Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
US Housing Market House Prices Momentum Analysis - 26th Feb 21
FOMC Minutes Disappoint Gold Bulls - 26th Feb 21
Kiss of Life for Gold - 26th Feb 21
Congress May Increase The Moral Hazard Building In The Stock Market - 26th Feb 21
The “Oil Of The Future” Is Set To Soar In 2021 - 26th Feb 21
The Everything Stock Market Rally Continues - 25th Feb 21
Vaccine inequality: A new beginning or another missed opportunity? - 25th Feb 21
What's Next Move For Silver, Gold? Follow US Treasuries and Commodities To Find Out - 25th Feb 21
Warren Buffett Buys a Copper Stock! - 25th Feb 21
Work From Home Inflationary US House Prices BOOM! - 25th Feb 21
Man Takes First Steps Towards Colonising Mars - Nasa Perseverance Rover in Jezero Crater - 25th Feb 21
Musk, Bezos And Cook Are Rushing To Lock In New Lithium Supply - 25th Feb 21
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21
US House Prices Momentum Analysis - 20th Feb 21
The Most Important Chart in Housing Right Now - 20th Feb 21
Gold Is the Ultimate Reserve Asset - 20th Feb 21
Is That the S&P 500 And Gold Correction Finally? - 20th Feb 21
Technical Analysis of EUR/USD - 20th Feb 21
The Stock Market Big Picture - 19th Feb 21
Could Silver "Do a Palladium"? - 19th Feb 21
Three More Reasons We Love To Trade Options! - 19th Feb 21
Here’s What’s Eating Away at Gold - 19th Feb 21
Stock Market March Melt-Up Madness - 19th Feb 21
Land Rover Discovery Sport Extreme Ice and Snow vs Windscreen Wipers Test - 19th Feb 21
Real Reason Why Black and Asian BAME are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 19th Feb 21
New BNPL Regulations Leave Zilch Leading the Way - 19th Feb 21
Work From Home Inflationary House Prices BOOM! - 18th Feb 21
Why This "Excellent" Stock Market Indicator Should Be on Your Radar Screen Now - 18th Feb 21
The Commodity Cycle - 18th Feb 21
Silver Backwardation and Other Evidence of a Silver Supply Squeeze - 18th Feb 21
Why I’m Avoiding These “Bottle Rocket” Stocks Like GameStop - 18th Feb 21
S&P 500 Correction Delayed Again While Silver Runs - 18th Feb 21
Silver Prices Are About to Explode as Stars are Lining up Like Never Before! - 18th Feb 21
Cannabis, Alternative Agra, Mushrooms, and Cryptos – Everything ALT is HOT - 18th Feb 21
Crypto Mining Craze, How We Mined 6 Bitcoins with a PS4 Gaming Console - 18th Feb 21
Stock Market Trend Forecasts Analysis Review - 17th Feb 21
Vaccine Nationalism Is a Multilateral, Neocolonial Failure - 17th Feb 21
First year of a Stocks bull market, or End of a Bubble? - 17th Feb 21
5 Reasons Why People Prefer to Trade Options Over Stocks - 17th Feb 21
The Gold & Gold Stock Corrections Are Normal - 17th Feb 21
WARNING Oculus Quest 2 Update v25 BROKE My VR Headset! - 17th Feb 21
UK Covid-19 Parks PACKED During Lockdown Despite "Stay at Home" Message - Endcliffe Park Sheffield - 17th Feb 21
How to Invest in ETFs in the UK - 17th Feb 21
Real Reason Why Black and Asian Ethnic minorities are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 16th Feb 21
THE INFLATION MEGA-TREND QE4EVER! - 16th Feb 21
Gold / Silver: What This "Large Non-Confirmation" May Mean - 16th Feb 21
Major Optimism for Platinum, Silver, and Copper - 16th Feb 21
S&P 500 Correction Looming, Just as in Gold – Or Not? - 16th Feb 21
Stock Market Last pull-back before intermediate top? - 16th Feb 21
GAMESTOP MANIA BUBBLE BURSTS! Investing Newbs Pump and Dump Roller coaster Ride - 16th Feb 21
Thinking About Starting to Trade This Year? Here Are Some Things to Keep in Mind - 16th Feb 21
US House Prices Real Estate Trend Forecast Review - 15th Feb 21
Will Tesla Charge Gold With Energy? - 15th Feb 21
Feeling the Growing Heat and Tensions in Stocks? - 15th Feb 21
Morgan Stanley Warns Gasoline Industry Is About to Become Totally Worthless - 15th Feb 21
Debts Lift Gold - Precious Metal Prices Will Rise on a Deluge of Red Ink - 15th Feb 21
Platinum Begins Big Breakout Rally - 15th Feb 21
How to Change Car Battery Without Losing Power, Memory, Radio Code Settings - 15th Feb 21
Five reasons why a financial advisor can make a big difference to your small business - 15th Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold and the PM Stocks Will Make 2011 A Happy New Year For All!

