Today we hear again from J.S. Kim, who we’ve featured in these pages a number of times in the past. We’ve followed J.S. closely over the years and he has been an excellent timer of gold market tops and bottoms so he is definitely worth paying attention to we reckon. We just received this timely note from him over the weekend on the recent price drop in gold and silver and their respective mining shares. He has very strong views on the “influencers” of these prices that he details below…
A few months ago, we informed you here in our free newsletter that it was still buying season for gold and silver mining stocks, and in the chart below, we indicated where we told our clients to buy. Since then, The HUI Gold Bugs Index has moved much higher and then lower, and even though we are now once again very close to our noted buy point from several months ago, our critics have emerged to slam all gold and silver advocates in recent months. However, as we tell our critics every single year, they will be wrong for mocking our strong belief that gold and silver will produce the best investments yields in the world, just as they were wrong last year and every single year they have mocked gold and silver as an investment choice.
Despite the steep dive in gold/silver assets we experienced last month, one can see that even now, we are still near our aggressive buy signal that we granted during the middle of last May (again refer to the chart we have included in this letter). Right now, we still have a wonderful opportunity to buy gold and silver mining stocks and to buy physical silver. The reason why most gold and silver investors never make any money is because they allow bankers to manipulate their emotions of fear when bankers occasionally take down the price of gold and silver. Sometimes the banker take downs can be countered with defensive strategies and other times gold and silver investors must be willing to wait out the banker take downs to turn huge profits in gold and silver in the future. However, act impulsively and with fear instead of with facts and logic when it comes to investing in gold and silver and this formula nearly guarantees gold and silver investor losses.
So let’s get rid of the emotions and look at the facts. The critics that said the recent pullback in gold and silver prices a month ago proved that gold and silver were bubbles that had burst merely demonstrated their utter ignorance regarding mechanisms that Western bankers utilize to manipulate gold and silver prices in the short-term.
(1) Gold and silver prices are set in the Western world only (New York and London) and only in the paper futures markets. This will change as China gains more influence over setting the price of gold and silver but Western bankers still firmly control the price of gold and silver as of today.
(2) Western bankers created futures markets in silver and gold specifically to suppress the price of gold and silver and to be able to produce rapid volatility to the downside at times, and for no other reason.
(3) Western bankers literally trade hundreds more times paper gold and paper silver than real physical supply that exists. That means that the volume of IMAGINARY gold and silver that does not exist in the real world is literally what sets the price of gold and silver every day.
(4) Supply and demand of REAL physical gold and physical silver have no bearing on the wild fluctuations you see in gold and silver prices. Bankers literally prevent real supply and demand fundamentals from driving the price of gold and silver higher even when behavior in the physical gold and silver world MERIT a rising price.
Trivia question of the day: Where can real physical demand increase and real physical supply decrease yet price plummet at the same time? Answer: The PAPER gold & silver futures markets. Though gold and silver prices are still floundering at the moment, in reality, this recent Western bankster engineered takedown in the PAPER futures markets has tightened the real PHYSICAL supply of gold and silver and has intensified real PHYSICAL demand for gold and silver in direct contradiction to the falling PAPER price. This is not speculation but fact. In turn, this will tighten the noose around the necks of the criminal Western banking cartel in the near future. They have shot themselves in the foot right now so they can continue to limp around and continue to champion their current charade of a fake monetary system and a fake commodities market. And every single gold and silver trader has understood this mechanism for at least 10 years. But it will turn out to be the beginning of their demise.
During the Western banker-engineered price takedown of gold and silver last month, private investors in Hong Kong, Thailand, Japan, S. Korea, and China formed massive queues to buy physical gold. Silver bullion dealers in Saudi Arabia, Australia and the United States have all but reported the disappearance of their physical silver from their inventories as buyers snapped up physical silver at these massively depressed artificial silver prices. Here, evidence of soaring demand for physical gold in Dubai, Hong Kong, the US, and Australia is provided against a backdrop of crashing paper gold prices, a situation that, according to free market economic principles we all learned in school, is literally impossible. So how can this be happening? It IS happening because the whole monetary and investment scheme set up by bankers is FRAUDULENT.
