June 3, 2011

1.    In regards to the "which gold stock pays the highest dividend for the longest time" question.... The US dollar is the stock of the United States.  A 100 yr bear market is ravaging the stock, and a mindless Gman and the OTC derivatives show both threaten to put it right off the board.

2.   Gold is punishing the value of all paper money now.  That could change down the road, for a time. Rates will eventually rise, and gold would be locked to the dollar/debt, turning the US dollar into the ultimate dividend-paying gold stock.

3.   You can't seriously believe the banksters are going to just hand that ultimate plum to the public to enjoy. Picture a 30 year US treasury bond paying, say, 10-20% a year, and guaranteed for 30 years, with the whole show backed by gold.  No way do the banksters hand out that free money to Elmer Fudd Public Investor.  They take it for themselves and sell it to Fudd later, as they are now.  How?

4.   Well, only those in gold now will reap the benefits of the coming gold dollar super party.  The banksters don't simply want to take the existing amount of dollars from the public and funds at low dollar prices. They want a lot more dollars to be printed, an amount that could see the current size of the  money supply increased dramatically.   

5.   Few understand how much value the dollar has lost, continues to lose, and yet how much more value it could still lose.  Most look at the US dollar chart against the Euro, because that's where the banksters want them focused.  That is a world of relative truth, not the gold world of absolute truth.  The $USD chart is a chart of the US dollar against other paper currencies, and mainly against the Euro.  Gold is the money of kings.  Paper is the money of price chasers and greed-a-holics.  Picture 10 men in a breadline. One holds Euros, and one holds Pounds, and one holds....whatever.  Against gold, all the paper currencies are already standing in the breadline.  

6.   Clockwork.  College professors tend to be punctual. So are many professionals.  My mother is ultra-punctual.  Let's say that everyday your alarm clock goes off at 6am and you rise and shine.  You are at work at 730 am precisely. 

7.   That routine goes on for years and you never miss. Then, one day, an hour before your alarm is set to ring, an ear-splitting mudslide roars towards your house.  You wake up, but do nothing.  You are killed in seconds. 

8.   Hyperinflation is that same hurricane of financial destruction.  Its arrival is very analogous to that alarm clock/mudslide situation.  Like a clock, when gold trades as a commodity, each fall the Indian gold buying season begins, and the dollar falls hard against gold for about 3-4 months, and then stabilizes or rallies for 8-9 months.

9.   Your "buy the dollar now" clock goes off as the Indian season ends, and your "sell the dollar now" alarm clock goes off as it begins.  That's a great seasonal strategy, most of the time.

10.           The problem is that a hyperinflationary probability is now on the table.  That is a game changer.  All the dollars you have made could become 99% meaningless if you get caught all-in on dollars during a hyperinflationary event.

11.           The reason you see the dollar rally hard against gold on price charts while when it falls it does so more softly.....is because paper is the base currency of most market participants who buy and sell gold.  Only the banksters really view and understand gold as their base currency.  And now, more of you do, every day.    

12.           Markets do fall much harder than they rise.  If the institutional perception of the dollar were to change in a short period of time, the movement down in the price of the dollar against gold could be "other-worldly".  Most are focused on the $USD chart of the dollar against other paperbug currencies, so they can't even really comprehend the level of dollar devaluation that has already occurred, let alone what still lies ahead.

13.           I don't see the current gold market as more volatile than it has been in the past, not on a percentage basis.  What I see is greater emotional instability on the part of investors, creating the illusion of tremendous volatility.  It is actually taking less and less of a bankster-engineered hit on the gold price to cause huge selling of gold by the funds and the retail investor.  And really, what we are talking about is greater or lesser volatility in the dollar and all paper money, not gold.  We are on the cusp of much greater volatility, but we are not quite there.

14.           So, here's the bottom line: in a heartbeat, all dollar profits made on all your past trades could be all wiped out if you are sitting all-in on in the dollar when an institutional money panic out of the dollar and into the stock market and hard assets occurred.  The loss of purchasing power for those stuck in the dollar would be staggering. 

15.           Today is jobs report day.  Like the gold seasonality alarm clock, you can expect many job reports to feature a dramatic rally in the dollar against gold going into the report, and then a dramatic fall in the dollar coming out of the report.  Set your jobs report profits party alarm clock every time, and when it does ring, take some action!

