Al's Insights – Fri 1 Jun, 2012

Sell in May and Go Away? Doesn’t look like it!

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Featuring:
Al Korelin

Comments:
  1. On June 1, 2012 at 8:43 am,
    Jed Davis says:

    Gold up. Gold Stocks up. General market down. That is very powerful. This is the 4th day
    in the past three weeks, not 3 years, that this has happened. It would indicate safe-haven buying and shorts being overwhelmed (as predicted by many experts) by the physical market. Let’s see what happens int he coming days.

  2. On June 1, 2012 at 8:56 am,
    Marc says:

    Big Al, Jed, et al -
    These markets are just “drooling” for some politically/economically driven data to make a move….US job data is, of course, a perfect example of this. All the fundamentals are screaming buy, buy PM’s…preserve your purchasing power from massive currency debasement, etc…theoretically it really shouldn’t take this data to move the market like this. Again, the overwhelming fundamentals SHOULD say otherwise. Wait till ” QE to infinity” really takes hold. It is inevitable -massive upswings are in the offing!
    All the best,
    Marc

  3. On June 1, 2012 at 9:35 am,
    Al Korelin says:

    Hi Jed and Marc,

    When you have a moment read Jon Nadler’s article posted on Kitco today.

    I will have some comments on it later today.

    Best,

    Big Al

    • On June 1, 2012 at 9:41 am,
      Jed Davis says:

      Thanks Al.

      Jed

      • On June 1, 2012 at 9:58 am,
        Dennis M. O'Neil says:

        Hey guys it is June!!!!!!!!!!!!

        • On June 1, 2012 at 10:00 am,
          Big Al says:

          Yes it certainly is Dennis M!

          Gold is supposed to be in the toilet. Remember don’t fool “mother nature” Fundamental laws cannot be broken.

          Big Al

    • On June 1, 2012 at 9:59 am,
      Peter says:

      Testing, testing…1,2,3. Was unable to post yesterday. Let’s see if it works now.

      • On June 1, 2012 at 10:00 am,
        Big Al says:

        HI Peter,

        Yep, it works!

        Big Al

    • On June 1, 2012 at 11:36 am,
      Marc says:

      Big Al,
      Will do, thanks

  4. On June 1, 2012 at 10:00 am,
    Peter says:

    Seems to work now.

    Having looked at Nadler’s piece, reminds me why I stopped listening to him a long time ago. Does anyone know who pays him, or how he makes his money?

    • On June 1, 2012 at 10:27 am,
      Big Al says:

      HI Peter,

      Jon is an employee of Kitco.

      Big Al

      • On June 1, 2012 at 10:36 am,
        Peter says:

        So was he hired to be the resident perma bear to provide “balance” over against all the bulls?

        • On June 1, 2012 at 11:37 am,
          Marc says:

          Exactly..Peter…Exacto mundo!

        • On June 1, 2012 at 3:18 pm,
          Big Al says:

          Probably a good possibility, Peter.

          Big Al

  5. On June 1, 2012 at 10:02 am,
    shawn says:

    I found it interesting that a lot of Greek citizens are moving their Euro’s to banks in Germany, I’m sure this has been discussed here but the way the banking system is now structured The German bankers know who these people are and when The Greek Government defaults all their Euro’s in the German banks will automatically be converted to Drachma’s at a 40 to 60% haircut. So many people still don’t get it, this is so sad,

    • On June 1, 2012 at 10:09 am,
      Peter says:

      Shawn,

      Interesting idea, but I rather doubt that the German bankers would confiscate the money of foreigners and give them drachmas in return. This would be unprecedented (I think).

      • On June 1, 2012 at 12:08 pm,
        impeachemall says:

        @Peter, the moment both sides agree (GRC+GER) on how the loot gets divided, it may go ahead just like @shawn imagines. Careful about using “unprecedented,” this weekend, Mr. Schauble may be reading a few books about “W@hrungsn0trecht” from a few decades ago.

    • On June 1, 2012 at 10:28 am,
      Big Al says:

      Yep Shawn,

      “So many people still don’t get it”!

      Big Al

      • On June 1, 2012 at 11:42 am,
        Jed Davis says:

        “So many people still don’t get it”! – My immediate family and extended family have been laughing at me for years. I have not yet heard any laughter today.

        • On June 1, 2012 at 5:54 pm,
          Peter says:

          My sister and brother-in-law are beginning to get it, but they still roll their eyes at the suggestion of getting into a gold-related investment. They are heavily into real estate and with the Alberta economy doing so well and the heavy oil upgrader going ahead in Fort Saskatchewan (where they live), real estate might actually be good as gold there.

