This piece was written several days ago and although it appears gold is working its way through this correction and consolidation rapidly; we’re going to post it anyway with the idea that perhaps there are some long term benefits to be gained by doing so. First and foremost is the idea that we are going to have more corrections along the golden path and it behooves us to learn from past lessons and not follow the other lemmings over the cliff. Keep your eye on the primary trend in gold, and whether or not there is any political will to reign in the spending and or slow down the printing presses. Will there be any plan to retire this enormous debt that has been built up over the past ten years in both the US and abroad? Finally, it is imperative to observe and understand the geopolitical ramifications of trading oil in currencies other than the dollar.
And please, one more thing. For all those clairvoyant analysts and commentators who saw this intermediate top in gold around $550-$560, and are telling me retrospectively how sharp they were; in the future and in full advance of any such correction, please shout it out from the rooftops so I can get out of all my positions for a week, or even a month. I would also appreciate you telling me exactly when to re-enter the market, be it a week, or a month later. Of course, I will consider the impact of the double commissions, the short term capital gains tax, accounting fees, and all the stress in the equation.
Where am I going with this? I don’t believe the average person; the Moms and Pops of this country make good traders. I think it is unfair to ask them to do so. Yes, there are “power up” trend lines and “power down” trend lines that we can use along with volume to guide us. But most folks simply don’t have the time to earn their diplomas in trading. Many, however, have spent a small fortune in that endeavor only to end up with empty pockets and a bare wall. However, that being said, I would recommend learning as much as possible about both technical and fundamental analysis and about the particular sector with which you’re involved. Senior Producers, Mid-level Producers, and Exploration companies are topics for future discovery.
Actually, I do like Jimmy Sinclar’s concept (www.jsmineset.com) of selling one third of your particular position into strength on a periodic schedule when gold gets overbought (ahead of itself-too expensive) and then buying it back when it becomes oversold (behind itself or too inexpensive). Visit his site, go to his archives, find the topic, and he’ll guide you through the process. But you definitely have to do your homework! You’ll also need to invest in a ruler, and a copy of Investor’s Business Daily. I would encourage you to pick up a CD or two that he has assisted in creating because they will help you become better gold investors.
I think we also have to understand what kinds of positions everyone is talking about. Are these positions in physical gold and silver, options, futures, junior mining companies, senior mining companies, or some exotic derivative instrument? What are they?
I suggest building a portfolio of quality gold and silver companies utilizing evaluation criteria we have mentioned in past articles and then hold on to them for the long haul.
And just so you know, you are not alone! We are not alone and I am not talking about aliens from outer space. We’ve all kicked ourselves in the butt or had someone do it for us, moaned about not buying this or that, selling too low, selling too high, not selling at all and everything in between. It’s OK. No one said it was going to be easy. But it can be easier if you settle in for the long haul and don’t get side tracked by a bunch of “carnies” trying to get you to join their circus. Try and stay focused on quality projects, experienced management, and integrity every step of the way. The gold and silver markets, if not the entire resource sector, and especially Uranium, are going to be very kind to you over the next several years. The greatest obstacle to our success will be ourselves!
Part II: February 15, 2006
I’m like to change tactics here and go for the laughs because I think that many people need a good chuckle right about now. I’m going to include what is attributed as George Carlin’s “Views on Aging” that was sent to me by a dear friend. Unfortunately, I can’t remember which one but it doesn’t matter. I’m getting older, and my memory is not what it used to be—you know the ‘key thing’, where’d I park the car, face looks familiar but I can’t remember the name, bed by 10:30 on New Years—wonderful reminders that I’m not 21 any longer.) I guess the point is they love me, I love you and Carlin (or his alter ego) loves all of us or he wouldn’t put such funny, yet “real and relatable stuff” to paper. I can just hear Carlin delivering this monologue in his own inimitable style. I hope you’ll visualize George as he does his thing with this material.
Here it is then. (Then if you’d like to hear “Gold Talking” in an exclusive scoop see “Confessions”, down below)
George Carlin’s Views on Aging
Do you realize that the only time in our lives when we like to get old is when we’re kids? If you’re less than 10 years old, you’re so excited about aging that you think in fractions.
“How old are you?” “I’m four and a half!” You’re never thirty-six and a half. You’re four and a half, going on five! That’s the key.
You get into your teens, now they can’t hold you back. You jump to the next number, or even a few ahead.
