There was a large pullback in gold and silver last Friday that, while frustrating, is not unexpected. My real concern is for those new here who have not seen this before. This has been a common occurrence since 2011 and I have been exposing it since at least as far back as that.

This one took me a bit by surprise because of the size of the pullback. We have seen many like this over the years, but we have seen pullbacks- while substantial- in the recent past have had major upside reversals. While the metals have been recovering since, they have not made up the pullback yet. (6-12-2024). If the Fed lowers rates today, they could make up a lot of ground in no time. As a matter of fact, my first guess was that they had to take the steam out of the metals “markets” to allow the Fed to lower rates on Wednesday without sending gold and silver into the stratosphere which could wipe out short positions across the board. By the time you read this we will know if rates have been lowered or not.

The takedown on Friday was likely a result of those “in charge” being greatly worried about their short positions in the metals (via paper contracts of course- no metals owned to match the size of their bets) and willing accomplices in the media that parrot a corporate line like- “China has stopped buying gold”. Some outlets even made-up stories about gold being so expensive that even China has stopped buying.

Nothing could be further from the truth, but truth doesn’t seem to be a concern in the mainstream media or on the financial game shows. It is all about manipulation and short-term games.

Keep in mind that silver- and especially gold are ASSETS. Gold, in particular, has been used as money for over 5000 years. It is a hunk of metal that has VALUE. The price is manipulated by banks conjuring up contracts in almost unlimited amounts to move the PRICE where they want it to go. Since the major banks own the Federal Reserve and the Federal Reserve’s power resides in the US dollar, they have been doing their best- through short (naked) positions to keep the true VALUE from being realized. That true value would reflect the terrible performance of the US dollar and undermine its use and price.

The inflation we are seeing is a direct result of too much cash being conjured up out of nowhere and the dollar’s loss of purchasing power. This is one reason why I say gold should be $20,000.00 or more right now.

I have heard experts like Lynette Zang say gold is going to $40,000.00 shortly. I hear Gregory Mannarino say it will reach parity with the DOW at some number. Greg has said that gold will not go to $40,000.00. Now, I think it is naïve to put a number on where gold could actually go because gold has INTRINSIC VALUE. The US Dollar does not. It is a unit of debt that is owed back to the Federal Reserve. Putting numbers on gold appears to me to be getting it backwards. The question is NOT how high gold will ultimately go but how LOW can the US dollar fall?

This difference in paradigm allows you to understand that gold’s VALUE doesn’t change- just the price (currently MASSIVELY manipulated). My answer when people ask me where gold will end up is that, at some point I don’t think you will get an ounce of gold for ANY amount of green paper. If you have enough computer blips you may fare a little better.

I have written extensively about the demise of the US dollar. This does not mean it will cease to exist (although it may at some point), but the purchasing power is in grave danger as the rest of the world is starting to shun using it. Econ 101 says that supply and demand determine price. That is, until a third party like central banks step in and suspend reality for a decade or two.

At some point, economic reality gets exposed, and PRICES are rematched to actual VALUE. Since there is no historical precedent for the current “Everything Bubble” the revaluation of assets that are being artificially propped up will likely be stunning to most when they see the lack of VALUE, they got for the PRICE they paid. On the flip side, those assets that are being artificially repressed will likely be equally as stunning in the opposite direction. Warren Buffet’s line is PRICE is what you pay- VALUE is what you get is very telling. One of the world’s greatest investors has a nearly $200 BILLION cash hoard which includes nearly 3% of the US T Bill market because he can’t find VALUE to buy.

Too many “investors” (most people now are traders or gamblers) are looking for short-term satisfaction rather than looking to retain long-term purchasing power.

While many of the world’s richest families may have started out by some sort of gambling the generational wealth that they pass on has historically been with ASSETS like gold, art, unencumbered real estate and tangible assets- not debt-based assets that count on someone else keeping a promise- that many have not historically kept.

Looking at the numbers now, it is glaringly obvious that there are Hundreds of TRILLIONS of dollars (deb-based) promises that cannot be kept with the dollar retaining even a fraction of its value. What that means is that even if you get paid in full you will not be receiving anywhere near the VALUE you expected.

It is also important to note that if gold were to go to $100,000.00 and you would expect to be RICH you may be disappointed to learn that you could still purchase what you could in relation to when you bought your ounces but because of the demise of our currency (and skyrocketing prices as a result) you will be better off than most but not as affluent as we might imagine today.

Of course, if you have purchasing power at that time when most don’t there will likely be bargains out there that will allow you to purchase assets you couldn’t imagine owning today.

What if … Stocks fall HARD, and many great companies share price collapses or the company even goes bankrupt? In a bankruptcy of a critical company, it will likely be reorganized. This could be a GREAT time to buy as all debt would be gone (prior shareholders wiped out of course) and the company should perform well in the future. Personally, I would BUY then.

What if … Real Estate prices fall because credit freezes up, people can’t pay their mortgages and lose their homes and the demand falls through the floor? My opinion: Time to buy- particularly if you have some suppressed assets (like gold and silver- or companies that produce them) and they have skyrocketed in PRICE you may get assets that have no liabilities attached other than upkeep and taxes.

The rest of this year should be a sight to behold.

Be Prepared!

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