“So, what gives, Larry? For years, you have been right as rain on gold and silver, and now, it seems like you’re way off the mark!
“You told us the precious metals had bottomed. Instead, they are tanking now, with gold below $1,200 and no bottom in sight and silver crashing.
“And recently, you told us to expect a bounce before the metals fell any further. Wrong again.
“Have you lost your bearings, Larry? Or worse, are you profiting from the decline in the precious metals while we either sit on the sidelines or suffer losses?”
That summarizes a lot of the emails I’ve been getting lately. So let me respond now.
I appreciate everyone’s comments. Yes, I have missed the mark lately.
But let’s put everything in perspective:
First, the short-term swings, in any market, are always extremely difficult to pin down — and even far more difficult when entering a period where a major trend turn is expected.
Second, I am 100 percent confident that the metals are now moving much lower. To sub-$1,000 gold and probably to $15 and even lower in silver.
|With the rising tide of geo-political stress, gold and silver’s long-term bull markets remain in place.|
Third, I am also 100 percent confident that the profits that will be available, both on the way down, and perhaps more importantly when gold and silver do bottom, will be all that much greater.
Fourth, we are merely witnessing a temporary extension of the bear market. All the underlying fundamental, cyclical and technical conditions for gold and silver’s long-term bull markets remain in place. The most important one: The rising tide of the war cycles and geo-political stress.
On that note, let me assure you, if you think the state of chaos in the world now is bad, you haven’t seen anything yet. The war cycles are still in the very early stages, with nearly six more years of ramping up to go.
In the months and years ahead, you are going to see domestic and international unrest that will make the current environment look like a walk in the park. This force, geo-political unrest, while also temporarily bearish, will invert and become the number one reason gold and silver soar.
But first, it looks like we’re going to have to see the die-hard bulls get decimated.
Fifth, my long-term track record in gold is unbeatable. I have nailed everything from …
The 1980 high to the low in 2000, to buying the pullback in the middle of the financial crisis in 2008/09.
To declaring the top was in mere days after gold hit its record $1,921 high in September 2011.
To nearly the entire three-year bear market since September 2011.
Even my most recent calls were prescient and not all that bad. While I did tell everyone to start dipping their toes in the water again earlier this year, at roughly the $1,300 level in gold …
It was just a couple weeks ago, when gold broke the $1,240 level, that I also declared the bear market was temporarily back.
So I missed about a $60 move. No big deal in my opinion. Gold’s fallen over $800 since its high of $1,921 in September 2011. I was bearish for that entire move, but for a $60 screw-up.
Moreover, had you listened to me and not gotten too aggressive in physicals, ETFs or mining shares, any loss you sustained should be minimal.
Am I defending myself? You bet I am. A) I don’t know anyone in the business with a better track record than I have in the precious metals.
B) I remain 100 percent confident that my successful long-term track record will continue well into the future. And C) …
The extremely high level of investor emotions in gold and silver right now also tells me that there are still way too many bulls in the market and that they will have to be bloodied before these markets bottom.
And you, if you follow me, will keep your capital intact and ready to be deployed precisely at the right moment, when gold and silver do bottom, when the die-hard bulls’ blood is running in the streets.
Now, let me give you a more detailed explanation of what’s happening in gold and silver.
As I recently told my Real Wealth Report subscribers, it appears that …
A. Deflation — with a capital “D” — now has the upper hand in almost ALL markets.
You can see it in the grain markets, where the prices of wheat, corn, soybeans are collapsing.
You can see it in the soft commodities markets, where sugar is sliding and the prices of cocoa and coffee are about to get hit hard.
You can see it in the base metals, like tin, iron, zinc, where prices are collapsing.
And you can even see it in the price of crude oil, which is now fulfilling my original forecast of a move down to below $80 a barrel.
Moreover, you are now starting to see it in the stock markets, where the initial turn lower is at hand. Yes, the equity market has to correct before it too heads higher. It’s as simple as that.
Naturally, both cause and effect is that …
B. The dollar is soaring like an eagle.And let me remind you that as bearish as I am long-term on the dollar, I have stood virtually alone in the field warning you that the dollar was entering a temporary bull market, and that inflation, or worse, hyperinflation were not going to be a problem.
The strength in the dollar is shocking to most. In terms of a basket of currencies such as the Dollar Index, the dollar has jumped a whopping 9.9 percent since early May and is now up almost 20 percent since its bottom in 2011.
And again, for all those hyperinflations out there, you have to ask yourself: With all that money printing the Fed did, how come the dollar bottomed in 2011?!!
The answer is simple: The threat we face is not inflation, but deflation, with a capital “D.”
Later, we will indeed see inflation. Not hyperinflation. But first, all the excesses of the past several years will need to be wrung out of the system.
At the same time …
C. Europe is now going down the crapper.Europe is in such bad shape, economically and geo-politically, that even I am amazed at how quickly it’s now falling apart.
Even Germany’s economy, the only economy in the euro-region that had shown growth, is now starting to slump. France is a basket case. So is Italy. So is Spain. So is Portugal. So is Greece.
They are all going down the tubes and as they do, a tidal wave of capital will leave Europe, pushing the dollar even higher and the euro even lower.
And yet here too, these very same forces, temporarily bearish for the precious metals, will also invert and eventually become bullish forces.
For when Europe’s investors realize they are merely jumping from the fire into the frying pan (the U.S.) …
They will start buying gold en masse, along with investors from other countries and regions of the world where the war cycles are wreaking havoc …
And the long-term bull markets in the precious metals will indeed reassert themselves, stronger than ever.
Keep in mind that nothing is ever black and white in the markets, in life for that matter. The global economy today is like a complex rainforest, where everything is interlinked, related and interdependent.
Right now, deflation has the upper hand. Investors in most parts of the globe are upping for cash, the dollar. They are anxious, uncertain, scared. They don’t know where to turn.
It is a temporary period that will give way to massive new trends in the not too distant future, especially the precious metals.
You just have to have the insight, objectivity, patience, and steel will to see it though. The world is changing in ways most can’t even fathom, and it’s all happening right before our very eyes.
In my Sept. 24 column, I recommended purchasing inverse ETFs to hedge any precious metals or mining shares you didn’t want to, or couldn’t, exit. Those recommendations still stand:
ProShares UltraShort Gold (GLL) or PowerShares DB Gold Double Short ETN (DZZ) for gold.
ProShares UltraShort Silver (ZSL) for silver.
Direxion Daily Gold Miners Bear 3X ETF (DUST) for mining shares.
If you haven’t bought them, for whatever reason, I suggest you do so as soon as you can and preferably on a bounce, which is coming. The metals are deeply oversold and a bounce can come at any time. Use it to your advantage!