Ten days ago I told you to buy gold.
I’ve no doubt you thought me crazy. But I had good reason, based on my intense and continued research and analysis…
That’s almost what happened.
From the time I sent you that email, to yesterday, the price of gold did move up a little. Its highest point during the last 10 days, in fact, was $1,394.40 per ounce. That’s definitely a “last gasp.”
But I will admit I was wrong on two counts…
First, growing troubles in India and China muted the fresh uptake of gold, which I expected to happen on a larger scale than it did.
Second, the last gasp was less… breathy… than I’d anticipated. That’s to say the price of gold didn’t go as high as I thought it would in the mini rally I was expecting.
Hey… no one’s perfect.
But besides those two “miscalculations,” gold has done precisely what I have been forecasting it would. Today gold miners are drowning in a blood bath. And gold bugs are in a world of pain.
They’re always telling everyone that governments’ printing of money will lead to hyperinflation… that currencies are being devalued to such an extent that gold is the only true currency.
They’ve been promising that gold would go to $5,000… that the U.S. dollar would go to zero.
The dollar hasn’t gone to zero. It’s edged up…
And gold just can’t stop falling.
I’ve been saying, for years now, that gold is in a bubble… that it will crash when investors realize that deflation, not inflation, is the primary trend.
Here’s how I view the current trends in gold…
The first crash, when gold broke below its trading range of $1,525 and $1,800 in early April, was a result of one reason: leveraged hedge funds were being forced to sell to meet margin calls.
The same thing happened with oil in 2008. Traders and hedge funds levered up and inflated oil into a bubble, peaking at $147. Then it crashed to $32 in just four months as they were forced to sell to meet margin calls.
Now that gold broke out of its long trading range, we may see a new one of the same magnitude, between $1,250 and $1,525. Time will tell.
The bottom line is, gold finally realizes what I’ve been saying for years: Money printing is not going to create more than minimal inflation. The death knell came for gold as inflation actually fell from 2% to 1%!
We are in the winter season of our economy, just like what people lived through in the 1930s.
80 years ago.
We predicted this downturn and deflationary trend, back in the late 1980s, from demographic cycles and our four season 80-year economic cycle.
When gold finally breaks below $1,250, get ready for $750 in no time.
If we get near $1,525, take your money and run.
P.S. Here’s a more detailed analysis for you on gold’s collapse.
Ahead of the Curve with Adam O’Dell
The rout in metals continues today after yesterday’s Federal Open Market Committee (FOMC) announcement. Have investors finally realized that all risk assets, not just stocks, have benefited from accommodative central bank easing?