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Richard Russell: Speculative Phase Of Gold Bull Lies Ahead




Richard RussellRichard Russell is not only the preeminent expert on Dow Theory, he is one of the most prolific newsletter writers (Dow Theory Letters) and thanks to his epic longevity, will hopefully go one to break records for many years to come. The "Oracle of the Dow" is not omniscient, unfortunately. Otherwise, we mere mortals would simply follow his sage advice to riches.

He was definitely in fine form in the summer of 2000 when he prophesied that "we’re in the first phase of a bear market that could be long, tedious, grinding and very painful. Before it’s over, I believe we’ll see big pools of money moving out of stocks and into cash."

But since then Russell has had an especially tough time with deciphering the stock market. Especially so these past few years. He was bearish for some time but then in May 2007 Russell switched to the bullish camp and pronounced that "an unprecedented world boom lies ahead."

It would seem that Russell has basically given up on trying to time the market's gyrations, writing recently that "the stock market is too unsettled, too questionable, for me or my subscribers to assume an all-out bullish or bearish position."

But he continues to be an unabashed gold bull. This is the one market he has been pounding the table about for quite a long time and he has been absolutely correct. To my chagrin, it took me far far too long to realize that gold is indeed in a secular gold bull market. And of course, the next thought after that is the dread that it will be soon over.

Russell puts those thoughts to rest writing recently:

"I’m going on the thesis that the highly speculative phase of the gold bull market lies ahead. Now I’m depending on my experience with other bull markets:

  1. Most great bull markets go higher and further than almost anybody thinks possible.
  2. Most bull markets progress in three psychological phases.
  3. I believe the first phase of the gold bull market has passed. It’s over. This is the phase where students of great values take their initial positions.
  4. I believe we are deep into the second phase of the gold bull market. This is the phase where the institutions and funds join in the bull market show.
  5. Often, more money is made in the third or speculative phase of a bull market than is made in the first and second phases combined. This can mean that the late-comers to bull markets often make a fortune, more than those who had the courage to buy early in the game, but they have to have fortitude to sit in the highly volatile second/third phases.
  6. Obviously, I could be wrong, but I believe that gold and silver are both still a buy.
  7. I've said this before, but I’ll repeat it. You do not trade in-and-out in a confirmed primary bull market. You take an early position and add to your position as the bull market progresses.
  8. Great bull markets don't usually provide marvelous entry points. Those who are waiting for the ideal or "safe" place to enter the bull market in precious metals may have a long and frustrating wait.
  9. In a great primary bull market, you just "shut your eyes and buy."
  10. Are you buying right or are you buying wrong? Great bull markets tend to bail you out of your mistakes. Perfect timing is nearly impossible in a great bull market. You’re either in or you're out.
  11. Great or fabulous primary bull markets may come along once or maybe twice in a generation. I believe the bull market in precious metals is just such a one — a once-in-a-generation bull market. We may never see another one to match this one in our lifetimes.
  12. I started writing Dow Theory Letters 52 years ago in 1958. Three times I’ve staked my reputation and my business on a bullish market call. The first instance was in 1958, when I told my subscribers that the third phase of the bull market lay ahead, and it was time to load up on stocks. I said so in my first Barron’s article. That call and that article put me in business. I thank Barron's late, great editor Bob Bleiberg (who had faith in me and went out on a limb for me).

    In late-1974 at the end of that horrendous bear market, I told my subscribers that I thought the bear market was over, and it was time to buy stocks.

    In the year 2000 I told subscribers that I thought the bear market in gold was over, and that it was time to buy what was left of the gold stocks and "put 'em away." I told my subscribers that we should treat the gold shares (many under five dollars) as perpetual warrants. "Buy 'em and forget them."

  13. Lucky thirteen. I’m confirming what I said in 2000. Buy gold and silver, put ‘em away and sit tight. The great speculative phase of the precious metals bull market lies ahead. My advice is concentrated in four words — Buy, and be patient."

Looking at the very long term chart of gold, the base at the millennium is apparent, as is the unrelenting march of the secular bull market. While it does deviate from time to time away from the long term trend, it quickly returns to it. Right now we are above the trend but not at an extreme point that has historically lead to regression to the mean:

gold long term chart Nov 2010

Currently the price of gold is trading at 16.3% premium relative to its 200 day moving average. Historically tops have corresponded with a premium of 20%+ so we still have some room the upside in this most recent cycle. And as Russell so eloquently puts it, quite a ways still from the "highly speculative phase".

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38 Responses to “Richard Russell: Speculative Phase Of Gold Bull Lies Ahead”  

  1. 1 Tiho

    "...so we still have some room the upside in this most recent cycle."

    I highly doubt that when I look at todays correction and the current chart of Silver. A strong correction is overdue.

  2. 2 Aries

    I started accumulating gold in April of 2002 and have not regretted it. An individual must be patient if wanting to in the long run profit. Perhaps we will have another correction or more, but then the upward path will be renewed. There's still a long way to go and I'm staying with it.

  3. 3 Martin

    I've bought and bought and bought and will continue to buy more and more and more,

  4. 4 Federalist45

    Tiho: I am a 53 year old who has lost more money in various markets than I ever should have. I have made many bad calls following much bad advice. About one year ago I got what I believe to this day was very good advice--buy gold and silver, which are in secular bull markets that will last until at least 2012, and probably until 2016. Gold will to at least $2500 per ounce and silver to at least $50 per ounce. I bought in with gold at about $950 and silver at about $18. Yes, there have been minor corrections here and there, but the same counselor advised that these pullbacks were necessary to consolidate and firm up the bull's rise. Since then, NOTHING in financial or world events leads me to doubt the value of the original advice. The U.S. government is doing all it can to devalue the dollar, U.S. government debt is beyond its tipping point, the dollar may correct here and there but is in a long-term bear market, the U.S. cannot get into a trade surplus, REAL unemployment in the U.S. is at about 25%, the Middle East is on the brink and oil is already rising toward $100, China continues to hum along industrially, using vast quantities of commodities such as silver (the exports of which it has said it will reduce by 40% next year), copper, and palladium, India mirrors China, people, institutions, and governments around the world are buying massive quantities of precious metals, and particularly gold. . . What in this picture leads you to believe that gold will go DOWN in the intermediate and long terms? Yes, this is all bullish in nature and one must be cautious when everyone is getting bullish, but the reality is there is so much more bullishness to come--when major institutions begin entering this market, when mutual funds and brokers push clients into gold, when banks peg products to gold. . . That is the Phase III speculation that is yet to come, and it can carry gold to $5000 and silver to $60 . Finally, a stash of gold and silver (especially junk silver) may come in handy if the dollar truly does collapse. There may come a time in the not too distant future when a baker selling bread won't take dollars, but will take pre-1964 silver dimes. Yes, there will be corrections along the way, but those are buying opportunities. Nothing is a sure thing, and it could all go the other way today. But so far I am pleased I finally found someone to listen to who was correct--at least so far.

  5. 5 Spenser

    RR is 'right on' - I've been in this since the late 90's, after having witnessed the run-up in 79-80 (but had no money then to invest).

    My motto, which I probably stole from someone else but can't remember who, is:
    "Be right, sit tight, and buy the dips!" In a long-term secular bull market more money is made by just having the courage of your convictions and holding on to what you have than by trying to time the market (UNLESS you are an EXPERT and have all day to do this).

  6. 6 Pick

    I bought my first Kruggerand, dated 1975, in 1976 and paid $141 for it. I still have it. I also bought three, $1,000 bags of silver for $3780 each and sold them in early 1980 for $25,000 each. After the metals crashed I bought back and am still holding the position.

  7. 7 Mr. James Massimino Sr.

