Found as a reply to an item on ZH, some PM favorable thoughts on what is to come...
Interesting as this commentator does not believe we are heading toward a peak that must be immediatelly sold...
Thu, 01/26/2012 - 17:38 | 2101079DavidPierre
The "MANIA" stage.
The action in precious metals yesterday was significant and the 3rd and final "mania stage" has been kicked off.
First look at the fundamentals. The Fed told that they will foster a policy of negative ... if they could create negative nominal rates they would... real interest rates for 2 more years. Watch reported ... fake... inventories of precious metals continue to drop. Central banks have become buyers of Gold. In the U.S. and Canada, sales of 1 oz. coins are now running at a faster pace than TOTAL production of all mines combined. Silver inventories in the U.S. and Canadian mints are nonexistent. If these coins are to be minted, the mints become buyers. Nevermind industrial demand, jewelry demand, investment demand of bullion bars or anything else, the sales of 1oz. coins are eating up all supply.
Then of course "rehypothecation" to the tune of over 100-1 in all sorts of scam paper products from ETF's to futures, options, pool accounts etc. To add to the "perfectness" of this storm, Sprott Asset Management pulled the trigger on a 10 million ounce order with another $1.2 Billion remaining shelved for future purchases.
Let's not forget the biggest "fundamental" of all, good 'ole common sense.
Common sense tells you that while governments are getting stuck in the quicksand of bankruptcy the natural action of "protect oneself" has the demand of precious metals exploding. Remember that 5 years ago, nearly no one differentiated between the fraudulent paper Gold and Silver products and the real thing. This siphoned real demand away from the real thing, this is changing rapidly and enough "big money" finally "gets it"!
So fundamentally, the perfect storm has arrived. Technically or "psychologically" the set up is equally bullish. Just one month ago the average investors in PM's were suicidal to put it mildly. Short positions... many naked and illegal... in the mining shares ballooned and COT numbers show the commercials less short and the specs less long than in many a moon. Bullish consensus numbers got as low or lower than the bottom days in 2008 while "cash for Gold" shops spring up like lemonade stands. The mental malaise or funk did exist and shook many investors off the bull. If you hung in there, you deserve to pat yourself on the back because NOW it looks like you are going to really get paid for your pain!
Jim Sinclair put a piece out last night...
kingworldnews.com
... where he says that "mainstream entities will enter the Gold market". He is absolutely correct and will be joined by "The Public". The public will have a much larger impact on the Silver market ... poor man's Gold... while institutions will devour Gold itself. Let's not forget India's "Gold for oil" deal and other major countries like China, Russia, France etc. setting up trade deals without using the Dollar for settlement.
The Sun is setting on the Dollar!
ALL of this has come together at the same time to create a perfect storm that just happened to kick off the day before an options expiration that surely has the shorts licking their wounds! The "2% rule" was soundly broken yesterday with an outside reversal day, the size of which has not been seen throughout the 11 year bull market.
Yesterday saw a bottom to top move of well over $60.
We are also getting upside follow through today which has NEVER happened ... been "allowed" ... in the past. Something is different now. Whether "they" have lost control or "allowed" yesterdays movement is a moot point because it "happened" and the genie cannot be put back into the bottle!
Bill Murphy says that "price action makes market commentary". It will now begin to work in favor of precious metals as opposed to against. The 3rd and final "mania stage " has kicked off. In the words of Richard Russell, "there is no fever like Gold fever" and that is in "normal times". These are not even close to normal times. We are living through the end of an era where governments are going broke including the issuer of "the money". "The money" has gone bad at the same time investors own little or no "real money". Years of brainwashing. Capital has been concentrated at one side of the ship and has very slowly been moving back to the empty side.
It has taken 11 years to get where we are today, it could very well only take one more year to clean up "all the marbles". What lies ahead price wise is anyone's guess.
We could very well see a double, a ten fold, a 100 fold OR an "infinite move" in Dollar terms if the Dollar is lost. A "revaluation" of paper money vs. real money is mandatory and has been necessary for a very long time.
THIS is it!
The "revaluation" that has been working it's way through for the last 11 years has changed gears and with today's abilities of information and leverage ... options, futures and OTC crap... has an additional boost! The computerized turbos and leveraged nitrous buttons will make what is to come in Gold and Silver legendary stories that will make the Dot Com/housing booms look like 2 pimples on an elephant's arse.
The biggest "difference" is that there will be no crash to follow the boom. When a currency dies ... ALL paper currencies... real money steps in and is "valued" to whatever new currency that is introduced. Or at least this is the way they would like you to perceive it, the reality is that the new currencies are valued by how much Gold or Silver they can "buy".
The important thing is that whenever a new currency is introduced, anyone sitting at the table with real money, ALREADY has "all the marbles". You will be entering the "next monetary system" wealth intact AND enhanced!
"Payday" is much closer than many expect.
This is the start.
www.lemetropolecafe.com
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