Bullion banks and their professional hangers on have staged a bear raid on the gold and silver markets this week. It’s the wartime equivalent of a diversionary raid that attempts to temporarily distract the attention from the true battle ground.
With stock markets stuck around all-time highs and the US markets facing a massive reversal if Elliott Wave theory holds true then it is pretty obvious that this is where the real battle will be fought. D-day was on the beaches of Normandy not up the road in Calais as the allies tried to fool the Germans in to thinking.
Only yesterday we published a graph showing how the monetary base and gold move in step. You cannot bet against the inevitable for very long and succeed. All the Comex traders are doing is giving the physical buyers the chance to snap up bargains, and the sales of coins suggests that is what is happening.
Meanwhile our eye is off the ball for a moment when the global financial markets seem at a key inflection point. We should all be instead looking aloft for the next black swan.
It could be that gold guru Jim Sinclair is right to have his dowser rods twitching over the fall-out from Cyprus. How was this massive fraud carried out? Who are these 132 people who managed to empty their accounts before the Cyprus banking system turned belly-up?
More importantly what systemic damage has been done? Is there a derivatives chain reaction still to come? Why did the Cypriot finance minister really just resign?
Yes a bear raid on gold at this moment is more than called for, it’s probably essential to stop a rush in the other direction. But will this be enough to prevent a financial crash? We doubt it. Think of it more as the first tremors in the system.
Where will the gold price go then? The Elliott Wave folk have the Dow back to 5,000. In these circumstances the Dow:Gold ratio will likely go back to its crisis average of one. That’s gold at $5,000 an ounce, and where would silver sit alongside gold then? $150-an-ounce?
If you hold gold and silver don’t let a bear raid frighten you out of your true inheritance to come!