James Turk: Central Banks are Losing the War to Suppress Gold & Silver Prices

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My guess is that 2013 and 2014 are going to be big up year for the precious metals, but we still have to contend with the central planners and the various government policies, which have been actively trying to keep the gold and silver prices from reaching fair value. The central planners are losing the war. They may win an occasional battle or two, but they’re losing the war, and eventually gold and silver are going to go higher.

So predicts James Turk, founder and Chairman of GoldMoney.com.

From James’ perspective, gold is not an investment. It’s a sterile asset, meaning it does not generate income. What it is, is money. Its function is to store wealth.

But money, like investments, can be overvalued or undervalued. And what we’re witnessing on the world stage is a gross mispricing of money as central banks engage in depreciation of their fiat currencies via inflation (i.e., money printing).

The process causes a transfer of wealth from those holding overvalued money to those who hold undervalued money. That’s what’s been going on for the past decade as the price of gold has steadily marched upwards versus fiat currencies.

But this process is not efficient. Mass awareness of this wealth transfer is low, so confidence in paper currencies is still high, supporting their perceived value. Market intervention by central banks and other parties conspires to keep the prices of precious metals artificially low and suspect.

This maintains an arbitrage for individuals to buy gold and silver at a discount to true value, which James believes will be slowly realized in full over the next several years as the bull market in precious metals approaches its third and final phase.

A factor in this rise will be the increasing fragmentation of coordination among the central banks. Increasingly, central banks outside the influence of the U.S. Federal Reserve are treating the precious metals as true money, and becoming net buyers of bullion for their reserves.

Ultimately, Turk predicts the price of gold will move to somewhere between $8,000-10,000/oz and that we'll see even higher price appreciation in silver.

The way markets normally work is, after you do have a big move, you get a correction. Even over the past 12 years, if you look at gold, you had big moves in 2005, 2006, and 2007 where you were in some years generating over 20% appreciation in gold. Then you had the correction in 2008. Even though that was a correction, gold was still up that year. Then, in 2009 and 2010 and the earlier part of 2011, you had again big moves. Then you had the correction where basically they moved sideways. My guess is that 2013 and 2014 are going to be big moves on the upside, because what’s important here is not so much the price of gold, but whether it’s a good value.

The proper way to manage a portfolio is, you move assets that are overvalued out of your portfolio and you concentrate on assets that are undervalued. That’s true regardless of whether you’re talking about investments or money. You want undervalued forms of money. You want undervalued investments. I use a couple of mathematical formulas which I’ve written a lot about, one being the Fear index and the other being the Gold money index; by both of those measures, gold is still very, very undervalued, as is silver, for that matter. Silver is even more undervalued than gold. My expectation is that these undervalued assets will continue to rise in price, because the market doesn’t like levels of overvaluation or undervaluation. The market is always constantly changing, moving money out of overvalued assets and moving into undervalued ones. And that’s what we’re basically seeing in the precious metals: people are moving out of overvalued fiat currencies and moving into undervalued gold and silver.

My guess is that 2013 and 2014 are going to be big up years, but we still have to contend with the central planners and the various government policies, which have been actively trying to keep the gold and silver prices from reaching fair value. The central planners are losing the war. They may win an occasional battle or two, but they’re losing the war, and eventually gold and silver are going to go higher – assuming that governments and central planners and central banks still continue to follow these same policies that they’ve been doing, which is defacing fiat currencies.

An interesting thing is that when we saw the price drop in gold and silver at the end of 2012, the demand for physical metal rose tremendously because people recognized that these assets are undervalued, and if they’re going to be sold down to such cheap prices, they may as well just pick them up and continue to accumulate them. So it certainly has a perverse affect when the central banks intervene. In fact, as we’ve noted, gold has risen 12 years in a row against the U.S. dollar – double-digit rates of appreciation. But I guess the best way is using an analogy. If you've got a pot of water boiling on the stove and it’s bubbling away, every once in a while you have to release or pull off the lid to let a little bit of steam out, and then you put the lid back on.

That’s sort of what the central planners are doing. Every year they release the lid, and gold on average has risen over the last 12 years by 16.8%. Then they put the lid back on. One of these days they're not going to be able to put the lid back on, and you're going to go into the third stage of a bull market where gold just keeps rising and rising and rising because confidence will be lost in the currency. I think that’s what we have to be focusing on.

