Gold & Fort Knox

Some have asked why exactly is the inventory at Fort Knox relevant or not? Largely. no one is going to prove that there is no gold there and quite frankly it does not really matter. Thinking that proving there is less gold there will cause it to rise is absurd. That is still looking at only gold and not the entire scope of the economy. Gold is for the individual. It is not for the major institutions and government is not interested in gold. The ECB told Cyprus to sell it. There is no respect for gold behind the curtain and that may make people furious because they want the world to believe what they believe, but get over it. You will never convince all the people to join that idea just as they will not accept that money is simply a medium of exchange and not a savings account with a guaranteed value, yet they expect everything to rise in value from their wages to home prices. How exactly then can money have a fixed value when assets float?

The 1980 high in gold adjusted for inflation is about $2300. Gold in real terms has not exceeded the 1980 yet. Gold decline for 19 years. That is a long-time waiting to be right. It is 50% to 33% of your lifetime. Gold will rise when the markets are aligned.

DJ1987-D

When markets crash, you have to get back above the high on the day when the crash took place. Without doing that, you will fall again. In the case of gold, we need to get above 1500. Here is the Dow Jones during the 1987 Crash. It took months to accomplish that but there were no retest of the low other than mid-range movement. On the downside, we made a lower low this year so the correction has manifested nicely despite all the hatred hurled my way. If gold can break the 12600 level and reach the 1150 level, then it will swing the energy to one extreme enabling a strong counter-trend move. Gold will still struggle until it exceeds $2300.

So sorry. There is no SYSTEMIC MANIPULATION to keep the metals suppressed. There are one-off manipulations, but not systemic. None of the commodities have kept pace with the advance in the Dow. The idea that ONLY gold and silver are manipulated continually cannot be supported since they are in sync with the entire commodities perspective. It is not like copper is 15 times higher than 1980 prices and gold is not. If you only look at gold and silver ignoring the rest of the markets, then it is like having only a hammer and everything you see looks like a nail. Gold will take off when the entire sector is ready for prime time.

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