Peter Grandich weighs in on the gold market
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The only traders making big money these days are those who sit behind prop desks with proprietary software, inside info and government backing. Anybody who tries to copy these people risks their lives.
There are no markets anymore — just interventions.” – Chris Powell
good comments the both of you………………….
Agree. That was a really interesting interview.
It is refreshing to hear an analyst tell it like it is. I commend you for that. You don’t have all the answers, you lost your own money and you can be honest about.
It is also refreshing to hear someone take personal responsibility for their choices and circumstances. I too have given back a ton of money with this gold and silver downturn that has been going on more than two years in silvers case and almost two years in golds case. I have no one to blame but myself. Not manipulation, not evil central bankers, not bullion banks. The fault was with me.
For you as a “wall street wiz kid” as you put it, to lose as much as you have is very telling.
It once again confirms in me what I know to be true – it isn’t intellect and information that beats markets. It is yourself. It is temperament, not intellect.
I was a “horse handicapping wiz kid” Just one of only three things in my whole life I was a “natural” at. I learned early that it takes patience and guts to beat any speculative game. Only by going against the crowd and having the courage of your convictions can you hope to achieve success.
That is why I know we are at a critical time in the gold cycle.
There is what is known as the principal of ever changing cycles. The trend, method, play works for a while and then it ultimately ceases and reverses itself. When the public finally catches on it is too late and they miss the move. The trend changes, the method changes, the play dries up. This is why I always say the public misses the wedding and shows up at the funeral. When gold hit $1920 it was then the cycle changed. We are now well off the highs. The sentiment is terrible. As the saying goes “gold can’t win for losing”
So it just might be that the cycle is about to change again.
I gave so much money back by doing what I knew not to do, that being “handicap” the gold market. Or another way of saying it is go by the fundamentals. The fundamentals for gold at $1920 were already baked into the cake. It had no upside. The funeral was here.
Now with gold in the gutter, everyone shorting it, the media stomping on it it just might be time for a spring summer wedding to get under way.
I am not a contrarian for contrarians sake. But the same fundamentals that catapulted gold up are still in place but now their might be inefficiency in the price. We might have true value here. Now is the time to hang on and put the blinkers on.
If you get depressed just look at it this way: Ben Bernanke is trying to duplicate the Flying Wallenda’s act. He is attempting to balance on the high wire without a safety net. Underneath him is a pile of $ bills he has dropped on the floor. He is holding a pole to balance. One side of the pole is deflation. The other side of the pole is inflation. The ring leader is standing their with a bull horn and the crowd is silent. One false move and it all comes crashing down. The safety net that was pulled away is gold.
Good post James
Everybody is still chasing nominal prices, but if you look at the paradigm in post-hyperinflation Zimbabwe, everybody who investedin the stock market there is a millionaire, except “It won’t buy three eggs,” as Bass put it. PM analysts galore have been warning us that the price mechanism is losing integrity, hence the breakdown between COMEX and off market PM valuations. The time is coming for a nominal surge as the herd finishes playing musical chairs with currencies, but in the meantime, we are already seeing a kind of run on physical. When the run finally comes for the shares, it’s probably going to be cosmic, and we’re going to have to move fast to ride the wave and then get out before the top.
It’s so INTERESTING!
Yeah, that was a good post James. And a nice addition to the interview. That’s why I keep coming back!
Have just re-read this piece James. Thankyou so much!
Big Al and all:
IMHO here is the bottom line: If you possess “STAYING POWER” you will ultimately survive and prosper in this sector. If not, then a change of scenery or a change in strategy might be pertinent and judicious.