I can’t say that trust between central banks is waning, but you have to recognize that there are two categories of central banks: There are central banks that are in the U.S. circle of control and dominance, and then there are central banks outside the circle of U.S. control and dominance. The ones that are outside of the U.S. control and dominance are accumulating physical gold. The ones within the U.S. control tend not to do that, although it’s interesting that Germany, Netherlands, and now Austria, too, are talking about bringing their gold back.

It’s quite clear that a lot of promises have been made, particularly by politicians and most governments around the world, and those promises cannot possibly be fulfilled. A lot of those promises are going to be broken. Particularly when it comes to the area of gold, a lot of central banks are relying on the promises of other central banks. Oh, yeah, we’ll be good for the gold if you ever ask for it. Those promises are likely to be broken as well, as the demand for physical metal continues to grow. Whether it’s going to accelerate in 2013, 2014, I don't know. But, my guess is the demand for physical metal is indeed going to accelerate over the next couple of years, because I’m looking for serious financial problems to be hitting. 

[A reminder: if you want to discuss the issues Chris and James discuss here on an ongoing basis with precious metals enthusiasts, consider joining PeakProsperity.com Gold & Silver Group. Simply go here and click the "Join Today" button.]

 

Click the play button below to listen to Chris' interview with James Turk (34m:47s):

This is a companion discussion topic for the original entry at https://peakprosperity.com/james-turk-central-banks-are-losing-the-war-to-suppress-gold-silver-prices/

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I think you want James Turk in the guest bio!  :)
[D'oh! Fixed. Thanks. – A]

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James Turk: Yeah, that’s a good point. One of the things I like to stress is that in years gone by – and I’m talking about decades ago, maybe a century ago – you could sort of trust central banks to do the right thing. And, you could sort of rely on them. With the exception of the Bundesbank in the past century, no central bank has really ever done the right thing. Now, they’ve always ultimately bent over to political force, the will of the politicians. The most recent example is the Independent Bank of Japan, now setting at 2% inflation target – which is exactly what the Japanese government wanted.

My grandmother was a young adult in Germany during the Weimar days. Where she worked, she would get paid at the end of the month. Her hourly rate was calculated as if the entire month's hours occurred on the last day of the month. She and her coworkers would get paid at noon and half would spend their lunch shopping for needed goods while the other half minded the office and went shopping at the end of the day. The next month, they switched. The last month that Weimar existed, inflation was ramping up so furiously that her month's earnings at noon were only sufficient to buy a pair of shoe laces a mere 5 hours later.

Don't give the Bundesbank credit for standing up to political force. There are still people alive who lived through the horror and plenty of people who have heard the horror stories. That is where the political will exists and the bank leaders know it. They are bending to political will by repatriating their gold. Do you really think they want to offend their masters at the federal reserve? By giving the federal reserve 7 years to deliver only half of what they claim to store on Germany's behalf, they are placating both sides ... and kicking the can down the road.

Grover

 

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Thank you for the talk. I had to listen to some parts again and again.
The Germans are particularly sensitive to Gold. They got burned badly during the Weimar Republic.

Wiki

I asked my friend Willie Webber what one must hold in such a situation. He said Gold and Land.

(Willies father was a musician in the Wehrmacht. Willie had inherited his musicality. I put Willie in the Casualty Department of the hospital with my violin playing.)

One never shouts loudly that the sun will rise in the morning. In other words, we are most vocal about what we are least certain of. I noticed that James kept reitterating the Historical value of Gold as a monetary metal. Therefore I conclude that he is most uncertain of this fact. It is his underlying assumption upon which he is dependent. If my belief were a bead on a wire I would slide it to 70% of the way towards the end called "True". 

The 30% remaining is due to the fact that Asimov said the the size of an Empire is dependent on its speed of communications. If we get a de-facto world government then the value of gold will be whatever  they say it is.