Thus, the smart money has been buying up boatloads of physical silver and physical gold and not worrying about the near irrelevant paper price that Western bankers have beenpushing up and down recently with massive volatility while the dumb money is running scared of the Western banking propaganda that silver will crash to $10 an ounce and gold will crash to less than $500 an ounce. What logical person would believe that free market forces could produce wild 3% swings in the price of silver daily with silver much higher in Asia daily and then crashing immediately when the criminal NY COMEX opens? NO ONE, yet this is what has been happening for the past month. What the dumb money does not understand is that Western bankers can suppress the price of gold and silver, even very significantly in the short-term because they control it by selling imaginary ounces of silver that don’t even exist, but, and this is a HUGE but, the real supply and demand fundamentals of the real physical gold and physical silver market will ALWAYS drive the price higher in the long-term.
As I’ve stated many times before, we’ve suffered dips in the mining stocks as deep as the recent September dip nearly every single year since the start of this gold and silver bull, but yet we’ve ended every single year with positive yields, and usually very significant positive yields since we first launched our newsletter in 2007. Gold and silver experts have understood for more than decade now that the paper gold & silver price have never accurately reflected the physical gold and physical silver supply and demand fundamentals, especially in the SHORT-TERM. So much for the most revered principle of Economics 101 classes taught to billions around the world because it is simply rubbish and inapplicable when it comes to the gold and silver market today. Today, bankers have rigged gold and silver markets so much so that they can engineer falling prices despite soaring demand and simultaneous dwindling supply. Furthermore, I welcome all of you to visit our blog at http://www.theundergroundinvestor.com and to read the articles we were publishing as far back as 2006 when we advocated the purchase of gold and silver with zeal. Our message has always remained consistent unlike the commercial investment advisors that don’t understand anything about gold and silver and are only recommending it now because nothing else is working. These types of people will also lead you astray when it comes to investing in gold and silver.
For example, on September 14, 2011, when silver opened at nearly $41 an ounce that day, these are the exact words I told my Platinum Members: a “$28 to $34 an ounce range is the bankster target for a silver takedown this month.” In that same report on September 14 that I sent to my Platinum Members, I stated that the obvious target for bankers was to take gold below $1,800 an ounce. However, on September 21, once I realized that the number one priority of the US Federal Reserve was, in my exact words, to “artificially manufacture another downfall in gold and silver”, I also realized that that my initial take down price target for gold was too optimistic. Upon this realization, I dug deeper into what the bankers were doing in the gold markets. Thus, on September 25, I told my Platinum Members that “the bankers [would] make a very strong push to try to breach the $1,600 level on Monday [September 26th] as they [were] only $58 away from this level” and that “their target [was] to take gold below $1,500 an ounce.” What happened on September 26,, 2011? On September 26, gold blew through the $1,600 level and nearly made it to the $1,500 level as I had predicted the previous day.
But even though we don’t reveal any of our opinions regarding the SHORT-TERM fluctuation of Western banker manipulation schemes executed in the PAPER gold and silver markets but to our paying subscribers, banker shills that criticize our public comments about gold and silver are still wrong and here’s why. Gold and silver critics serve the bankers’ mission brilliantly by appealing to peoples’ emotional fears that arise during times the bankers introduce marked volatility into the gold and silver markets. We stated in January of this year to all of our paying members that this year would be the year of volatility in gold and silver markets but that if one was willing to stand strong and not succumb to fear during these volatile times, that their conviction would be justly rewarded. Our positive year-end returns for four years running has justified our stance in this manner. It serves no one to endlessly worry about the short-term fluctuations in gold and silver price, even though they may be violent at times, when the long-term outlook solidly remains higher. And this is where gold and silver critics are ALWAYS wrong.
