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Love him or Hate Him, Here’s Larry’s Latest!!

Posted by silverngold @ 10:15 on November 29, 2014  

Gold’s Next Bull Market …

Larry Edelson | Wednesday, November 26, 2014 at 7:30 am

Larry Edelson

Almost no one thought gold and silver could ever get hit as hard as they’ve been. Not even the likes of big gold investors like George Soros … John Paulson … Rick Rule … Jimmy Rogers, and many others.

The thing is, they don’t really understand the gold market. They thought they did, but they failed miserably.

 They failed to understand that the gold and silver markets are like any other market. What goes up for 11 years straight has a very high probability of pulling back for two to three years. That’s simple technical analysis, and those high-flying money managers didn’t even get that right.

 They also failed to understand that central bank money-printing is not always bullish for precious metals.

There are times where no amount of money-printing can inflate gold and silver prices because, very simple again, either investors are too scared to do anything with their money … or they see better opportunities elsewhere, like in stocks.

 

Big gold investors, like George Soros, thought they understood the gold market, but they failed miserably.

 

I could go on and on about how the bigwigs missed most or all of the correction in gold and silver and how many billions they and others lost.

But there’s no need for that. But for a short period last year, I got it right, and I helped my readers and subscribers avoid steep losses, and helped them make pretty big profits to boot.

So instead, I want to now turn your attention to what the next bull market will look like for gold and silver — to the forces that will drive metals higher again — once gold and silver finally do bottom.

The bottom isn’t here yet. But by preparing you for the future and for what will drive precious metals higher again once the bottom does come — you will be light years ahead of other investors.

First, and perhaps most importantly, central bank money-printing will NOT be the major force driving precious metals prices higher in the future.

So let me be perfectly clear, if you’re counting solely or largely on central bank money-printing to drive gold and silver prices through the roof in the next leg up, then you’ll miss the real reasons the metals will go higher.

Money-printing, this time largely in Japan and Europe, will be a force, but it will not be nearly as strong a force as it was in the metals first leg up from 2000 to 2011.

The reason is simple: Between the towering inferno of as much as $158 trillion of global debt with weak underpinnings and derivatives bets that now approach more than $1.2 QUADRILLION in notional value …

There is simply no way central banks could ever print enough money to stabilize the global monetary system.

So print or not, the next leg up in the precious metals will not be  driven by money-printing. It will be driven largely by a breakdown in the global monetary system.

A breakdown in the global monetary system means there will be big banks and financial institutions going belly up … sovereign nations, especially in Europe going bust … Washington going bust … and sovereign bond markets collapsing to 10 cents on the dollar.

Money-printing will not solve or prevent or even delay those things from happening in the next several years. Period.

Gold and silver, once they do bottom, will start rising again because savvy investors are finally beginning to realize that their Emperors really do have no clothes, and all the money-printing in the world won’t be able to cover that up.

Second, inflation will NOT be a major force either. Don’t get me wrong. We do face higher inflation in the years ahead. But that part of gold and silver’s next leg up is still a ways off and won’t arrive until late 2015 or early 2016.

And even then it won’t be a big factor: Reason, despite what most pundits say, the U.S. willnever face hyperinflation.

The reasons are simple: First, despite all the flaws in the U.S. dollar, it’s still the world’s reserve currency. And when the rest of the world, again, mainly Japan and Europe, are having so much trouble, it means the dollar will be a magnet for capital, keeping it from plunging into an abyss, thereby avoiding hyperinflation.

Second, is the size of our debt markets. They too are, like the dollar, an exorbitant privilege we have over the rest of the world. Come any signs of major inflation, the bond vigilantes will send rates higher, killing much higher inflation rates in their tracks.

Bottom line: Do not count on inflation to drive gold and silver prices higher going forward. If you do, you will be completely befuddled when gold and silver prices rise, yet there’s no sign of inflation on the immediate horizon.

Third, are the war cycles I’ve been warning you about. In previous articles, I’ve told you how the impact of the war cycles is already beginning to show in many different geo-political realms.

In Syria, in North Korea, in the Cyprus confiscation of depositor assets, in Russia’s moves in Ukraine, in China and Japan’s war of words over the Senkaku islands, in China’s moves in the South China Sea and more.

This is going to ultimately be the most important force driving precious metals higher. It will coincide with the first force above, the collapse of the world’s monetary system.

It will be a nasty set of conditions where governments are at war militarily or financially with each other …

And where governments are at war with their own citizens — repressing more and more liberties and personal freedoms, chasing down assets to tax and confiscate, and more.

In other words, total upheaval of modern society, coupled with a collapse of the global monetary system.

In a nutshell, those are the real reasons gold and silver prices will soar in their next leg up. Not inflation alone. Not money-printing alone. Not even currency devaluations alone.

Get it right, and you will be buying gold and silver near their lows in 2015, when just about everyone else is throwing in the towel.

