Monday, January 7, 2013

In the Valley

Thanks for your forbearance over the last 7 weeks as I took a break from the blog whilst traveling overseas.

Anyway, it doesn't seem I missed much . Gold and silver prices are similar to this time last year and appear to be set for a little pop upwards into January and February. In fact, if us physical precious metal holders had all experienced a Sleeping Beauty moment for 2012, we wouldn't have missed anything.

So what about this year? The fiscal cliff is behind us and we have glided into the valley. More on this tomorrow.

In the old days, when prophets got a call wrong, they got stoned. With real stones. No mercy. So what of those gold and silver gurus that tried to give us their best forecast for 2012 and what of their predictions?

James Turk called for $70 silver by April 2012. David Morgan predicted $60 silver in 2012.

OK, so stoning is a little harsh. These guys do their best. I'm sure they aren't 'talking their books'. Anyway, it's all a matter of timing, which these men would no doubt agree.

My thinking is that the Fed is the source of much of the volatility that we are seeing. The boat is rocking more violently by the day. Are the Fed under control in that they give out information in an acutely organised way for the purpose of massaging the market up or down? Or are they out of control as the recent release of FOMC minutes may suggest? Whatever, the Fed is now the market-maker supreme. No one dare trade in anything unless they first reference the Fed moves. This can only end badly.

But then, that prediction, would make me fall into the 'doomsday' prophet category. And I value my life from the stone-throwing plebs.

But it is difficult to see any other outcome other than a huge reset of the world's currency system within the next few years. May be the shale oil and gas phenomena will keep the creditors at bay and give the West some breathing space. But rest assured, nothing but inflation (money supply increase) will fix the increasingly formidable mathematics behind the burgeoning debt.

The debt problems can't be satiated without devaluing our money. Currency wars have broken out everywhere. How can gold and silver prices not increase?

Gold in New Zealand dollars: $1992.90 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $36.29 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)

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