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Stewart Thomson

Stewart Thomson

Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is…

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Gold Wealth Building: Fundamentals and Technicals

Graceland Updates 4am-7am
Mar 29, 2011

1. "We are all getting poorer in hopes that a few don't get richer." - Victor Hanson.

2. Many gold investors are getting poorer, ironically, by waiting for a collapse of the dollar to make them richer. While a fall of the dollar against gold makes those around you poorer, it doesn't make you richer.

3. You may gain some power, but not riches. Only a rise in the dollar can make gold owners richer, because only a rise in the dollar allows you to buy more gold on sale. Gold is on sale this morning, but is anybody in the golden grocery store? Is anybody taking action?

4. I'm here at the empty gold grocery store, buying this gold sale, like I buy every sale. The store is basically empty, except for the usual banksters alongside me, also on the buy. Wait, there's a couple of members of the gold community, too. Thank goodness, it was almost a wipeout!

5. Click here now to view a picture of my Gold Grocery Store.

6. While my competitors, and most investors, get better and better at predicting the next theoretical valuation of their fixed amount of gold, I get richer. Every day, sadly, I watch my competitors hoist their fixed amount of gold up the dollar valuation flagpole, and salute their toilet paper flag. You need to decide whether standing at attention at the flagpole for hours every day, or getting yourself into the gold grocery to take buy action, today, is going to make you richer. Focus on that key word, "today"....

7. If you bought ten ounces of gold in 1998, how many ounces of gold can you buy with that ten ounces now? The answer is ten ounces. You build no wealth by measuring a fixed amount of gold against the dollar, but you get to watch millions get poorer and poorer, and see them eventually go to the breadline, as the crisis causes them to hold less and less dollars, with each dollar they do hold buying less and less of the items they need to survive.

8. You build power, not wealth, by watching those around you get poorer against your fixed amount of gold.

9. If you have a million dollars of cash in your trading account and a thousand ounces of gold in a vault, what is your wealth? The answer is that your wealth is a million dollars of cash, and a thousand ounces of gold. 99% of investors think your wealth is the dollar value of the combined items in your portfolio. That assumption is 99% incorrect, and is a large part of the reason that 99% of investors are lifetime losers in the market.

10. Do not value your wealth in dollars. Value your cash in dollars. Value your gold and silver in ounces, your wheat and corn in bushels, and value your oil and natural gas in barrels and BTUs.

11. Use valuation as a tool to increase wealth, not as a measurement of wealth, or at best your wealth will remain static, and at worst, and most likely, it will nosedive.

12. Working professionally to increase your wealth is not an act of greed. Staring at a fixed amount of gold hanging on a dollar valuation flagpole is greed, and that action of pure greed will destroy your wealth. "I have a professional wealth destruction plan of action in place, and it is standing at attention at the dollar valuation flagpole, a flagpole built by the banksters." - Not you, March 29, 2011.

13. If you want to get richer, here is your course of action. Predict nothing, buy gold on sale, and do it now. Getting poorer is not funny. I'm not just interested in getting richer. I exist to get richer. That's all I do all day long. I get richer, through professional market action, from 4AM to 8PM. Get yourself richer, in cash, gold, silver, oil, gas, wheat, corn, gold seniors, gold intermediates, gold junior stocks. Get more, more, and...more!

14. Dollar valuation is a tool. Use it correctly. Don't use dollar valuation like a chainsaw in the hands of a four-year old, or you will soon look like a diced financial tomato. There are only two correct uses of dollar valuation. The first is to value the amount of cash you hold, and the second is to build absolute wealth, by buying gold and other quality assets when they are on sale, which they are today.

15. For 99% of investors, the dollar valuation tool causes horrific wealth destruction. There's only so much time I'm going to devote to watching the show, "a thousand ways for Elmer Fudd Public Investor to financially die". Most of your time should not be wasted guessing when the gold grocery is going to hold a sale, but spent responding to the sales that do occur, without exception. Today is one of those days that demands you respond professionally, on the buy. Stand back from the mob that is glued to the dollar valuation flagpole, or you will destroy your wealth.

16. Investors should understand that today's dollar price of gold is a tool, not a valuation. The banksters want you to think $1410 is a valuation. It's not a valuation. It's a tool. If you are bored in the gold market, it is solely because you are erroneously using the price of gold as a tool for valuation, rather than as a call to action.

17. Once you are awake, you should be rushing to the quote machine, to see if you bought any gold on sale or not. You should be rushing to look at the cash in your accounts, to see if you bought any of that on sale too!

18. You only get richer when your amount of cash measured in dollars, rises, and your amount of gold measured in ounces, rises. If you have a thousand ounces of gold and $1 million in cash, you only get richer when you have more than a million dollars in cash and more than a thousand ounces of gold.

19. I estimate that 1% of investors understand that they are engaged in wealth destruction, not wealth building, and only 1% of investors will end this gold bull market any richer than when it started. Many will end the bull market with more power over poor people, but you won't be any richer. I think relative power is over-rated, compared to absolute riches. What do you think?

20. Let's take a look at some charts, while you read the above 19 points repeatedly, until you take buy and sell action like riding a bike, rather than engaging in predictive action like riding a bike.

21. Here's the gold juniors chart, via GDXJ. Notice the short term stochastics is giving a bit of a sell signal, while the longer term stochastics is flashing a buy. It is a complete and utter waste of your financial time to guess whether "short term, we might have a dip".

22. As time has passed since the gold markets stalled out against the dollar last October, a huge amount of energy has been expended by investors to guess whether we are going lower or higher. More and more, price is shaped as a consolidation, but in the end all that matters is whether you are prepared to use the cash in your accounts to buy gold market items if they go on sale, as they are today.

23. If gold market items go more on sale, then you buy more. If you have significant assets, you should be carrying a position of gold put options and gold short positions as well, so you are booking profits today while buying long positions.

24. The bottom line is that the gold market is what you make it. It is boring if you stand beneath the dollar valuation flagpole with a fixed amount of gold and pretend you are getting richer or poor as the banksters raise or lower the flag. It is phenomenally exciting beyond most of your imaginations, if you use the flagpole as a "gold on sale" and "cash on sale" tool. Now, I apologize, but I have to go, because my cash registers on my short positions are ringing loudly, while I'm pushing my longs cart around in the gold grocery. Most everything is on sale, today! See you at the store!

Gridtime. Is there ANYTHING else to say, except...check your buy and sell fills now!

Special Offer For Website Readers: If you want to feel the rush of booking wins every day trading the gold market while building both cash and gold positions, and get out of the quagmire of dollar valuation of a fixed blob of gold that never weighs any more or less on a scale, then send me an Email to freereports4@gracelandupdates.com and I'll rush you my "Get Richer Now!" report! I'll send you the exact trades I'm doing in gold on the short and long side, and show you how to apply that daily action to your favourite gold juniors! Thanks!


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