Thank you for the Armstrong link. His comments sound plausible. But keep in mind, last year about this time, as I recall, he was forecasting a low in gold to be made by this time period, calling for possible 1000 gold due to the very reasons he now suggests will cause it to fall such as currency turmoil, rapid flow of capital, and large market movements causing investor fear.
He also vigorously advocated Germany was selling or would sell its gold.
Although Indian demand for silver was substantially off during the first quarter as he contends, Indian demand for gold during the second quarter, per WGC, was strong - and presumably so was silver.
Silver could be stored in London as he maintains, but even so, how much of that is available for sale. And, if he is aware of such storage, and publicly proclaiming it, would not every major dealer in silver also be so aware. And if so, why have other analysts such as CPM group not mentioned this in their reports. Conversely, it makes no sense whatsover for silver stocks to be depleting rapidly with Indian demand being off so much during the first quarter and in view of global economic conditions. And the market appears to so deem it has it has fallen significantly despite a reduction in Comex stocks.
Although he claims gold might go to 190, impliedly he also claims it might not. Alhtough he claims that silver might go to 3, impliedly he also claims it might not. The writer thereby places his bets both on the red and the black
However, gold stocks are unfortunately also suggesting that the POG will drop much further before it is over, and a meaningful turn-a-round in price is not yet visible. How much of this is dictated by irrational fear, or by fundamentals remains to be seen. But if it does not soon turn, the POG portends considerable financial distress for the global economy, and in particular for emerging markets and those in which commodities have a strong influence on GDP such as Russia, Australia, Saudia Arabia, Venezuela, Mexico and the list seemingly becomes longer with each passing day. As the currency of these countries is devalued, the more difficult it is for them to pay foreign debt, increasing the risk of default and consequent ouflow of capital to US bonds. If they do default, there is a further risk that the default will spin through the global debt structure like a cancerous growth affecting everyone in its link with contractionary consequences. Which supports his thesis.
The bottom line is that present global fear, the POG, and conditions give support to his arguments which make them all the more plausible. Whether they are in fact correct remains to be seen. Since such views are merely a rehash of what is apparently currently priced in the market, I would be much more receptive to reading a coherent and plausible counter-argument.
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