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When promoting his business GoldMoney (later bought by BitGold) - the purpose of which was to encourage people to buy precious metals - hopefully, through his company - James Turk made some of the most outlandish and ridiculously poor calls in the sector. Let's look at a few of these headlines from articles:
November 16, 2010 James Turk - $400
Silver by 2013 to 2015 - and yet it flounders at 1/27th your
predicted price 1-3 years after your specified date. Any comment Jimmy?
Now, it's acceptable to make a few bad calls, but one should look at the motivation behind guys like Turk and Sprott - the pronouncements of anticipating higher metals prices is compromised by the benefits such predictions make for their respective business ventures - they are content luring manipulated investors into pouring good money after bad into their services. They may be well-spoken, quality orators, but that doesn't make them any less a charlatan. Unfortunately, there are plenty of other PM analysts that band-together refusing to acknowledge their failed predictions and continuing to hype the paper-price of PMs with the inference that it is manipulated. This benefits them to tell unwitting followers of their videos, newsletters, services etc. exactly what they want to hear; that the public's coin/bar buying is helping defeat an unjust paper system and a dramatic reset is imminent! But looking at Sovereign tonne data - this is nonsense. When it comes to the physical gold market - we are a drop in a bucket dwarfed by CBs, countries and we are microscopic in terms of paper gold. You may feel enlightened owning Gold but expecting the masses to follow in your footsteps borders on arrogance. For the rest of your lives the world will need fiat money (in the form of paper or digital!) - with its varying levels of eventual devaluation. So...
Which of these two scenarios are
more probable, in your mind?
If you consider #2 - then what happens with robust physical demand? (take a look at our Rocco calls page to examine this scenario) We can see that higher physical demand means a lower paper-price. Let's remember:
"In our current dollar gold market, the less (physical) gold is supplied, the more it pressures the (paper) price down! Players must create and sell not just more contracts to cover expiring ones, but also sell enough paper to force the price down further. In a market that's becoming shorter of physical gold, this is the only way they can add equity to cover rollover positions. "FOA - The Gold Trail, Feb 23, 2000
So,"Players" create.... and large western investors buy these gold derivatives which, as they are fractionally backed by physical, dilutes the total - hence diluting the price over time. Physical - as bought by Sovereigns, CBs, Chinese, East Indians etc. and YOU (way last on that list - massive coin sales not withstanding, Mr. St. Angelo) increasing the fractionalization ratio. With a glut of paper gold available - where do you think the price will go? (remembering the paper price denominates the physical price... for now.) Down, Down, Down. But your gold savings will be unaffected - it just sits there being the world's best wealth asset... until it is revalued as such. It won't happen on anyone's preferred timeline - it will happen when it happens - be thankful you became aware on the right side of this knowledge.