Kitco Radio – Thu 24 May, 2012

Sideline Time – Thursday Gold Report

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Al KorelinRoger Wiegand

  1. On May 24, 2012 at 10:10 am,
    Marc says:

    Hey Big Al,
    Merkel and the new French President – I know what that is about! Hey, they are going to try out here is the states for “Dancing with the Stars”…or should we say dancin with the ‘financial devil”.
    All the best,

    • On May 24, 2012 at 4:42 pm,
      Big Al says:


      Dancing with the “financial devil”! That is great!

      Big Al

  2. On May 24, 2012 at 10:21 am,
    Bobby says:

    Sideline time is good advice, but as Peter Grandich said today, most of us have already picked several bottoms already and do not have much left to put in. I would have to say hold the line, do not sell. I purchased some majors (nem, abx) last week and at this moment they are both Green.

    • On May 24, 2012 at 10:31 am,
      Marc says:

      In my humble opinion, agreed 1000%
      All the best,

    • On May 24, 2012 at 11:10 am,
      castanheiro says:

      Yep Bobby,
      Like you, I’ve expended just about all my dry powder. I’m virtually all in, and I’m not selling anything! Just waiting patiently. Not stressed at all! My decision for getting into this sector was right, for all the right reasons. Nothing has changed. The political, economic, and financial landscape just keeps getting worse, so all the better for us. Hang on people. I’m confused about the day to day stuff too, because we don’t have all the information. OK, so be it. Don’t need to understand the day to day stuff. It’s just noise. Fundamentals are sound! Situation getting worse! We’re in the right sector! Good to go! My suggestion is, “do not bail now”! These are the times that separate the strong from the weak and develops in you and I real character. The MASTER of the Cosmos is in the boat with us. We can ride this thing out successfully!!! Put your Faith in the ONLY ONE who deserves it, and rest patiently for your good reward. Our ship will come in!
      For anyone interested, here is an excellent interview with
      Donald Coxe on KWN. He gives a powerful and reasoned analysis for why we should hang in here and not give up.
      Best to all,

      • On May 24, 2012 at 11:16 am,
        castanheiro says:

        Sorry folks,
        Here’s the link to the KWN interview. Definately worth your time.

      • On May 24, 2012 at 3:40 pm,
        Big Al says:

        Great point, Mr. C!

        That exactly where we are also.

        Big Al

      • On May 25, 2012 at 4:15 am,
        Jerry O^OTB says:

        C..HERO…..I agree with you….hang in there…..this time next year , this will be a distant memory……$2250…silver…$75plus

        • On May 25, 2012 at 6:00 am,
          Big Al says:

          Don’t you agree In the Box, that the real issue is not where these prices are, but the degree to which we are all protected from hard times?

          Big Al

          • On May 25, 2012 at 12:23 pm,
            Jerry O^OTB says:

            Yes AL,,,I would agree…..hard times are coming and we all need hard assets…..

          • On May 25, 2012 at 3:55 pm,
            Big Al says:

            You know, In the Box, at the age of 68….. No I better not go there!

            Big Al

        • On May 25, 2012 at 9:21 am,
          castanheiro says:

          Hi JerryO^OTB,
          Man, I hope you’re right. I’ll take your gold and silver prognostications any day. I agree with Big Al too, that safety and preservation of wealth(responsible, wise stewardship) is our goal, and hey, if we make some profit on the way, that’s good too.
          Best to you!

          • On May 25, 2012 at 4:07 pm,
            Big Al says:

            Mr. C,

            Profits are good!

            Big Al

      • On May 25, 2012 at 8:21 am,
        Clay says:

        Mr. C: I too like Don Coxe and have been reading and listening to him for years. He puts out a week presentation that you can listen to at following link. If you don’t want to download the link, you can access audio by doing following.

        1) Click presentations after archived. Then you will have to navigate through some clicks to find “Audio Only” and it will start in Windows Media without having to download.

        If you have trouble accessing the audio, just ask and I will help.

