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by Gregor Macdonald

Understanding Where Gold and Silver Go from Here

by Gregor Macdonald, contributing editor
Monday, November 21, 2011

Executive Summary

  • The outlook for precious metals will be heavily influenced by the steps the European Central Bank (ECB) takes in the near future.
  • Understanding the likely price trajectories of the precious metals whether or not central banks resume quantitative easing (QE, a.k.a. money printing)
  • The specific price targets for both gold and silver under the most likely scenarios
  • Underscoring the gravity of our current situation

Part I – The New Price Era of Oil and Gold

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II – Understanding Where Gold and Silver Go from Here

As readers now understand, I am not currently a supporter of higher gold prices as a function of inflation risk. Instead, my view is that we must first move through the various iterations of crisis, collapse, debt default, instability, and policy panic before gold attaches itself to inflation. Yes, I agree with the Paul Brodsky thesis (and the FOFOA thesis) that the foundations of future inflation have already been laid. But it’s also my view that for a severe inflation to unfold, there has to be a collapse in currency demand itself. It would also be necessary for global industrial production to have collapsed down to much lower levels to provide sufficient scarcity of goods. Mind you, I see both of these conditions — rejection of currencies and industrial collapse — as high risk. The two maps I offer here include them.

Mapping the Price Future of Gold and Silver

The first price path I want to share with you is called The Grand QE Cycle. It begins with the resolution to the most pressing question facing markets right here, right now, today: Will the ECB federalize all Eurozone debt?

Based on my own analysis and in consultation with contacts, I concluded for myself weeks ago that the crisis in the EU was becoming increasingly binary. Indeed, it is now fully binary. Either the ECB guides to a new charter or mandate, allowing it to buy unlimited quantities of EU debt, or it follows through on its hard-money threats — and the sovereign debt, which forms the core asset of pension funds, banks, institutions across the EU, will become distressed debt, forcing a cataclysmic purge.

Because this urgent question has not been definitively answered as yet, gold is making its way in volatile fashion towards a price of…

Understanding Where Gold and Silver Go from Here
PREVIEW by Gregor Macdonald

Understanding Where Gold and Silver Go from Here

by Gregor Macdonald, contributing editor
Monday, November 21, 2011

Executive Summary

  • The outlook for precious metals will be heavily influenced by the steps the European Central Bank (ECB) takes in the near future.
  • Understanding the likely price trajectories of the precious metals whether or not central banks resume quantitative easing (QE, a.k.a. money printing)
  • The specific price targets for both gold and silver under the most likely scenarios
  • Underscoring the gravity of our current situation

Part I – The New Price Era of Oil and Gold

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II – Understanding Where Gold and Silver Go from Here

As readers now understand, I am not currently a supporter of higher gold prices as a function of inflation risk. Instead, my view is that we must first move through the various iterations of crisis, collapse, debt default, instability, and policy panic before gold attaches itself to inflation. Yes, I agree with the Paul Brodsky thesis (and the FOFOA thesis) that the foundations of future inflation have already been laid. But it’s also my view that for a severe inflation to unfold, there has to be a collapse in currency demand itself. It would also be necessary for global industrial production to have collapsed down to much lower levels to provide sufficient scarcity of goods. Mind you, I see both of these conditions — rejection of currencies and industrial collapse — as high risk. The two maps I offer here include them.

Mapping the Price Future of Gold and Silver

The first price path I want to share with you is called The Grand QE Cycle. It begins with the resolution to the most pressing question facing markets right here, right now, today: Will the ECB federalize all Eurozone debt?

Based on my own analysis and in consultation with contacts, I concluded for myself weeks ago that the crisis in the EU was becoming increasingly binary. Indeed, it is now fully binary. Either the ECB guides to a new charter or mandate, allowing it to buy unlimited quantities of EU debt, or it follows through on its hard-money threats — and the sovereign debt, which forms the core asset of pension funds, banks, institutions across the EU, will become distressed debt, forcing a cataclysmic purge.

Because this urgent question has not been definitively answered as yet, gold is making its way in volatile fashion towards a price of…

by Chris Martenson

How to Play the Greatest Gold and Silver Bull Market of Our Lifetime

Wednesday, June 29, 2011

Executive Summary

  • The extent and impact of price manipulation on current bullion prices
  • How to build or increase your allocation to gold and silver (how much is right?)
  • The best vehicles and storage options for owning precious metals
  • Exit strategies: what indicators to watch to know when it’s time to start selling
  • How high are gold and silver prices likely to climb by the end of the current bull market?

Part I – The Screaming Fundamentals For Owning Gold and Silver

If you have not yet read Part I, available free to all readers, please click here to read it first. 

Part II – How to Play the Greatest Gold and Silver Bull Market of Our Lifetime 

Market Manipulation

This brings us to the topic of market manipulation. As many of you are aware this is a topic of exceptional controversy. On one side, we might place the Gold Anti-Trust Action (GATA) organization, alleging constant official manipulation to suppress the price of both gold and silver, and on the other we might place Jeff Christian, managing director of the metals research firm CPM, whose position is that all price movements can be explained by ordinary market forces.

