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Germany’s failed bond auction (yes
we can call it a failure) was what it sounds like when money silently leaves
Europe. Call it a hint or a clue but don’t say you didn’t hear
the warning signs. Effectively, Germany’s failed bund auction was akin
to a zero confidence vote in the troubled “experiment” that was
the European Union. Investors don’t want to throw money at
Europe’s largest economy because, how can I say this, they are still is
tied to the European Union itself and thereby inextricably linked to the debt
problems facing many member countries. Think about it for a moment. What does
it tell you when the “most secure” European nation fails to
attract sales in their bond auction? Investors don’t want to throw
money at the perceived safest nation in Europe and as such it should make you
wonder whether or not they will throw money at any other troubled nation who
needs cash more desperately than the Germans. We have ourselves a massive
crisis in the making. The rot that lies underneath the faded varnish used to
cover up the fraud and financial irregularities will soon be revealed. The
United States is next. Let us not forget their massive debt problem. For now
though, Europe remains the focal point as I wrote a couple of months ago.
Everything for the time being will be guided and directed by the direction
and guidance coming out of Europe.
I am still amazed when I recall back to
when the Greek crisis started to gain traction last year that the clowns who
purport to broadcast the news over on CNBC were downplaying the event so
much. “How can such a tiny economy take down banks” was the
rallying cry used to suck more ignorant investors into believing that the
crisis would be contained. Remember that this is the same network that had
“pros” on telling people to buy real estate in 2007 and to buy
stocks in early 2008.
If it smells bad, it usually tastes
worse. We all knew there was a massive stink bomb hiding underneath the
covers over in Europe and someone let the air out and did so with a
vengeance. All of Europe is now gripped in panic mode as the
“union'” of debt ridden nations who fudged their books to gain entry
into the exclusive club of nations has run out of money and lenders.
This is what I meant the other day when
I wrote that it was time to get out. If I wasn’t clear, I said that I
expected pretty much everything to go down with the ship. Yes, as staunch as
a gold guy I am, I do believe that we have seen the highs for a while yet.
The same holds true for silver. Silver’s “move” I’m
afraid, in hindsight, was from $27.00 to almost $50.00 an ounce. The bouncing
around we are seeing now is consistent with a confused market. The same holds
true for gold. They say all good times come to an end eventually. After a
staggering bull market, we saw a classic double top formed in gold and I am
afraid that it will be some time yet before we regain those lofty heights. I
have to be real about it. If it was going to happen it would have happened by
now. The perfect storm has been in place for a while and the crisis bid has
not fled to gold. The only manipulation going on at the moment is the belief
that there is manipulation. What we are seeing right now is a classic
‘sell before the next guy’ syndrome. People, companies, nations etc all need money! I remind you that you don’t buy
gold and assets when you are in need of cash…you sell
what you already own to raise money. You buy stores of wealth when
you have wealth to store.
I reiterate what I said the other day.
$1600.00 gold, $27.00 silver and 10,000 on the Dow Industrials in soon enough
time. I would not be shocked to see these levels breached by the end of the
year. Personally, I am in cash saving mode. I am not playing the markets,
metals or gambling on the words of some dishonest politician. I am looking to
save as much as I can. I expect significantly worse economic conditions than
we have seen the last two years or so and I reiterate the old saying that
today rings truer … “cash is king”. You may disagree, and
chose to rebut my logic and I respect open and honest two way discourse.
However, if anyone so choses to rebut my current opinion all I ask is that
you address this in your reply; What’s worth more to you today in terms
of purchasing power .. the
$50.00 bill in my wallet or the $50.00 silver round purchased by some near
the highs earlier this year?
And before we all get off on a
tangent…I am not bashing silver and gold investing. I still own
physical and believe that all of you out there should own some Tinka Resources, Kaminak Gold
and a little physical in your portfolios. I just chose to look at
fundamentals and right now, they stink.
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