About this episode
* Today's Podcast is entirely devoted to gold and gold stocks * Last night, in just a few minutes, gold dropped $50 * One or more major sell orders hit the market at the same time and gold went down below $1100 * It was down $20 by the time New York trading opened and by market close gold was down around $37 on the day * Silver was down only about .15 today * Why was all that gold dumped? The goal could not have been to get a good price - the goal was to knock the price down * The HUI was down 10% on the day * This bear market in gold stocks is now bigger than the one from 1996 to 2000 * Gold stocks are much cheaper today than they were at the end of the dot com bubble * If this a measure of trust in central bankers, the market is expressing greater confidence in Janet Yellen than it did in Alan Greenspan in 1999-2000, * We know how badly that turned out for stocks and how bullish it turned out for gold * The timing of this selloff comes on the heels of the media's spin on Janet Yellen's recent Congressional testimony * But the real news that ignited the sell-off was China's admission that they have gold reserves and in fact they intend to add to those reserves, surprising the market * If China was lying about how much gold they have had for the last six years, why does anyone believe they are telling the truth now? * I think they are still lying - being strategic * They want to get the price of gold down because they still want to buy a lot more gold * If China still needs more gold, eventually this will bring the price of gold up * Also a very negative WSJ article compared gold to the "pet rock" craze * This is the same nonsense that proliferated in the 1990's * The WSJ article describes gold investment as "a leap of faith" relative to dollar or stock investments * Gold should not be compared to stocks - it is currency, a commodity * Gold has intrinsic value, whereas the dollar is a fiat currency, backed by faith alone * Gold has had value for 5,000 years - you don't need ot have faith, you just own it * There will always be a use for gold * Why have faith in central bankers when everybody who has put their faith in central bankers in the past has been burned * An article on Zero Hedge compared the WSJ op-ed to a similar one from 1999 * The title was, "Who Needs Gold, When You Have Alan Greenspan?" * They called him "the maestro" * He gave us the dot com bubble, the real estate bubble and the financial crisis of 2008 * That's what happened to the people who put their faith in Alan Greenspan * Over the next 12 years after that article was written, gold appreciated 650% * Who needs gold when you have Alan Greenspan? Everybody * Today Alan Greenspan recommends gold * If we've got Janet Yellen, then we need gold * Greenspan wrote the playbook that Bernanke and Yellen are expanding and he knows it does not work * When you have Janet Yellen, you need all the gold you can get * Fortunately, it's a lot cheaper to buy gold and it is a lot cheaper to buy the companies that mine it * What could go wrong? Everything - what went wrong in 1999 and in 2008? * The same thing that went wrong then will go wrong now, because it is the same central bankers * And the same players on Wall Street either don't recognize the danger or are pretending it doesn't exist and abandoning everything we know about monetary policy * This is the biggest bubble yet - the entire economy is dependent on bubbles * Just when people trust the central bankers the most, that's the best time to buy gold * When this market turns it's going to be vicious * Once the market turns, Our Sponsors: * Check out FRE and use my code LISTEN20 for a great deal: https://frepouch.com * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy