Regularly Updated Commentary on Gold and Silver Bullion Markets

The bullion dealer's goal is to provide gold and silver bullion investors with market commentary when significant developments warrant updates.   At this point, that will probably be every other month starting in 2011 since the author has been writing this free ezine for over a decade now and still has not won the Pulitzer Prize.





Liberty Weeps at Re-Election of Marxist Obummer
 Liberty Weeps at O'bummer

Little did I know how ignorant Americans are of economics and finance, but last night's win by The Amateur for another 4 years of failed policies is actually a bullet dodged by the conservative movement in the United States.  It has always been my private, personal belief that had Mitt Romney been elected President in 2012, he would have served only one term.  Serving only a single term is considered a de facto failure of a presidency Stateside, regardless of the legislative achievements made.  However, rapidly deteriorating conditions on the ground, not on the campaign trail which Barack will have to exit permanently and actually earn his salary and benefits going forward DOING THE PEOPLES' WORK, NOT HIS OWN RE-ELECTION WORK, will create an environment of civil unrest in the U.S.A. that will vilify whoever occupies the Oval Office in the next 4 years.  WE ARE NOW SOLIDLY ON THE PATH TO GREEK INSOLVENCY, WESTERN STYLE.

I say this with absolute conviction that while Sandy will likely become the Obama Katrina based on incompetent relief efforts by FEMA to date in New Jersey and New York, the anemic growth of the U.S. economy in the last 3 quarters is about to become progressively worse.  Just look at earnings projections for the 4th Quarter and beyond, and it shows declines upwards of 7% year-to-year, a harbinger of another recessionary episode that a frail economy cannot afford to experience.  Supposedly the stock market is a forecasting barometer for the economy, so expect a severe swoon in stock prices at any moment now that the distribution top in process for the last several months has run its course.

[ Regarding Obama's Katrina, a.k.a., Sandy:  My suggestion to Barack Hussein is to hire Mitt Romney to handle the Sandy disaster and send the FEMA life-long government employees back to Washington to twiddle their collective thumbs, which we all know they are very adept at.  The private sector could handle this mess with massive human suffering better than the Red Tape Nightmare dubbed FEMA.  Give Romney a budget, which we know he can stay within, Barack, and access to freshly printed Federal funds and the ability to hire private companies to expedite the relief efforts.  BUT THIS STORM IS GOING TO BITE THE ANOINTED ONE IN THE BEHIND BEFORE IT IS OVER.  THAT SAID, it will still run in second place to the disaster named Benghazi Terrorist Attack ......... stay tuned on that pie about to come out of the oven of Transparent Presidencies.  SORRY, BARACK, MITT CAN'T HELP YOU ON THAT LAST ONE, EXCEPT TO FAIL TO MAKE IT AN ISSUE DURING THE NOW-EXPIRED PRESIDENTIAL RACE. ]

OBAMA, BAD FOR AMERICA's LONG-TERM HEALTH, BUT FRICKING WONDERFUL FOR GOLD AND SILVER.  The devaluation of the U.S. Dollar will accelerate in the Obama, Phase II Era, as Federal spending and requisite money printing by the Fed set new world records.  Bernanke will resign his post at the Federal Reserve when his current term ends, because he knows that the patient is beyond saving and he is just running a Monetary Ponzi Scheme that history will tag him on!  He also wants to avoid the missiles lobbed by the angry crowds that will be visiting the White House daily.

I still expect to see $2,100 Gold and $38 Silver before the end of 2012.  Targets for 2013 will be substantially higher because the world will be in Full Panic Mode by then.

There will continue to be legislative gridlock in Congress, with Tea Party Republicans, amongst others, rejecting outright any and all Fiscal Cliff proposals by Obama, Harry, and Nancy that raise taxes on the small businesses of America who are struggling to stay afloat in the Obama Depression.  Forget about new hiring by these ultimate New Job Creators.  In fact, going over the fiscal cliff and bringing the economy to its knees may just be the bitter pill the Nation needs to swallow to realize that Greek-style fiscal largess is a Grecian Road-To-Disaster.  PLEASE DO REACH ACROSS THE AISLE, MR. PRESIDENT, but I would wear asbestos gloves in doing so.  This is not a scorched-earth, sour grapes perspective.  THIS IS TOUGH LOVE FOR A NATION THAT IS ADDICTED TO ENTITLEMENT SPENDING AND MUST BE WEANED FROM THE NARCOTIC, even if it means a period of great upheaval ensues.  Moms dutifully wash their kids' ears despite the deafening screams of abuse.

The Sage of Wexford sees civil unrest coming to a venue near you ( and me ).  Shotguns with pistol or stock butts are in order.  I expect inflation to continue to increase as we approach 2013, especially in food prices and for all currencies around the world to devalue in relation to both Gold and Silver due to endless money printing by the Central Banks of the World.  We have now completed the consolidations from the first 2011-2012 recovery rallies in both Precious Metals, and are ready to work our way higher in the weeks and months ahead.  The conditions on the ground are perfect; of course, in a perverse sort of way.  Unrest in Europe, which is ready to erupt once again in both Greece and Spain as my nimble fingers fly across the keyboard, is going to be another Party Pooper for the Obama Victory Dance.  Barack, please do not spike the football; it will seem very unseemly as the stadium empties during The Panic.  Kicking the can down the road is about to meet a giant pothole of crisis retention.

