pitstop at this minor resistance zone, the GDX bull is poised to drive its golden horns into the bears… and begin a magnificent charge up to $23.50!
Let’s lump the rest together and close this out. Ray Dalio is an intelligent and thoughtful man. He has also been among the most wrong callers of the markets since I became aware of him a few years ago. I like him and I like his rational views. But he’s not someone who you listen to simply because he runs the largest hedge fund in the world.
The big bank analysts? See directly above.
It’s almost like the writer puts his fingers in his ears and goes “nah nah nah… I can’t hear you… nah nah nah” as the pile of evidence mounts that inflation can be good for gold but it is definitely not good for gold mining operations (beyond temporary stock price bursts as inflationist gold bugs go full frontal pom pom) because cyclical inflationary phases tend to drive up other assets better than gold.
Of course you booked solid profits managing the small swings for wide eyed casino patrons. Two things…
Thing 1: If a 100 year golden era is really upon us why bother with the chump change of these little swings in a massive bull market that is in its infancy? Why not just buy and add on the pullbacks? That’s how you really get rich in a 100 year golden era (or even a 2 year bull run).
Thing 2: Did he ever promote in public writing the “drop dead gorgeous bull wedge” that went the wrong way immediately after being published or simply just move on to the next rationalization?
After I fucked up with the 888 target for HUI (yes, even giving it the cute nickname “The 3 Snowmen”) I spent years making sure I did not hide from it by periodically mentioning it publicly. I was W.R.O.N.G…. it topped in the low or mid 600s. It’s okay to admit when you’re wrong and even gives more credibility when you tout some analysis you happen to get right.
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