Kmart Blue-light specials. They came without warning, they didn't last long, were good while supplies lasted, and were very often ridiculously low prices on something you didn't want (but occasionally needed). As marketing gimmicks went, It was one of Bagholder's favorites. It was economics in action at a very base level. Sell shampoo for a dollar that normally cost $5 - and it will fly off the shelf. Thats how free markets work. The Gold & Silver market today is reminiscent of a Blue light special.
Gold is on special today by any reasonable standard. Relative to its 200 day moving average, its the cheapest its been in 3 years. In fact, It is below its 200 day moving average for only the 3rd time in the last 7 years. Its trading about 17% off its all time high, only twice in the last decade has it traded lower. As with all blue light specials, this one on Gold won't last much longer. The fundamentals underlying the price advance in Gold the last decade are stronger today than they have ever been.
If you understand nothing about the Gold market, Know this: Checking the structure of the market (who is on which side of the trade) we find the most bullish COT report Bagholder has ever seen. Right Now, the Paper aristocracy (banksters) is the longest they have been in decades. Meanwhile, man on the street is the Least Long he has been in decades. We may have to depart for the emergency room soon - as looking at this weeks COT report gives Bagholder one of those 4 hour Hard-ons.
Gold is a better deal today at $1600, than it was ten years ago at $265. A decade ago Central banks were dumping 400 plus tons a year on the market, today they are net buyers. A decade ago Gman man wasn't printing $$ with reckless abandon, today - not only is he printing - he has openly admitted it. Ten years ago real interest rates were positive and falling, today they are negative and falling (better yet). Ten years ago, the US Government wasn't obviously bankrupt; today they are beyond bankrupt, both morally & financially.
The powers that be are running a Bluelight special on Gold, solely to increase confidence, temporarily, in Gmans paper. Do not expect the special to last. Gold has returned 22% per year for ten years running. We here at Mytwocent$ are well aware of how bull markets progress, consequently we know the % return the next ten years will dwarf the 22% of the last ten. For the record, another decade of 22% per year gets us north of $10,000/oz by 2020. Bagholder believes $10,000 will be taken out well before 2020.
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