Monday, July 28, 2008

Get All Your Money Out of Banks - Increase Gold and Silver Holdings

Gold Price Close Today : 927.70
Gold Price Close Friday: 926.60
Change: 0.90 or 0.1%

Silver Price Close Today : 17.417
Silver Price Close Friday : 17.325
Change: 9.2 cents or 0.5%

US Dollar Index Today: 72.219
US Dollar Index Friday: 72.67
Change: -0.18 or -0.3%

SILVER & GOLD PRICES both rose slightly today. More than that, for the first time in a week both metals rose stiffly in the aftermarket, gold 2.30 from 927.70 close to 930, and silver from $17.417 to $17.54. Add to that premiums strengthening on physical silver & gold. Gold sits above its 50 DMA (916.30), silver just below ($17.58).

This situation speaks out of both sides of its mouth. It's scary because the gold price made that great breakout but then failed to penetrate $1,000. That might be interpreted as a permanent failure, destined to take gold down, but I've explained recently what that call is utterly wrong.

It might hold true in a weak market, but gold's performance has been anything but week, and is only 7 years into a primary up trend. On the other hand, bull market moves that kiss the 200 DMA or bring the 50 & 200 DMAs close to each other are perfect opportunities to buy, harbingers of large rises to come.

Besides, look at the trees of the forest we're walking through. Do US banks dropping here & there take demand out of silver & gold? A 97-pound-weakling US dollar? Bumfuzzled Fed and Treasury officials? Threat of a systemic world financial crisis?
Every one of these builds demand for silver & gold, so relax.

But remember that for the next few days silver and gold prices could behave with great volatility, including sudden puke-in-the-wastebasket drops that make you think they will never come back. Don't panic. All this will end with August's passing.

STOCKS sank today, taking the Dow down 239 points to 11,131.08 & S&P to 1,234.37.

More than stocks, banks concern me. Two more fell over the weekend. Anyone who has ever investigated already knows that the supposed "protection" of the Federal Deposit Insurance Corporation is a mile wide and a millimeter deep. It is structured to contain one or two failures, not a systemic failure, and its "insurance" coverage is laughable. If I tell you to get all your money out of banks, I might be thought an extremist. On the other hand, other extremists will call me squishy. I would peel my bank deposits down to a minimum, and, yes, increase my gold and silver holdings. Don't think for a second that I'm joking.

Since 1 July the US DOLLAR INDEX has twice attacked 73, and twice suffered ignominious defeat. Today it fell under its 50 day moving average (72.76) to close at 72.67. Whatever the dollar is, 'tain't strong. Thinking about the crisis in the US Banking system & the US Dollar I keep wondering if I am not caught in August 1914 again. That month the world sat in suspense and disbelief watching European arrogance & stupid draw the world down into war. Now we sit in complacent disbelief, watching banks sink one by one while the dollar treads water, waiting for The Big Crash we all pray won't come. Much as we despise Bernanke, Paulson, & their cronies, a large part of our heart hopes they won't fail, hopes the banking system won't get what it deserves.

Many thanks, dear readers, for your compassion & your prayers for Susan. I deeply appreciate them. I'll keep y'all apprised of her progress. She has a heart catheterization on Wednesday.

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.