Thank God Scott Brown was defeated in Massachusetts!  He lied about his conservative principles to get elected some 2 years ago upon Kennedy's death, and he deserved to be thrown out on his duplicitous ass by a True American Indian ( no deception there! ) who will not engage in clandestine maneuvering to hide her liberal legislative agenda.  I think Mr. Brown will find work in the Middle-Aged Models arena, hopefully fully clothed, but that may even be a stretch.  What about the Liars' Club.  Eventually the public finds slimy politicians out; they are just still working on The Greatest Fraud Ever Perpetuated On The American People ( see Clint Eastwood for explanation ).

I should stick with the monster font size throughout this ezine, I can fill a lot of space fast!  Is inflated text a sign of the times??!!

Off to do more productive things, but I may return with more dewdrops of wisdom if the urge beckons.  Did not get much sleep last night, was ready to hang American flag upside down in the mariners' classic Sign of Distress. 

However, once I realized that Barack Hussein Obama's legacy would be dominated by the Greatest Depression America has ever seen, a sick smile came across my face. 

Obama is truly the 2013 Captain of the Titanic and he can't, although he will try, blame Bush for this shipwreck!  HE COULD BLAME HIS PREDECESSOR THOUGH!!!!!!!!!!!!  That Great Unifier guy that served from 2009 through 2012?


A Nation addicted to entitlements puts the biggest givers back in office.


Hey, Clint, got a spare room at your digs?


The Sage of Wexford, ready and able for THE Second American Revolution.

P.S.  Dear Al Gore who has a Carbon Footprint the size of a coal-fired electricity plant that I hear is being built in a certain Chicago neighborhood:  SANDY WAS NOT CAUSED BY GLOBAL WARMING.  Your obese carcass at a public event, Al, creates more warming AND Mayor Bloomberg, always on top of everything, just ask Staten Island residents, is on the way to take away your giant sodas.  Two Hypocrites of the Ages.





January 25, 2013:  Fix Bayonets And Get Ready To Go Over The Top.

Ah, The Sage uses such literary images to get his point across concerning Gold and Silver ownership!  This is World War I imagery where an American Doughboy is leaning against the muddy walls of a rat-infested trench in France, fixing his razor-sharp bayonet upon a trusty Springfield '03 in preparation for the order to go over the top of the trench ....... AND CHARGE.  Now, we all know from history that this form of warfare was very costly in terms of shear numbers of lives of soldiers, so don't expect the same grim results with mustard gas and machinegun fire and artillery barrages that the real Doughboy suffered through in the early 1900's.  In this transformed image, it is the Gold or Silver Investor of 2013 that would rather take his or her chances running across the killing fields than being stuck in the stinking trenches of Dollar Devaluation, Stock & Bond Bubbles, Cost of Living Inflation and Government Monetary/Fiscal Malfeasance.  These are effectively the Four Horsemen of the 2013 Apocalypse that are riding headless at breakneck speeds down the middle of the trenches we Doughboys are soon to exit. Sounds like four separate trenches, but it is indeed one very putrid and foul-smelling rift in Mother Earth that has been created by the Evil Axis Powers of Wall Street Banksters, the Bernanke Federal Reserve, and the U.S. Government.

You could either risk dying in the trenches or dying in the fields of once picturesque France.  We Goldbugs, as we are derisively referred to in the financial media, a venue primarily sponsored by the Wall Street finance chop shops, are very well armed with Golden Bayonets and Silver Bullets and possess the fortitude and stubbornness of a Sergeant York to take the higher ground.  We have been resolute in arming ourselves with these weapons of Financial Survival for the last 12 plus years, and are not about to lose faith in our cause now.  We have been sitting in the trenches for the last 4 years, adding numbers by the day, and waiting patiently for the Captain to blow his whistle signaling the commencement of the CHARGE.  This will not be the Final Charge, but a move to much higher ground that will leave our naysayers stuck in the trenches at the mercy of the Four Horsemen of Financial Ruin that I mentioned above.  And we can see that our Captain ( the Global Bullion Market ) has the whistle to his lips ready to initiate the charge to higher ground.

Now this past week of trading in the precious metals may seem like a nocturnal artillery barrage, with sky-borne flares and all, but it is a blessing to those of us adding to our stockpiles of bayonets and bullets ( Gold and Silver ) as prices come back in a mini-dip to increase our Purchasing Power of same.  With real-life U.S. inflation in virtually every product or service that we Doughboys ( and Doughgirls, I know the Chairman of the Joint Chiefs of Staff has not been in a trench for some 20 years AND PANETTA ..... well ...... NEVER! ) use in our daily lives, it is nice to get a bargain every once in a blue moon.  U.S inflation is north of 9%, just check your monthly expenses from year to year, and you will see.