“How old are you?” “I’m gonna be 16!” You could be 13, but hey, you’re gonna be 16! And then the greatest day of your life . . . you become 21. Even the words sound like a ceremony. YOU BECOME 21. YESSSS!!!
But then you turn 30. Oooohh, what happened there? Makes you sound like bad milk! He TURNED; we had to throw him out. There’s no fun now, you’re just a sour-dumpling. What’s wrong? What’s changed? He Turned!
You BECOME 21, you TURN 30, then you’re PUSHING 40. Whoa! Put on the brakes, it’s all slipping away. Before you know it, you REACH 50
….and your dreams are gone.
But wait!!! You MAKE it to 60. You didn’t think you would!
So you BECOME 21, TURN 30, PUSH 40, REACH 50 and MAKE it to 60.
You’ve built up so much speed that you HIT 70! After that it’s a day-by-day thing; you HIT Wednesday!
You get into your 80s and every day is a complete cycle; you HIT lunch; you TURN 4:30; you REACH bedtime. And it doesn’t end there. Into the 90s, you start going backwards; “I Was JUST 92.”
Then a strange thing happens. If you make it over 100, you become a little kid again. “I’m 100 and a half!”
May you all make it to a healthy 100 and a half!!
(The way to that 100 marker is not to sweat the little stuff! And guess what, most it is just that—little stuff! This correction in gold and the ones that will surely follow are the little stuff—the noise. Don’t pay attention to it—enjoy your family, read a book, take a walk on the beach or in the mountains. Gold is going to $1000.00 and beyond and don’t let this bull or the “naysayers” buck you off! DSA)
HOW TO STAY YOUNG — Carlin
- Throw out nonessential numbers. This includes age, weight and height. Let the doctors worry about them. That is why you pay “them”. (Hmmm, I’m not sure about this one but it sounds good! DSA)
- Keep only cheerful friends. The grouches pull you down.
- Keep learning. Learn more about the computer, crafts, gardening, whatever. Never let the brain idle. “An idle mind is the devil’s workshop.” And the devil’s name is Alzheimer’s.
- Enjoy the simple things.
- Laugh often, long and loud. Laugh until you gasp for breath.
- The tears happen. Endure, grieve, and move on. The only person, who is with us our entire life, is ourselves. Be ALIVE while you are alive.
- Surround yourself with what you love, whether it’s family, pets, keepsakes, music, plants, hobbies, whatever. Your home is your refuge.
- Cherish your health: If it is good, preserve it. If it is unstable, improve it. If it is beyond what you can improve, get help.
- Don’t take guilt trips. Take a trip to the mall, even to the next county; to a foreign country but NOT to where the guilt is. (Remember that guilt is a synthetic emotion—man-made, artificial, and not a real emotion-DSA)
- Tell the people you love that you love them, at every opportunity.
AND ALWAYS REMEMBER:
Life is not measured by the number of breaths we take, but by the moments that take our breath away. (Ok, it’s a little corny, but hey, isn’t it true? DSA)
And if you don’t send this to at least 8 people - who cares? But do share this with someone. We all need to live life to its fullest each day!!
Again, this a little corny but it’s very true. We should all live life to the fullest. But if you’ve just lost your job, or a loved one, or a pet, or you’re in a bad relationship, or financial difficulties, it is not so easy to be Mr. and Mrs. Beaver Cleaver. This is still America—the good, the bad, and the ugly.Focus on the good. Most of us don’t live the Cleaver legacy: we’re overworked, in debt, juggling work and family or two jobs and two families and there is simply too much stuff going on. We’re usually in denial about some things in our lives. It’s difficult to relax but we should learn how.
Allow me to humbly make this one suggestion. If there is a difficulty in your life, take the first step towards resolving it. Take the little baby step that gives you the motivation to take the next little baby step. If you need help, don’t be afraid to ask for it because Americans for the most part are still a good hearted lot. But you and only you, or me and only me, can take that first step. The very first step is to acknowledge the difficulty. Remember, internally, we really do know most of the answers to the important questions in our lives. What we need is validation. We need to be strong enough to validate ourselves.
Part III: Secret Confessions of a Young Bull Market in Gold
Now we should conduct a bit of business; actually it’s a pep rally but we shall not tell a soul if you won’t. The gold market has outward appearances of correcting and or consolidating and I sense many confused faces over the past week to ten days. I just don’t want you to become too morose because “it just ain’t that bad”. And guess what—you can look forward to going through it again and again!
I can hear “Gold Talking”.
….but then again, I have little friends that only I can see.
