immediate future, page-9

I'm back in here after switching from OGC. They were losing too much of their gold leverage for my liking after another hedge. Maybe the correct move for them but not suiting me.

I am gold bullish so prefer pure gold exposure now but also prefer high margin, growth and low debt in case gold is kept down longer than I expect. MML fits well.

This chart shows why the current POG correction had no fundamental reasoning and why most gold miners are struggling. There are all sorts of reasons floating around for why gold and the gold stocks fell; from “taper of QE” to “the miners went for too much growth through lower grades”. Monetary base has not stopped growing yet POG has corrected deeply for 2 years. That had much more to do with manipulation than fundamentals. The miners had been looking for expansion through lower grades for more profit but also to meet ever increasing demand. They are struggling now because of the massive increase in the monetary base and its inflationary effect on costs and at the same time a sharp drop in the POG. The POG drop has had no fundamental justification with this backdrop. It will snap back up violently eventually and in the mean time I doubt it will go much lower as the big banks forecast. They were very wrong all the way up for most of the 10 year rally; always making assumptions that the price of gold was going to be lower in the following years and regularly changing their assumptions higher (often by up to several hundred dollars trying to keep up with the price rise) but always with the same theme that prices would be much lower over the next two years and they were wrong for nearly 10 years straight. Then after gold finally peaked in 2011, their assumptions for the following years were much higher than what turned out to be correct and they regularly have adjusted them lower- much lower lately to try and keep up with spot prices. They maybe had it about right briefly in 2012. GS finally got one call correct with the “prediction” that gold would fall through 1500 early to mid 2013 and it fell through immediately afterwards with the help of massive shorts put on in part by GS along with plenty of bearish talk. What’s the better description; correct prediction or manipulated drop?
So these guys have been very wrong with price predictions for almost all of the last 13 years and yet so many in the market give them credit that they will be right about lower gold prices for 2014 despite such a big fall and the price so close to cost of production and ever increasing consumer demand. Where’s the track record for them to deserve this credit? If you go by their track record you should bet against their predictions. Some have criticised me for being wrong over the last two years that POG didn't reach $2400. $1900 wasn't that far off considering the price rose from a $250 base and we are all wrong at times. At least I was right for most of those 13 years unlike most of the big banks. I still expect to be right going forward and still expect to see $2400 although with the manipulation we have seen timing can not be taken for granted.