And that is the perspective that every Doughperson ( politically correct moniker ) should have via Gold and Silver price action at this point in history.  Like the dirigible that was used for surveillance in the War To End All Wars, soaring above the smoke and din of battle to gain perspective on the whereabouts of opposing forces, WE NEED TO KEEP PERSPECTIVE ON THE RECENT PRICE HISTORIES OF BOTH GOLD AND SILVER TO REALLY APPRECIATE WHERE WE AND THEY BOTH HAVE COME FROM:


5-Year Chart of Gold Bullion London PM Fix with moving averages
5-Year Chart of Silver Bullion London PM Fix with 50-day and 200-day moving averages

Technically, a cup and handle formation is forming for both metals that is known to break sharply to the upside when completed.  This backing and filling activity is really a sign of accumulation by strong hands, so once we break out, soon I am sure, the move will be over $1900 in Gold and $43 in Silver before any consolidation at those levels.

Let's not us war-weary souls forget that just over 4 years ago Gold bottomed around $850 per ounce and Silver bottomed at just under $10 per ounce at the termination of the Sell Everything Panic of 2008; and I must admit as a bullion dealer that during this price decline WCM set new all-time records for Gold and Silver sales!!  See non-leveraged buyers of physical precious metals have the foresight to buy Gold and Silver upon declines with total conviction that prices will eventually go much, much higher ........ AND THEY DID!!  IT IS THE LEVERAGED PAPER GOLD AND SILVER TRADERS WORKING THE COMEX AGAINST LONG-ESTABLISHED REGULATIONS THAT MUST MEET MARGIN CALLS DURING A PRICE SWOON, AND THEIR EFFECT UPON PRICE DISCOVERY IS SOON TO DIMINISH AS MORE AND MORE DAILY TRADING VOLUME MOVES OVERSEAS, ESP. TO ASIA.  Not to mention the effect that decreasing levels of physical at Comex warehouses will have on the ability to write contracts that are 10x to 20x times the exchange's ability to deliver physical gold and silver at purported contract settlement.

So per the pretty pictures above, both Gold and Silver proceeded to set new all-time bull market highs which the stock market is still struggling to achieve
.  Not to say that 2007's S&P 500 high of 1575 won't be reached before the wheels fall off of the ammo cart, free money for the use of vested interests on Wall Street can inflate an asset market well beyond anyone's logical expectations or reasonable price valuations.  Happened in 2000 and 2007, and will happen in 2013, stay tuned, financial problems as far away as China or as close as Washington could be the catalyst.

Furthermore, we do know with some certainty now that the Exchange Stabilization Fund through the New York Fed's financing of J.P. Morgan and Goldman-Sachs in the futures markets has taken the equity ( and the bullion market on the Short Side ) manipulation strategy to new heights to attempt to keep retail investors on the battlefield while insiders and moneyed clients head for the barracks.  Americans pouring $Billions into equities this month as 2013 opens is a sure sign that the feint maneuver by the Axis Powers is working, setting up the stage to trap as many unarmed stock investors on the killing fields when the machineguns open up fire.

( Sage Note: Totally amazing that Hollywood has gotten a free pass in the Gun Control debate when the disgusting, gory, gratuitous violence they depict in virtually every dramatic movie can do nothing but de-sensitize people to actual acts of violence. )

An almost double in Gold's price and a tripling in the Silver price are not too shabby when the Wall Street Mob and its sheeple pound their chests about the 112% gain in the S&P 500 from the March, 2009 lows as of Friday's close.  Our Golden Bayonets kept pace with the liquidity induced stock bubble created by Bernanke's $3 Trillion expansion of the Fed's Unbalanced Sheet ( that we know of!!! Dollar Swaps anyone!!! ), and our Silver Bullets blew the doors off of equities.  Be advised oh Unarmed Sheeple that U.S. stocks have once again grown annually in price during this 4-year period at the 1990's Bubble Rate of Ten Times the growth rate of the U.S. economy which has been 2% at best. 



Stocks continue to rise even as Earnings Expectations trend
downward for S&P 500 stocks.  THIS DIVERGENCE WILL NOT
LAST, as historically, without exception, earnings must grow
in order to keep stock prices aloft.  TOP AT HAND.


GOLD AND SILVER ARE MERELY IN ACCUMULATION PHASES GETTING READY TO GO OVER THE TOP.  And the "at-the-open" Comex trading selling-swoons of Paper Gold and Paper Silver that we saw this past week is just another attempt by the Axis Powers to blow smoke in your face to obstruct your field of view ON A DOLLAR COLLAPSE IN THE MAKING.  Always remember that new highs in Gold and secondarily in Silver are a ringing VOTE OF NO CONFIDENCE ON FIAT CURRENCY AND FIAT GOVERNMENTS.  AND THE VEHICLE THAT THE DOLLAR'S ENDLESS CREATORS USE TO SEPARATE INVESTORS FROM THEIR HARD-EARNED MONEY .......... U.S. TREASURIES AND CORPORATE  & MUNICIPAL BONDS ......... HAPPEN TO BE MORE OVER-PRICED THAN AT ANY TIME IN HISTORY.  No premium for creditworthiness or REAL inflation rates!!!  Just ask Bill Gross of PIMCO on this one!



Looks like this puppy has finally turned upward to higher yields, a devastating event for financial asset investors, not to mention the creditworthiness of the United States. 