I happen to be in the middle of those views. I know for a fact that the price of gold is of official interest, and that gold has been actively suppressed in price in the past in order to affect one policy aim or another. The London gold pool of 1969 is one such example, but there are others.

I reason that anything that has proven to be a useful policy tool in the past is a likely candidate to be a tool in the present. It would be up to the detractors of this view to prove, from time to time, that gold is no longer of sufficient official interest that its price is not a target of official intervention or negligent oversight.

But even if manipulation exists, there’s only so long that official intervention can hold back the tide. This puts me in the camp with Erik Sprott of Sprott Asset Management, who recently told me in an interview:

How to Play the Greatest Gold and Silver Bull Market of Our Lifetime
PREVIEW by Chris Martenson

How to Play the Greatest Gold and Silver Bull Market of Our Lifetime

Wednesday, June 29, 2011

Executive Summary

  • The extent and impact of price manipulation on current bullion prices
  • How to build or increase your allocation to gold and silver (how much is right?)
  • The best vehicles and storage options for owning precious metals
  • Exit strategies: what indicators to watch to know when it’s time to start selling
  • How high are gold and silver prices likely to climb by the end of the current bull market?

Part I – The Screaming Fundamentals For Owning Gold and Silver

If you have not yet read Part I, available free to all readers, please click here to read it first. 

Part II – How to Play the Greatest Gold and Silver Bull Market of Our Lifetime 

Market Manipulation

This brings us to the topic of market manipulation. As many of you are aware this is a topic of exceptional controversy. On one side, we might place the Gold Anti-Trust Action (GATA) organization, alleging constant official manipulation to suppress the price of both gold and silver, and on the other we might place Jeff Christian, managing director of the metals research firm CPM, whose position is that all price movements can be explained by ordinary market forces.

I happen to be in the middle of those views. I know for a fact that the price of gold is of official interest, and that gold has been actively suppressed in price in the past in order to affect one policy aim or another. The London gold pool of 1969 is one such example, but there are others.

I reason that anything that has proven to be a useful policy tool in the past is a likely candidate to be a tool in the present. It would be up to the detractors of this view to prove, from time to time, that gold is no longer of sufficient official interest that its price is not a target of official intervention or negligent oversight.

But even if manipulation exists, there’s only so long that official intervention can hold back the tide. This puts me in the camp with Erik Sprott of Sprott Asset Management, who recently told me in an interview:

by Chris Martenson

This report lays out an investment thesis for gold and one for silver.  Various factors lead me to conclude that gold is one investment that you can park for the next ten or twenty years, confident that it will perform well. My timing and logic for both entering and finally exiting gold (and silver) as investments are laid out in the full report.

The punch line is this: Gold and silver are not (yet) in bubble territory, and large gains remain, especially if monetary, fiscal, and fundamental supply-and-demand trends remain in play.

Introduction

In 2001, as the painful end of the long stock bull market finally seeped into my consciousness, I began to grow quite concerned about my traditional stock and bond holdings. Other than a house with 27 years left on a 30 year mortgage, these holdings represented 100% of my investing portfolio. So I dug into the economic data to see what I could discover. What I found shocked me. It's all in the Crash Course in both video and book form, so I won't go into that data here.

By 2002, I had investigated enough about our monetary, economic, and political systems that I decided that holding gold and silver would be a very good idea, poured 50% of my liquid net worth into precious metals, and sat back and watched.

Since then, my appreciation for and understanding of the role of gold as a monetary asset and silver as an indispensable industrial metal have deepened considerably.

Investing in gold and silver is still a good idea. Here's why.

Why own gold and silver?

The reasons to hold gold and silver, and I mean physical gold and silver, are pretty straightforward. So let’s begin with the primary reasons to own gold.

 

The Screaming Fundamentals For Owning Gold And Silver
by Chris Martenson

This report lays out an investment thesis for gold and one for silver.  Various factors lead me to conclude that gold is one investment that you can park for the next ten or twenty years, confident that it will perform well. My timing and logic for both entering and finally exiting gold (and silver) as investments are laid out in the full report.

The punch line is this: Gold and silver are not (yet) in bubble territory, and large gains remain, especially if monetary, fiscal, and fundamental supply-and-demand trends remain in play.

Introduction

In 2001, as the painful end of the long stock bull market finally seeped into my consciousness, I began to grow quite concerned about my traditional stock and bond holdings. Other than a house with 27 years left on a 30 year mortgage, these holdings represented 100% of my investing portfolio. So I dug into the economic data to see what I could discover. What I found shocked me. It's all in the Crash Course in both video and book form, so I won't go into that data here.

By 2002, I had investigated enough about our monetary, economic, and political systems that I decided that holding gold and silver would be a very good idea, poured 50% of my liquid net worth into precious metals, and sat back and watched.

Since then, my appreciation for and understanding of the role of gold as a monetary asset and silver as an indispensable industrial metal have deepened considerably.

Investing in gold and silver is still a good idea. Here's why.

Why own gold and silver?

The reasons to hold gold and silver, and I mean physical gold and silver, are pretty straightforward. So let’s begin with the primary reasons to own gold.

 

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