          • On June 1, 2012 at 6:54 pm,
            Big Al says:

            Just played golf with a fellow who lives in the “interior” of B.C. He thinks that Canadians will see a 20% – 30% correction in real estate.

            Time will tell,

            Big Al

    • On June 1, 2012 at 6:17 pm,
      Peter says:

      Al,

      You are a former banker. Do you think that it is plausible to believe that German banks or the finance minister would decide to single out the euro holdings of Greek citizens with bank accounts with deposits in other European countries, who are EU citizen first and confiscate their money and then give them drachma in return?

      This would mean that Greeks are suddenly barred from holding euros. But even Americans and Russians are allowed to hold euros. They could just exchange their freshly received drachmas back into euros, since they can’t really be singled out as not being allowed to own euros – even if Greece left the EU.

      Meanwhile, all EU citizens have a passport that reads “European Union” above the name of the province. see:

      http://hadassahsabo.files.wordpress.com/2009/11/british_passport_2002.jpg

      • On June 1, 2012 at 6:56 pm,
        Big Al says:

        Hi Peter,

        I would be really surprised if, as long as Greece uses the Euro, that would happen. But, you know what, stranger things have happened.

        Best,

        Big Al

  6. On June 1, 2012 at 11:04 am,
    Matt R. says:

    We’re up over four percent now in gold. This is HUGE!

    • On June 1, 2012 at 3:19 pm,
      Big Al says:

      HI Matt,

      The next few weeks will be very interesting!

      Big Al

  7. On June 1, 2012 at 1:05 pm,
    Dennis M. O'Neil says:

    Picking up NEM at $44 was better than selling in May.

    • On June 1, 2012 at 3:20 pm,
      Big Al says:

      I don’t think that May was a particularly good time to sell. I know, that I certainly didn’t!

      Big Al

  8. On June 1, 2012 at 1:36 pm,
    John W. Robertson says:

    I looked at the Nadler article. It’s nice to see Jon at least accepting there IS a bullish argument, even if he doesn’t agree. I noticed how Jon and the sources he cites feel that gold bulls largely place an commodity emphasis on the price of gold, not an insurance policy or inflation emphasis. Or at the very end of the article, he notes “be careful what you wish for”, as perhaps none of us here understood already that for our bets to pay-off, the world has to go to financial-armageddon. I think we all know that, but we also know it’s inevitable, given the path we’re on. And therefore, we have taken the bets on PM’s that we have.

    As I say, though, it was nice Jon even recognized there is a bullish side. Since gold went up $50/oz the day he published his article, well…I’m sure we all see the irony. Nothing more to say, really.

    • On June 1, 2012 at 3:14 pm,
      alan in vancouver says:

      I’ve read Jon Nadler’s commentaries for years. It really is quite intriguing how he always manages to, without fail, add a bearish little dig to any article he writes about the gold price. If gold is soaring, he calls it a bubble and if its tanking he says how much further its going to fall because of all manner of reasons he comes up with. The only even remotely positive thing he’s ever said about it is that Gold is an insurance and to put 5% of it in your portfolio (no more than that though, he always adds!!).
      For the senior editor on Kitco, a site in the business of selling gold and discussing gold and metals daily, to be so blatantly one-sided in his discussions on the metal and to hear him chuckle every time the US$ moves higher and talk down to people who believe the US$ will ultimately be severely de-based from current levels, is quite bizarre.

      At least we’ll know when the top is in, in the Gold market. The day Jon Nadler says ‘Buy gold’ unreservedly, with no tongue in cheek comments made immediately afterwards. That day, the top will be in and we can all sell.
      I imagine that day is a long way off and the price will be several multiples of where it is today.

      • On June 1, 2012 at 3:26 pm,
        Big Al says:

        Hi Alan,

        Please stop by and visit us at the Show on Sunday or Monday. We always have a booth and I will be conducting a workshop on Monday.

        Best,

        Big Al

      • On June 1, 2012 at 4:25 pm,
        John W. Robertson says:

        Alan,

        I was wondering recently why Jon even allows for a 5% allotment…presumably he doesn’t feel the events in the world today are worthy of a greater allocation for insurance. If not now, what else could his 5% be insuring against? How bad would it have to get for Jon to insure 10%? 20%??

        I’ve noticed Mr. Nadler has significant faith in the EU and its ability to bail itself out, and he also felt the financial freeze of 2008/9 blew over and is “we survived”, so it appears he sees few risks to the economies of the world. In short, I think Jon has faith in the collectivist policies of governments around the earth.

        • On June 1, 2012 at 7:00 pm,
          Big Al says:

          Well John W,

          So far the EU is still in big trouble. Did the U.S. really survive the “financial freeze” you mentioned?

          I mean sure in the end every entity will survive in one sense or another. (Assuming you believe in an afterlife) But let’s define the word “survive”!

          I know that Jon believes in gold, but his feelings about the amount to hold is different from most of ours.

          Big Al

          Big Al

    • On June 1, 2012 at 3:24 pm,
      Big Al says:

      Hi John W,

      I really don’t think that financial-Armageddon has to occur for the precious metals markets to do well.

      I personally agree with you that it is probably inevitable in one sense or another.

      I certainly am not wishing for it and I suppose am looking for a miracle. Don’t see how it could happen though!

      Precious metals is a great sector for stocks even if gold falls to under $1000 and silver falls below $15.

      Agree?

      Big Al

      • On June 1, 2012 at 4:27 pm,
        John W. Robertson says:

        Al,

        Yes. The returns in 1980, 1984 and 1994 on select PM stocks makes the whole exercise worthwhile. I suspect, as many do, that the inflation-adjusted price for gold will far exceed that of 1980/81 this time, and the better mining stocks are going to eventually go along for that ride. We’re in that perfect “buy when they’re hated” sweet spot right now.

        • On June 1, 2012 at 7:01 pm,
          Big Al says:

          John W,

          My thoughts exactly!

          Big Al

  9. On June 1, 2012 at 2:17 pm,
    tj says:

    mm… worked for me. Sold my silver at $31.50 and bought back at $27.

    • On June 1, 2012 at 3:26 pm,
      Big Al says:

      Working for a lot of people tj!

      Happy for you,

      Big Al

  10. On June 1, 2012 at 2:18 pm,
    John W. Robertson says:

    Here’s a nice Daily Insight. I’m sure you’ll all hear about this anyway, but take a quick read (Vortex, you’re going to love this)

    http://redtape.msnbc.msn.com/_news/2012/06/01/11998060-first-amendment-rights-can-be-terminated-when-cops-cameras-dont-mix?lite

  11. On June 1, 2012 at 3:32 pm,
    Big Al says:

    That John W is of course something that we have to really watch out for.

    Thank you for this article.

    Best,

    Big Al

  12. On June 1, 2012 at 4:09 pm,
    Jon Nadler says:

    “The End Game: 2012 And 2013 Will Usher In The End” – The Scariest Presentation Ever?

    Submitted by Tyler Durden on 05/31/2012 20:01 -0400

    If Raoul Pal was some doomsday spouting windbag, writing in all caps, arbitrarily pasting together disparate charts to create 200 page slideshows, it would be easy to ignore him. He isn’t. The founder of Global Macro Investor “previously co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul came to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe… Raoul Pal retired from managing client money in 2004 at the age of 36 and now lives on the Valencian coast of Spain, from where he writes.” It is his writing we are concerned about, and specifically his latest presentation, which is, for lack of a better word, the most disturbing and scary forecast of the future of the world we have ever seen….

    And we see a lot of those.

    Consider this:

    We are here…

    We don’t know exactly what is to come, but we can all join the very few dots from where we are now, to the collapse of the first major bank…

    With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves.
    There are almost no brakes in the system to stop this, and almost no one realises the seriousness of the situation.

    The problem is not Government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivatives…

    Yes, that equates to 1200% of Global GDP and it rests on very, very weak foundations

    From an EU crisis, we only have to join one dot for a UK crisis of equal magnitude.
    And then do you think Japan and China would not be next?
    And then do you think the US would survive unscathed?

    That is the end of the fractional reserve banking system and of fiat money.
    It is the big RESET.

    It continues:

    Bonds will be stuck at 1% in the US, Germany, UK and Japan (for this phase).
    The whole bond market will be dead.

    Short selling on bonds – banned

    Short selling stocks – banned [I think that should be banned ALWAYS. Imagine if there was no shorting! Shorting does more damage to price than covering repairs!]

    CDS – banned

    Short futures – banned [what will that do to your short ETF? Don’t count on being allowed to reap the benefits of a system collapse]

    Put options – banned [Bummer]

    All that is left is the Dollar and Gold.

    It only gets better. We use the term loosely:

    We have around 6 months left of trading in Western markets to protect ourselves or make enough money to offset future losses.

    Spend your time looking at the risks of custody, safekeeping, counterparty etc. Assume that no one and nothing is safe.

    After that…we put on our tin helmets and hide until the new system emerges
    And the punchline

    From a timing perspective, I think 2012 and 2013 will usher in the end.

    Gold will then go to zero.

    Sincerely,
    Jon Nadler

    • On June 1, 2012 at 7:05 pm,
      Big Al says:

      Thanks Jon,

      Lots of interesting opinions out there aren’t there?

      Love to get together in Vancouver this weekend if you are there.