Right now, I still expect to see gold below $1,000 early next year. Then the bottom will be in.

Silver could fall to as low as $12.50, worst case.

After that, the lid will come off, and the precious metals will begin their inevitable march higher, to $5,000 gold and at least $125 for silver.

For now, remain hedged up or outright bearish per my suggestions in these columns to use inverse ETFs. They are serving you well, with nice open gains.

And stay tuned!

Best wishes and Happy Thanksgiving,

Larry

Lifeboat @ 7:05

Posted by Floridagold @ 9:03 on November 29, 2014  

Thanks for the update! 🙂 Hope all is great with boat life and we see you more often here at the Oasis!

anybody need some Coffee?

Posted by Floridagold @ 9:02 on November 29, 2014  

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Buygold @ 21:19 Matt Simmons

Posted by goldcountry @ 8:58 on November 29, 2014  

Died in his hot tub of a “heart attack” when he got a little too vocal about the Deepwater Horizon oil spill. He was saying at the time that there was more than one venting hole.

Lifeboat @ 7:05 Great Story

Posted by silverngold @ 8:49 on November 29, 2014  

Thanks for sharing it. Makes one think a little deeper about the true value of money and the accumulation of wealth, which was used to build a society of enduring  integrity, rather than one of dishonesty and greed. All The Best…………..Silverngold

Yap Stone Money

Posted by Lifeboat @ 7:05 on November 29, 2014  

Yap has been mentioned derisively recently as the home of stone money, by Ambrose Evans-Pritchard in the Telegraph for example, and by Citi’s chief economist Willem Buiter. So I think this is a good time to retell the Yap story.

A few years ago my wife and I found our way to Yap. It is one of the sovereign States which form part of the Federated States of Micronesia, and is nearly as far west in the Pacific as you can get without bumping into Asia. Even the main island of Yap is very isolated from the world although it is beginning to be seen as a popular dive destination. The outer islands get almost no visitors except the odd yacht, but all in all the people of Yap and its islands seem remarkably content. In the remoter parts the men usually wear loin cloths and the women only lava-lava skirts. They are not averse to modern ideas, just comfortable with their old ones. The outer islands have maintained the traditions of ocean navigation for millenia, and even now build canoes the old way and make very long voyages. I was lucky enough to go sailling on one and was very impressed by the sailing skills of the crew. However, money is the main reason the principle island of Yap is famous. It is the home of ‘Stone Money’, and this little country can certainly teach us a thing or two about the meaning of money.

No-one knows exactly when the Stone Money was first used. Local folklore says a long time ago, some western commentators say only a few centuries. In my opinion, since the money was quarried in Palau 250 miles away it must have originated at a time when inter-island voyages ages were common, which allows a very long history.

Yap has very little good natural stone, but Palau certainly does. So the men of Yap evolved the tradition of sailing to Palau, and setting up quarries in an area little used by the Palauans. They would stay there months at a time using basic hand-tools to hew out big discs of slightly lustrous stone with a hole in the middle for ease of carrying. These discs, the biggest of which might be 10 feet across and weigh tons, were then loaded onto rafts and towed the 250 miles upwind back to Yap where they were used to settle debts and obligations, buy land, for bride money and in all matters of significant trade. For the small stuff bead, shells and barter still worked, but it was the stone discs which really denoted wealth.

Interestingly, once they were installed in Yap the bigger discs were never moved again, but were established in public areas where everyone could see them and where everyone knew exactly who owned what, called, guess – ‘Money Banks’. Money Banks are to be found everywhere on the island, and medium sized discs also sit proudly outside many a home, especially a chiefly house or that of a family with status. In most cases the ownership might change with time but the location does not. The ‘records’ were the common knowledge of everyone and for the older discs the older men kept track of things. Small discs could be moved of course, but the location and ownership of the disc remained common knowledge. How’s that for transparency in banking?

How do you value a stone disc? Size, Uniformity, colour, lustre and so on all play a part, but the real value was how hard it had been to acquire. Sailing ocean canoes is a dangerous occupation, as is quarrying stone in a remote land. Towing the discs home again was especially dangerous. The main value came from the venture, did people die making the disc and bringing it home? Did the voyagers survive hardship and deprivation, arriving to acclaim and applause? Each disc therefore carries a story, the story of its creators and its owners, its origins, its adventures and its banking and cultural history. These stories are the stuff that really give the discs value.

Into this steady picture steps David Deane O’Keefe, an Irish American who was ship-wrecked there in about 1870. He stayed on the island long enough to learn the customs, and after being rescued he came back with a trading schooner, some Chinese labour and steel tools. He then quarried new discs in Palau, brought them to Yap where he traded them for copra and beche-de-mer which he then took to Hong-Kong. He became rich and famous in the orient and in the Pacific, living mostly in Yap. The new wealth of Stone Money that O’Keefe brought to the country made him the hero of Yap, popular throughout the island. Now everyone could have stone money, not just the rich and powerful.

