I do appreciate when I get questions from my research update readers… it confirms to me that you appreciate my efforts and more importantly, you are paying attention… Keep the questions coming!
Q: Today’s question is from David O…. When the markets in the US drop as they did this week, why does gold & silver drop? If people are liquidating stocks and have cash to buy something else, shouldn’t that make metals go up?
A1: The fact is that today, the world’s reserve currency is the US Dollar (although my opinion is that it’s not going to be that way for very much longer. Refer to Research on China) so today when large investors and traders sell and go to cash, they run for the USD as a flight to safety. Unfortunately, there are no safe currencies on the planet today, so when you are liquidating and going to cash, you look around and see that all the currency choices are weak and ugly due to massive over-printing by Central Banks, so if all currencies are ugly, you have to choose the least ugly of them all… and today that is the USD.
However, each time this happens, it’s only a temporary knee jerk reaction until investors decide to get back into the markets of their choice, then the USD resumes it’s downtrend and gold & silver resume their uptrend. (refer to Jim Rogers article today) Therefore, when the dollar rallies, the metals sell off and more and more traders dump metals and anything else and run to a quick trade in the USD.
A2: The most logical answer is that I believe there are still so many people today who don’t understand what money really is. Money should have and hold value, however, they have been tricked by governments to believe that the “cash” they print is money and holds value. If that were the real truth, than why would Central Banks and countries around the world be NET BUYERS of gold today? Refer to my VIP Special Reports Dated 6/9/12 & 6/14/12. Furthermore, Central Banks and Governments around the globe today are manipulating gold & silver in a last ditch effort to continue to kick the can down the road until they run out of road and that time is coming sooner than most people think….(refer to the last link of this report)
That’s why it’s SO IMPORTANT to take advantage of these opportunities to LOAD UP ON GOLD & SILVER ON EVERY DIP. You see David, when the dollar rallies, we all have more buying power with those dollars and when gold & silver prices come down as a result, we can take those “temporary” strong dollars and buy more of the real honest money such as the case of Gold & Silver at great discounts.
People love to buy things when they are on sale and when there is a FIRE SALE they buy even more to “stock up” and this correction should be viewed NO DIFFERENTLY!!
The only time to sell your precious metals is when every American is back to work, the housing market is in full bloom and the economy is fixed… and unfortunately my friend that is a long way away, so until then, keep stacking!!