The Gun Has Been Fired: Precious Metals to Hit New Highs

So I was dead wrong about what the Fed would do in the video blog that I put out last night.  I did not expect them to expand their balance sheet with asset prices as high as they are and the economy supposedly growing.  This is THE signal I have been waiting for (and the spark that I mentioned in my recent GoldMoney interview) to be sure that this latest rally in the precious metals is the real deal and that new highs are in the cards.

It doesn’t take long to realize how bullish this is for gold and silver.  Everyone I know has been waiting for new QE to really make serious changes and now we have it.  This action will lead to two questions being asked by investors.  First, if the economy is recovering why do this?  Second, if they are doing this now what do you think they will be forced to do when things get worse?

The elephants of capital will now move and the ground will start to shake.  The one asset class I think should suffer the most from this is credit.  Yield will not be en vogue in the inflation that is coming.

From the Fed statement:

If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. 

I always wondered what it would be like to trade in Zimbabwe.

 

 

9 Comments

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  1. The high has been put in place for the day. Expect stock surge into close and the lid put on the P.M. as the day winds down. Portfolio channeling by Fed must stay intact. ZH just posted “Gold friends best friend is Bernanke.” This guarantees that the raid is coming soon. That is when you want to buy!

  2. How refreshing to read the work of someone willing to say, “I was dead wrong” about a prognostication. But, as the scientific method assures us, getting it wrong has enormous utility, too.
    Yours is a unique voice, Michael; good luck with the new site.
    Peace out.

  3. “Money” The Greatest HOAX on Earth.

    “The collapse of the people’s confidence in the created money, which was forced upon them by legal tender laws, will have a bad effect upon the government. It would be to the advantage of those really in charge to avert a total loss of confidence in their created money, to declare bankruptcy, initiate a deflation, returning so much wealth on the dollar and issuing a new redeemable one, if only to continue their power over us. It is inevitable, we will see a tremendous depression and a return to gold and silver as wealth mediums of exchange – it has always gone that way. – Money :The Greatest Hoax on Earth, Merrill Jenkins, 1971,
    Central bankers have been content to extract the wealth of their individual nation’s citizens with the art of delusion, perfected over many years of practice. The whole international system is about to collapse because they have become so skilled in the United States that the Fed has used the scheme on citizens of other countries to such a degree that their individual systems have now been placed in jeopardy.

    http://www.itulip.com/forums/showthread.php/2809-Money-The-Greatest-HOAX-on-Earth

  4. A 4% move in silver, while still 30% lower than 19 months ago as markets approach their ALL TIME HIGHS, on the announcement of MORE money printing actually seems pretty pathetic to me. The raids have definately done some massive pysch damage to P.M. participants-so I expect them to let silver rise a little before the NEXT HUGE SMACKDOWN. It’s really quite sad.

    In Asia hours, the Asian stock markets are now soaring along with U.S. Stocks. You’d think silver would be going parbolic as these non g-6 countries just shun this U.S. move by buying massive amounts of gold and silver on this horrendous news. But, no. Silver is barely up, ditto for gold. Sad. Sad. Sad.

    Then I see a post on ZH showing that 24% of US GDP will be on the Fed’s balance sheet by the end of 2013 and this should equate to rougly 2250 gold. So what though. That’s only 22%. That’s nothing. Big deal. Housing related stocks will probably be up 75-150% by the end of 2013…..with some small tech companies up 200-300%. Sorry, just can’t get excited anymore about these pathetic moves in gold and silver. Though I still will own physical for insurance that’s really all it is good for. Insurance for a loss of faith if FRN’s. Ain’t gonna happen though anytime soon–Americans have become too stupid on McDonalds and still bow down at the worship on the great FRN.

    Someday, you’d think the U.S. creditors would pull the plug on this non-sense. But sadly, that ain’t gonna happen either. Jim Rickards said the Fed could just “freeze” china’s holdings.

    So, the game will go on and on and on and on…….oh, and just think, with the S + P 500 hundres up a few trillion since last year, capital gains taxes alone with cut the deficit in half next year. Yup, the end is NOWHERE in sight.

    • It sounds like you should sell your silver. I’ll keep mine, though.

      • No, I will not sell my silver until the day comes that it trades freely without all the corruption. I will hold physical ONLY and do not care really what the price does. My man point is that the blatant lid put on silver can go on and on and on. Fine. It’s very liberating to also own some inflation hedge type stocks, and not miners, that aren’t manipulated down almost every day by TPTB.

        The free market blogosphere has ruined many peoples portfolios by fearing them into thinking ALL STOCKS ARE BAD and that ANY.SECOND.NOW stocks are going to crash and they basicaly just continue to CRASH UP.

        If i listened to sites like this or ZH I would have never made 2500% in GGP or 200% in BH and believe me I am inforned of the situation.

        Many comapanies have real tanglible assets that have and will contineu to crush gold and silver over the long haul..

        But no, like I said, I’lll hold gold and silver for protection against the total loss of faith in FRN’s.

        • Jack Jack Jack What are you smoking. I’ve been investing full time since I retired 10 years ago I’ve probably lost $150,000 on your large and small cap stocks. Thank God I have made more than $300,000 on Gold and Silver equities. The problem with people like you is you can’t stand the fact that people have been making lots of money for the past 10 years,in gold and silver and you haven’t. I’m not calling you a liar but I just looked at your 2 stocks you touted and there’s no way on earth you could have made those percentages. You still have time to make a small fortune in stocks like exk, slw, ngd and gg if you wake up, but I don’t think it will ever happen

          • Ohb bill. Did you pull up a chart of GGP? Poor fella. I bought GGP while it was in B.K. duirng 2009. It has since been exactly a 2352% gain. You see, your pathetic yahoo chart doesn’t show GGP pre-org along with massive spin-off of Howard Hughes corporation that is also up 1300% since re-org! So do yourself a favor, and don’t look like such an idiot posting misinformation publicly.

            I am not jealous, my stock picks have killed gold and silver. But what part of me owning gold and silver TOO did you miss goofball?

            Oh, and BH was also a re-org that used to be Steak n Shake. You’re really a fool aren’t you now?

            My more recent pick was JCP at 21. It has also crushed gold and silver thus far. But has far more room to run.

            JCP has $1 billion in cash, 13 billiion in OWNED real estate, neting out leases, meant I bought JCP for under 50% of net asset value. If the ops turn around at all, and they will, I’m looking at a 5 to 10 bagger.

            I don’t usually argue with idiots in public but I just had to correct you on your B.S. and amatuearish

  5. Silver couldn’t even rally two days in a row on the annoucement of QE Forever. And today is no smackdown, just a continuation of weak Asian trading in the metal. Like I said, pathetic. I’m glad I’ve ingorned the free market blogosphere that stocks were going to TANK.ANY.SECOND. NOW. for the last 4 years as stocks have ripped up over 100%,

    I’ll continue to profit and watch this massive bull market rip the faces off the free market blogosphere who has warned AGAINST common stocks to the demise of everyone who has heeded such non-sense.

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