      Best,

      Big Al

      • On June 1, 2012 at 7:48 pm,
        Jon Nadler says:

        Hi Al,

        I like posting on this forum and I might just see you in Vancouver this weekend. It’s a much safer place than Seattle, anyways. Maybe we should just move there.

        See you then,
        Jon

        • On June 2, 2012 at 3:24 am,
          impeachemall says:

          Sir,

          is there any way gold might even go to sub-zero? I once put a 2008 krugerrand into my deep-freezer, and when I took it out one hour later, the springbok was frozen stiff. Sadly, it hasn’t recovered since, even after attempting intensive care in my microwave oven. Any advice, or should I just dump it for a nice stash of Syrian paper pounds?

          Sincerely,
          Imp.

          • On June 2, 2012 at 11:28 am,
            Jon Nadler says:

            Dear Impeach…all

            Dumping (even a damaged krugerrand) for Syrian pounds may not be the good idea that some people think, the reason being that the Syrian pound might approach zero value before your krugerrand does.

            You might want to consider however, unloading your krugerrand on some unwitting gold bug and take advantage of the dead cat bounce in gold we are currently witnessing.

            Sincerely,
            Jon

    • On June 4, 2012 at 7:29 am,
      Raymond Saw says:

      Dear Sir,
      I agree 100% that 2012 and 2013 will usher in the end…
      but i DON’T agree 100% that the Gold will go to zero…

      Yours faithfully,
      Raymond

  13. On June 1, 2012 at 4:22 pm,
    Ryan says:

    Another aspect here is that investing and making money is only part of my motivation for getting involved in this metal. Many have said that owning gold (and silver) are like a religion. My response is, yes, and this religion is growing everyday as people wake up to the new realities of what has been euphemistically termed the “new normal.” The religion of gold and silver buying is based on the idea that you can’t have something for nothing and that fraud and lies eventually do not pay off, even if they appear to do so in the near term.
    Jesse over at jessescafeamericain quoted this verse from the Bible that I found appropriate for those of us trying to speak truth to power in many ways (including but not limited to buying gold and silver), and I think it is appropriate for this site and this family, no matter what your religious beliefs are:
    “Do not be deceived: God is not mocked. For whatever one sows, that they will also reap. For the one who sows their selfish desires will from the flesh reap death, but the one who sows in goodness will from the Spirit reap eternal life. So let us not grow weary in our labors, for in due season we will reap His justice, if we do not fall away and give up. And as we have opportunity, let us do good to everyone, and especially in support of our family in faith.” Galatians 6:7-10

    • On June 1, 2012 at 7:08 pm,
      Big Al says:

      Ryan,

      I try very hard to life my life as is written in Galatians 6:7 – 10.

      I will take it one step further. I feel sorry for people who don’t!

      Big Al

  14. On June 1, 2012 at 7:00 pm,
    Keep Stacking says:

    Yes Big Al, this sure feels like the time to buy more equities, like New Zealand Energy and selected mining shares. I am very happy with this site and feel informed by your many guests and bloggers. Trader Tracks, with Trader Rog sure can make me some money. Am excited for the future and my 7 figure account growing to 8. Rule #1 for me is to know my market of interest. You guys sure help. Many thanks.

    • On June 1, 2012 at 7:09 pm,
      Big Al says:

      So do you and the rest of our family, Keep Stacking! I mean, of course, help me and the others.

      Big Al

  15. On June 3, 2012 at 8:39 am,
    Jim Richmond says:

    I am so glad I took the time to look at your Daily Insights page. First I am impressed that you take the time to ACTUALLY engage in a dialog with folks who post here! OMG, thank you for that. As a frequent poster in other forums, Daily Insights is now my first destination in the AM with frequent checks during the day!
    The discussion with Jon Nadler clearly illustrates both sides of the Gold “coin”. I suggest the window of time until the devastation Jon describes is a little wider than he suggests, realistically though, more HOPE than conviction.
    I have been a Gold Miner since 1977, recently as an investor. Before coming an investor, I quit the business some 20 years back because I was ambivalent about the negative side of being a Gold Bug; Betting on Gold meant betting for financial Armageddon, as suggested here. I really am a generous person who wishes ill to no one, the distaste for this aspect of gold mining had me move on in 1990 to own several small businesses and teach science, teaching is an act of generosity and paid “tons” of rewards.
    Life has brought me back to Gold geology and investing even though the negative taste is still evident. Now my focus is on gathering resources to weather the coming storm the best way I know how by applying my passion and knowledge in the HUNT for gold and sharing that passion with other folks.
    Thank you gain for “Daily Insights”…Have a great show in Vancouver and say Hi to Laura Stein for me. For Love of the Game