Does that make me a bad person? I don’t think so.
I actually did this ”interview” with Gold about a week ago.
“It’s funny, when things are going great guns and I, gold, am ripping to new highs everyone’s giddy and in a good mood. Listen, it’s only human nature. When my corrections or is that contractions arrive, and arrive they do—sometimes fast and furiously—you humans have a natural tendency to look around for reasons why and to seek out your favorite guru for answers. Humans, you already have the answers. What you’re seeking is validation. Again, it’s only human nature to want that validation because it helps to reinforce your own views. I have a secret confession to share with you. I love to see you humans scramble and squirm around. I get a kick out of seeing you change your views every other decade, but hey, I’m only an element, # 79, when I last glanced at the chart about 100 years ago. I still say I’m No. 1! But what do I know!? Geeze, time flies.”
“My price?— it’s like a gold-darn yo-yo—it goes up and down depending upon all sorts of things—but here’s a secret I know from being around for 10,000 years or so. I’m the real deal. Wars have been fought over me—I’m not proud of that you know. Humans believe in me, they trust me and my brethren. There are not many of us left, or there never was a bunch of us found, relatively speaking of course, and there’s a whole lot of ‘paper’ trying to act like us. They’re imposters!”
“Wannabees! It won’t work, I tell you. I’ve seen it over and over and over again. You’d think you humans would get it right by now, but noooooo. Oh yea, the secret confession of this chunk of mellow yellow—our price is going up. Too much of that ‘paper’ around, and it just isn’t any competition for us. It’s a no brainer for gold’s sake—you can make ‘paper’ in a Midas minute.”
“Ole Mr. Greenscam should have put all his green paper on rolls and be done with it! Cheesta! By the way, King Tut—he was da man! Big ole statures made of me (OK, OK, us!) and it was the real deal. But wait now, the Aztecs, they were pretty sharp cookies and those Middle Eastern guys with their gold bathrooms. These humans know how to live. They appreciated us for what we are, for what we can do. Art-Statutes-Jewlery-Vases! No phony baloney for them. By the way if you see those Aztecs, tell’em we say hey. Now that was a culture until those stoopid Spaniards came a long (no offense) and melted us down into ingots. Where’s the respect? Some of us are still at the bottom of the ocean since 1492, not that we care, but we sure look a whole lot better buffed out AND ON DISPLAY. Do I make my point!?
By the way, most of us are definitely not into the bar thing. We don’t want to visit them and we don’t like staying in them. You meet the tackiest stuff there! Platinum for gold’s sake! Then they stick us in a vault somewhere and forget about us—where’s the fun? You might as well stick all of us in the same vault. You know, a pretty big vault would work and we’d all fit. What is it, like one or two of those Egyptian Pyramids? Hey, we like family, just like you, what I can say!? But listen, we’re really show-offs and much prefer to be on display. Coins, rings, statures, bathroom fixtures?
Now, here’s my sister from Brazil—she’ll give you a little of our basic family background because I’ve got to jump—back into that stream—but hey, good talking with you. That’s a nice ring—looks like my brother from Nevada. By the way, that necklace you’re wearing—it’s a fake—plated—looks like pieces of my nieces from Canada. She always did mix with the wrong crowd. I’m not into plated. I like me—I like the real thing. 24 Carrots and forget the Bugs Bunny if you catch my drift.
“Thanks Bro—isn’t he a character—or is that characteristic? I’m, new to this secret confession thing but ole Bolivia Boy talked me into it.”
“Hi there, I’m a gold from Brazil—we have a big family—all over the globe but just so you know what all the fuss is about.”
“I’m a chemical element in the periodic table that has the symbol Au (from the Latin aurum) and atomic number 79. I’m a soft, shiny, yellow, dense, malleable, ductile (trivalent and univalent—whatever that means) transition metal, I don’t react with most chemicals but I despise chlorine, fluorine and aqua regia as they can attack me and I’m pretty resilient, along with being just a bit cocky. I occur as nuggets or grains in rocks and in alluvial deposits and lucky me, I’m one of the coinage metals—you know, back when the humans had their heads on straight, they made this thing called money out of me. It worked pretty well until I became worth more than the money I represented. Something about depreciation and paper and it’s all so confusing; but listen, one thing I know is that I’m just about irreplaceable or is that irresistible, I’m still learning the lingo you know.