    I usually don't leave any comments on these pages,but this is an exception to that because Symbol [ SLW:NYSE: ] Is by far the not only best performing ,but the best stock to own in this precious matals bull run,I am a silver bug ,"I guess thats what u would call myself],due to I have invested in the pyysical American Eagles from the high $18.00 ares all the way up,but mainly my average is mabe ??21.50 per coinx 240 coins to date.
    Thats just the bullion part,I also bought a decent amount of ms-70's first strikers earle releases ,bot he the sil.eagles and the chinese pandas also.
    They are the coins you just put away for your granchildren In my opinion.
    Then suddenly i came accross [ slv ] which normally follows the spot on the silver by -.50 almost religeosly every day,give or take a few cents,but then while still doing my daily research I stumbled upon the KING OF KINGS In this special bull run in p.m.'s which is mabe a few bucks or so higer,BUT!.... iT ALSO GOES UP ALMOST 3-1 COMPARED TO SLV.
    sO ONCE i RESEARCHED SLW /sILVER wEATON AS MUCH AS POSSIBLE IT WAS VERY CLEAR TO ME THE perfect way to go here is to sell the slv I had ,take some prifit from a parcial amount of my coins wich included a 1900.00 profit along with my origanal money I used to purchase them and buy SLW / Siler Weaton the ,as I said KING OF KINGS IN THIS BULL RUN AND APPROACHING THE THIRD STAGE WHERE MOST PEOPLE MAKE THE MOST MONEY ,LIKE MORE THAN THE FIRST TWO STAGES TOGETHER ,i WANT TO SELL EVERTHING i OWN,EVEN MY CAR! LOL AND BUY all THE slw I cAN POSSIBLY BUY IN PORTIONS AT EACH DIP OR OPERTUNITY THAT SHOULD ARISE.
    oNCE i AM OUT OF THE DRY POWDER ,ITS A WAITING GAME,TIME TO GET AWAY FROM MY DAILY 8-10 ONLINE WITHOUT GOING OUT OF THE HOUSE,BUT THE BEST PART IS i KNOW DEEP IN MY HEART AND DUE TO THE OBVIOUS SUPPLY/DEMAnd issues already taking effect,add in the jpm and that creww that still have to cover and I could go on and on with many more realistic reasons why this is as close to a sure thing as you or me will ever come accross in our life times ,this is a fact,backed up by numbers ,records ,needs and wants,supply and demand and so much more it just ?????is mind boggleing unbelievable and I am so graciious to be able to be a part of this greatest oppertunitys Ive EVER HAD THE CHANCE TO BE LUCKY ENOUGH TO PARTICIPATE IN.
    sOMETIMES i REALLY WONDER IF IT WOULD BE POSSIBLE THAT THIS WONDERFULL THING WE HAVE HERE WILL BE SO SUCESSFULL THAT i COULD POSSIBLY GET BACK THE 80,000.00 i LOST BACK IN 2008 OR NOT,THAT WOULD BE ENOUGH FOR ME TO BE CONTENT,i LEARNED ALONG THE WAY TO BROKE NEVER EVER BE GREEDY,HAVE PACIENCE,BE GRATEFULL FOR A GAIN NO MATTER HOW SMALL OR BIG,AND A GAIN IS A GAIN ,PERIOD!!!!
    I have also learned to hate the exspressions woulda ,coulda ,shoulda and I almost had it ,I shoulda stuck with my gut feeling ,for the first guess is by rule of thumb usually the best way to go,so stick to it.
    jmo ,thank you for reading my feeling and oppinions towards the p.m.'s bull market and I truly wish everyone the best,we all need this chance to finally make some of the money back we've been manipulated and screwed out of over the years this I know for sure,and heres to a much better level playing fied to come one day soon,I pray ,anyway. Giacomo /Jim Peace out............

  8. 8 saxa

    check first majestic silver as a competition for slw

  9. 9 Mr. James Massimino Sr.

    I'm so sorry if I missed your intentions of that comment,Sir.
    Is Majestic a p.m. broker/co. ,or a security on an exchange?
    Sorry for my ignorance of Majestic ,I think I'v heard the word used before ,but would appreciate a better easier repost to understand ,for people as I who wouod like to know.
    Thank You ,Sicerely,James Massimino Sr,Peace out!........

  10. 10 Babak

    First Majestic Silver is a junior that trades on the TSX (FR.to) or Frankfurt (FMV)

  11. 11 Yaun

    As for valuations, the pms seem to be quite overvalued towards the base metals right now. The only way to justify such a premium is their increasing remonetization.

    On the other hand, for a full remonetization of gold we would need to see a further 1500% rise vs USD (if goldreserves and M0 stay constant). I think the only way this would happen would be in a hyperinflationary scenario. We will wait and see what happens.

    Since some people here are talking about miners. Does anyone know what bookvalue means for a miner? Does this include reserves? Reserves and Resources? In a certain fraction? I couldn't find any information about this, but price book value evaluations for different miners differ substantially so I would like to understand the reason.

  12. 12 saxa

    frmsf on the ny stock pink sheets exchange. 9.77 today closed up 160 percent compared to 80 percent for slw just in the last 3 months.

  13. 13 Federalist45

    AGQ was down 16.50 (about 12%) today when I bought into a large position. Did not follow it after 2:30, but believe that at some point, AGQ will get back that 12% plus, perhaps, 100% more before the silver bull is finished. If we really do get into a Phase III speculative phase, it could go much higher than $50-$60.

    UGL was down 4.50 (about 1.8%) today when I bought into a large position. I believe the same drivers apply to gold as apply to silver, less the industrial use of silver.

    Given a $13T debt, another $120T in long-term obligations, and a government that believes it is meeting draconian austerity requirements by cutting future annual deficits to $4T from $7T, I don't see any hope for the dollar. People will flock to gold and silver by the end of 2012 as the only potential safe havens. It could go well beyond a Phase III speculative phase into a Phase IV last-resort phase.

    If you disagree with the big-picture analysis, please let me know how you see it. I dread the day the dollar collapses, and pray it never happens. If you can see a way around this, please explain your analysis.

  14. 14 Silver Dollar Coin Value

    I bought SLW at $4.60 back when no one was talking about it. I have been a firm believer of the chaos that has been happening to our money in this country for the last decade. I been buying gold and silver since 2002 and the Fed, and US Congress is giving absolutely no reason to stop now. Buy gold and silver, sit tight, and have faith!

  15. 15 Tiho

    I completely agree with your view, Federalist45. I am not 100% sure about anything in life, however I have a decent convocation that Gold is going to go much higher in the long run. But I also think it's due for a decent correction now as well, and I have some short term shorts on it. Silver too. But none the less, I agree corrections are longer term buying opportunities.

    I manage money in two ways. I speculate and I invest. When I speculate I go long or short on certain asset class for a few weeks to a few months based on timing tools. It doesn't work perfectly, no where near perfect actually. However money management is important.

    But investing is where I put majority of my money. I do not like to invest too much money in a bull market like Gold that has been going up like a turbo engine. I rather buy depressed assets. I literally try to buy low and try to sell high... always. Jim Rogers once said that to make a killing, you need to get in early when everyone is pessemsimtic and situation looks horrible.

    I, for one, do not see such conditions in Gold. All of you here on the forum are so sure that Gold is the right investment for you. And it most likely is, and it most likely will be, as it goes higher. But for myself, when in search of asset classes to invest, I look at something that is depressed. Currently, I do not see anyone on this forum talking about Uranium. Uranium is a very depressed, very cheap asset class, which has not made any front pages like Gold or Silver. But if I was you, I would give Uranium a second look. Uranium fundamentals of supply and demand are improving. There are shortages developing in the next decade.

    On top of that, I also like Natural Gas, Rice and Cocoa. All of these commodities are quite cheap when compared their historical highs, or when compared to inflation adjusted price, or even when compared to Gold or Silver. And there are now shortages developing for both Rice and Cocoa. No one has mentioned the asset classes. I guess that investing in em might be difficult or that main stream media rules them out of news reporting, so popularity is an issue.

    Golds supply and demand is actually not very good from investment point of view, so the price is rising, in my opinion, because everyone believes Gold to be the financial savior from currency problems. It is the fear that is creating a demand for Gold. if and when the fear eases like in 1981, the Gold bubble will collapse. It might be awhile yet however, when I look at Washington leader. While agricultural commodities like Rice are experincing shortages now, because it is real fundamental need that is creating demand. People are hungry and floods, heat waves and old ages farmers cannot support the food supply too much longer.

    I am bullish on Gold, but I am much much more bullish on Uranium, Rice, Natural Gas or Cocoa.

  16. 16 John Ausiman

    Started buying gold in mid-80's. Don't have a lot but doing okay. Goal is to have as much bullion, both gold and silver as practical. Don't need Ms69s or 70s, will let the collectors have them. Was a former salesman for a large precious metals dealer in the mid-west where I really got an appreciation for gold and silver. Really like the $20 Liberty and Saint - XFs or AUs will do just fine but bullion more practical for me now. Silver favorites - Merc Dime, Walking Liberty Half and Morgan Dollar. I'm keeping the faith.

  17. 17 Richard Whisler

    Interesting discussion! I too own bullion and junk silver. But I went the way of quarters. Dimes were too small to handle easily. And I went to the bank and got a lot of quarter wrappers. Each roll was about half a pound, and I counted and handled each coin. Very few coins were worn at all, and over 60% were 1962 or 64. And appeared to be in almost uncirculated condition! I was pleasantly surprised to find that 100 rolls fit nicely into a small sized deposit box. Just load carefully, the weight was just about the max. A great website, which I have found to be invaluable is | www.coinflation.com | Silver Eagles and and Silver incuse Indians top everything off! We should do this again sometime! I am intrigued about SLW, but also Lithium, Rare Earth Elements, Thorium and of course, uranium. But don't forget Nickel! Fresh unpolluted water becomes more scarce by the day. Huge infrastructures in countries like India, China, the Middle East and elsewhere will need vast amounts of stainless steel! For both desalinization and water treatment plants. We must protect our valuable Freshwater resources against the top 10 polluters like Koch Industries for instance. A company under indictment on 99 serious violations. They are headquartered in Oklahoma, and have ruined the underground aquifers of parts of six states!

  18. 18 mitch

    After the 3rd stage of speculation finishes and gold or silver tops out, do you get back into dollars?
    How do you take profit if dollars are devaluating.
    thanks
    Mitch

  19. 19 John

    Mitch, I've been wondering that meself. I rally dan't no.

  20. 20 Tiho

    After the commodity bull market ends, not just Gold but all commodities, than you get into stocks - if history is any guide!

  21. 21 Glen2Gs

    When is the Bull Market over for Gold?

    The Rule of Thumb that I have always heard was ...When You can buy the Dow Jones Industrial Average for Two (or Three)Oz. of Gold....DO IT!

    On 11/11/10 the ratio was 8.0069 Gold to DJIA... I can't find my notes to give a more exact number, but last year, The Ratio was in the High 9s

  22. 22 dpm

    I say gold and silver are long term holds, you cannot look to bail every time there is a hiccup.

    These short term corrections were always on the cards.

    Same old story, many will bail because they have to and those that don`t will win big in time.

    Wouldn`t it be wise to hold some amount in case is does go "parabolic" as they say?.

    The problem is for most people they do not have the cash to spare, and many will slowly sell to survive as inflation makes life tough.

  23. 23 Rick

    for multiple plays check out Pinetree Capital ,Canadian company , an investment bank that buys warrants, stocks and helps finance micro and small cap resource companies in Canada. They invest in uranium, silver,gold, oil,gas ,rare earths and more.. PNP.TO

  24. 24 Federalist45

    A poster or two asked about the end of the gold and silver bulls. Analysts on whom I have relied for my entry into these markets predict $50 silver and $2500 gold by the end of 2012, and also believe the bulls may extend through 2016. The problem, as with any investment, are the myriad factors that are next to impossible to predict. Will the U.S. government and the Fed continue to try to kill the dollar? Will the U.S. government remain one that spends as if it has infinite amounts of money? Will U.S. employers of all kinds regain a competitive advantage and start hiring in big numbers again? Will the U.S. engage in further foreign wars? Will such wars turn out to be existential necessities to feed people, keep them warm, and keep them employed? Will Iran go nuclear and annihilate Israel, forcing the hands of U.S. decision-makers? There are so many variables, none of which are predictable with certainty. So, in the end, who knows? That is both the interesting and frightening reality of investing in "interesting times."

