When we last visited this price area on gold in December 2011, I challenged the loud-mouthed gold bears to wager $1 million dollars on gold hitting $2,000 before $1,000. I offered the world’s worst gold forecaster and the “Tokyo Rose” of the gold market to double that bet, but instead he/she did his/her usual “duck and cover” dribble (Jon, the public knows how bad your track record is no matter how much a few in the media make you think your past forecasts were forgotten).
Since then, an avalanche of bearish forecasters have hit the gold market (including one that comes and goes with his gold is only worth $800 or usually half the going price) and many former bulls have gone into hiding and/or are hedging their forecasts so not to look like they are ardent bulls anymore.
Well, this former “legend in my own mind” who was once CEO and chairman of the “Me, Myself and I” society may appear to be brash, but with what I believe is one of the most crucial junctions in the mother of all gold bull markets upon us (please recall the flack I took when I boldly said the same when we couldn’t stay above $500, $800 and then the crap that flew around $1,000), I feel like John Belushi in Animal House.
I hereby challenge again the first gold bear to accept my $1 million dollar bet that gold will hit $2,000 without first hitting $1,000. I’ve once again asked the law firm of Lomurro, Davison, Eastman and Munoz of Freehold, N.J., to stand ready to hold the funds in trust and shall keep this offer open until this Friday, May 18th at 5PM. And, if the world’s worst gold forecaster can actually grow some you know whats, I’ll make it $2 million with him (and his company can put up the $2 million, as I suspect based on his decade long poor performance he doesn’t have any real monies himself).
I’ve stated that most in the financial industry and the financial media hate gold. They are entitled to that and I have no problem with it. But, I do take great exception when some of the worst forecasters who have been constantly wrong for years and are little more than “broken clock” forecasters go unchallenged in their consistent calls for gold’s demise.
The mother of all gold bull markets shall continue in my opinion because:
• The former two largest negatives have been net positives for quite some time now and there’s nothing on the horizon to suggest this is about to change. Central bank selling and producers hedging are things of the past and not recognizing this has caused so many to miss one of the greatest investments in the last decade.
Central banks are not only printing more and more reasons to own gold but are buyers of large quantities of gold themselves. The bad news on this is you go to jail if you use printing presses to manufacturer money as they do. The good news is you can be like a central banker by imitating their asset purchases by buying gold.
• Real wealth around the world shall continue to seek gold as an alternative to paper currencies as most debt-laden countries continue to flood the market with more and more paper money creation. The large sums of wealth in the world have really only three currency pools big enough to absorb their cash flow – the euro, US dollar and yen. As bad as the euro may look at the moment, it’s only the opening act to what’s in store for the dollar. Real smart money has known that, and that’s why gold has gone up so much while the US dollar can’t get out of its own way despite many so-called bullish factors (including highest long positions in a decade plus). The yen is just overvalued, period.
• Greece is just a preview of what’s to come in America. See my May 9 commentary.
• Calls of a gold bubble are ridiculous. 99.9% of the people who should own gold still don’t (bubbles are caused by too many people owning and chasing of which neither comes remotely close to gold’s ten year performance). Similar to how so many missed the first half of the great equity bull market of the 80s and 90s (go back and see how the American investing public was not net long equities for any great length of time until after 10+ years from the start in 1982), the public shall only first rush into gold IMHO when we break above $2,000 and the scenes in Greece shift to America within a year or so after our national election this November.
I hope you realize that gold is trading where it was last December – only the number of bears has increased dramatically and mining and exploration shares have been sold off as if they’re the buggy whips of the 21st century. A true contrarian should be jumping for joy and find gold attractive yet again.
To those in the very small minority who have rightfully seen the economic, political and social cup half-empty, I remind you that the vast majority in the financial industry and the media that follows them shall never accept the reality of how bad things really are (and are getting worse). They know the light of truth shall crumble their house of cards so the goal is to keep the masses in the dark. For your sake and mine, Gold has managed to preserve wealth for several thousand years. And it has done so for the last decade as well despite all the claims it wasn’t a safe-haven investment all the way up.
The risk in gold appears to be $100 down and reward $500+. Man your battle stations.
“Consider the postage stamp; its usefulness consists in the ability to stick to one thing until it gets there.” Josh Billings