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I began following James Turk in about 2006-07. I bought and read his book, "The coming Collapse of the Dollar." I listened to every internet interview I could find (Howe Street, Goldseek, Etc.), and I've read a lot of his writings, especially those posted on the GATA website and Goldseek.
Here are some of his previous predictions:

  1. Silver to reach $35 by THE END OF 2008

  2. Undeniable signs of Hyperinflation in the US by THE END OF 2010.

  3. Gold to $2,000 per ounce by END OF 2012.

Turk has been WRONG, WRONG, WRONG over and over, yet he never admits this or apologizes for it. He keeps on making new perma-bull predictions, and the internet interviewers always give him a free pass and never question his horrible calls from the past. This is possibly because Turk and his "Goldmoney" gold and silver dealership pay a lot of advertising money to websites that focus on precious metals investing.

Over the years, Turk has written numerous articles with log-scale charts that predict a a parabolic (or hyperbolic) increase in the metals prices due to silver backwardation, increased metals demand, uncontrollable chinese buying, and "pure" technical chart analysis. Few of his price calls have come to pass, and NONE of the hockey stick charts he predicted were in any way predictive of reality.

Turk has also been very bullish on mining stocks, which have performed poorly.

Turk has NEVER warned of a pull back or price drop. When Silver was getting close to $50, Turk was talking about Silver going beyond $100.

Anyway, please be very cautious when listening to James Turk predictions. He may be right about Hyperinflation someday, but never forget that he is a GOLD AND SILVER SALESMAN who uses FEAR to convince people to buy his product.

 

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Thanks so much for joining just so that you could point out how crazy wrong Turk's predictions have been since the 2006-2007 timeframe.  The average price of Gold in 2007 was $695 (see ref. below)…   so I can see why you would be so down on Turk, since if you had invested $1000 in Gold then you would only have $2388 left today.  I can see how that would leave a real bitter taste in your mouth.  That's what I call some WRONG, WRONG, WRONG investment advice… right? 
You are a troll of the highest order Pete.  I am only sorry that more people don't understand what you are doing here - otherwise, how to explain the thumbs up ratings?

We are all adults here and we know that everyone talks their book.  Turk does not hard sell Gold Money… you can take it or leave it as a means to invest in Gold.  Please take your paperbug talk somewhere you will be appreciated… because here ain't the place.   

http://www.nma.org/pdf/gold/his_gold_prices.pdf

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Jim H:So you're saying that because James Turk kinda sorta got a trend right, we should ignore his ridiculous perma-bull calls?
Okay, lets try that approach with a different example to see if it makes sense…In the year 2000 gasoline was about $1.50 per gallon. If I'd said at that time that there would be a major fuel shortage and that gas prices would go to $500 per gallon my 2013, you're saying that I would forgiven for making this horribly innacurate prediction because the price of gas today is $3.30 per gallon? Because I sorta got called the general direction of the trend, I don't need to be right on the specific prediction? Would you listen to me and defend me now if I started talking about Gasoline going to $1,000 per gallon?
Remember, Turk called for HYPERINFLATION by the end of 2010…Hyperinflation cannotes runaway food prices, middle class women turning to prostitution to feed their kids, old people freezing to death in winter, crime rates exploding, crazy speculation, kidnapping for ransom being common place, landlords requiring diesel fuel for rent payments, city people attacking farms for food,$100 dollar bill toilet paper, etc. Apparantly, you think its okay to yell FIRE and try to scare the crap out of people like Turk did to me…as long as gold went up a thousand bucks in six years?
I like the false accusation of "paperbug"…on what FACTS are you basing this ad hominen attack? I can back up all my claims with FACTS…how about you?
I invested a heck of a lot more into physical precous metals than $1,000 in 2007-2007, and I would have done so anyway without Turk's fear mongering BS.
 

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I read Turk's predictions with a wry smile. In the current climate of universal price warping anyone who stakes his/her reputation on timing and price projections is a fool. Cheap marketing. Unless of course your inflation/DOW/yield/debt ratio crystal ball is in full working order.
If the common belief of currency devaluation amongst PP members holds, then who cares that your ounce is priced at $10,000 in 2 years' time? As the distortion between price and value becomes more acute I'll become less interested in $ prices and far more interested in the ratio of ounces to a single acre of land, or to a unit of productive asset. The Weimar & Zimbabwean experiences should've taught us that, if nothing else.

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A.  Timing markets is near impossible.  Blame Turk all you want… but this lesson must be learned by all at some point in their investing careers.      
B.  If you are mad that Gold, Silver, and miners have not appreciated fast enough compared to paper money…  and you don't cite the fact that the banking cartel has been working overtime to suppress metals, then you don't understand what is going on, and you are effectively making the case for the opposite of metals, which is paper.  You made a fairly strong paperbug case in your previous post.  If we should not buy Gold out of fear that the dollar will depreciate… the argument you are making is that there is no reason to fear depreciation of the dollar.  I can give you 85 Billion reasons per month to fear depreciation of the dollar, and it's name is QE.    

C.  The $1000 figure was made simply to illustrate investment returns in a way that is easy to comprehend.  I didn't wake up until 2009…  I would be an even happier camper than I am had I started converting green paper in to metal in 2007.  Exactly what is the source of your ire? 

D.  Turk may not have his timing right (see A.)… but the fact remains, the entire world's debt-based, derivative-underpinned money and banking system is going to destruct in a short number of years.  This is not fear mongering… it is simple mathematical reality.  Japan holds a national debt that is 24X their tax roll.  While other black swans could preclude Japan from being the proximate cause, Japan is at least the most visible fuse that is already lit.  Don't listen to me though… listen instead to Klye Bass;

    http://www.youtube.com/watch?v=JUc8-GUC1hY&feature=player_embedded

If you don't have some fear of what is coming, then you have simply not done enough research.       

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Your responses are showing that Pete hit on one of your beliefs, and not logical thinking.  Your belief in Au and Ag as the end all be all is something I would hope you'll look in the mirror about.  
We all have been following Turk for quite a while, and IMO Pete is correct in some ways.  Do I discount everything that Turk says?  No.  But as with anyone, I take his info in, and decide what I like and don't like…but I do it in a logical manner, not through a belief system.

Jim, you're a smart guy and give a ton to this community.  But to attack someone because they've gone against your beliefs is wrong IMO.

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If one is going to make predictions about a market, one best be right about both the price level AND the timing, or else the prediction should be considered wrong.  Timing really does matter in markets, and if you are going to make a prediction and you are unsure of the timing, then say so: there is a big difference between saying "the world will end, but I'm not sure when" versus "the world will end by the end of next week."
I think the past two years has given the gold perma-bulls a bit more humility about timing issues.  Turk is now talking about how markets do have pullbacks and that's all for the positive.

There is a lot of talk about hyperinflation from money printing.  If you believe that (hyper)inflation comes from the expansion of the total amount of money and credit in the economy, the Fed printing a few trillion is nothing compared to the total credit outstanding of 55 trillion dollars.  Velocity matters too, but if we just do a static analysis, it would appear hyperinflation is still far away.

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Yeah, there are some people who just pick at your scabs and it is difficult to just let these Folks go by without a little piece of your mind. Boys being boys I guess.
Jim H. has absolutely a valuable voice here at PP and I think if he stepped back he would see the silliness of being upset with someone on the other side of this blue screen. I've been pulled in a couple of times myself.

I am unemotional about Gold. I have just determined that I need it. I am unemotional about Silver. I have just decided I needed it. In both cases I believe these physically held metals are a bank account who over time will keep with inflation.

If everything in our economy works out and I am wrong about precious metals then I will still live a very rewarding life. If these expectations are halved and I don't realize some of our pensions, Soc. Sec etc…then my/our Gold and Silver will supplement our standard of living. These are my hopes, and come what may I see I have zero control over what will transpire so I will, and are making the best choices for a survivable future.

Lastly, I am NOT in the totally and completely PARANOID camp as some here most certainly are.

RED, WHITE and BLUE forever, that's me. I still DO NOT believe the FED will completely eradicate the dollar or even risk reserve currency status but I prepare as if that is exactly their plans. 

What will replace the dollar and is globalization even in the cards any longer?

I have no fears financially so much because I basically have weighted every possible outcome.

I come here to PP and all other reserach sights to learn as an " in the world student " on how to protect what I have. I do this with a lifetime of experience as a business owner and Man of his household along with the help of a truly gifted Lady.

Everybody talks their books and NO ONE is fully trustworthy as they seek their own advantage not yours. Truthworthy is not to imply anyone here isn't but everyone here has a different mind set and goals structure so is different perhaps to mine. So I TRUST my thoughts and many of these thoughts are solidified by the TEACHERS like Chris, and others. 

