Friday, January 04, 2008

Be on Guard With Silver and Gold for a Sudden Correction

Gold Price Close Today : 863.10
Gold Price Close December 28th : 839.60
Change: 23.50 or 2.8%

Silver Price Close Today : 15.346
Silver Price Close December 28th: 14.77
Change: 57.6 cents or 3.9%

US Dollar Index Today: 75.919

Be on guard with silver & gold for a sudden correction. Both have put in astounding performances this week, but be on guard anyway. Over the next 8 weeks or so gold ought to rally to at least $1,000 & on a spike might reach $1,200. Silver needs a swift kick to get going, although this week it hasn't danced badly. Still, this stage in a gold rally (halfway) is when silver usually begins to outpace gold.

I fear 2008 will be a tougher year for reading markets than 2007 was -- mercy. And full of bad surprises for those in stocks & real estate. Dollar will rally in the second quarter, but it won't hurt silver & gold much, as presently gold has broken out upside against the Euro (that ridiculous Frankenstein currency with more holes, scars, and stitching than the ridiculous dollar) and has almost broken out against the Yen, another preposterous fiat currency backed by -- nothing!

What does that mean? That gold, the master alternative currency, is rallying against all sorry unbacked fiat central bank currencies. Defend yourself this year by getting as liquid as possible, paying down all debt, & fleeing from stocks and central bank currencies into silver & gold. Brace yourselves for a turbulent year!

Let loose the dogs of collapse & rally!

Stocks have performed wretchedly, miserably this week. They opened the year lower. Great start. Today the Dow closed below its August low (12,846) and 1.14 points above its November low (12,799.04), the lowest price since August. What do you call a series of lower highs and lower lows? Right, a downtrend. And the poor S&P500 closed a bare 11 points above 1400 and infamy.

Against gold the Dow reached a new low in this bear market that began in August 1999: G$306.57 (14.830 oz). The Dow in Gold Dollars is also signaling like a Confederate semaphore corporal that stocks are fixing to drop much, much more against gold. Against silver the Dow sank today to 834.11 oz, down over 67% from its June 2001 high at 2,566 oz. Please, while there's still time, swap stocks for silver & gold.

The feckless US DOLLAR INDEX is behaving like a banana-republic currency trying to rally. Oh, it probably will rally later this year, but first it must torture all the onlookers. Flee all dollar paying assets while you still have time: bank deposits, certificates of deposit, bonds, annuities, pensions. The buzzards who run the US monetary system -- no, vampires is the more precise word -- are bleeding y'all dry, yet y'all sit still for it. Why?

- Franklin Sanders, The Moneychanger