Commodities / Gold and Silver 2011 Jan 04, 2011 - 02:30 AM GMT

By: Lorimer_Wilson

Commodities

Best Financial Markets Analysis ArticleGoldrunner writes: It is fascinating to be living during the greatest PM Bull Market in history – and to be entering its Seasonal Strength as the parabola rushes forward and upward - and I look forward to keeping you informed on a regular basis throughout 2011 as it unfolds.


Value vs. Price

Over the last several years many have pounded on the table about how the Dow would crash down to 1,000, yet the Crash was a silent one based on "value", not "price."  I think very few understand the concept of "value versus price" and how aggressively printed paper currencies can so distort "price." 

The real PM Stock Bull did not start for the PM stocks until after the equivalent of the Deflation Scare for most of the PM stocks and this fact makes me shudder when I hear so many talk about "taking profits."  If the 70's cycle continues to play out, there still appears to be around 90% of the gains in the PM stock universe going forward that are still sitting on the table.  Taking profits, now, will lead many to "chase price" as we go.  An analogy might be quitting while you are ahead after a few steps in a hundred yard dash.

There is no doubt that the only sure insurance against the ravages of aggressive Dollar inflation is to own physical metals.  Will owning PM stocks provide a leveraged insurance in the same way?  Nobody really knows, but Jim Sinclair seems to think so.  It worked in the 70's Dollar inflation, and I believe it will work again this decade.

Insurance Against Hyper-inflation
The fractal work I do monitors the degree to which we are still on track versus the 70's as a measure of whether the leveraged PM stocks are continuing to serve as "insurance", and it can also work as a gauge of whether hyper-inflation is taking place.  I have only seen Weimar Germany mentioned in terms of hyper-inflation yet Weimar Germany might be considered a bit of "black swan" since it faced what it faced in isolation. 

Personally, I believe that what would constitute hyper-inflation in the current period would have to be something "more than the inflation of the 70's" as a base definition.  I have laid out the basis for this in previous editorials.  We should be able to gauge that "defining point" where historical inflation steps up to hyper-inflation by monitoring the fractal work off of the late 70’s using the $Gold chart, along  with the Precious Metals surrogate stock chart.  As long as these two charts continue to closely track the late 70's I don't think "hyper-inflation" will become a reality.  Yet, one never knows what the future will bring.

Nevertheless, we need to find imaginative means of evaluating "risk versus reward" and to that end I would like to suggest that everyone make a New Year's Resolution to have a plan to use some portion of PM stock profits gained over the coming months to buy physical Gold and Silver (held in hand) as financial insurance.  Why?  Because even if we can track the price of $Gold and the $HUI through the fractal work to an unforeseen "inflation versus hyper-inflation line", once that line is crossed it might be very difficult to find the physical metal necessary for financial protection.

The bottom line is that too many have waited (or will wait) too long to start to see life in terms other than one based on paper derivatives like the US Dollar.  The possibility exists that many might find sudden and severe loss in paper Dollar Derivatives much like the holders of "green stamps" did when the company that offered them folded up. Paper money used to be a derivative of Gold back when it was backed by Gold.  Today, the paper money derivatives float with absolutely no backing of value, whatsoever.  Paper promises don’t seem to be worth much in the current environment, witnessed by the parabolic move in Real Money Gold- the historical “anti-promise” of real stable value.

 As long as the PM stock certificates are backed by ownership in PM mining companies, their production, and/ or Precious Metals Reserves in the ground, PM stock ownership will serve as a leveraged type of insurance against the ravages of currency inflation.  However, if those stock certificates are not held in hand your ownership is still based on a promise from somebody else that you will have access to those stock certificates as insurance against the continuing aggressive paper currency debasement. Jim Sinclair has written extensively about this issue.

What To Do
Therefore, it is exceedingly important, as we enter what promises to be a most exciting, challenging and financially rewarding New Year of 2011, that we adhere to the principles that my friend, Deadeye, often shares:

1) Have a plan.

2) Know your risk/ reward ratio in everything you do.

3) Choose partners in life who you can trust.

4) Choose partners in life who will promote your intellectual advancement.

5) Know what you love, and love it forever and, above all else.....

6) Know Thyself.

I hope you will follow my ongoing fractal analysis articles on $Gold and the $HUI Index throughout this New Year as we sit on the edge of the next sharp advance in the PM Sector – just one more step higher in the continuing parabolic advance of all things Precious Metals- related.

GOLDRUNNER

Goldrunner is a frequent contributor to www.FinancialArticleSummariesToday.com  and www.munKNEE.com  and you can receive information about our new subscription website once it is active by dropping us a note at Goldrunner44@aol.com. You are also encouraged to sign up for munKNEE’s  FREE weekly “Top 100 Stock Market, Asset Ratio & Economic Indicators in Review” which will begin early in 2011.

Disclaimer: Please understand that the above is just the opinion of a small fish in a large sea.  None of the above is intended as investment advice, but merely an opinion of the potential of what might be.  Simply put:

The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules