BigSky, you have the wrong guy. I've never been short gold.
The author at the start of the thread wrote when a silver default occurs it will bankrupt JP Morgan. Neither is going to happen; its conspiracy crackpot stuff. Hanging out with crackpots in a bull market is fine but not a bear market. Newbies to precious metals, and there are more of them each day, should be made aware of these lunatics.
There are no gold and silver shortages. Both behave as money and money is changing hands at higher prices as investment demand drives them higher. When investment demand eventually declines, they'll still change hands as prices fall.
When will this happen? Take a look at Hobo-Jo's Aussie real estate vs. gold charts at the top of the page. Then consider what happened in the US real estate market. In terms of gold/silver, US home prices collapsed 80-90% past 10 yrs. Despite central bank supply drying up, Americans are able to buy more precious metals from the US mint than ever before. Where is the supply coming from? From their fellow citizens of course, exchanging bullion to buy 5-10-times more real estate than it could just a few yrs ago.
My guess is the gold bull will be over in 2-3 years. For the first time in a decade, I'm planning my end-game. Gold at $2000 and DOW Jones at 6000 would mean a DOW/gold ratio of 3. That will be near the bottom, time to start switching into financial companies/real estate I reckon.
In the shorter term I'm anticipating another intermediate term peak for gold early 2011. Kerns SKI system for gold stocks is on a major buy signal (first time since 2005). Market Vane bullish consensus for bullion last week is indicative of a bottom rather than a top (one would think gold was $850 not $1250) and Mark Hulbert is reporting the same conclusion:
http://www.marketwatch.com/story/gold-timers-skeptical-of-new-high-a-good-sign-2010-06-18
Fundamentally the gold stocks are poised for a great run in the next 12 months. If you run through the financial statements of ASX junior gold producers NONE of them made a decent net-profit-after-tax in FY09. For those with a clean balance sheet all that is set to change in the FY10 reporting season and again FY11, some may even pay a dividend.
Finally, the Fed doesnt want to be audited because it doesnt want you to know that gold is important. My suspicion is it holds substantially more than 8300 tonnes officially stated.
Rowingboat
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