I doubt that any of the critics that jumped on the “gold bubble is bursting” and the “silver bubble is bursting” bandwagon last month have any clue as to any of the determinants of gold and silver prices in the short-term. I doubt that they even understand the CME’s manipulative role in raising gold and silver futures’ margins during these Western banker engineered setbacks in gold and silver prices. I use the word setback for a very specific reason, for these deliberately banker-engineered drops in gold and silver are nothing but mere “setbacks” on the road to a much higher gold and silver price. Thus the smart money views them as nothing but wonderful opportunities to accumulate more physical gold and physical silver and to accumulate more mining stocks while the dumb money constantly harps on every little setback as the beginning of an apocalyptic event in gold and silver that never comes to fruition.
The temporary setback we experienced last month and are still in the midst of, is nothing more than a second chance to buy in at prices comparable to the point in May that I pointed out to my current clients at the time. Though we may see and I even expect a bit of further weakness in the mining stocks the rest of this week and into the end of October before the gold/silver recovery begins in earnest, I do believe that this second window to purchase gold and silver assets at May 2011 prices will be closing shortly and that six months from now, those that have not taken advantage of this wonderful opportunity to buy gold and silver assets at bargain basement prices will not only have extreme buyer’s remorse but will also have missed out on a prime opportunity to protect themselves from the bankers’ plan to bankrupt them. What bankers attempt to do by introducing volatility in the short-term into gold and silver assets is to frustrate gold and silver investors into liquidating their positions. Again, if you are to make money in this ongoing gold and silver bull that has yet to experience its largest gains, you must realize that the Western bankster rigging games are only effective in the short-term. As happened in 2008 when bankers took down the gold price more than $200 an ounce only to watch it furiously rebound more than $700 an ounce higher in the next few weeks, the same scenario will play out in silver and gold this time again.
Thus from our launch on June 15, 2007 until the latest available figures as of September 30, 2011, we have managed our Crisis Investment Opportunities newsletter well enough over the long term to have yielded a cumulative +162.40% GAIN over this time period. Compare this to the cumulative -36.20% LOSS of the Australian stock market, the cumulative -25.70% LOSS of the US stock market and the cumulative paltry +16.98% GAIN of the Thai stock market over the same time period. This means a $500,000 investment in our newsletter would now have grown to $1,312,000 by September 2011 while a $500,000 investment in the Australian, US and Thai stock markets would respectively only be $319,000, $$371,500 and $584,900 today. Thus while commercial investment advisors at “respected” global firms ask their patients to be patient for years about recouping their losses while their portfolios remain sick, even though we’ve had to deal with volatile bouts in gold and silver, our clients only have to remain patient for several months before their portfolios turn higher once again.
Quite a large difference despite gold and silver critics jumping all over the backs of gold/silver advocates any time gold and silver turns downward NOT due to free market forces, but only due to Central Banker manipulation. Clearly, all the losses created by downside volatility in gold and silver assets have been 100% recouped and then soared even higher during every leg of this gold/silver bull while clients invested in the broad stock market indexes have NOT recovered their losses to the downside in recent years.
Again we believe that there we will continue to see continued weakness and possibly one final down leg in gold and silver assets into the end of October before the gold/silver bull continues in a spectacular fashion. Again, there is always the possibility that bankers will successfully engineer another steep pullback in the future but if so, our members will know about it. However, we are confident that during the next four years, our gains provided to our members will be even stronger than during the first four years of our operation and that to continue to harp on every short-term downside fluctuation in gold and silver is a mistake of enormous proportions to one’s long-term prosperity. And if you understand our message in this short read, you will not be scared away from investing in gold and silver as are those that do not understand banker manipulation schemes. This is NOT a time to be fearful about gold and silver assets but a time to be introspective and logical. For those that understand what is giving rise to the extreme volatility in gold and silver prices right now, they will understand that now is one of the best opportunities they will ever receive to accumulate gold and silver assets courtesy of the criminal banking cartel.
In Monetary Freedom, Sincerely Yours,
Chief Investment Strategist