My first thought on hearing this story was that it would be a perfect inflation analogy, with the flooding of new money into the market, the debasement of the currency until the system collapses. In reality it is much more complicated than that. To some extent the currency was debased, the new money did devalue the old, and the use of Stone Money did change. However, some of this change was likely to have happened anyway, this was after all the time of great European expansion into the Pacific. Beyond this, though, the Yapese were wiser than one might imagine. Remember, it is not the discs which are valuable but their history, their stories. The new discs might have been lovely, their size perfect, their lustre wonderful, but they brought with them no glory. Like Monopoly money they were nice to have but don’t confuse them with the real thing. In other words, the Yapese could use and enjoy the new discs but could also see through the inflation problem and still hold onto what counts, things of real and enduringl value.

Now I like a gold coin as much as anyone, but compared to Stone Money gold is lifeless. True, there is labour, and some rarity and risk associated with the production of a gold coin, but nothing which compares to a quest which Ulysses would have been proud to join. The more I think about Yap Stone Money the more I like it. For example, what’s the point of stealing it? It’s not the disc which has value but its aura, and that can’t be stolen. In fact the opposite might be true. If you were to steal a disc it would eventually be recovered and returned to its rightful place with its aura of value probably increased. Consider also the young men of Yap. As my wife likes to remind me, most societies have trouble with their bored and over-active youth. What better way to keep them busy and stop them making war and trouble than to send them off on a voyage to hunt for risk and strive for treasure?

Think too what it is that binds a society together through time. What better way to combine legends, history, social relations, marriage, property law, contract, obligations, commerce and all aspects of daily life? Can you think how it would be to sit around a fire at night and tell the stories of ancient daring and risk, link them to the wealth of today, and then point across the garden to the artifacts which everyone admires? How better to inspire your son to become a man.

O’Keefe died in 1901, lost on a voyage from Hong-Kong back to Yap. By then he was a revered old man, with his own island and a large house in Yap. His legend lives on and he is still widely respected by today’s citizens. These days, the greenback suffices for day to day affairs, buying groceries, gasoline, and the big ticket items which come in from overseas. However, Stone Money continues to play an important role in legend and culture, and many of the bigger social matters, land, marriage and so on, are still settled with Stone Money as the true currency of Yap island.

In 100 years the Euro, the Yen and the Greenback will be but a chapter in the history of human avarice. In 100 years Stone Money will still be in use and still doing what money should, transmitting value from one generation to the next. I’ll tell you another thing about Yap. Like most countries the states of Micronesia suffer from some corruption and let’s say ‘financial irregularities’, some more than others though Yap almost not at all. If you live in Micronesia and want a manager who can run your business well while keeping his hands out of the till you’ll hire a Yapese. Throughout the area they are the ones with a reputation for integrity. It may be that this sense of honesty is what led them to create their enduring stone money in the first place. I like to think it is also what maintains it.

Apart from clinging to their own religion of Keynesianism, what Buiter & Evans-Pritchard seem to forget is that money is nothing if it cannot be trusted. The Central Banks of the world have certainly forgotten this, but even today, years after the stone discs were mined, the Yapese have not. I’d love to have a 10 foot disc of Yap money. Since I can’t, I’ll stick to gold.

– Lifeboat

Wake me up

Posted by Ororeef @ 1:33 on November 29, 2014  

when the Shootin starts !

I think we have had enough !

Amals

Posted by goldielocks @ 1:23 on November 29, 2014  

I pretty well understand the consequences of the things that led up to the shooting. No one can say for sure excepts for the actual witnesses.  Yes witnesses can lie but I’m also they can be cohersed into changing their story. It would be too easy for them to threaten the person who was with him into saying what they want with threats if long sentences your being a accomplice to something. It happens in one form after another all the time. Then there’s the question of who’s on first. Did the cop pull the gun and the teen reacted or did the teen attack the cop first. If the teen did and that’s if he did try to grab his gun it would most likely be hard to taser him if her couldn’t do something to his arm reaching in the window like breaking or twisting it. When someone did that to me I held on the the ark and rolled the window up. I was on the passenger side meanwhile my friend took off while ” there was two of them” were running down the road yelling at me to let go of their arms which I did after we picked up enough speed I could release one holding with too arms the other my foot, that they couldn’t try it again and were glad to get get their arms back. I wasn’t there didn’t see all the evidence so can’t say for sure what happened.  What aim sure of besides cops lie just as people off the street is that lots if parents don’t really know their kids these days. My question to parents today with so many moms out if the home. Do you really know your teen.

We Are Closing In On Absolute Panic In The Gold Market

Posted by Auandag @ 0:54 on November 29, 2014  

These kind of headlines on King News have been going on for years and make “The Boy Who Cried Wolf”sound like a deaf mute compared to them LOL.

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Post by the Golden Rule. Oasis not responsible for content/accuracy of posts. DYODD.