Transcript of Session #1:
Why Invest NOW In ThePrecious Metals And Mining Shares?
Larry here. Welcome to my gold WAR ROOMS, a new five-part online precious metals conference! I’m thrilled you’ve joined me today.
As a savvy investor, you understand that getting a handle on the forces that will soon drive precious metals higher again is critical to MAXIMIZING your profit potential.
So in these war rooms, I’m going to cover those forces. I’m going to bring you up to date on them, and I’m going to do a whole lot more as well.
For instance, in Session II of my War Room series, I’m going to review for you how I pick the best vehicles to trade the precious metals, from how I select ETFs to the very best mining companies I am looking at right now.
And of course, discussion of the right investments to look at in the precious metals markets would not be complete unless you know which metals investments you should also avoid!
In Session III, I’m going to cover the very important concepts of how to get upside leverage in the precious metals, but without using options or futures.
Plus, here too, no discussion of leverage is complete unless I also show you my very best methods for reducing risk when investing in and trading precious metals and mining shares, with or without leverage.
Then, in session IV, I’ll get down to the nuts and bolts of investing and trading the precious metals, and I’ll show you — for the first time ever — the methods and models I use — the technical, cyclical timing elements — to know WHEN is the best time to get in, get out, or even stand on the sidelines, waiting for the next big profit opportunity, with the least risk.
And then I’m going to wrap it all up in Session V — where I will answer your questions.
My objective with this war room series is simple: To help you become a savvy investor in the precious metals so you can maximize your profit potential going forward, in what should prove to be a massive new leg up in the metals and in mining shares.
So let’s get started. In today’s session, I will discuss the very important issue of WHY NOW? Why invest in the precious metals when gold and silver have plunged more than 31% and mining shares have lost as much as 78% of their value in the last two years?
Why invest in precious metals when it appears the financial crisis is over, the U.S. economy is seemingly on the mend, the dollar is firming up, and inflation appears to be tame?
My answer: Because if you’re a savvy investor, then you know that all of the above is merely the calm but deceiving eye of a massive financial hurricane, the back wall of which, the worst part, is about to hit us HEAD ON.
Why do I say that? Simple. Just consider the latest developments in the global economy — and especially the forces that I’ve previously identified for you as the main triggers for a new bull market in the precious metals.
Let’s start with interest rates. As I showed you in a previous online conference, savvy investors know that when interest rates start to rise from an historic low, it almost always means inflation will soon come rip roaring back. That’s how the smart money sees rising interest rates.
And what’s been happening to interest rates of late? They have been soaring, jumping sharply higher EVEN THOUGH the Federal Reserve has stated it plans on trying to hold rates as low as possible for as long as possible.
For instance, the yield on the 30-year Treasury has exploded from 2.8% to 3.75% in just the past 3 months. That’s one of the biggest percentage jumps in 30-year yields, ever.
And it’s not just in 30-year rates. It’s also in 10-year rates, where the yield has jumped from 1.6% to 2.7%, also one of its biggest jumps, ever.
Moreover, this current rate rise is not confined to just the United States. Interest rates are rising now in very corner of the globe — and again, despite central bank attempts to keep rates low.
So what does it all mean? Rising rates means two — and only two things — both of which are bullish for the precious metals sector.
First, it means that all that money that central banks have been printing over the last several years is going to start flowing through the credit markets, finally coming home to roost and boosting inflation higher.
Second, it also means that investors are losing confidence in government. That’s why they are selling their bond investments — despite central bank warnings that they’re not done trying to keep rates low.
Loss of confidence is government is a key force behind another rise in the precious metals. After all, precious metals are an anti-government type of investment. You want to buy and invest in precious metals not only when everything is not well with the economy, but even more so when all is not well with the public sector, with government.
And there’s no question there are problems with governments today, especially in the U.S. and Europe. They’re broke, and they’re spying on the private sector like never before.
Bottom line: Rising interest rates is your signal that inflation is coming back and investors are getting fed up with their governments. Both forces are extremely bullish for the precious metals!
Speaking of governments, let’s now take a look at the recent developments in Europe. As you know, I’ve written extensively about Europe recently. That it’s going to end up a major force driving the precious metals higher.
Why? Because Europe’s financial crisis is far from over. Despite the eerie calm of late in Europe, nearly every one of the countries in the euro zone is sinking further into the abyss and Europe’s financial crisis is going to soon come roaring back — sending trillions of euros into the safe harbor of the precious metals sector.
Consider Spain, where unemployment is 26.3%.
Or France, where unemployment just hit a record 10.4%.
Or Greece, where youth unemployment just hit a record 65%! Or Portugal, Or Italy. Or even Germany, which is now seeing its economy contract and unemployment start to rise.
Soon, in fact any day now according to my models, you’re going to see Europe erupt into a nightmare of social chaos, failing banks and a collapsing euro.
