Monday, May 14, 2012

Silver And Gold To Blast Off

Earthquakes Before The Price Eruption In Silver Coming 
 CIGA Eric
Silver will be the key to timing precious metals in the coming weeks.  Silver diffusion index which surged to 75 suggests massive inflows (long buying and short covering) into price weakness by the invisible hand (see chart 1).  This is extremely bullish.
Chart 1: Silver London P.M Fixed and the Silver Diffusion Index (DI)
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The invisible hand while focused and busy may not be done. Similar to the gold market, earthquakes before the price eruption tend to precede major bottoms (see chart 2). The silver volcano while rumbling and venting gas has yet to record any significant seismic activity.  It’s coming and only the perma-bears won’t feel them.
Chart 2:  Silver London P.M Fixed and the Silver Long/Short Concentration Index (CI): 1 = Bullish Setup, -1 = Bearish Setup
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More…

Hello Jim,
In regards to comments made by yourself that it’s more important than ever to be one’s own central bank, to be one’s own clearing house. When switching shares to the DRS that are held in trust companies in Canada, is that in relation to holding bullion outside the US? I understand completely that shares are not bullion, but is the idea the same? Gratitude, a deep sense of appreciation, and my support don’t seem to do it justice.
Thank you for all you do.
CIGA K
Dear CIGA K,
If you hold bullion outside of your country then be prepared to go and live with your bullion.
Jim

Jim Sinclair’s Commentary
The following is a note from CIGA Richard that speaks to the buying power of gold, and silliness that deflation today can be described as an increase in buying power for the dollar.
Jim,
As I type this and look on the wall at my $100 Trillion Zimbabwe Dollar note, I’m struck again by how few people understand the difference between ‘nominal’ and ‘real.’ I will not use Webster’s definitions, because with the advent of Google, even fewer folks now posses a dictionary. Using my definitions then:
- Nominal: the ‘face’ value printed on a paper fiat note.
- Real: what you can really buy with that note, or these days, a whole lotta fiat notes.
While the buying power of fiat money has fallen by 96% under America’s greatest failure (the Fed), the buying power of Gold has increased ~700%. This equals the ‘invisible’ robbing of the Poor and Middle Class by the Fed. Let me give you an example of the difference between average wages in paper fiat over time, compared with equivalent ounces of Gold:
- Average wages in 1959 were $5,016 or 143oz of Gold
- Average wages in 1977 were $15,000 or 120oz of Gold
- Average wages in 1999 were $28,970 or 104oz of Gold
- Average wages in 2008 were $41,335 or 53oz of Gold
This is not exactly rocket science, yet most folks consider that they are ‘doing better’ because their nominal wages have increased over time, when in fact it takes increasing nominal amounts of debauched fiat to buy the same ounce of Gold (in effect making Gold more valuable over time in terms of buying power, as the Dollar slides into bongo-buck territory… my Zimbabwe note ref’d infra germane).
Hmmm… which would I rather have? A wheelbarrow stuffed with $100 bills that won’t buy me a loaf of bread, or 100 ounces of Gold? Gee, tough one. Too bad the Fed and our politicians (excepting Ron Paul) aren’t making any efforts to help me choose.
Meanwhile, I’m completely ignoring the very short-term white noise in the heavily manipulated bullion markets, and hanging tough until the ‘invisible hand’ has inflicted maximum pain and this temporary swoon turns around.
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