    Posters. . . . Can you offer your best recommendation for a uranium play and why?

    Mitch. . . . Are we sure the dollar will survive the next 5-10 years? The next 2-3? I am not so sure of it.

    I have tried water plays (PHO), agriculture plays (PAGG and DBA), S&P plays (stocks, mutual funds, ETFs), and NASDAQ plays (was murdered in spring 2000). NOTHING I have ever owned made money in the end. Of course, that can be said for lots of people whose primary investment experience began in about 1999. We rode the tech bubble, then exploded with it, and then we had to watch the DJIA and S&P rise and fall and go sideways. It has been a bad decade for investors---EXCEPT those prescient enough to buy gold in 2000. I was not and did not. Now that I am in (admittedly later than I would have wanted), I am staying in until I see a sound REASON to believe we have reached a turning point. I figure that time will not come until the U.S. has a balanced budget, unemployment under 5%, inflation under 5%, and no foreign wars.

  25. 25 John

    I guess if nuttin else then jist by the Dow Janes Upheaval Averragge!!!!!!! Dats whut i allys says.!!!!!!!! Call CNBC for hand holding.

  26. 26 Londonian

    Federalist 45: uranium plays: UEC, URZ, KAH.L and KIV.V are my choices. Please do your own DD

  27. 27 Londonian

    That's URZ.TO, BTW

  28. 28 Chapman Champion

    Robert "Bob" Chapman (The International Forecaster) is the most brilliant financial forecaster out there, second to none.

    If anyone knows of a more intelligent, more experienced individual with a more superior track record, and a more multi-dimentional mind, they ought to name that person on this here blog.

    Any Doubting Thomas is very strongly urged to read Chapman's advice, much of which is available free of charge, and listen to his interviews, also for free.

    Chapman made his millions many years ago, he turned 75 last October 15, and, to quote him, "where I'm going, I don't need money" (you don't need his 180 IQ to figure out 'you can't take it with you.') Most people in this world will find it outright impossible to believe that someone's actually trying to help others (no wonder the world's in the deep you-know-what that it's in).

    Essential snippets and segments of the twice-per-week (Wed. & Sat.) publication can be printed out from his website (http://theinternationalforecaster.com/) and from Goldseek (http://news.goldseek.com/InternationalForecaster/).

    Chapman has his own YouTube Channel (http://www.youtube.com/user/thebobchapmanchannel?blend=1&ob=4) and there is a Chapman tracker/blogspot (http://bobchapman.blogspot.com/), and folks can just go to YouTube to search for the very latest Chapman video.

    On average, he does about 25 hours of radio per week.

    Chapman's e-mail is Bob@intforecaster.com (only for financial questions).

    His golden advice is just that: it's worth gold and silver.

    Chapman would probably agree 100% with Russell's 13 points outlined in the above blog, and Chapman gives Russell credit where credit is due: Russell truly is one of the giants in economics/finance/investment.

    So, please take Sir Richard Russell's advice.

    Any skeptic can select/copy Russell's 13 points, paste them and e-mail them to Chapman, along with any personal finance-related questions, but here's a time saver:

    Chapman recommends 6 mining stocks (because you only need a handful of big winners), the first 4 of which are core holdings, the remaining 2 more speculative:

    1. Agnico-Eagle (Chapman's favorite)
    2. Goldcorp
    3. Silver Standard
    4. Minefinders
    --
    5. Hellix Ventures
    6. Abington Resources

    That's all, folks. He does not recommend options, warrants and other such financial instruments for the average man in the street (if you're a pro, knock yourself out).

