It never ceases to amaze me how normal corrections in gold get everyone so bent out of shape. Europe is collapsing and Western nations can’t balance their budgets. Japan is headed for a monumental collapse, and the combination of an aging population, a 200% debt-to-GDP ratio, and an overly xenophobic population guarantees an epic crisis there. Here in the U.S., the profligate spending of our leaders has put us in a situation where it costs about $300 billion a year to service our debt. Given this backdrop, why the hell are you concerned that gold fell $60? The bill has literally not come due for America, Japan, and Europe.
Today’s sell-off was driven largely by technical factors. I said in my newletter that a break below $1600-$1614 would precede a sharp drop. This is a market that is not being driven by fundamentals right now, and if you get shaken out of your position before a rocket launch to new highs, well, that’s your fault. I guarantee the smart money is salivating right now because they see the value in gold.
My problem is probably that I read too much, so current events just seem like a replay of the past. To forecast events accurately, you need to understand history and human nature. People are fundamentally driven by self-interest, and the only time leaders actually do things to benefit the people is when their self-interest is aligned with the people’s. Think about it: why have there been so many instances in history where a leader is good at home and an absolute brute abroad? Same people, but different behaviors required for self-preservation. Understand that the self-interest of our leaders guarantees there will be no solution to this crisis because they want to pass the blame to someone else. People like Barney Frank screw us over, then they just retire as millionaires. Do you think most politicians care about our future?
These are extreme times, so you must re-calibrate the way you think and your understanding of price movements. On a percentage basis, these moves in gold are not that big. But since so much money is being printed, the perception will be of extreme volatility. Both the stock market and gold have been extremely choppy within a range, and this means we will probably see some crazy volatility. But I would be buying all the huge corrections in gold.
I see the big picture. Our leaders are acting like morons, but Americans are letting them get away with it. After I make my money from this debacle in the U.S., I’m probably leaving the country because the lunatics have taken over the asylum. U.S. citizens can now be detained indefinitely in U.S. soil if they are suspected of being a terrorist. Seems pretty subjective to me. If you don’t think this is bullish for gold, you are nuts.
I could write a book about the troubling trends in America and their precedents in history, but I’m too busy protecting myself from the collapse in America our leaders are creating. A new monetary system MUST be created. This implies bank runs and serious civil unrest. A default in America will come, probably before 2020. Try to see things from a broader perspective and stop worrying about insignificant corrections in gold.