        Don is a strange fellow but honest. What I mean by that is he is not a School trained financial goon, but educated in history and then returned for finance. He is mostly self educated which is the best kind of person, not that I have any dislike for cookie cut people but Don will tell it like he sees it even if he is wrong and might not agree. In fact he sometimes won’t agree with himself which is confusing.

        Anyway, Don is alright by my thinking.

        • On May 25, 2012 at 9:34 am,
          castanheiro says:

          Thank you for the additional info on Don Coxe. That was the first time I had heard him, so a new discovery for me. Appreciate the link to his site.
          See gang, this is another great reason to be associated with Kereport. We don’t all listen to the same people. There are other knowledgeable folks out there that we may not be aware of, but someone is listening to them somewhere. Just as Clay did, by introducing us to these people, we can all become “smarter”, as we benefit from multiple points of view. Hey, I’m glad I don’t have to depend on just my thinking and brainpower. I would be a very “poor” man(in more ways than one) if not for the valuable input of so many people in my life.
          Best to all!

        • On May 25, 2012 at 4:08 pm,
          Big Al says:

          Many thanks, Clay!

          Big Al

          • On June 16, 2012 at 1:10 am,
            Sherard says:

            OMG you’re a real blogger now! I’m still waitnig for my first troll. Ha!I’d probably just post it without any additional response. I don’t think that attempting to correct her or laying into her would change anything (that’s usually how I determine if it’s worth fighting).Also, I’m totally going to be the parent who wonders why people bring kids to restaurants when I’m there with my kid. Totally.Ange recently posted..

          • On June 16, 2012 at 7:36 am,
            Big Al says:

            Regarding the restaurants Sherard, I do agree with you!

            Big Al

    • On May 24, 2012 at 4:42 pm,
      Big Al says:

      HI Bobby,

      Some of mine are certainly coming back also!

      Big Al

  3. On May 24, 2012 at 10:37 am,
    Dennis M. O'Neil says:

    Each one of these events escalates the degree to which the derivative unwind becomes incalculable.
    These guys are swapping a bunch of worthless spit and their mouths are getting dry.
    AIG needed bailing out because it was GS’s counter party.
    Greece has been held up because it’s debt unwind will just rip the curtain back on the big banks. Then we have the larger European Countries and the US is in no better shape if not worse.
    We have insolvent countries bailing out banks who have been insolvent since the day they opened and each day they are open never let the shovel stop digging.

    So then we have banks buying the insolvent countries debt to prevent the failed bond auction embarrassment.

    Then today Jim Cramer says it is time the IMF came in and enslaved Greece. Then Greece can become the IMF vacation spot for Europe. To attempt to stimulate Greek self esteem

    the IMF will require Greece to re-name itself to Eastern Jamaica.
    As a kid I always wondered when the adventurer would look for the buried treasure.
    I could never figure out…..Why would someone bury a treasure? Why would’nt they put it in a safe place like a bank vault?
    Now I know!!!
    Here is P! of a great movie about what the IMF does to enslave countries it supposedly assists:

    • On May 24, 2012 at 10:43 am,
      irishtony says:

      That barking in the background…….who let MERKEL in ?.

      • On May 24, 2012 at 11:14 am,
        castanheiro says:

        Hello irishtony,
        Is that who that is? I thought it was Barosso trying to get away from Nigel.

      • On May 24, 2012 at 4:43 pm,
        Big Al says:

        Mr. Irish,

        Her name is Caly! And, she is very bright!

        She is also our fourth daughter!

        Big Al

      • On May 25, 2012 at 4:04 am,
        Jerry O^OTB says:

        That was’t barking…that was wimpering….the poor thing heard you would be gone for a couple of days while you were visiting the queen on Jubillee Day…..

    • On May 24, 2012 at 11:12 am,
      castanheiro says:

      Hi Dennis M. O’Neil,
      You are soooo right my friend!!
      Excellent post!

      • On May 24, 2012 at 12:17 pm,
        Dennis M. O'Neil says:

        You would think Jim Cramer knows the IMF has been 1/3 of the infamous troika for the last how many times Greece has been fixed by the technocrats.

        • On May 25, 2012 at 4:42 am,
          Bobby says:

          Dennis, I refused to listen to Cramer since i heard of his rant of throwing his monitor across the room of his hedge funds office. Sometime back around 2000. Btw, he was banned from CNBC shortly after that. How times change.

          • On May 25, 2012 at 5:58 am,
            Big Al says:

            Morning Bobby,

            The problem with many of the “personalities” out there is they are simply showmen. Who knows what they really believe!

            Big Al

    • On May 24, 2012 at 4:44 pm,
      Big Al says:

      Thanks for the link, Dennis M

      Big Al

  4. On May 24, 2012 at 11:04 am,
    Richard says:

    Gold is reversing today and that’s not a good sign. Oil is going a LOT lower. The conventional markets are on a precipice. If gold closes lower Friday, in all likelihood we’re going lower. We should see gold in the upper $1400s and lower $1500s. The dollar has broken out and should move higher in the next 6-8 weeks. As mentioned often in the past, this thing smells more and more like a cyclical bear market for the conventional markets. We’re going to have to be patient for a long time. If gold moves lower, I believe it’ll do it gradually with no sudden lurch lower. There’ll be plenty of time to purchase the PM stocks since in all likelihood they’ll bottom for some time and the charts will give you clues when to enter.

    • On May 24, 2012 at 4:32 pm,
      Big Al says:

      My personal opinion, Doc, is that the turn will happen sooner rather than later.

      Big Al

  5. On May 24, 2012 at 12:01 pm,
    Richard says:

    Al, I believe that basically we’re having a deleveraging of just about all asset classes—-all except the bond market. This era essentially is similar to the great depression versus the 1970s. The central bankers will eventually come into the picture again but not for awhile. They’ll have to find a way to get the currencies directly to the folks instead of the banks. Throwing money at the banks doesn’t do anything for demand since the folks are deleveraging as well as the whole system. Also the banks have tightened lending standards which take a lot of folks out of the picture.

    • On May 24, 2012 at 1:20 pm,
      Dennis M. O'Neil says:

      Not for awhile is relative to what?
      When I reverse engineer the setting we are in I anticipate summer stimulus in time for Obama’s Convention. Put another way if we do not see such a move Obama has been assigned the dignitary going to another dignitaries’s funeral role. Richard….I do not see easing to be delayed in arriving. If some liquidity does not arrive a few weeks before the NC Convention those gathered will all be on foods stamps.
      Our debt ceiling has become a cathedral ceiling largely because when they stop the money credit expansion the unwinding daisy chain of monetary evaporation once startred will vortex out of control.
      I see easing near term…..and I also see upon a big scare the return of direct checks sent to tax payers. Although not advised… will be very politician friendly.

      • On May 24, 2012 at 1:37 pm,
        Mark Alan says:

        Howdy Dennis

        I think what Richard is saying is that since the time the money printing started by central banks – NONE of it is going into the hands of the consumer, so therefore, the VELOCITY of money is no present. In other words, the consumer can’t borrow and spend because the banks aren’t loaning. Small businesses can’t borrow because with all the new laws that restrict their operations, it makes it much more difficult to borrow and stay afloat. So, what the central banks may try is to BYPASS the too big to fail banks and get the money straight to the consumer. This would excellerate the velocity of money exponentially. But when this will happen…I haven’t the slightest idea. Maybe I am wrong with Richards assessment.

        • On May 24, 2012 at 1:49 pm,
          Richard says:

          Mark, you hit the nail on the head. If things really get rough all over the globe and you get the folks in the streets, the politicians and banks may want to place money directly in the consumers’ hands since giving more to the banks won’t make an iota of difference. By putting it into the consumers’ hands is when you start to get the possibility of inflation.

          • On May 24, 2012 at 2:55 pm,
            Big Al says:

            That’s what I learned in school, Doc!

            Big Al

          • On May 24, 2012 at 3:55 pm,
            Barry says:

            Yep, banks are just a black hole.

        • On May 24, 2012 at 2:57 pm,
          Big Al says:

          Interesting point, Mark A!

          Big Al

      • On May 24, 2012 at 1:46 pm,
        Richard says:

        I would not be surprised to see the Fed continue “operation twist” at the end of June. They might not have to purchase as much if people continue to flee to the perceived safety of treasuries. You could get increasing Chinese purchases along with other countries since they’ll see the strengthening of the dollar and they’ll see America as the safe haven again. China is heading for a “hard landing” and they’ll want to put increasing amounts of their dollars in our treasuries—especially with the dollar increasing in value. The Fed also doesn’t want to add a lot more to their balance sheets if they can avoid it. I have a feeling they also wouldn’t mind seeing the conventional markets have a pullback. By the time the markets get momentum on the downside all over the globe, any movement by the Fed and other global banks won’t impact the markets for weeks. It’s generally accepted that it takes about 6 months before you see an impact. Of course, investors could anticipate that affect sooner and begin to bid risk assets up before the ultimate rise. By the way, I don’t think a move by the central banks will be in time to reverse the markets and bail Obama out. I believe we’ll have a new president in November.

        • On May 24, 2012 at 1:56 pm,
          Mark Alan says:


          There is one thing that is certain, the FED is always behind the curve. With all the news coming out proving a global slowdown, the FED may even institute operation twist 2 along with something else. I think they are starting to realize they are way behind the curve and may try to throw something so large that they ‘think” it will do the trick, only to result in a crashing market (along with the dollar) just a short month, or two later. Things are really getting interesting out there. What an exciting time to be alive!

          • On May 24, 2012 at 2:48 pm,
            Dennis M. O'Neil says:

            Bush and Bernanke sent checks across America oil went to $147 a barrel in 2 months time.
            Velocity is an important factor.
            But remember the difference between kinetic and potential energy.
            Creating a bunch of a medium of exchange is like throwing a tennis ball in the air.
            Your effort has created a lot of potential energy. When the ball begins to fall back to earth (spending) wa la kinetic energy.
            We need a formula for when all this stored monetary creation starts the fall…..
            The Ben Bernank has said “we can suck up the reserves’. It would be as if they never existed…give it back bank…no harm no foul…but then what is money?
            When the tennis ball reaches the apex we know the the gravitational potential energy is mgh (it’s mass times x 9.8 m/s-squared x height).
            Money does not share the formula but it will not stay aloft in perpetuity.
            All that money and more to come are and will be storing up energy.
            The velocity of money has a hard time creating problems when money is scarce.
            Velocity is zero when the money is in a hoard.
            But when money is not scarce and economic activity accelerates watch out.
            We will all be wearing WIN buttons again.

          • On May 24, 2012 at 2:53 pm,
            Big Al says:

            HI Mark A,

            Not an exciting time to be alive, but a fascinating and exciting time to be alive!


            Big Al

          • On May 24, 2012 at 3:03 pm,
            Mark Alan says:

            Well Dennis,

            I completely understand your reasoning, but perhaps you might be forgetting one little detail….
            Today’s money is NO longer printed on paper, its all “1”s and “0”s, so while the analogy of natural physics and its laws would be agreeable for PRINTED money, with today’s digital monetary system, I think they can probably adjust that kinetic energy quite a bit. Plus, what would happen if a major hack took place, or an virus was introduced into the electronic banking system that wiped out and erased all digits? I’m beginning to think this is one of their whole plans.

          • On May 24, 2012 at 3:12 pm,
            Dennis M. O'Neil says:

            So Mark A…..that is why they want our guns!!!!!!!!!
            It does amaze me when I go to an initial consultation and the potential client has a 1/2 inch stack of paper and toner on a table and he/she/they tell me “That is eveyrhing I am worth!” I might sound like AL but combine that scenario with your comment and “It is statring to get a little scary around here….Don’t ya think…What do you guys think…let me know!”

          • On May 24, 2012 at 3:33 pm,
            Mark Alan says:

            Isn’t it amazing Dennis!

            I still can’t convince my brother or sisters, mother and father, heck not even my neighbors! People today in American value themselves by the numbers they see on a piece of paper, which they think the larger the number, they more they are worth! This is COMPLETE INSANITY!! It shows how America has lost its very soul!

            We are not a stack of paper. We are not bytes in computer, We are not a 9 digit number administered by the government! People can not associate themselves unless they have a material object, or even an ethereal representation of themselves!

            Do Americans not understand they are flesh and blood?

          • On May 24, 2012 at 4:34 pm,
            Dennis M. O'Neil says:

            Do not leave out the soul.
            John W. got a kick of one of the first post I placed here when I typed to the effect:
            “You should own the most modest house your wife lets you live in”. I am serious.
            Your wife (Karen …your hubby)will not let you live in a complete shack….and anything more than what your wife finds satisfactory…requires you to engage work or disengage pleasure for periods of time that will never ever return.
            You are the sum of the moments of your life. Make the best of it.
            Answer to no alram.
            Answer to no bell.
            Answer to no whip.
            Answer to no ones clock.
            Answer who you are????….and enjoy.

            With that typed my lovely wife just cut me off….happy hour is over!

          • On May 24, 2012 at 9:53 pm,
            John W. Robertson says:

            Dennis M.,

            And I still get a kick out of that line!

          • On May 25, 2012 at 4:01 am,
            Jerry O^OTB says:


        • On May 24, 2012 at 2:56 pm,
          Big Al says:

          Afternoon Doc,

          I do agree with you!

          Big Al

  6. On May 24, 2012 at 1:57 pm,
    Ryan says:

    Say hi to the dogs for me– we can’t take ourselves too seriously–
    In other news, the HUI had another green day today. I know some big forecasters are calling for summer doldrums, but that sure wasn’t the case last year, and I wouldn’t necessarily expect it this year if we get more “interesting” news, shall we say, out of the Euro zone. I also haven’t heard much about our own debt ceiling issues and wonder for how long that can be kept out of the headlines.

    • On May 24, 2012 at 2:52 pm,
      Big Al says:

      Probably up until about 30 days before the deadline, Ryan!

      Big Al

    • On May 24, 2012 at 4:36 pm,
      Big Al says:

      Hi Ryan,

      At the risk of repeating myself, no we certainly cannot take ourselves too seriously!

      Big Al

  7. On May 24, 2012 at 2:27 pm,
    Mark Alan says:
    • On May 24, 2012 at 2:52 pm,
      Big Al says:

      Thanks Mark A!

      Big Al

  8. On May 24, 2012 at 2:38 pm,
    Irwin says:

    As unhealthy as it is to keep forecasting hope and glory for the believers, I just can’t help myself.

    [quote]In this sort of scenario, the inflation hedges will sniff it out first. So I would expect the precious metals to bottom well before everything else does. In fact, we could be looking at a situation where the metals and their shares rebound sharply while the U.S. equity markets continue to decline. This could last many months. I want to point out that the GDX bottomed in October 2008 and was up 100% before the S&P 500 bottomed in March 2009. So over a five month period the GDX doubled while the SPX declined 25%. Don’t think that can happen again?”

    • On May 24, 2012 at 2:51 pm,
      Big Al says:

      Sure it can, Irwin, sure it can!

      Thanks for the comment.

      Big Al

    • On May 24, 2012 at 3:05 pm,
      Mark Alan says:

      That’s a great observation Irwin! I sure hope it works out that way.

      • On May 24, 2012 at 3:21 pm,
        Richard says:

        Irwin makes a very plausible point. In fact, I tend to agree with him. Many of the miners are spitting out cash all over the place. The variable that could lend credence even more to Irwin’s point is the falling of oil. I believe we’re going to see it contract much more then anticipated. Since energy makes up about 20% of miners’ costs, a low crude price should benefit their bottom lines even more. I’m watching the gold indexes and miners very carefully and there are signs we may be getting close to the bottom for some of them. I do believe many of them will first trade sideways for awhile to show us the bottom. I don’t expect a V recovery for them. So there’s no need to catch a “falling knife” right now.