How can both the U.S. Mint and the Royal Canadian Mint have suspended Silver Eagle and Silver Maple shipments to primary distributors this month unless demand for these silver products is off the charts??!!!  Another example of physical, real-world demand for bullion rising while the bullion market price is manipulated downward in a futile attempt by the Axis Powers to keep us Doughboy-Goldbugs wallowing down in the trenches while they fill them with suffocating mustard gas; better yet, since this gas is the direct emission of a Rotting Dollar, we should label it "Dollar Gas".  Could it also be that such astute traders as the Chinese are employing some of the Axis Powers known as Morgan and Goldman to depress both Gold and Silver temporarily while they continue their accumulation program to have a Gold-backed Yuan or Gold-backed Asian Currency Basket??!!!  Not an unheard of move by a sovereign state.


Not exactly the picture of a healthy, strong currency, this U.S. Dollar thingy.


The world has entered the inevitable Currency Wars as George Soros calls them where virtually every central bank takes every measure possible to cheaper its domestic currency in order to attempt to save its currently struggling export industries and attempt to pay off its unserviceable mountain of debt with a Devalued Currency.  Near zero interest rates, well below what a rational market would set based on creditworthiness, default risk, and inflationary expectations are one such strategy, a la Academic Bernanke, but domestic savers are punished, hurting discretionary spending instead, especially for those in retirement.  Unintended Consequence: lower economic growth from this growing segment of most developed countries' populations.

THE LITERAL RACE TO THE BOTTOM.  But confidence in the reserve currency, the Dollar, is waning fast with a U.S. Government spending and creating Dollars with wild abandon, and exits from dollar-denominated assets or mere buyers' strikes are enough to put pressure under U.S. interest rates.  A lower Dollar and higher interest rates Stateside is a deadly soup to serve global and internal investors who are stuck with a boatload of Treasuries used to neutralize export sales receipts in Dollars.


It is another fact that Central Banks around the world have been in a Gold Reserve Accumulation Mode for going on some 3 years now, if not during the entire "recovery" period after the 2008 Collapse.  THEY KNOW THAT THE ENDLESS CREATION OF NEW MONEY TO STAY IN POWER DURING A MASSIVE DEBT COLLAPSE IS AN INFLATIONARY ROAD TO PERDITION.  FIAT MUST BE CONVERTED INTO TANGIBLE WEALTH, GOLD AND SILVER, IN ORDER TO KEEP THE FOOT SOLDIERS' CONFIDENCE IN THE PURCHASING POWER OF THE CURRENCY OF THE REALM.  As an American, never forget the expression:  "Not worth a Continental".  History is littered with the carcasses of Governments and Bankers who have tried to print their way out of a Debt Collapse.  If you think 2008 was a whopper of a collapse, wait until this Greek Tragedy unfolds with more compromised debt outstanding around the world today than then.  Years ending in "13" may be very unlucky years for Debt Creators and Debt Holders.

Funny how manipulations through ill-conceived and ill-executed market interventions such as the Fed's sophomoric micro-management of the U.S. economy through Quantitative Easing  at $85 Billion per month and Zero Interest Rates have unintended consequences.  More troops are now armed with Golden Bayonets and Silver Bullets and READY TO GO OVER THE TOP.  And yet the U.S. economy remains mired in a growth rate, if positive at all currently, that fails to put millions of Americans back to work.  WELCOME TO THE BERNANKE-OBAMA DEPRESSION OF 2013. Higher taxes have already hit Americans' pocketbooks and more are in the pipeline ......... how is that going to work to instill buying power for a consumer-driven economy???  Californians, Texas looks mighty good right now, free cowboy hats included.


THE SAGE OF WEXFORD, gas mask strapped on tight.

P.S.  If the analogies used in this month's ezine appear insensitive to some given the Gun Control fiasco that is emanating out of Washington and Biden's pickup truck, so be it.  So long as I have Freedom of Speech in this country, I will exercise that right without apology unless I unduly offend those that have directly suffered at the hands of a madman.  It is much more a mental health system and Hollywood/media induced problem than a gun ownership problem, in my humble opinion of being a law-abiding gun owner for some 45 years now.  As a business owner and possible target of office invasion, and gold and rare coin dealers have experienced this already in not insignificant numbers, an AR-15 is actually on my buy list.  The bad guys will always get the high capacity magazine weapons, even Eric Holder has been known to give them out.  Why shouldn't law-abiding citizens has access to them, Ms. Feinstein, to level the field in self-defense?!  Biden can give me another shotgun also, since he and Barack have access to the Public Checkbook. 

Remember as well that an armed American citizenry known as the Colonists threw off the freedom-robbing yoke of an Imperial England that was hell-bent on disarming these patriots over time.  Be it also known that Adolf Hitler disarmed the German people in order to achieve his iron grip of Fascism.  I am not a radical, but
Don't Tread On Me.



EVER SEE A WORKER BEE DIE OF EXHAUSTION?!!  Any Government that takes more and more from its Worker Bees is very likely to get stung in the end; the Bozo's on Capitol Hill think the honey pot is bottomless, but I think Americans are about ready to aim their stingers in Washington's direction and bring a few pitchforks to boot.  Nancy and Harry and Barack better sharpen their golf swings.

March 16, 2013:  Money Always Goes Where It Is Treated Best.

The Sage has to drag himself to the keyboard to pound out these ezines these days.  Aside from writer's block, I suffer from nausea after watching the cable news during the day.  Fox News, of course, because I am a Worker Bee Conservative, and I throw stuff at the TV if I get a Major Network /Mass Media channel that would shame Soviet Pravda in its distortion of the facts and outright propaganda for the Obama Administration and the Leftist/ Socialist agenda in general.