    Alternatively, if you think a stock portfolio is more suitable for your needs, Chapman suggest the Sprott Gold & Precious Minerals Funds (Sprott Asset Management), managed by Eric Sprott, John Embry and their team in Toronto. Sprott is superior to most others, no question.

    The top 3 issues of The International Forecaster this year (so far) are dated May 5, 2010 and May 12, 2010 and Sep. 25, 2010. They are archived on some of the above-mentioned websites. Just look at how the best mining shares did (compared to bullion) during the Depression, never mind during the late 1970s-early-1980s.
    Folks, James Turk and other like-mined individuals are saying what Chapman's been saying: "The gold and silver [mining] shares are an explosion waiting to happen."

    By the way, anyone who wants to buy a whopping quantity of physical silver but doesn't want to take delivery should check out the new Sprott Silver Trust.

    Buy, hold, ride out the bull. Depending on your personal situation, Chapman recommends up to 70% shares, 30% coins. He's currently 50-50 on silver-gold in his coins portfolio (a change from his previous 25-75 silver-gold). But you should be close to a 100% in gold and silver (total portfolio) for your protection. It's okay if you have maybe 10% in agri & energy, and 90% in the precious metals (ever notice that word, "precious"?).

    Not incidentally, long before Robert Zoellick's recent announcement regarding gold, Chapman was saying we (who have gold) may never want to sell gold or part of it.

    For those of you who want to follow the silver specialists, Theodore (Ted) Butler and David Morgan are the top two names.

    On the subject of silver, Max Keiser has initiated the "Crash JPMorgan Buy Silver" movement (although it wasn't his idea, and he admits to that), so, let's take action.
    Not incidentally, Chapman always suggests you take physical delivery of coins.

    Folks, Michael Maloney points out that gold and silver will overshoot their equilibrium some day (they'll be overvalued), and the metals will correct downward, perhaps too much initially. However, bear in mind what Chapman says: we may never want to sell at least part of our gold and silver. We'll know when we get there. Chapman thinks this won't be for at least another 5 years. This time-frame projection corresponds with at least 2015, but always bear in mind that it is becoming increasingly more difficult to make time-forecasts. There are just far too many variables, and the pressure is building on all fronts.

    The fundemental reason for gold and silver bullishnes is fundementally one thing and one thing only: fundementals.

    Since Aug. 15, 1971, the entire world has been on a Ponzi scheme. That'll be 40 years next summer. In view of the fact that on the 100th anniversary of the planned coup d'etat of the U.S. (Nov. 1910 - Nov. 2010) World Bank Prez. Zoellick was instructed to make the statement about gold, it is in the realm of possibilities that the big international meeting (which Chapman has been writing and talking about) might take place next summer. June 13, 2011 is a projected low-point by Martin Armstrong, and the Fed's $600 billion money pumping runs dry in June, so the big meeting may come next summer.

    Chapman points out that during this meeting there will be multi-lateral defaults and currency devaluations and revaluations (think Plaza Accord, Louvre Accord, etc.).

    Of course, the can may be kicked down the road -- think U.S. Prez elections, Nov. 2012, or Dec. 2013, the coup d'etat in the U.S. (100th anniversary). Again, timing is next to impossible to predict with accuracy.

    Alternatively, the other way out is war.

    Does anyone in their right mind think that the $1.5 quadrillion (nominal) derivatives will go away, just like that, without any ramifications? Even the "official" figure of around $600 trillion in (nominal) derivatives should speak louder than words. If you want to see what that looks like, check out "The Great Credit Contraction" by Trace Mayer, J.D.

    Chapman points out that some 20 major nations are either bankrupt or on the verge, and until that situation has been settled (e.g. the big international meeting), just keep protecting your wealth. Think about it: the U.S. alone will have to inject between $4 trill and $5 trill over the next 2 years to not deflate into a deflationary depression. And then there's the rest of the world.

