Gold’s 50-Dollar Sunday Night Collapse Explained – Ep. 97

Released Tuesday, 21st July 2015
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Today's Podcast is entirely devoted to gold and gold stocks
Last night, in just a few minutes, gold dropped $50
One or more major sell orders hit the market at the same time and gold went down below $1100
It was down $20 by the time New York trading opened and by market close gold was down around $37 on the day
Silver was down only about .15 today
Why was all that gold dumped? The goal could not have been to get a good price - the goal was to knock the price down
The HUI was down 10% on the day
This bear market in gold stocks is now bigger than the one from 1996 to 2000
Gold stocks are much cheaper today than they were at the end of the dot com bubble
If this a measure of trust in central bankers, the market is expressing greater confidence in Janet Yellen than it did in Alan Greenspan in 1999-2000,
We know how badly that turned out for stocks and how bullish it turned out for gold
The timing of this selloff comes on the heels of the media's spin on Janet Yellen's recent Congressional testimony
But the real news that ignited the sell-off was China's admission that they have gold reserves and in fact they intend to add to those reserves, surprising the market
If China was lying about how much gold they have had for the last six years, why does anyone believe they are telling the truth now?
I think they are still lying - being strategic
They want to get the price of gold down because they still want to buy a lot more gold
If China still needs more gold, eventually this will bring the price of gold up
Also a very negative WSJ article compared gold to the "pet rock" craze
This is the same nonsense that proliferated in the 1990's
The WSJ article describes gold investment as "a leap of faith" relative to dollar or stock investments
Gold should not be compared to stocks - it is currency, a commodity
Gold has intrinsic value, whereas the dollar is a fiat currency, backed by faith alone
Gold has had value for 5,000 years - you don't need ot have faith, you just own it
There will always be a use for gold
Why have faith in central bankers when everybody who has put their faith in central bankers in the past has been burned
An article on Zero Hedge compared the WSJ op-ed to a similar one from 1999
The title was, "Who Needs Gold, When You Have Alan Greenspan?"
They called him "the maestro"
He gave us the dot com bubble, the real estate bubble and the financial crisis of 2008
That's what happened to the people who put their faith in Alan Greenspan
Over the next 12 years after that article was written, gold appreciated 650%
Who needs gold when you have Alan Greenspan? Everybody
Today Alan Greenspan recommends gold
If we've got Janet Yellen, then we need gold
Greenspan wrote the playbook that Bernanke and Yellen are expanding and he knows it does not work
When you have Janet Yellen, you need all the gold you can get
Fortunately, it's a lot cheaper to buy gold and it is a lot cheaper to buy the companies that mine it
What could go wrong? Everything - what went wrong in 1999 and in 2008?
The same thing that went wrong then will go wrong now, because it is the same central bankers
And the same players on Wall Street either don't recognize the danger or are pretending it doesn't exist and abandoning everything we know about monetary policy
This is the biggest bubble yet - the entire economy is dependent on bubbles
Just when people trust the central bankers the most, that's the best time to buy gold
When this market turns it's going to be vicious
Once the market turns, it will move quickly that very few people will have an opportunity to buy

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Episode Details

22m 41s

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