What is perfectly clear to me however is that NO ONE has a definative conclusion as to what even tomorrow will bring. So I care NOT AT ALL what some will say to me based on their conclusions if they don't jive with mine. I will admit that some here are so negative or contrary as to disturb my morning bliss and it gets to me sometimes. As it has with Jim (meant disrespect Jim) and the poster who has effected his bliss.

I am blessed to be able to balance things out a bit and not risk putting all my eggs in one basket. I DO NOT care if I am the riches Man on the block I just want three squares and a bunk. 

I am in the camp that feels the Fed "MAY" just end its QE plans earlier than is expected. The last Fed minutes were somewhat telling. Who knows right? So we/I plan for all outcomes. We MUST.

I read the "Depression and 50% unemployment" statement by Chris and still had to ask myself if this is the way forward and we get out of this mess in shorter order then lets do it. I just see Hyperinflation as the equal but opposite bad outcome. Meaning the same results as it would probably cause 50% unemployment but would also include the destruction of our currency and a sure way to HELL was a continuation of my thought process. Each outcome isn't all that appealing so why wait. Most all of us know how to handle a Depression but few understand how to handle a Hyperinflationary event.

I believe even Chris has stated on many occasions that we have the technology and the energy now to effect change and I assume an ease of transition if we get under way and I agree. I also believe Churchill has said we will try everything else before doing the right thing. I could site many such quotes throughout our history, and they are all born out of our history as Americans, our trials and tribulations, and so I weight a great deal towards historical patterns. In roughly 250 years through some serious times we have stayed the day of execution and still have a rather strong pulse.

I give no more weighting to precious metals than a good company stock (Oil is my strongest weighting however when I am in the game). I do have more physical Gold and Silver than I probably need and this is equal to what (in todays dollars) will support an off the grid, paid off log cabin, and the land enough to sustain a relatively quite, and mostly sustained system for food and vegetables and fruits. I may just stay where I'm at.

I know this for absolute certainty the flag of the United States will still fly, and we will call ourselves capitalist with Marxist, Socialistic and all other ' istics' too as we have always been. Capitalism has never been, and is an idea so we move along defining and redefining. What is new about any of this. We have always been allowed to our religious and political beliefs. We have always took care of our sick and poor, and so we move along, and the system ends up being what it is. Honestly, three squares a bunk and my Tigers games are all I ever wanted. I imagine I will live the rest of my life with my wishes being granted.

Peace

BOB

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[quote=davefairtex]If one is going to make predictions about a market, one best be right about both the price level AND the timing, or else the prediction should be considered wrong.  Timing really does matter in markets, and if you are going to make a prediction and you are unsure of the timing, then say so: there is a big difference between saying "the world will end, but I'm not sure when" versus "the world will end by the end of next week."
 
[/quote]
Granted Turk missed the timing, but let's look at the Big Picture. He identified the trend before it was popular as it is today. Had anyone followed his advice 10 years ago they would be in good financial shape. IMHO he is still correct on the trend. (Dollar devaluation and Gold Price Stability.)
Let's give the guys like Turk and Martensen who raised our awareness early on, some credit even though they make an occasional bad call. At least they have the courage to make calls and give us the opportunity to accept or reject their assumptions.
I was fortunate to have lunch with James and his son at the Gata Conference in London 2 summers ago, and regard him as an honest individual. I don't use Gold Money personally, but see him as a pioneer in a very difficult market invironment. 

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I apologize for my histrionics last night… this community does a very good job of censoring itself, and I did go overboard. That being said, I stand by my original point, which is pretty much what Olive is saying above.  WI Pete, "doth protest too much methinks" for more than doubling his money in Gold in five years time.As with any community, I think we sometimes get caught up in the minutiae of our differences in belief or outlook, and I am guilty of this as well.  The thing I forget, the thing many of us seem to forget, is that not one in one hundred folks you meet in daily life has any idea how tenuous our economies and monetary systems are… buying hook, line, and sinker the propagandizing prognostications of our Gov't, Corp., and Corp. media leaders.  Gold and Silver are suppressed to make sure that the 99% stay asleep.  Most continue to buy, hook, line, and sinker, the falsified signals coming from the BLS, the captured and QE'ed interest rate markets, the QE-infused stock markets, and the inventory-controlled, Gov't backstopped housing markets.  It takes much study coupled with critical thinking skills to see through all of this to a clearer view of the underlying truth.  
What I find truly amazing is that many commentators, including Kyle Bass, whom I referenced above, see the system crashing WITHOUT even considering CM's meme of resource depletion as added drag.  So, we have unprecedented drag on future growth prospects from debt, around the world, and a largely unrecognized new form on drag due to the peak of almost all finite resources the world has to offer.  We have fake markets that promote the status quo at a time where our only real chance of surviving without a major catastrophe demands that we face the truth, extinguish bad debts, and allow the process of creative destruction to occur on a broad scale.     
   