    Folks, just follow the advice of the brightest minds in the world: Bob Chapman, Richard Russell, Harry Schult, Alex Jones, Gerald Celente, the list goes on and o (King World News, Financial Sense, etc.).

    So:

    1. Buy
    2. Hold
    3. Relax

    Enjoy the show.

    That's all, folks!

  29. 29 Londonian

    OOps! Forgot to mention BSK.V

  30. 30 Steelerdude

    gold and silver are held as insurance, you do not trade them for paper dollars....thats stupid!

  31. 31 Londonian

    After the gold bull's ended, go into whatever commodities and/or stocks are hot. Maybe real estate will be good again by then. Maybe Africa will be the place to invest. Who knows? Be ready to be flexible. But this is all obvious, surely...

  32. 32 guru

    if some sort of societal chaos and/or collapse is impending or possible is it good enough to buy ETS of any of the above commodities (ie. gld,slw) or is it essential to possess the physical commodities and be able to transport them, etc? Many seem to think it is possible that the government can and will limit and or prohibit a citizens right to own physical gold.

  33. 33 Tomo

    Chapman Champion said:

    1. Buy
    2. Hold
    3. Relax

    Enjoy the show. That’s all, folks!

    ---

    You are going to get a rude awakening if you buy, hold and than try to relax. The price could sink lower, and lower and lower. Gold could correct by a huge amount and still be in a overall long term secular commodities bull market. Why? Because nothing goes up in a straight line. Gold has had only one serious surprise in the last four years and that was in the second part of 2008.

    Last Gold bull market was full of surprises. Gold started its run in an amazing fashion from 1970 to 1974, with corrections here and there. What followed was a 50% correction where almost everyone was shaken out. Majority of retail investor had no guts to hold as prices of Gold kept falling and falling.... and falling.... and falling. Let's see you relax when that happens?

    Those who did relax however, were later rewarded as Gold bull kept marching higher by eight fold spike from 1976 to 1980. If history is any guide in commodity bull markets, than Gold bull will not be a one way direction where you just buy, hold and relax.

    Just wait until a big surprise comes around... I hope you stay relaxed than, as your $1,400 entry shows you a massive paper loss.

  34. 34 Mr. James Massimino Sr.

    Hey people ,I'm back a second time only cause we are going through a uncharted time and I personaly don't feel charts or past behavior is any way to prdict the future here with maily silver,but gold also.
    The JPM thing has all kinds of opinions floating around different boards,with many totally different opinions,so this tells me it's a crap shoot in a sence of when we will return to our upward trend once again,it's really not a matter of if,I think it's more of when,almost as the demise of the dollar with qe's,they [bernacki/Obama] will undoughtably destroy our dollar ,and not if but again I use the term when??
    I feel each investor must play their own hand due to every investor has a different entry,different everything,and hopefully not on margin,or usingfood money to play this bull market exspecting to return the borroewed money soon,this is to me a long term investment .
    As I said once before ,by the dips,and wait,also NEVER go on margin especially in a period of unpredictable times as now.
    I guess I could say more but ,Im still holding my position in [SLW] yet ,its not as big as I was about to make it last week,but thankfully I didn't pull the trigger yet! wew!!
    I think the best way ,imo,to buy a dip is to wait for the reverse trend to be on its way and then biuy.At least you know which way we are going at that point ,bynot waiting u may buy prematurely and the dip may continue lower.
    So ,use your best judgement and what else is there I ask?? good luck as always ,Sicerely James Massimino

  35. 35 guru

    Anyone have an opinion on my comment above?

  36. 36 Tiho

    This post has received a much bigger number of comments than any other in the last few months. It just shows that Gold is very speculative already!

  37. 37 CB

    Please, don't trust Bob Chapman, he is "the champion of stupidity".

    He mention sometimes ago (1990 approx) when the price of gold was raising "Sell the farm and go gold" and the price of Gold sink very fast.

    People who follow his advice are naked.

    If you have a chance to listen an interview with him, you will understand.

  38. 38 ronarvada

    pleasekeepmeapprised

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