However, I think this Literary Pied Piper is weary after some dozen years of trying to lead the American and international masses in the right direction as to where to put their money.  Kind of like herding cats.  Many still do not get the message that we Americans and most of our less-disciplined trading partners are well on our ways to mutual economic and financial destruction via out-of-control Government spending and promises AND via central banks that print money to keep these Spending Addicts afloat.  Oh, I am such a pessimist they say.  Ha ....... I have had the best and last laugh with gains in gold and silver that have firmly secured my upcoming retirement in some 4 to 5 years ...... if I am still kicking, of course, and have not expired out of abject disgust for what has happened to the once-great America I grew up in in the 1950's and 1960's.

If you have other pressing commitments today such that you do not to have the time ( or enough fresh java ) to read the entirety of this month's "Dewdrops of Wisdom", then I will sum things up as best I can for you Clift Note graduates out there:

American financial and commodity markets are destined for second-class and lower standing and trading volumes in the years ahead DUE TO OUTRIGHT MANIPULATION BY A PRIVILEGED/ INSIDER FEW, NON-ADHERENCE TO PUBLISHED EXCHANGE REGULATIONS, AND BIG-MONEY PREFERENTIAL TREATMENT AT THE OUTRIGHT EXPENSE OF RETAIL CUSTOMERS.  One thing about new money:  It knows an inequitable playing field when it sees one and has the smarts and means to seek out and participate in more level / efficient venues.

One early sign of the veracity of this statement is the continuing decline in financial services industry employment some 4 and 1/2 years after the Financial Panic of 2008.  Just observe the past and recent lay-off announcements concerning same.  The American Financial Services Industry is in a state of decline that will not be reversed by the "purported" New Bull Market in the Dow, but will accelerate as All Things Paper lose their positions with global investors as efficient stores of value THAT WILL NOT EXPERIENCE A FAILURE TO DELIVER AT SOME REDEMPTION POINT IN THE FUTURE.

In my personal and professional opinion, I think the Gold and Silver ETF's with the sole exceptions of Eric Sprott's entities are huge Ponzi Schemes that will, in the not-so-distant future, fail to deliver during a court-ordered or politically-motivated audit.  I feel strongly that the alleged gold and silver that these custodian arrangements supposedly hold is not even close to the published data, but that this "mystical gold" and "mystical silver" has been lent out or hypothecated to an extent that gravely compromises the liquidation values of the trusts.  I would wager that actual physical bullion was never delivered into the storage vaults in the first place on many occasions.  Wexford Capital Management receives orders on a weekly basis that are the result of enlightened investors finally getting religion that "American promises to deliver" are not worth the paper they are printed on.  We are not talking about the U.S. Dollar here or U.S. Treasuries, although some day soon we will be.  This flight from Paper Gold and Paper Silver will continue to accelerate going forward, and will reach a panic mode the nanosecond that a failed ETF audit occurs or is hinted at.  The millions of ETF holders have class-action status that will open many an empty bullion vault to the sickening light of day and subsequent prosecution of the alleged "trustees".  Maybe finally a financial services executive will get the dreaded orange jumpsuit and serve prison time along with Madoff and Corzine.  Oh, forgot ..... Corzine was big contributor to Barack.

Overall trading volumes are down for these major political contributions of the American Ruling Financial Class led by Goldman and Morgan, not just because the retail suckers in stocks finally read the memo that the market on Wall and Broad is a casino rigged against him or her, but increasingly overseas investors' money is entering emerging marketplaces where America's bad habits and crooked practices have yet to take hold.  The historic decline of American markets, along with the building decline in the use of the Dollar in international trade, will be a world-class lesson that few of these newcomers are likely to ignore or repeat.  As these budding exchanges in Shanghai, Singapore, Moscow, Mumbai, and Mexico City grow in size and stature, the fate of American Trading Homogeneity will have been well sealed.  Sadly, as corrupt as our current political system is here in the Divided States of America, so have our trading venues become places where corruption via preferential treatment and rule bending or outright violation has left a very bad taste in the mouths of the average American retail investor. 

Sage NOTE:  Massive losses in equities since the Year 2000 top in stocks and a "Lost Decade" of zero or substantially negative results from equity investing have also left a very, very, very bad taste in American investors' mouths, not to mention the reality of delayed retirement plans that keep on being pushed out further and further into the future for these fleeced investors.  COULD THE U.S. STOCK MARKET BE READY TO FORM A TRIPLE TOP AND BURN STOCK INVESTORS ONE MORE TIME??!!!  YOU BETCHA.  Three strikes and you are out.  Out of time and out of money.  That is the Sage's call.


