When they ran from $250 and $5 an ounce, respectively, to $1,920 and $49 in 2011, those who listened, acted, and sold a bit did quite well. We argued the “longer time bullish case” as these metals dropped into their final cyclical bear market graves in late 2015.
But that was then… and this is now.
What we DID get right was that when the Big Turn finally came, it would change directions so swiftly and violently that anyone waiting for “the bottom” would miss it, as rising premiums more than offset declining prices..
Now in the first half of 2020 it seems that, like the broken clock we’re sometimes accused of being – we are getting it right. Really right!
Speaking for my colleague David Morgan and myself, I can say unreservedly that I don’t intend to ride this bull down into another multi-year trough when it finally gives up the ghost – three, five or more years hence.
In fact, we feel so strongly about this that we wrote a book on how to avoid doing just that, discussing how to employing every skill we’ve learned to extract as much profit as possible. “How to Make – and Keep – Big Profits from the Coming Gold and Silver Shock-Wave” tilts the odds sharply in favor of anyone who acts upon its distilled wisdom.
Forcing the Hoover Dam through a Garden Hose
Over the last few months, the tenor and strength of the metals’ market has changed in a big way.
We’re not going back to the corrosive experience that seemed normal in the last decade.
Expect gold and silver to move irregularly higher in violent impulse moves, followed by broad sideways corrective action that stores energy for the next burst higher.
Doug Casey uses the analogy that the effect of buyers rushing into gold and silver will be like trying to force the output of the Hoover Dam through a garden hose.
Market sentiment has fundamentally changed. If you keep waiting and hoping for a return to last year’s prices with low premiums and plentiful supply, that’s what you’ll be doing… waiting and hoping.
A New Day for Gold and Silver Has Dawned!
The gold and silver markets have fundamentally changed. Plan to change with it.
Expect bouts of amped up investment desire leading to recurrent shortages and steep premiums. To run with this trend, institute a regular program of adding to your holdings.
Nick Barisheff spells the math out this way, saying, “Globally, there are around $350T of financial assets – in stocks and bonds. If just 5% moved into gold, that would be $3.5T. But there’s only around $1.5T of above ground investible grade (London Good Delivery bars) gold totals! So, “Who you gonna’ call?”
Don’t do what I did in 1977.
In 1977, as a young man with limited financial savvy, I ran across a few ounces of gold (at $165/ounce x 3 = $495) that I didn’t remember acquiring.
Of course the idea of having this kind of money and not spending it on something meant that the coins burned a hole in my pocket, so I promptly went to the local coin shop and exchanged them for some of those infamous pieces of currency David Morgan has long referred to as “paper promises.”
I don’t even remember how I spent the cash. Had I held it for just another three years, its value would have tipped the scales at… $2,250!
The late Richard Russell, the most prolific and long-published newsletter writer of the modern area, once said: “Take your position in gold and gold shares and forget it. You don’t buy and sell your life insurance, and I feel the same way about gold.“