I REALLY BELIEVE THAT ALL OF YOU VERY FINE GURU’S OF GLD/SLVR SERVICES, ONES THAT SELL NEWSLETTERS, ADS FOR GLD/SLVR COMPANIES, ETC. HAVE NO EARTHLY IDEA OF WHAT IS GOING ON IN THIS MARKET. I MEAN NO DISRESPECT TO ANY OF YOU, BUT YOUR CHARTS AND YEARS OF INDUSTRY KNOWLEDGE NEVER LEAD YOU TO UNDERSTAND THE ‘GOLD WAR’ THAT IS TAKING PLACE. IT IS A WAR OF POWERS FAR GREATER THAN ANY OF YOU, ONE OF BANKSTERS, COUNTRIES AND MEN OF POWER (BUFFET, ETC.) FIGHTING TO DESTROY ANY NOTION OF A TRUE MEASURE OF MONEY OTHER THAN PAPER. THEY GIGANTIC! IT WILL TAKE SOMETHING HIGHLY CATASTROPHIC TO BRING THEM TO THEIR KNEES…MORE THAN ANOTHER BUBBLE OF ANY KIND. IT WILL TAKE A MAJOR BANK FAILURE, ANOTHER COUNTRY COLLAPSE, ONE HIGHLY UNEXPECTED, I.E. HOLLAND, TO BEGIN ‘THE FALL OF THE ECONOMIES’.
IT WON’T HAPPEN UNTIL THEN….THEN GLD/SLVR WILL RUN RAMPANT….EVEN THE CURRENT RUSH FOR GLD/SLVR WON’T DO IT…NOT UNTIL ‘THE FALL OF THE NATIONS (THE ECONOMIES)’ COMES TO THE FOREFRONT. SO, WE WATCH, WONDER, FRET AND STRUGGLE FOR ANSWERS. IT WILL HAPPEN SOONER THAN LATER…AND GOLD AND SILVER WILL WANDER HERE AND THERE! HANG ONTO YOUR PM!
‘ simply said’……….wyn
Wyn, you’re bang on. The total collapse of the world financial system in 08 has just been postponed to give the rich and powerful time to re position their wealth so that they can benefit in a huge way.
Asia is telling us that gold will be a part of the eventual fix.
WYN — GOOD POST. NO NEED TO SHOUT. (grin)
he was not shouting…..his capital key go stuck……..OOOOOOOOOOOOOOOOOOOOOOO
og….go……….got…………..
Ditto – I mean good post!
Any comments please?
Andrew…..thanks for the post……my comment is ,,,I think I have said this before,,,,gold and inflation,,,,the article says the same,,,,gold is a good inflation hedge. Example…..gold 1971 was $35 per oz….today $1450…..,,,,
Reverend,
Yes, I saw that. My, somewhat perplexing question still remains: What the sam he___ do naysayers of gold and silver NOT see or see that we don’t? In other words, with the global macroeconomic fundamentally aligned for gold/silver so perfectly – how can you possibly be on the other side of the argument – medium to long term? It is like – WHAT???????????????????????????????????????????????????????????????????????????????????????????? 🙂
Thanks my thoughts also Marc, A
I’m on the same page as you guys and still looking at buying some more phys silver after losing a very large spec bet that I didn’t cover with a put option. There are many that have been slaughtered in this calculated drop. Hang on to your quality miners. What I’ve seen recently is nothing I expected to happen, but easy to rationalize now. It leads me to believe what Wyn is saying above. If there is in fact unlimited fiat to move sentiment and prices, what happens if prices go lower? Does the spread increase exponentially on phys and down-payments put on IOU’s for phys? Also, after hearing that there have been major delays and outright rejection of physical delivery, what does a default actually look like that will push this market higher.? The last time I checked my econ 101 books, when production is this minimal, the only way to create more supply is for prices to increase, period. This is not a true market, but then maybe that is the point… to desperately push people away from the market understanding that it is in a way controlled. We shall see.
Good comment, Ditto….
Supply and Demand for gold is not that easy to calculate though Brad. What do they say….maybe half of all known gold is already above ground and because it does not get “consumed” in the traditional sense it just does not function exactly like other products or commodities. Sugar (for example) where wartime shortages drove prices spectacularly higher. The other odd aspect that makes price discovery more difficult is that in some countries, India being one of them, buyers hoard the metal for generations. There is barely even a speculative market in such a situation because spec markets require both buyers and seller to function properly. What can you say about folks who accumulate and simply never sell but rather only pass the metals down the family chain unless they land on hard times and are forced to liquidate?
Good point. Given where things are going economically and with population growth still exploding in “gold hoarding” countries, I have no problem buying PMs based on that point. Regarding the fiat price of it then, the only question is to what extent the paper instruments will continue to control movement.