16.           It's very hard for investors to think about booking profits on dollars [by selling them, buying other] during a situation like yesterday and last night.  Click here now to view the first in a silver chart series:  silver h&s bottom chart. That chart shows a weak-looking head and shoulders bottom pattern on silver, and implies the possibility that the bottom is basically in on silver against the dollar.  Buys would be placed by technicians if price can "breakout" above 39.  I don't see it that way.  I see the pattern as an emotional positive and nothing more.

17.           Click here now to view a second silver scenario chart.  In this case, the idea is that silver is consolidating a down move against the dollar in a sideways blob of movement, and there is a 2/3 chance it breaks down.  Let's call it the "oh no, maybe I should sell now before I lose more!" chart.  That mindset leaves a bad taste in my mouth.

18.            Here's a third possible view of the silver chart. Look closely at that chart.   Price has come down into one HSR zone and I've drawn in another bigger one at 31.50.  As you can see, price doesn't necessarily magically reverse course at major HSR prices, but the whole mindset of silver players has changed from terror to at least a level of calm.

19.           I like to operate calmly in the market.  When I get emails about how "price could blast here or tank there" I do give it some thought, but the bottom line is that if you plan to go all-in at some turn call point for silver, price might just sit there, or never even go there.  Those catching falling silver swords can get killed.  Those catching silver pins with PGENS are piling up silver on the scale while maintaining a full and normal sleep schedule.  I get the odd bad night's sleep, but it has nothing to do with the market.  Many of my competitors have horrific sleeping patterns, and it all can be traced to their obsession with making dollar profits, not gold currency profits, and price plopping huge amounts of risk capital into turn call points.

20.           "First you get da money, then you get da power!" -Tony Montana, Scarface mobster.  Tonyboy ended up dead, with no power, no money, and it wasn't a death to be admired.

21.           My suggestion to you is this:  First you get the PGEN power, then you get a good night's sleep consistently, then you get the gold money.  The way to get power in the market is to trade smaller than you know is rational, so you control a larger part of the price grid, and do it rationally. 

22.          You can simply buy and sell at HSR gridline points, and manually build a PGEN around those points.  Or you can run PGENs in those price areas, so you are covered for both greed and fear.  Maybe price goes below a HSR point after you buy, or maybe price doesn't quite reach it, by a fair margin.  Rather than guessing where price stops, you simply PGEN into the area.

23.           All around you, millions of chicken with no head investors and thousands of similar analysts are running around waving "I've got the next price fully predicted, you can bet big money on my scenario, I promise!" flags.   A mountain of missed calls are ignored, and the wipeout of entire accounts is swept under the reality rug.  All because of a greedy obsession with "the now".  The banksters have probably made more money, whether measured in ounces or dollars, just responding to price on the rallies and declines from silver $50 to now, than the entire gold community will make by the time the whole bull market in silver is over!  Remain professional, and you'll build wealth consistently, as they do, rather than go off the board with a hero hat on.

24.          There are only 35 dollar price points in silver from here to zero.  Be a player at all of them with some capital.  Get the power first if you want the money.  The power comes from checking your ego at the dollar-obsession door.  The greatest market traders of all time all ran serious paper trading [?] programs.  Harry Schultz and Jim Sinclair in the gold market are two prime examples.  Those are trades with play money, but the accounts are treated as real money.[?]  I've never found any emotional difference between operating a paper trading account and a real [?] one.  Some brokerages now offer full paper trading accounts. [?] Don't laugh at paper trading or you'll be crying when the painful lessons that could have been learned on paper are learned with big real money losses.  You need to move into real money trading very gradually.  Drawing arrows to zero on GDX, gold, and silver charts, and pretending the market is about "big calls" might sell newsletters.  It rarely builds any wealth and usually destroys it.  The bigger you trade at any single price point, the bigger the problem you have.  Your greatest wealth is generally built on the buys you least expected to happen.

Gridtime.  The 2^nd most popular choice in the dividend gold stock survey was, "all the gold stocks!".  I'll take that as pretty much correct.   Once again, when we look at the rally from gold $1462, we see the gold stocks as a group again underperforming.  Is your endurance underperforming?  I hope not because asking when the situation ends won't make you richer.  Endure your way through.  Those looking for a short cut thru it will find themselves in a maze with no exit door.  Patience and endurance are how you leverage your gold stocks against gold.

Thankyou

Cheers

St out!