Dec 7, 2010

1. The five day weekend. Readers should know I refer to Friday as "report card day" and Monday as the start of your "five day week-end."
2. Some questioned that reality, but as I write this sentence at about 4 am Tuesday morning, Gold, Silver, the GDX, and the GDXJ have all taken out, upside, their $1424 "correction area" highs.
3. What's your bottom financial line? Your five day weekend is underway, and has been since Monday morning!
4. Eric De Groot, who writes for "Big Jim" Sinclair, recently stated that it is not necessarily the "strong" who survive, but those who adapt. Adaption is strength. I'd like to see you adapt to the new reality of Gold $1424 and higher. When gold was trading at say, $300, and then it broke over $330 and ran to $388, those who failed to adapt to the new 388 reality were left to wallow in an emotional and financial quagmire that is, "bring me back the past, it's better!". Wrong.
5. You all know people who talk about "how much better the past was". Most of them are technology haters, but when they get sick, they are the first to demand the doctors use the best technology to save them. With gold, you can't waste your financial life setting emotional quagmire prices, points you demand gold return to, to satisfy some ridiculous urge to get the past back. $1424 and higher is here. 1424 is now. Adapt and prosper.
6. How do you adapt to the $1424 and higher reality tactically? You don't chase it like a madman in a fit, like happened at $1387, and then watch it fall even harder than it did from there.
7. Just as a human breathes in a rhythm each new day, you must do the same in the gold market. Listen to Gold's heartbeat and get your actions in tune with the price rhythm. Gold's rising price is telling you the crisis is not over, but instead is accelerating. Think about a boa constrictor. Operate the same way in the gold market. As price weaknens within the 1424-1624 range, pounce with your buy orders. Gold's price breathing rhythm theme is bigger breaths now, not a single massive inhale or exhale. Adapt and prosper.
8. Don't become like Elmer Fudd Public Investor. Do not get lackadaisical or get an ego just because price (in paper credits valuation) is rising on your holdings. The odds of the financial system experiencing one or (more likely) numerous closures are growing exponentially, not contracting.
9. Rising Gold defines crisis acceleration and you need to manage that real risk professionally. Fudd thought he was entitled to a lifetime of free money from the stock market, and another lifetime of free money from the real estate market. He demanded various rates of return from his golf ball advisors as he chased price higher, which they promised him was going to happen on a candied road to eternity, and the golf ball advisors promised their own monies the same. Instead what happened was the banksters locked them in a financial blast furnace like a crumpled ball of rice paper. Earth to Fudd in the blast furnace: The banksters haven't turned the furnace on yet, but they will! Think about that fact very very carefully. Fudd thinks the crisis is waning. It isn't. It's accelerating, bigtime. All you've seen so far is the various warm up acts. The US dollar taking about the 70 marker and going into the 60s is the main act, the big show, and it may be caused by an imploding US T-bond market. My standing prediction remains the same. The "solution" to the crisis is: Devaluation of Fudd's net worth. How big of a devaluation? Answer: All the way to the breadline, all the way for millions of people.
10. Marking the derivatives to model did nothing to reverse the real world losses. You got a taste of reality when Lehman went into the tank, and another taste before that as commodity prices started to go parabolic. Can you even imagine the horrors if the banksters decided to mark a load of derivatives to market as the bond market and the dollar start a major new downleg? You know it can't happen, correct? Wrong. It can happen. Never laugh at real risk.
11. China's Govt is putting price controls on food in place. Does that sound like somebody "planning ahead", or somebody in a panic? What does that mean for commodity prices? China's Govt Gman is desperate to secure the minerals it needs for its people, not "astute" or "thinking ahead". The people will kill him if he fails. The Chinese Gman had 5000 years to stockpile metals. Now he shows up after a super bull market and starts trying to do it? Hundreds of millions of people have yet to come off the farms and into the cities, in what will be phase two of the Chinese industrial revolution. Phase two of the food and energy shortage crisis. Phase two will occur. Commodity prices on food items like wheat stand to go to levels that are mindboggling, and the Chinese govt may yet lose control of the whole situation. In a crisis, food price controls don't lead to happy times forever. They lead to starvation. Are You Prepared?
12. Think about the crisis. Think about Gold's new reality of 1424. Don't be ridiculous and demand gold serve some emotional urge you have to have to see it at lower prices where you think you "failed to buy more", prices that don't reflect the reality of this horrific and accelerating crisis. When prices does decline into your buy points here in the new price range reality of $1424-1600, or to price well below that, remember the crisis as you buy, remember the fundamental reality. The system is not being fixed. It's breaking apart at an accelerating rate.