I will borrow a line grandich often uses but instead use it to describe him versus most others in his shoes
Peter Grandich is a refreshing breeze in an sea of b.s. within the junior resource industry
[…] Listen […]
Would Pete Grandich still make his bet with Nadler?
Pete pumps stocks that tank. Grandich is a jerk who hides behind his “faith”. He wrote insulting comments about those disagreed with him.
The pompous get what is coming to them.
During the California Gold Rush, those who usually ended up with the most money were the ones selling the shovels, not the one’s using them. I wonder if there is a modern day corollary regarding analysts news letters and those who read them???
Lore initial post above wins it for me. Because there is no integrity in the markets, instead government/quasi-government sanctioned manipulations of the market by the big trading housing who front run their buys and sells with highly leveraged options prior to drive a stock or commodity in the direction necesary to maximize profits. Adam Smith would puke if he saw what Wall Street has made of the “free market”.
Sorry about the grammar. Extemporaneously typing in the comment box often sets my grammar a drift.
BJ, etc.
Interesting comment…when I first got into the juniors…I did subscribed to McCoach’s service – Hey, he is good guy…and I was a newbie. BUT, I will not follow thru with any of them anymore. If you have some time and you are active – you can scour the internet and FIND companies that our often cited by various professionals that just give a few examples to help the interview. When I first got to the CRIC a year and a half ago, I met a high-end subscription guy there and he gave me one company that WILL absolutely take off….the company…..of course – the project generator EURASIAN MINERALS. Sure enough, that company eventually showed up in my original sub-service I have. My point is, that you can really nail down the juniors that are fundamentally sound JUST BY keeping an acute eye and ear out when you are doing your daily routine (DD) as an ACTIVE READER OF RESOURCE WEBSITES. Do you NEED a sub service once this thing really takes off…I say emphatically – NO! IMHO. Not investment advice… 🙂
BTW,
I wholeheartedly agree about the grammar comment! 🙂
I keep a notebook and pen handy by my laptop at all times. In a typical day of reading I come across so many different companies and ideas I simply cannot contain it all in my brain. The best leads get followed up later but it is a long slow process to winnow down a list of eligible bets and some that initially look great turn out to be turkeys on closer inspection. It always helps to have insights from the honest brokers in the bizz who are not just pumping a stock. That practice is still far too common. End of the day we need to look long and hard at the recommendations of others and not be buying hot tips.
Truely another good comment, Ditto….
oooops to B J`s comment 7:30 pm section
IMHO the PM prices will surprise to the upside from Asia, and North Americans will
miss the opportunity in general. As for the people who believe in PMs, we are ahead of the bell curve but could die waiting. Note to self: Don’t forget to live a little and know you are right even if you have been beaten down. The paper market has turned criminal.
Dan
Gary – Nadler was an anti gold perms bear the ENTIRE WAY UP. I don’t know anything about any bets between them but I do know Nadler trashed gold the entire bull market. I don’t like when people take a position and it ultimately happens only because things have to eventually change and they act as if they’ve been right all along. Kind of like saying Jesus is coming back, yeah eventually you’ll be right, but what about all the wrong calls you made on the past. Nadler was an anti gold shill with an agenda, glad to see him go.
The incredible disappearing silver lease rates have disappeared again, only to have come back as straight line and a big gap with nothing.
http://www.kitco.com/charts/s_leaserates.html
Dan
Hi Brad
I noticed you used quotes around “gold hoarding”. I also dislike that term and prefer gold savings. I have silver bullion coins in my savings account and that is it. Not a single dollar bill or a representation there-of: a corm of forced savings because a beautiful coin is much harder to cash in to spend.
Dan
Oh my kingdom for a crystal ball
It’s called keeping the faith Tom!
Traders trade the market by using every word any fed related person might say. They use every “technique” known to man and monkey be it charts, sentiment, politicians or buzzard guts, whatever appears to work they use it.
Phooey on traders, a construct of markets and bankers. Now the whole world trades and narrowly a realist among them, no wonder the whole world is a Ponzi scheme with traders circling around the next “get rich scheme”, even Central banks are dancing to the tune.
Value in what has been, is and will continue to be is the only investments for me whether I live another year or not because when governments and banksters do otherwise it will be read as written in progeny.