are we getting delusioned with fml, page-11

I'd just like to point out that there is substantial fear in the markets.

I get the feeling that many speculative positions have been closed.

There is way too much bearishness and fear.

This means that weak investors will exit their tenuous positions.

Whilst I don't suggest that FML will necessarily increase with the gold stocks in general (would be nice however), I think the gold, and gold stocks in general, is in a position to kick up very quickly.

There has been sustained and increased physical buying during these lower prices.

I think that with the run up over $1900 gold, there was excessive leveraged futures positions taken by inexperienced investors. Transfer from weak hands to strong hands as physical buyers have taken advantage of cheaper prices.

Once the fear has run out, which I think is soon, we should be looking at a very strong run up.

Remember the fundamentals for many companies, FML included, are excellent. There is significant value to be had at current prices across the sector.




Regardless of whether you agree with me or not, this is what I think the endgame is:

This is NOT the 1970s gold bull market or anything like that. I think that there will be a day, I'm not sure when but it could be next week or the next two years, where gold is re-rated overnight. What will happen is that some currencies will decide to link themselves to gold via a floating gold reference (note that this is not the same as gold standard). Essentially we see an overnight end to the fiat currency system and all currencies will be forced to take a similar approach or else face hyperinflation - some may want the hyperinflation over the short term.

Therefore, if this were to occur, you would not want to trade your core gold positions - be it physical bullion or gold stocks (I view gold stocks as leveraged bullion with potential for massive future cash flows after a re-rating). If you didn't have your core holdings, you would be left with your pants down as the system adjusts in a waterfall decline. This is where you get the whole $20k + potential for gold. The number doesn't matter - it just needs to be big enough to wipe all the existing derivative debt system and to have a fresh start. The day for this to happen is getting closer and closer, but who knowns when and how it happens because we have never seen it in modern markets.