 

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…well stated my friend. I would hate to tussle with you I know that for sure.Honestly Jim, I have no real clue where this is headed, I just don't. In the same breath that Kyle Bass calls for the imminent destruction of Japan, Europe and his disdain for China, and all that entails he is betting rather large on the U.S. housing market. That sounds like life after death to me. That the dollar still will stand tall and he's buying paper not the physical asset in housing. He doesn't have a super large (percentage wise) dowry in Gold or Silver (physical). So I am just playing the way the Big Boys are playing. As a fiduciary he has responsibilities, and I'm guessing here but if he felt Gold was it then I suppose he would weight a great deal more than his stated allotment.
I have read and re-read most every word written by Bass and he is consistent and doesn't scream dump the dollar. No one does, if anything it's called "the best horse in the glue factory or "best house on the block", "cleanest shirt in the laundry basket".
Those who's interests in their assets are allot stronger than others, they only naturally defend their positions, that is where conviction comes from. Which does require a great deal of research and contemplation as Oil does with me.
I do know this, Gold has been a good play, and no one has lost any cash if they purchased four years ago and that's a good thing. I am, and imagine you have been one of the lucky ones. I invested because it made sense and was a hedge not for monetary gain just to stay even with inflation, and that has been accomplished.
If I gained the world owning Gold and lost my country I would not feel as though I won I know that. So I could cares less about the price of Gold really. Just insurance.
Respectfully Given
BOB

16

You said:
"Blame Turk"
"Sources of ire"
"Mad that gold…(has not) appreciated fast enough"
I think you ASSUME I'm mad or angry at James Turk or for outcomes I do not like…Wrong!
What I am trying to do is warn people that James Turk has a bad track record for making predictions so others don't take his information too seriously like I did. I would have greatly appreciated knowing this in 2007 so I would have taken his prognostications with a grain of salt. Of course my metals investments did great, but I was already buying before I heard of Turk. Unfortunately, I believed his Hyperinflation predictions, and I ended up living a very fearful existence. For example, I had been a successful real estate investor, but when I started believing in Turk's hyperinflation predictions, I quit investing in house/rentals because I was sure that rice and beans were a better hedge aganst the coming tempest. I missed some of the best real estate buys of a lifetime during 2007-2010 because guys like James Turk had me convinced that Hyperinflation was immenent. I'm not angry about this, but I don't want others to be tricked like I was.
The only people I feel anger towards are the interviewers and writers for precious metals related websites who introduce Turk like some kind of highly-respected psychic guru, and never challenge him on his previous failed predictions. The fact that the only place you're hearing any criticism of Turk is in some rarely-read comment section should be evidence of my claim.
Since you brought up the subject of QE and "paper" money, please be aware that Turk repeatedly says "Governments" create money out of thin air. This is not true. All "money" in our debt-enslavement monetary system is created by banks in the form of debt. When a person borrows $200k for a mortgage, the bank creates this checkbook "money" instantly out of thin air via a simple ledger entry. The government borrows its money from the Federal Reserve which is privately owned by the same legalized counterfeiters called banks. Turk claims to be of the Austrian School but he keeps saying "Governments create money out of thin air," and "Governments print money." Guess the "Austrian" Turk has never read Murray Rothbard and does not understand the fraudulent currency creation process…another reason to question James Turk.

17

I grant James Turk that he was early in his higher gold call and that he has been directionally correct. And I have no quibbles with his integrity, nor the fact that some of his predictions havebeen wrong, or possibly just early.
The problem, as I see it is, a certain forgetfulness on his part on past wrong calls. It would be more helpful to analyst and reader alike for him to revisit previous forecasts and review which ones were correct and which ones missed the mark and the reasons why.  As to the ones that were wrong, what tweaks to his analytical framework might allow more accurate predictions in the future?  It is through this iterative process that an understanding of the multiple factors at work in the changing value of precious metals is deepened and the credibility of the analyst is enhanced.   