Oh yea, the most important thing? The chicks love me and so do the guys, but hey the chicks go crazy like I’m some kind of rock star (get it-“rock” star-like Mick Swagger from the Aging Clones or Shiny Stones or something like that? But listen, I can’t hang around—your neck, I’ve still got some work to do. I’ve got to get down this stream within the next forty years or my name is mud—no really, I mean it, they’re building a dam! Really, gotta run. Tell GoldSeek.com that we’ve been found. Best gold site on the Web but I hear they’re into heavy metal. Go figure.”
Well, there you have it from gold itself, Atomic Element 79 Au, An Exclusive Interview, A true Confession!
What do you make of that? They like to see us scramble. We change our views every other decade? And what is this about validation? Here’s what I think.
The key is to be balanced in where you go for that validation. If we always read and follow the people who think like we do, then yes, we are going to get the validation we want. However, we need to be sure to read and understand people who don’t think like we do to gain access to the other side of the story. One guy who does that is Ron Paul, Congressman from Texas. He definitely does not think like the rest of his colleagues. Please read his February 15, 2006 message to Congress. This is serious commentary from one of America’s reigning Patriots. In fact, I’m going to append that speech to the bottom of this piece so we end this debacle with at least some dignity and intellect intact.
The great investors are the ones who think for themselves. They don’t need huge amounts of validation from other people because they trust their own instincts, especially when calculating what numbers the markets are giving them. They also have to read between the lines because everything is not as it would appear. I believe that that Uncle Bill, Uncle Chris, and the entire GATA Conglomeration or Congregation if you will, have proven that fact time and again. And they’ve proven it beyond a reasonable doubt in the face of overwhelming resistance. Why? Because the “other side” would not have you acquire a balanced perspective. They don’t want you having the complete picture so you can make up your own mind. It’s called SPIN! Beware of SPIN, learn to recognize and to keep it in perspective. The world we live in, and especially America, is all about SPIN—turning or crafting a story so it will meet the parameters of what a particular special interest group wants to present.
They don’t want you to understand that if 1% or less of all the fiat currency in the world were invested in gold and silver, we’d see it at $5000 and $1000 respectively ….or even more.
Why Should I Ignore the Noise, the Little Stuff and focus on the “Big Picture?”
Well look, we all have our pat answers, our own idiosyncratic mine-set as to why gold and the precious metals complex functions the way it does. For me, there are three things that define this gold bull market and until they change, I believe that guys like Russell, Buckler, Sinclair, Norini, Murphy, Powell, Howe, Casey, and many others have it down pat. There may be variations on the theme but for me, this is what makes the most sense. Gold will continue to rise in value against all odds and against all fiat paper because of Debt. Oil and the Payment for Oil via particular currencies will play a part in this debt equation. (Please See Congressman Paul’s excellent piece below.) The three reasons to own gold and silver and reasons not to worry when the next “take your breath away” correction occurs are:
- Debt (U.S. Account Deficit, Trade Deficit, Budget Deficit )
- Debt (Too many dollars being created)
- Debt (the need to preserve wealth in the face of that debt)
Did I mention debt?
Until there is the political will to reduce that debt and right the financial wrongs over the past 20 to 50 years—from both the Elephants and the Donkeys—there is going to be the need for wealth preservation. Gold and Silver are real money. It’s that simple. If you don’t believe that a crisis is looming on the horizon, then you do believe in the Easter Bunny—or I need to find the last ten cards in the deck for you! (But hey, this is from the guy who is talking with gold!)
Has anything fundamentally changed regarding that debt? Is there still a need to preserve wealth? Are the supply demand fundamentals in gold and silver any different than they were two weeks ago, four weeks ago? Will they be any different six months from now? I personally don’t think so.
You know the answers to all of these rhetorical questions. As I said in my last missive, do not be a trader or on margin in this market because it’s going to be volatile. Now listen, volatility is not a bad thing, it just means, like Mr. Gold said in the True Confessions Interview, that people are jumping all over the map in their perceptions of gold. Only instead of extreme volatility occurring every ten years or ten months, it is now every ten days!
There’s more! But relax a bit—it’s the weekend, don’t sweat the little stuff, tell someone you love them, and be sure to take that first baby step if the need is there.
And if possible, buy yourself a little gold or silver. No, not jewelry—you heard Mr. and Ms. Gold say he likes the real thing—no pieces of nieces. The real thing is American Gold Eagles and American Silver Eagles for starters. These are made for the United States Government. You won’t regret it.
Until next time,
D, Stewart Armstrong
Posted by D.Stewart Armstrong in Articles