Declining fundamentals, loss of confidence, and just prudent take-the-money-and-run psychology will eventually over-ride the giddiness created by an endless stream of Fed-printed liquidity.  We all know painfully well by now that Fed money printing DOES NOT PRINT FINAL CONSUMER DEMAND.  With a laughable BLS GDP number of 0.1% in Fourth Quarter of 2012, give me a fricking break that we have not been in recession for many a quarter now in the U.S.!!!   Remember also, when it is time to make out your Christmas gift list, that The Sage of Wexford has been telling you for years now that we essentially have experienced no true economic growth since the summer of 2007.  Especially in a debt-burdened/ consumer-driven country where the necessary liquidation of both good and bad debts has yet to occur in any meaningful degree at any level:  consumer, corporate, or Government.  What a joke it is to even suggest that Government debt has gone down during this Obama Depression when we are pushing the $17 Trillion National Debt Level BEFORE UNFUNDED OBLIGATIONS!!!   Per the ECRI data point of a prior peak in economic activity in July, 2012 ( sales, income, production, etc. ) that signals a current recession for the second time in 5.5 years, I have yet to see a stock market stay elevated no matter how juiced it is by overt and clandestine Government actions in the face of declining sales growth

We just had a little blip in some of the Government econ stats, but they do not a trend make.  People needed to replace automobiles of late because they are now driving them 15,000 to 20,000 miles per year with the sprawl of urbanization in America.  Not to mention car travel over air travel with the hassle and cost to get on an airplane today!!  That new car smell is overwhelmed by pet stinks and spilled giant sodas from the Bloomberg Deli right around 80,000 miles.  And lenders are back to their former "stupido" lending standards with interest rates of 2% to 3% for 60-month loans, not to mention home lending at below 4% to an increasingly challenged borrower class.  As an American, don't you get a sense of pride knowing that the FHA has taken over from bankrupt Fannie and Freddie Mae in the granting of 3% money-down mortgages as the guarantor of first resort to borrowers that often should only be living in their cars.  Another sure sign of insanity in the American Financial System.  Deja Vue All Over Again?!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Having jettisoned the vast majority of equities from my personal accounts as early as 1999, this is one man-on-the-street that has done just peachy in tangible assets during the last 15 years.  In fact, I was telling my managed account clients as early as 1997 that the financial markets were an inequitable investing venue and were overvalued even at that point in time.  And almost without exception, during that decade's raging bull that stretched equity prices to levels that would eventually not be exceeded for a dozen or more years hence, THEY LOOKED AT ME LIKE I HAD ANTENNAE COMING OUT OF THE TOP OF MY HEAD.  Yikes, an Alien.


Back to markets that treat investors' money well ......  one has to look no further than Gold and Silver regardless of the skullduggery that occurs on the Comex daily to attempt to cap prices and discourage bullion investors from exiting Decaying Dollars and Helicopter-Dropped U.S. Treasuries.  I was rolling in the aisles with laughter when I heard that our illustrious CFTC, the tainted watchdog!/ regulator of our U.S. commodities exchanges, was looking into the possibility of an investigation into the London precious metals price fix!  Wow, these government sleep-walkers have done such a good job of prosecuting uncoverable, manipulative short positions in silver on the Comex, that I highly recommend they spread their protective wings to international waters.  Could it be that the bidding up of gold and silver prior to the U.S. open is starting to take its toll on the ability of Goldman and Morgan with Exchange Stabilization Fund money in their Armani pockets to effectively slap down the precious metals silly in the first 2 hours of trading each day??!!!!!


Oh, I know that the last 2 years have been quite trying for Precious Metals investors, but price spikes like we had in the Second Quarter of 2011 can take a couple of years to work off.  This is a prolonged consolidation period and nothing else; hardly the end of the bull and, certainly, not the sign of a bubble peak.  In fact, now that the vast majority of weak hands have been washed out of Gold and Silver, the strong hands which include the central banks of China, Russia, Singapore and India can exert their influence by accumulating as many ounces as possible at these temporarily depressed prices.  You can rest assured that Dollar Weary central banks have been accumulating Gold and Silver reserve in lieu of paper currencies in vast quantities over this period, and the statistics show this surging trend in central bank purchases of gold in particular.  No more caps on central bank sales of gold a la a Washington Agreement in a world drowning in debt that is denominated in rush-to-devalue currencies; quite the contrary, Grasshopper, central banks are firmly in accumulation mode of gold and most likely silver in such countries as China and Mexico and probably Russia where "gold's poor cousin" has a history of having been a monetary reserve metal.  Monetary Reserve Metal history or not, I firmly believe Silver will be accumulated by central banks around the world in addition to gold because no one, including the "Doomsday" Sage with the thunderstorm cloud floating above his head, could have forecast how bad things really are in man's 2013 world of humongous unresolved bad debts in the $100's of Trillions.  Interest Rate Swap Derivatives are the next giant hairball to be coughed up on the world stage, Cyprus move over.


Russian Central Bank Gold Reserves March 2013

  Da Ya thunk they know something most Americans don't??!!

WE ARE ON THE CUSP OF A MAJOR MOON-SHOT IN BOTH GOLD AND SILVER.  I know I am the perpetual bull when it comes to these two ever more precious metals, I stand guilty as accused, but I see one in one-thousand clients that is even close to being able to buy a significant chunk of either Gold or Silver or BOTH at the absolute price bottom in a move.  "When you got the Dough, GO!", is my motto with gold and silver purchases.  Naturally, as a reputable and well-established bullion broker what would you expect me to say, but my clients have made many, many times as much money in their bullion positions since 1999 than I have made at a 1.4% average fee level in selling it to them!

