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EmailHow 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:
Your faithful information scout,
Chris Martenson
Copyright 2011, Chris Martenson. All rights reserved.
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Comments
Chris, thanks for the great report. You covered your recommendation for PM as a percent of net wealth, but would you mind telling us what ratio of gold to silver you recommend/hold? Also, do you think platnium, paladium, rhodium or any other PMs are worth investing in?
Chris,
This is tremendously helpful. Thanks.
Doug
Over at inflation.us, they have really played up the idea of investing in preceious mining stocks, hoping to gain leverage on a boon in precious metals prices. In a hyperinflationary environment, could mining stocks give a good return, or would they simply devalue along with the rest of the market?
I read part 1 on the Zero Hedge website. Was so intrigued that I enrolled just to read part 2. Awesome information. I have become an avid fan and will be a long-time member! Kudos for a terrific and informative article.
Hi Tin Man, those guys at inflation.us are (imo) playing a speculative game with the junior miners. It will work until it doesn't, and I'm thinking there is a pretty high risk to capital deployed there (again imo). I consider political risk to be much higher than most folks will consider; I don't think that hard-pressed goverments - coming - will forever restrain from taking the cash cow at some point...
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Chris,
Thanks for the in-depth piece on gold and silver investment. As usual, nothing you said was sensational or over the top. I think it will become more apparent to even the ordinary citizen that trying to save or invest is nearly impossible in a system that can be best described as criminal...
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Great report Chris, very informative !
Like you, I haven't found any investment other than PM, that I feel really comfortable with currently and for the forseeable future.
So, over the last year or so, I have been moving out of stocks and forex and cost averaging into gold and silver...
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I'm torn on the mining companies, but here are some of the pros and cons as I see it.
Pros
Upside leverage
Possible Dividends
If oil crashes again in currency crisis, and gold stays firmer, then operating costs would decrease
Lower taxes for capital gains than bullion
Homestake mining was one of the best investments of The Great Depression
Cons
Downside leverage
High oil prices keep operating costs high, so profit is minimal even as gold price rises
All stocks vulnerable in global sell off
Mining companies do well, but desperate Governments tax them to death
Stocks are still in the "Financial System"
***That exercise really didn't help me all that much...
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The physical pm are as everyone on this site knows is the ultimate safe investment with no counter party risk. At the current time (next two years) the risk of bank holidays in the U.S. is not great. Currently the pm mining stocks are about 20% undervalued to the pm...
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Chris;
Like many I have most of my assets in my IRA. Noticed that GoldMoney.com has a relationship with a company that allows IRA investment in gold and silver. do you know the company and recommend going that route? Concerned about protecting these assets...
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