About Gold and Gold Stocks

So let me ask you; what website was posting stuff about the proper fundamentals needed for gold and especially the gold stock sector leveraged to it all through the gold bear market? Who was asking you to tune out the promoters beating the tired old inflationary horse to death or worse, promoting war, famine and politics in order to keep the gold bug faithful interested and in line? Who was there in real time with a brightening picture (many pictures, actually) of the macro and sector fundamentals that matter in real time?

While we are still in the process, the simple fact is that what would be needed is for the stock bubble (and I don’t call it a bubble based on valuation or conventional analysis; it’s a bubble because of its origins in the Bernanke Fed’s desperate macro manipulation as this morning’s post pointed out) to pop and confidence to decline. The “dollar collapse” that half the gold community has been on the sidelines waiting for has not happened (yet). The sector bottomed and turned up against a firm dollar.

Now finally, people are reminded of the real way to buy the counter-cyclical gold sector and that is amid fear, loathing and collapsing confidence. The USD may be receiving a flight to liquidity bid during the process.

We have been tracking the 2000 analog for months now in NFTRH. Here are the relevant charts showing what happened at the beginning of the big bull market in 2000…

…and what has been happening of late.

When the S&P 500 failed (at its SMAs 50 & 200) to the degree that the average market participant took notice, the HUI Gold Bugs index climbed above its SMA 50 in both cases. This is among the few actively bullish technical indicators we’ve been tracking along with a host of freakishly bullish sector and macro fundamentals. Still, some of the most gold focused analysts out there have remained fundamentally cautious until very recently. I assume that is due to disorientation that ensued when inflation expectations crashed, removing a favored tout.

Now a look around at the gold websites shows the bears having been vanquished and the cautious herds firming up. Wash, rinse and repeat. You can go to the gold experts for advice on how to manage the bull phase. Many were wrong all these years but are at the ready to dispense views to a novice public about to enter the sector. They are the gold “experts” after all. This is akin to following the stock market perma-bears now because finally, after years and years, they appear to be right.

But it seems to me that thinking as an individual will work best because I have learned that there are scores of smart sounding charlatans (some knowingly running scammy marketing operations and others believing their own bullshit). It’s why I figured out how to do my own work. As I noted somewhere recently (I think in an email to a fellow gold guru survivor) I was once taken by the charisma and/or reputations of people like xxxx and xxxx (redacted, for better decorum). That was nearly 2 decades ago. I grew out of it early on, thankfully, as I educated myself better.

I hope that the years I’ve spent writing like a thorn in the gold community’s side will help some of the new entrants to do likewise.

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