        • On May 24, 2012 at 3:35 pm,
          Mark Alan says:

          I believe Doc, that you and I talked about this three weeks ago!
          I can’t catch a falling knife any more Doc, I lost all my fingers on the last one that dropped. 🙂

          • On May 24, 2012 at 3:43 pm,
            Richard says:

            That’s good, Mark.

        • On May 24, 2012 at 4:18 pm,
          Irwin says:

          Remember guys, those aren’t my words (I’m not that smart)

          I was quoting Mike Krieger, as linked above.

          • On May 24, 2012 at 4:30 pm,
            Richard says:

            Irwin, you disappoint me. I had you on a pedestal for your astute observation.

          • On May 24, 2012 at 4:31 pm,
            Mark Alan says:

            If you are reading Mike Krieger AND you are researching what he says; then Irwin, YOU ARE smart. It’s when people take what is spoken at face value that makes them stupid.

  9. On May 24, 2012 at 4:49 pm,
    Big Al says:

    Mark A,

    That is soooo true!

    Big Al

  10. On May 24, 2012 at 5:20 pm,
    Jed Davis says:

    Stick with Gold and high yield Canadian essential services and oil pipelines. That’s it. Everything else is a confusion. Not buying and not selling. I feel like I am in a ocean eith all these cross currents converging in one place but nothing is moving.

  11. On May 24, 2012 at 8:45 pm,
    hal says:

    Just a thought in a broad based way. In 2008–PM started to sell off before the general market–then both the general marlet and PM both sold off–then in ~november PM started its rally and then in March-when mark to fantasy accounting was announced–the general market rallied.

    Back in 2008–gold 740 was tossed around as an important number to launch from. Many think 1520-35 is the low range. Physical demand is one reason. Chris Martinsens pennants chart is pretty compelling but not quite read for resolution IMO.

    I have held my core positions. Sold my leveraged a while back-recently I have instituted probing leveraged positions and quickly have sold them at the first sign of weakness. I am looking for the uptrend to start and will load up on leverage and ride it for its term.
    Some risk–of course since a lot of the leveraged etfs use futures and keep cash, I also use equity options and option spreads and squeeze the positions daily.

    IMHO–when this turns up its gonna be one heck of a ride.

    I also hedge positions–puts and things like DUST and ZSL (Incl calls on dust and zsl)

    This all boils down to whether you/we think our situation can be fixed or are we going to follow give or take Europe. With so much debt and deficits which are growing, and absolutely no appetite in DC to fix problems–I think we know where we are headed.
    If you are not early to the PM window–you will be late.

    • On May 25, 2012 at 6:09 am,
      Big Al says:

      Morning Hal,

      The million dollar question is “do you think our situation can be fixed or are we going to follow give or take Europe.”?

      Take Europe? I really don’t think so.

      Follow Europe? Probably, at least to an extent.

      Fix problems? For the life of me, I don’t see how that is possible without major changes.

      Regarding investing, listen particularly to the segment with Louis James on the Weekend Show.


      Big Al

  12. On May 25, 2012 at 5:12 am,
    Jerry O^OTB says:

    CONFUSSUS SAY…..”him that sits on sidelines,is observer only.., he that participates may endanger physical being…”

  13. On May 25, 2012 at 7:09 am,
    Dennis M. O'Neil says:

    CONFUSSUS SAY: New Jersey without the smell is Long Island

  14. On May 25, 2012 at 9:40 am,
    castanheiro says:

    You guys are great, all of you!!!
    Enjoy the dialogue, the information, the analysis, the analogies, metaphors, points of view, direction, suggestions, and the HUMOR!!! Don’t have time to answer all of you individually, that I would like too.
    Best to you all, and thanks for your valuable input into my life!!!

    • On May 25, 2012 at 12:31 pm,
      Jerry O^OTB says:


    • On May 25, 2012 at 4:06 pm,
      Big Al says:

      Mr. C,

      One simple question: where do we send the invoice?

      Big Al