Thursday, July 31, 2008

The Bottom of the Silver and Gold Price Correction

Gold Price Close Today : 913.90
Change: 11.00 or 1.2%

Silver Price Close Today : 17.750
Change: 32.8 cents or 1.9%

US Dollar Index Today: 73.22
Change: -0.09 or -0.1%

Whew! That GOLD/SILVER RATIO really dropped, now 51.49 down -0.338 or -0.7%, & that tells a tale of strength.

Yesterday the GOLD PRICE met my expected low by closing at $902.90, right near the $905 support/resistance. The SILVER PRICE, though, closed higher yesterday at $17.42, in effect gainsaying gold's weakness (okay, "non-confirming" for you who can't stand plain English).

Okay, okay, how did they follow through today? Perfectly, with gold rising $11 to US$913.90 and the silver price popping out of its bottoming range altogether, up 32.8 cents to $17.75. Yesterday probably saw the bottom of silver & gold's correction.

Also, silver's trading since the 24 July low at $17.24 buttresses that conclusion. Since then it has trended higher, so it looks like silver has successfully defended that level. The silver price traded from $17.42 to $17.24, back & forth, and today's close shot out of that range. What more could you ask?

For now then I have to conclude that SILVER and GOLD PRICES have finished their correction & will move higher. Yes, you still have time to buy more, and ought to, with both hands. Come end of August, you'll be too late.

Pondering the Dow I went back to the low on 15 July at 10,962.54 & measured performance since. As of today at 11,376.39 the Dow has gained 413.85 points (3.8%). To achieve that somewhat less than historic advance, the Dow went up and down a total of 1,932.01 points, or 18% of its beginning price. What's the point? The Dow has burned a huge amount of buying ammunition to make a pitiful gain. Or think of it this way. Your Cadillac (without Posi-traction) is stuck in the mud. You keep spinning and spinning and spinning your tires, but getting nowhere. Pretty soon, not only are you stuck, you also have burned a hole in your tire. Please, while there's still time, sell stocks & mutual funds & put the proceeds in silver & gold.

The US DOLLAR INDEX, dropped back 9 basis points today to close at 73.215. It remains above the 50 day moving average (now 72.79). It could very well advance from here to assault the last high at 74.31, but could also fail here. That would be very bad news for the US dollar. Stop waiting for a miracle: sell dollars!

In his latest book, Barton Biggs, who has been for 40 years one of the top investment strategists on Wall Street, suggests a great wealth destruction "Apocalypse" is coming, and that "A working farm protected both your wealth & your life." From a man of Biggs' background, this is a breathtaking statement.

You will think it a big jump, but consider. Christendom began to fall with the French Revolution. Her last bastion fell with the South in 1865. Thereafter technology became the West's post-Christian religion. For the first five decades of the 20th century, the remains of post-Christian Christendom spent destroying itself.

Technology is not only a cruel & bloodthirsty god, but it is also not self-sustaining. It is a net consumer, not a net producer. Only agriculture is a net producer, but now technology has seized even agriculture so that it, too, is a net consumer. Now technology & its ruler, fiat money & usury finance, have reached another fevered,crisis. They will die, choking on their own excess, if not this time, then the next or the next. The new god will fall on its face, like Dagon.

But I am not as much concerned with its collapse, as I am with the new world to be built, and now a-building. It is springing up even before the ruins of the old fall to the ground.

That brings me back to Biggs' observation. My family, knowing nothing, moved to a farm 9 years ago this month. We killed a lot of animals learning how not to do things, made a lot of mistakes, but now we can do it. I know that most people are repulsed by the work & the lack of prizes -- no Mercedes-Benzes in the future here. But in truth, the labour is invigorating, the prizes far overrated, and the life style gloriously peaceful. Not everyone can do what we've done, but if you can figure out a way to escape urban areas now, do it. Whether apocalypse arrives or not, you will be infinitely profited, in body & soul.

And you will learn how to tell wealth from money.

Susan's heart catheterization yesterday went very well, & showed that she can undergo the less traumatic "minimally invasive surgery" from her right side rather than through her sternum. She will have surgery to repair or replace her mitral valve on 26 August. In the meantime she is suffering from trouble sleeping because of coughing & shortness of breath, & becomes exhausted from walking up a flight of stairs. Trouble is, she is used to being so active that I am afraid we will have to tie her up with chains & steel balls to keep her still until surgery. I am most deeply obliged and touched by your prayers and well wishes. Thank you -- and DON'T stop!

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.