And unlike previous acts in Europe’s financial crisis, this one promises to last longer and go deeper than any of the previous phases. One chief reason why, come September 22, Angela Merkel will probably be reelected as Chancellor of Germany, giving her austerity policies a shot in the arm, which in turn, will take down most if not all of the smaller weaker European countries.
All this is why I also recently warned you that the dollar will likely RISE at the same time that precious metals start to take off. It will be due to a massive exodus of capital out of Europe, into the United States and into gold, silver and other precious metals investments.
I know, it’s hard to believe the dollar and gold can both rise at the same time. BUT, that’s EXACTLY what happened back in the early 1930s when Europe collapsed. The dollar and the black market price of gold rose so strongly that in 1933 President Roosevelt was forced to devalue the dollar by raising the official price of gold!
And more recently, we got a glimpse of it in 2008 and again in 2010, when gold exploded to its recent record high at $1,920, even as the dollar soared nearly 18% from its 2008 low.
Keep in mind that Europe is home to many of the largest — and weakest banks — in the world. Banks that could make the real estate bust and near system-wide U.S. banking collapse of 2008 and 2009 look like a walk in the park.
Consider for instance:
* BNP Paribas, with $2.42 trillion in total assets, rated D- by Weiss Ratings …
* Or Societe Generale, with $1.63 trillion in total assets, rated E+ by Weiss Ratings …
* Or UniCredit SpA, with $1.2 trillion in total assets, also rated E+ by Weiss Ratings.
So when Europe soon goes under, do not be surprised at all when you see both the U.S. dollar and gold soar!
But there’s more to the current setup for a renewed bull market in the precious metals sector.
Despite how bad Europe is, or how much the dollar will rally as Europe goes under … or even how well our stock market is performing —
ALL is not well in the U.S.!
The economy, though growing, is exceptionally vulnerable, with GDP at a mere 1.7%.
Many U.S. banks are still loaded up to the gills with highly leveraged derivative bets, especially in interest rates. So as interest rates rise, they TOO remain vulnerable to another round of massive losses.
And then — perhaps one of the most important reasons, from my perspective to begin investing and trading precious metals — is none other than my work on what I call the WAR CYCLES.
As I have previously shown you, they are marching almost incessantly higher, with social chaos, civil war and international stress points building — all together — and virtually non-stop.
Consider what’s happening in Egypt, and most recently, in Yemen. Consider the NSA and Snowden affair and how the majority of Americans are now fed up with Washington eavesdropping and spying on all of us. Or how Snowden is now being harbored by Russia, kindling talk of a new cold war between the U.S. and Russia.
Or Iran, where it is now rumored Israel may strike Iran at almost any time. Or North Korea, quiet for now, but I can assure you, will soon be acting up again.
Or Japan, recently forming alliances with several Southeast Asian countries to defend the South China sea from China’s territorial claims.
All of this — from rising interest rates to the imminent implosion of Europe …
To the weak U.S. economy … to the ramping up of the war cycles …
ARE THE REASONS WHY YOU WANT TO START INVESTING ANEW IN THE PRECIOUS METALS. PERIOD.
AND THOUGH THE BOTTOM MAY NOT YET BE CONFIRMED IN GOLD OR SILVER, NOW IS NOT THE TIME TO BE DECEIVED BY THE SEEMING CALM OF THE MARKETS — OR BY THE DUMB MONEY THAT THINKS GOLD AND SILVER ARE NOW BACK IN BEAR MARKETS!
QUITE TO THE CONTRARY, THEY ARE ON THE VERGE OF ANOTHER EXPLOSIVE MOVE HIGHER.
That said, I repeat my warnings of late:
FIRST, if you have even one red cent in Europe, get it out of there. Period.
Out of its bond markets, out of its stock markets, out of its banks.
SECOND, ditto for U.S. sovereign bond markets. They are starting to plummet. Be sure you own no U.S. Treasuries with a maturity of more than 1-year. Also stay out of municipal bonds, even the best of them. If you own and invest in corporate bonds, buy and hold only those that are rated AAA.
THIRD, keep building up your cash and have it ready to be deployed on a moment’s notice. That way you’re ready to trade the new bull market in gold and silver that’s now at our doorsteps — both to PROTECT your wealth and to GROW it.
Get ready to add loads more precious metals-related investments. And get ready for some very active trading!
FOURTH, please realize that the same technical signals that told me this bull market in gold and silver was beginning in 2000 … that allowed me to call every major turn since — including the correction that started in 2011 …
Are now telling me that this next huge rally in gold will take three full years to unfold. That means you’re going to have the chance to multiply your money over and over again until 2016.
FIFTH, be sure to attend my next session in this Precious Metals WAR ROOMS, airing tomorrow.
In that next session, I’m going to review for you how I pick the best vehicles to trade the precious metals. From how I select ETFs to the very best mining companies I am looking at right now.
This is Larry Edelson; best wishes and I’ll talk to you again at my second war room, airing tomorrow, August 20.
