Oct 20, 2011

Some of you may have seen the movie, "Total Recall", where Arnold Schwarzenegger goes to Mars. The rebels (Gold Community?) are fighting the "banksters".
The king bankster cuts off the air supply to the rebels, slowly. They end up on the floor, totally comatose. Alive, but unable to even move.
Look out your market window at gold $1607 this morning. Look around at the real state of the gold community, unable to move, curled up in the fetal position. The banksters debate about whether to let them live, or finish them off.
If you look at even investors, or even the average professionally managed gold fund, they are 100% invested, with no cash, and unable to act in the market.
In direct contrast, the banksters focus on profit velocity of money at play, not their returns on their whole account, which is something totally foreign to the average investor, and the main reason why the average investor almost always ends his investing life a total loser. Some collect tiny usury fees from the Gman and call themselves winners. That's not investing skill. It's a sucking on a baby bottle. There's a time to suck on the Gman's usury bottle, and that's after the bond collapses, not now.
The bottom line is the biggest money is made buying this total morbidity you see all around you in the gold community, but the obsession with missing out at higher prices has left 95-99% of the community unable to act emotionally, and 80% of the community unable to act financially, in my estimation.
Many investors with millions in cash are emotionally frozen, unable to act rationally, if at all, because they invested so much risk capital at what appears to be vastly higher prices, in their minds.
The maniacal obsession with "missing out" on up moves is one of the most destructive forces in investing. It reached its pinnacle in 1999, when the largest number of the world's stupidest investors worked hand in hand with the largest number of the world's stupidest advisors, to create the largest greed-based retail investor price chase (the stk mkt) in the history of markets, surpassed only by the current fear-based price chase of "growth with safety" in the bond market.
However, both of those monster price chases appear as a microscopic peanut when compared to the OTC derivatives price chase that was engaged in by governments, banks, insurance companies, corporations, and pension funds.
GoldLion is looking for either a final bankster cleaning of the gold and fundster community souvlaki sticks, with a move down to around $1450, or a violent $200 upmove from here.
Remember when GoldLion predicted that 95% of the gold community would be wiped out by gold $2000? The ultimate dream, gold $2000, has become the ultimate nightmare, gold $2000. The reason: greed. The attempt to outsmart and replace gold bullion with gold juniors stock, and "outperform gold".
Rather than using patience to wait for bullion to move, then to use a modest portion of that bullion to play the astro upside for gold stocks, the serious nature of the crisis was forgotten, and, most seriously, the surprise theme that is the hallmark of any major crisis, was ignored, and now the result is.... carnage.
Look at your accounts this morning. Realistically, by what percentage would you consider your positions to be, "too big"? I'm not talking about the pretend world of the flip trader liars whose lifetime account returns are minus thousands of percent, but who are screaming that if only you sold everything at 1920 and shorted wildly, you'd be superman like they supposedly are.
I'm talking about looking at your holdings, thinking about the degree of discomfort, and factoring that discomfort against the very real and serious nature of the crisis. Saying, "oh I should have sold everything at $1920" is the statement of a child with a major attention disorder, demanding cake for every meal, every day, along with good health. Can't happen.
Look at the crisis, and look at your discomfort. Are you maybe 20% too heavily invested, realistically? OK, well, the next time all the news tells you price is "getting away", cut your positions by 20% in stages into that feeling, so you can respond professionally on the buy side, when you feel like you feel now.
This is the playtime drawdown zone, compared to the drawdowns that are coming in the real gold reval zone. Focus on repairing your mental state, not creating an even worse emotional foundation for the reval zone than you had at $1920. Higher prices will not fix what's wrong. Those who bought the Dow all the way down in 2000 and in 2008 are those who built wealth there, not those who bought into 1999 and 2007 and demanded higher prices where they promised (lied) that they would never chase price ever again. Think hard about what I'm saying, and apply it to gold.
Do you have cash allocated to buy one ounce of gold at $1100, if it fell there? If not, why not? In the reval zone, you are going to experience that kind of decline, and worse. You are looking at the top callers and buying their swill that they know what they are doing. They do not know what they are doing. I've handled some of their accounts as a broker. They are total market losers who stoploss themselves to far more losses than any wins they tell you about.
The game is over. The game was pretending that a microscopic short position on gold and silver, most of which is a dealing position balanced many times over by the world's largest physical long position, would blow up the banksters, while the gold community went to "higher gold prices forever and ever" nirvanaland, while the financial system shut down and Dow put options went to beyond infinity.
Now, reality is here. The reality of dealing with endless massive and surprise drawdowns, in the greatest crisis of all time. The reality that it will take generations of methodically accumulating gold on all price weakness, not a pop in the gold price, to hack away at the power of the banksters.
Instead of Ron Paul's dream of the end of central banking, that he didn't know how to MARKET with a TROJAN HORSE with a multi-decade plan of careful action, we now have "wealth transfer from taxpayer marks to the banksters" as official central bank policy. It was always there, but now they have put up a sign that slaps our faces with it.
Unfortunately, you're going to have to come to grips with a much smaller gold community, here and now. Every hour, more of our comrades are throwing in the gold stocks towel, and permanently crawling to the photocopy machine. The horrors coming to these new dollar bugs is beyond imagination, after booking gargantuan losses on what they believe is a totally failed juniors market. I don't know where it ends for those who thought juniors would have anything less than 50% drawdowns for THEM, but I know the end will be "beyond horrible", as they move from one horror (failed juniors) to another even bigger horror (the photocopier), in the reval zone.
It's imperative that you robotically compartmentalize and isolate risk capital. I use a myriad of accounts and mental tricks to keep myself in a positive state at all time. See the video I posted this morning on compartmentalization, on the site. I'm broken mentally now, like most of you, but not from watching the market. I feel horrible watching the banksters dismantle the gold community like tigers ravaging deer. It's a horrific scene watching the gold community hand their gold stock to those they revile more than anything in the world.
The reason I talk about gold $1100, $900, etc is not because I think price is going there, which I don't. It's because I'm 99% sure price is going to the equivalent of those prices, emotionally, in the REVAL ZONE, creating the emotional scene that would exist if gold plummeted to $900 over the next few weeks or months. A gold community wasteland is coming, not nirvana, in the reval zone, yet few are preparing themselves. Instead, there is the hope that higher prices will allow investors to fix what was broken in terms of price plopping, fuelled by innocent promises never to chase price again, if the price masters just allow price to go over GDXJ $43.
Wrong. The urge to price plop will exponentially increase in the reval zone, to the point you will be 100% sure the dollar is going off the board and the system will shut down. You will feel the urge to sell your homes and even your businesses to buy gold; the urge will be that strong. The urge to chase gold price will be 1000 times stronger in the reval zone that it has been at any point from 1999 to now. The reval zone is better termed the gold community extermination zone, and the question is, Are You Prepared?

Gridtime. IF gold fell to the $1100 equivalent price at some point, do you think you would want to have some cash to buy it? In regards to the idea that you need to be 100% invested in gold, throw that idea in the garbage can, unless you did it at $250-$400 prices. If you are in a position, now, to calmly buy at the $900-1100 EMOTIONALLY equivalent marker in the reval zone, not the financially equivalent one, you obviously are not going to feel like liquidating what you hold, when that feeling hits you in the face, which it will, in the reval zone. Write this down, and stake it to your forehead with a railway spike: It's not how you act on price strength that will make you richer in any major asset, but how you act on weakness. Hold, buy,

Or die.

Thanks!

Cheers