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Companies With Mineable Ounces Soundest Investment For Coming Volatility
Today was long and enlightening for me. I made multiple meetings in New York City with significant money managers. During these meeting the price of gold rose above the $1764 level which I have repeatedly told you is as important as $524.90 was when gold broke out of its arithmetic up trend and entered its first power up trend. I wish to remind you $1764 is the point where gold moves out of its power up trend and enters into its geometric uptrend. I have also assured you the central banks and especially the US Fed via the BIS and Exchange Stabilization Fund seek not to depress gold, but only to prevent it from running so hard on the upside as to expose the true condition of Western world finance. There has been significant interventions in the gold price at Angel $1764 with unexpected other central bank accumulation resulting in inexplicable strength in the $1710-$1720 area. As the strong dollar policy is clearly a policy of softening a long term decline, the interventions in gold have been to modify a desire in the market itself to go ballistic on the upside. If there was any startling realization today it was that among true geniuses and maturity in major money managers there is a grave lack of understanding concerning the forces at work in the financial can kick of the century now about to take place. Only one person today knows that the war with Iran starts when Iran is frozen out of the Swift system. In terms of finance, that is a nuclear attack. It was just that threat alone that made Swiss banks destroy their tradition of privacy and send their loyal clients to a mass execution, assuming that they were cheating on taxes. Not one person I spoke to today ever asked themselves who determines if credit event is a default and what that means to the mountain of credit default swaps that US banks have vended via their non US subsidiaries. By this method the count of these OTC derivatives by the US Controller of the Currency is way short of the true amount of debt insurance banks have sold. Only one man understood what a commodity currency was and had studied where currency induced cost push inflation had produced severe price inflation during periods of awful economic conditions brought on by all types of debt failure. I am speaking with leaders in finance who control immense sums of money. If these people do not understand the forces at work what makes you think politicians or their college professor appointees to central banks have a better understanding? The answer is simple – they do not! Let me share with you the conclusion I took away from today’s luncheon
Therefore the soundest investment now is what I, and others (McEwen) are doing in building companies whose inventories of goods to be sold are mineable ounces of gold and other precious metals in the ground moving towards production. The immense shorts in this industry group are whacked out noobies without a clue. New mines need never pollute. Old mines can never be cleaned up. Open pit and surface enrichment is the type of gold that will be least effected by rising costs. Respectfully, |
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