The Wallace Street Journal
This Ain't The Bottom (But you can see it from here)
June 5, 2012
By David Bond, Editor
Wallace, Idaho – Bernard Baruch famously said: “Don't try to buy at the bottom and sell at the top. It can't be done except by liars.” Good advice. So many ersatz experts are calling this the bottom for silver and gold that it absolutely cannot be the actual bottom. It may be so close that we can see it, but we're willing to ride this elevator down a few more floors before we hit that big red STOP button.
At the last bottom, in 2008, Hecla was a buck and Teck was only $5 ahead of it. If you read Jeff Clark's article at Casey Research, read it again. If you haven't, return to Go.
But smugness is the enemy. Until you feel panic in your loins – and you don't feel it now, just yet – stand pat. Not that you're going to be burned, buying just now, but the fire sale is ahead.
Our own crystal balls – Paul Sarnoff told us that prognosticators don't have crystal balls, they just walk like then –tell us that we will see a massive sell-off in silver, down to the $18 level.
(Paul first brought to this writer's attention what Clark's article drives home: that decreasing open interest during a price trend signals a price trend reversal. If the price of gold keeps going up, but fewer and fewer people are jumping in, then jump out. The converse is true: If the price of silver and gold are going down, and fewer and fewer players enter the markets every day, then the price is headed northward.) Watch the open interest. If prices rise and more people jump in, that is the end of the bottom.
Three events will transpire this year that will send us and our little silver mining camp, temporarily, cratering. They haven't happened, yet:
First, the pretender now occupying the White House will be defeated, which will incite riots by feral adolescents in every major U.S. city. (He might also prevail, in which case the same conditions will apply.)
Second, the young man who got the best of that fight with Trayvon Martin, will be acquitted on facts. This again will incite riots by feral adolescents in every major U.S. city.
Third, the Euro will collapse, which will incite government workers, feral whites and feral Muslims in the European capitals to tear down what's left of the decent places there. What the Czars and the Nazis could not accomplish, Paris' own recently-imported citizens will obtain the destruction of that magnificent city – in the harmless name of diversity, one supposes. Last chance to walk the fair arrondissements of the City of Light along the Seine without having to look over your shoulder. (What has been built on faith is easily destroyed on the altar of nihilism – just like fiat currency.)
These three events will drive the U$D up to record high levels as the Euro collapses. Probably happen late summer, early fall. The flight to the U$D will momentarily suck the wind out of the gold and silver sectors. The crash will be hard. We may well see $18 silver and $1,200 gold and a 66.6-to-1 silver:gold ratio before the bloodiest is over.
It will happen and it is going to suck. But it will be temporary.
Then, sometime late this year of early next year, a few bright people will discover that the U$Dollar has no meaning, no value, other than its reputation as a pledge of the “full faith and credit” of the United Snakes. But there is scant credit to obtain from this nation of debtors. We are not a country of farm-owners, of factory-owners, or even property owners or free men. We're just renters without equity, and there is nothing to secure our debt.
I fear there will be violence at the portals of our great mines. Unlike the Mine Wars of a century ago, which pitted management against workers, this violence will pit Us against Them. Either Obama or Romney will need to seize ownership of our mines in order to secure the debt of these United Snakes. Our miners will be conscripted, and paid a barely meaningful wage – but enough to keep the cable TV turned on and the NFL package live.
If you are a shareholder in one of these mines, your future is secure. After all, even slaves need to be fed, and dividends will be paid as promised. Corporations and their shareholders are whores: if they're paid, they're fine.
Some things we have recently noted:
National Public Radio's muppets are encouraging a U.S. military involvement in Syria. One supposes they would encourage Obama to enter into a third regional conflict, one more than He inherited, and blame it on Bush;
California will increase its cigarette tax by $10 per carton, on the heels of the Messiah's tax increase of $10 federal tax per carton upon his inauguration. Having run out of Germans, Russians and Blacks to despise, the government is turning the hatred inward. What's next? A call for school children to snitch off parents who do smoke?
The federal drumbeat to inform authorities of any suspicious activities on the part of one's neighbors, no matter how harmless they really might be. My mother told me not to be a tattle-tale.
The continued irradiation and groping of people boarding airplanes. (Back when I was a child, you could just walk out onto the ramp, meet the pilots, extinguish a cigarette if they were refuelling. If you were polite they'd let you board and maybe even fly jump-seat for the next leg without a ticket. Nobody but your uncle took a picture. Try that now and you will be tazered or shot.
Imagine, if in 2021, a small group of screwed-up Americans hi-jacked an airplane and flew it into the Burj Al-Arab tower in Dubai, UAE. Imagine if then the United Arab Emirates spent the next decade invading Canada and torturing its citizens, leaving 8 million dead. Get the picture? Or am I being subtle?
Welcome to the Nazification of Amerika, land of the fleeced: We have ring-side seats to the planet's greatest calamity, the death of its largest-ever Republic. Guilty until proven innocent – that's our way. Gold and silver are no longer just a good investment. They will be the only way out of this snake-infested hole.