Issue #55
Dear Member,
Just a quick update here. Janet Yellen will most likely be nominated — and confirmed — as the new Fed chief, the first woman ever. I applaud the nomination. Not only because she’s a woman, but primarily because Ms. Yellen is one of the most astute central bankers there is. She will be a far better Fed chief than anyone else who vied for the position, especially Larry Summers.
But what I think is especially important right now is this: Despite all the worries that Ms. Yellen would have — and probably will have — an easier monetary policy than her predecessor, Helicopter Ben …
Gold and silver are plunging this morning, with gold down almost $19 and silver down more than $0.50 (8:50 am ET), proving me right all along that …
A. The interim bear market in the precious metals is not over yet. And …
B. When the big turn up and the next phase of the bull market finally does arrive, the forces that will drive the precious metals higher will be very different.
Yes, inflation will be one force. But the predominant forces that will emerge for the next phase in gold and silver’s bull markets will be …
1. Collapsing Western governments in Europe and the United States.
2. The concomitant collapse of their sovereign debt markets.
3. The growing police state in Europe and the United States, and the ramping up of the war cycles I have previously shown you.
Speaking of which, London, England’s prestigious newspaper The Guardian just published an article on the growing police state in this country. It’s worth a read. You can access the article here.
Right now, I need to see how today’s action in gold and silver pan out on a closing basis. But the trend is down. And as soon as I get a solid, high probability sell signal, I will alert you to take on new short positions via inverse ETFs.
In the meantime, hold your shares in Direxion Daily Gold Miners Bear 3X Shrs (DUST), which surged dramatically yesterday, soaring $3.35 a share, or 9.35%. This morning, DUST is showing the potential for a strong open. Also keep your protective sell stop in place. I will soon tighten it up even further, but need to see a bit more action.
The Dow Industrials, as I noted yesterday morning, is looking very weak, which is adding further downside pressure on mining shares, and upside pressure on DUST.
Stay tuned …
Best wishes,
Larry
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