13. Let's look at the phenomenal technicals. I'd like you all to stand now, stand and salute one of the Gold Community's Flags. Click here now for your salute: Wheat Market Flag Breakout?
14. Wheat, one of the mightiest assets of all time, is set to launch what could be a mind-numbing upside move equal or bigger in size than the 60% upside move from about $5 to $8.30, the move that created the flagpole. Well, don't just stand there saluting the flag, get your buy orders on weakness into this market today, and join the party!
15. Here's the gold reality chart: Gold Daily Chart. You can see that price is breaking above 1424 and in fact price tagged 1427 this morning. My suggestion is to now focus on the 1424-1624 price zone as the gold bullion playing field. There are some new risks to manage. For example, business owners who still have cash flow, but who blew up playing the stock and real estate markets, will now proceed to act with significant price plops on the "Is gold an asset here to stay?" discussions they held with their golf ball advisors on the first run to 1424, after missing the entire run from 250-1400. Their golf ball advisors, who know less than zero about gold, will make the sales pitch, and plop, plop, plop, into gold they will come. They bought nothing on the fall to 1320, and view 1424 now as some sort of magical confirmation that they knew what they were talking about, so 1424 is a "safe buy". It's not a "safe in size" buy point. In hindsight, it will likely be revealed as the beginning of a huge gold price chase by the world's worst investors. It will end with a transfer of most of that gold to the banksters, after they engineer a horrific crash.
16. What I want you to focus on is gold and silver stock. Many in the gold community think a run from $1424 to 1624 is going to see gold stocks "yawn higher" as they did on the $200 move from $1033 to $1225 last year around this time of year. You should understand that the richest players in the gold community are not blowing out bullion, because they understand the crisis is accelerating. But for investment reward purposes, a gold bullion move to 1624 could cause the beginnings of a really parabolic move in gold stock.
17. I want to reiterate that while the largest gains in gold stock did come in the first stage of the bull market and out of the 2008 hole, the fact is that as an investor you know that the risk of a junior gold stock going off the board is vastly higher when the product it sells is going for $300 an ounce, versus the current and prospective $1400-$1600 an ounce. Investment involves both risk and reward, and my richest paid subscribers, who are billionaires, are totally ("maniacally" is a better term) focused on gold stock. Let's assume, hypothetically, that you are perhaps, shall we say, not a billionaire. My suggestion, today, is that you pay keen attention to the liquidity flows of those billionaires who sold out of the stock market in 1999, bought bullion then, and are now focused on gold stock. Sound good? The billionaires say it is good! How about you!
18. While silver went to a new high yesterday the silver stocks ETF is several days ahead in defining the new high playing field floor as $25. I expect another upside blast for you today, if gold and silver bullion remain strong into the 930am NYSE open. Here's the Silver Miners ETF New Price Reality Chart! Notice how each price range is expanding in size. Volatility is growing, and is soon likely to grow exponentially.
19. Why do I want to see you use a minimum of a $25-33 mindset for the Silver Miners ETF? Answer: Look at the price range between about $18.50 and $20.50. That's a 2 dollar range. Then there was a $4 range, between approx. $21 and $25. I submit to you that an $8 range may actually be the bare minimum range you should be considering, based on a possible run to $1624 on gold. I think a $25-53 SIL move on a gold bullion move to $1624 is very possible.
20. Think big. This is the big show and you are a main stage player. A move to $1624 represents only a doubling of the $1315 to $1424 run. It could happen in days, and the question is: Are You Prepared? Are you prepared for that move could mean for gold and silver stock? My suggestion to you is: Join my billionaires with your actions and get prepared now.
21. Here's the GDXJ Daily Chart. GDXJ Daily Chart. Horrifically, while the GDXJ sits on the verge of performing a double if gold jumps just $200, you have seen many in the gold community hedge their total exposure to gold and gold stock to zero, because they were afraid it was going to break $1315. Don't ever hedge your exposure to gold to zero or anywhere near zero, in a bull market, and you should not hedge to zero even in a bear market.
22. Selling all your gold is an act of madness at any time, and during the greatest crisis in modern history, it is "beyond madness".
23. The minimum range for GDXJ on a bullion 1424-1624 move should be $43-57. That's the minimum. I would say a range of $43-100 is not irrational, not at all, and that's just on a move to bullion 1624. Most of you freaked yourselves out of some gold and gold stock in 2008. I told you to buy. Then as gold broke over $1033 many of you did it again. I'm telling you now that all price weakness must be bought now with a focus on gold and silver stock, and what is coming is going to dwarf everything you've seen so far in the whole bull market!
24. Some gold stocks stand to move more, just on a move from 1424 to 1624, than they have for the entire ten plus years of the bull market!

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Thank-you,