We don’t demand infallibility of the analyst but rather intellectual curiosity and the ability to adapt the analysis to the ever evolving reality of the world we live in.

18

…step back from your computer screen, take stock of those who love you as they are the only ones who truly feel your pain. Hug them, kiss them, and let what has happened go. Frankly, the finger should be pointed in one direct, a hard concept sometimes but the truth none the less.Brother we are always bombarded with someone elses book, take a look:
http://www.youtube.com/watch?v=_a0yDfCGtRs
…and we all feel this and have felt this:
http://www.youtube.com/watch?v=DV7yx2y3TtY
…so what do we do now? We live to fight another day:
http://www.youtube.com/watch?v=rmCpOKtN8ME
…don't get me wrong, I like a good fight as anyone should. Take a look:
http://www.youtube.com/watch?v=NGBOzMWeIjs
I wish you well.
BOB
 
 
 
Respectfully Given
BOB

19

@oliveoilguyFull credit to Chris and Mr Turk for calling the gold price trend correctly back in 2002.  And Chris for all he's done here.  I didn't realize either of those two things were at issue.
Market timing remains an important issue with me.  Was anyone at KWN calling the top for silver at $50?  I certainly don't remember them doing so.  It was dreadfully overextended, and had you bought silver there, you'd have lost 40% of the value of your investment.  Timing really does matter, and apart from our Faith in the Ultimate Victory of Gold over Evil Central Banking, its probably a good idea to measure how extended a market is prior to making buying and/or selling decisions.  It doesn't require Market Manipulators to cause a price correction in something that's really overextended.
Secondly, I'd like to continue asking for evidence of this incipient hyperinflation I hear so much about.  What evidence do we have that hyperinflation is on the way?  What indicators should we be looking at?  None that I follow suggest hyperinflation.
From what I can tell, looking at the metrics I believe in (inflation being driven by an expansion of money and credit), hyperinflation just isn't happening.  At best, we're creeping along at an overall 2% inflation rate, based on growth in TCMDO.  (TCMDO = total credit market debt owed)
Third, is gold overvalued, fairly valued, or undervalued?  It depends on what you measure, and what you compare it to.  During the interview, Chris mentioned comparisons with other commodities.  I thought that was interesting enough that I went off and created some charts and put them up on a page.  Gold vs other commodities - gold looks fairly priced.  Gold as a backing for total money - gold is distinctly undervalued.  Gold vs the US equity market both short term, and long term - perhaps somewhat undervalued.  Which indicators do you believe in?  Are there others that bear watching?
http://mdbriefing.com/goldvalue.shtml
So 3 issues.

  1. Timing does matter, we can measure it in various ways, and it might be a good idea to remember that it is probably best not to buy something when things are overextended on the high side.
  2. What is the theat of hyperinflation and how we measure that, and
  3. Whether or not gold is over or under-valued, and how we measure that.
     
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DAVEFAIRTEX:I'm replying to your challenge, "Secondly, I'd like to continue asking for evidence of this incipient hyperinflation I hear so much about."
I agree that right now there is no clear sign that Hyperinflation has begun or will begin in the immediate future. Contrary to Jim H's claims that I am James Turk hating troll, I actually agree with James Turk that there will likely be a Hyperinflation in the US in my lifetime (I'm 41 now).
The best argument for hyperinflation I've seen is the 2008 study by Swiss economist Peter Bernholz. He studied all known hyperinflations that occurred after 1980 (there were 28 of them) and studied them all to determine the common denominator. His conclusion was that hyperinflation is INEVITABLE when a government borrows more than 40% of their expenditures. THe US crossed that threshold around 2009-2010. I don;t know the exact number, but I heard talk-show conservative Mark Levin say in 2012 that the US is borrowing over 43 cents for every dollar spent.
Here's a link to an article mentioning the study by Bernholz:
http://www.rapidtrends.com/2009/10/26/hyperinflation-in-the-us-no-way-ok-maybe/I
We may have already crossed the point of no return to hyperinflation, but low rates are temporarily preventing the horrible outcome.