Get in the bullion market while you can and leave market timing to the computers.  Shipping delays via backlogged product, not to mention increasing transportation & insurance costs for my distributors, are popping up in more and more of my Gold and Silver products as mints and refiners become overwhelmed with actual physical demand and the cost of doing business in the United States keeps going up.  Another very telling indicator that suppressed Comex prices will mean little to you in the end.  Depressed exchange prices when physical demand is surging ..... doesn't make any sense to anyone with a pulse and certainly doesn't make any sense to The Sage who still has a pretty good pulse at about 55 per minute.  The buoyancy of cork will not violate the laws of physics.

The U.S. Comex is going the way of the Doo-Doo Bird as a major global price "discovery" venue for both Gold and Silver.  Unfortunately, overall, we are a nation in decline.  But fortunately for you, you have a GLOBALLY-TRADED market where your fortunes will not decline, GOLD & SILVER.  Precious Metals are the final currencies of choice, or will soon be, THE WORLD OVER.  When the stock and bond markets collapse and the Dollar seeks its true value once again in the dustbin of history, these markets will soar to $5,000 for Gold and $160 to $200 for Silver.*  Fiat currency failures are facts of history and not figments of this writer's imagination.  American currencies have failed many times since 1776 and the current Dollar is about to meet a like fate.

Haven't I been right on the money since 1999?!!!!!  No guarantees, of course, but there is no guarantee that our Government or our Banks will be solvent with doors open on the 'morrow!  Note how the emergency $250,000 FDIC guarantee of checking accounts has now expired.

THE SAGE OF WEXFORD, putting money where it has treated me best.

* Actually, we will not have to wait for these climatic events; the TURN in both Gold and Silver prices is already beginning in my humble ( or not-so-humble ) opinion.  Accept that you will never buy at the absolute bottom in a move and move Dollars into both Gold and Silver when they are rotting in your bank or brokerage account.


gold Technical chart [Kitco Inc.]
Silver Technical chart [Kitco Inc.]


The renewal of the decline in Money Supply Growth Year-Over-Year assists in confirming the double-dip recession The Sage knows we are firmly within! 
Bennie Boy has floored the Economic Jalopy, BUT THE VEHICLE IS MERELY SPINNING ITS WHEELS ON A ROADBED OF DEBT-LADEN SAND!!!!!!!!!!!!!!



THIS CHART ON THE VELOCITY OR TURNOVER OF THE MONEY SUPPLY SHOWS THAT RECESSIONS HAVE ALWAYS OCCURRED WHEN THIS STATISTIC HAS BEEN EITHER FLAT OR IN DECLINE ..... AS IS NOW OCCURRING.  It appears that the velocity of the money stock has been in decline on a general trend basis since about 1980, at a historic peak in interest rates around 20%, so it appears that money turns over less frequently in the modern American economy.  This may be a very significant factor in the Fed's inability to increase economy activity just by flooding the system with liquidity or freshly-printed "money".  It takes more and more Fed Juice to keep the system fluid with such massive and progressive cash hoarding.

AND now with "scared depositors", such as in Cyprus thanks to Lagarde and the IMF proposing deposit haircuts to subsidize bad banking practices further than massive taxpayer subsides already made, WHERE IS THIS "SCARED MONEY" GOING TO GO????  When such cash sits idly in banks yielding negative real interest rates in a banking system where the depositor has generally lost faith and confidence, the "money" seeks out ANY returns outside of the economy and banking system, into the "risk-on" segments of asset markets.  However, with financial asset prices peaking, financial markets will no longer see this scared money in the 2013 Loss of Confidence Phase to the Greater ( Obama ) Depression, please make a note of this observation in your diaries.

Hey, Bennie, you had better work on your golf swing also!  I will certainly not shed a tear upon your departure early in 2014, your Honorary Weimar Central Banker spot is now solidly confirmed in history.  Note how this chart conforms to the bond bull market in reverse, a market that has now entered a mammoth secular bear phase!!










The Sage's venomous pen has pretty much run out of stingingly-honest ink since it has been copiously flowing over these electronic pages for the last decade plus.  The old expression:  "You can lead a horse to water, but you can't make it drink" remains as appropriate today as it did upon origination, probably back in the Wild Wild West days of this westward-bound Nation.  Getting slumber-walking Americans to wake up to the fact that the Once Great Country we call America is rapidly slipping into a position of Secondary or Tertiary World Status on almost all fronts:  Reserve Currency, political, economic, and financial, is a task I frankly have gotten quite weary of attempting.  Why any overseas investor would want to buy U.S. stocks in a country where corruption exists at the highest levels of Government, its central bank under Greenspan's clone, Bernanke, is buying up some 60% plus of all new Treasuries, and the country entered a new economic contraction in July, 2012, IS WAY BEYOND ME!  THE OLD EXPRESSION:  FOOLS AND THEIR MONEY IS SOON PARTED comes to mind.  Let's see, the trade du jour is:  Sell bonds to buy stocks.  Yikes.  How about selling your primary residence in San Francisco, CA to buy a grossly overpriced apartment in Hong Kong, China or New York City.  Seems like a "from the frying pan into the fire" type of move from one over-priced asset to another.  How can Gold and Silver be over-priced if the inflation-adjusted price from the 1980 highs for Gold is $2,350 and for Silver is $140?!


Note how analysts' estimates continue to come down for
2013 as we progress into the year and the year-to-year
growth in earnings 2012 to 2013 is a measly 7.7% if
these guys are lucky enough to be right!  Note how 2012
earnings estimates sank after about mid-year, and they
were off some 10% from first-half 2012 estimates!  How
can the U.S. stock market trade at over 15x forward 2013
earnings and the New York Fed call stock prices "cheap"?
Bernanke thinks growth in stock prices equals economic
growth.  NADA.  Main Street not growing.  Sage


It is just that soup lines are not funny at all.  It is just that hobo's jumping from freight trains into your town to seek survival is not funny at all.  It is just that daily riots in the streets of a population pushed beyond the breaking point is not funny at all.  It is just that not being able to get your hard-earned money out of America's shaky banks or getting an I.O.U. instead in 10-year Non-redeemable Treasuries is not funny at all.  It is just that watching your once-strong Dollars buy less and less of your daily bread with a concerted, conscious effort by those currently in power to DEBASE AND DEVALUE THE SOVEREIGN CURRENCY OF THE REALM is not funny at all.  It is just that watching your grandchildren and great grandchildren being stuck with a bill for your living large on borrowed money today that they can never hope to repay without civil disobediance is definitely not funny at all.

DEPRESSION IS VERY SERIOUS BUSINESS.  IT IS JUST TOO BAD THAT WE HAVE A BUNCH OF CLOWNS AT THE HELM OF THE SHIP OF FOOLS. They are literally pumping water into the boat with GLOBAL MONEY PRINTING, kind of a MONETARY BILGE PUMP IN REVERSE.  The solvency and viability of most of the Developed Nations of the World is just not compromised or listing to port at this very moment, THEY ARE ACTUALLY FRICKING SINKING AT THIS MOMENT.  But the captains of the ships of state are just letting the passengers dance on the deck of the Titanic while the icy waters fill the galleys below.  We don't want to cause a PANIC, do we??!!!  The Sheeple will panic on their own, thank you very much.  Americans may be an uninformed lot on many issues, but once their bank accounts start shrinking before their eyes, THAT IS A CALL TO ACTION.


This is the cost of shipping goods by sea
around the world, and one has to wonder why
that price has been softening substantially ever
since the March, 2009 low in stocks.  If there
was a global recovery with legs, see 2003 to
2007 period, this graph would be trending up.



The violin and case recently authenticated as belonging to TITANIC
bandmaster Wallace H. Hartley (W.H.H.) who played along with his
band until the Titanic slipped below the icy North Atlantic waters.  Is
Ben Bernanke going to be the lead bidder in the upcoming auction for
this historic, yet tragic, artifact???!!!  No offense to the Hartley family.

The way Americans and other suckers are literally throwing money at the Stock Market reminds me of August, 1987; January, 2000; and May, 2007.  Now say after me: 
"LIQUIDITY DRIVEN MARKETS ALWAYS END BADLY ....... ESPECIALLY BADLY WHEN THE UNDERLYING FUNDAMENTALS ARE CRUMBLING AT THE SAME TIME ASSET PRICES REACH FOR THE MOON.  Excess liquidity could be partially behind the 2009 to 2011 surge in Gold and Silver prices, BUT THANKS ONCE AGAIN TO THE SHIP OF FOOLS, THE FUNDAMENTALS FOR OWNING THESE TWO MONETARY METALS THAT DATE BACK TO THE IRON AGE ARE IMPROVING, NOT DETERIORATING ONE IOTA.  There is a huge difference between literally-free money flowing into assets with deteriorating fundamentals versus into those whose fundamentals have never been better in the history of man.  The former soon becomes SPECULATION, the latter has and will become PRESERVATION.  A sad monetary, financial, and economic history of man, regrettably, we are seeing repeat itself.  Greed is an elixir that once tasted feeds on itself to muddle the minds of normally sane men and woman.  Exponential price appreciation is the locoweed of investing.



The Retail "Chicken" who has been put in the fryer once
too often since Year 2000 has lost confidence in the
once-held strategy of investing in stocks to obtain
financial nirvana.  Burned in the pan until crispy!  So what
is keeping this market surging ahead?  Institutional
tape painting by the reptiles of Wall Street.  When they
exit the nest, all hell is going to break loose; and we are
very close to that event as my fingers fly across the keys.
No one wants to be last at a party where the booze is
getting stale.  Hear that Bennie Boy BERNANKE???!!!

I wonder if the Bernanke Fed ever got the memo that if printing money to buy government and mortgage debt was the road to salvation AND SOLVENCY, the Weimar Republic of post-World War I Germany would still exist in some form or the other.  And be King of the World.  Kind of reminds me once again of the Sorcerer's Apprentice where Disney's Mickey Mouse (Obama, Bernanke, Holder, Reid, Pelosi, Schumer, Durbin, pick your character) keeps using his magic wand to multiply the brooms and buckets to take the workload off of him/her such that when the minions run amuck and start flooding the castle with an ocean of water, EVERYONE AND EVERYTHING GETS SWEPT AWAY IN THIS MAN-MADE SEA OF LIQUIDITY.  ( I would wager that many retirement plans are getting swept away in the U.S. stock market at this very moment with the S&P 500 now at about 1646; new money-drug induced highs, yes. New hysterical, speculative mass behavior, yes.)

If there is Zero Cost to own money, what is money really worth?  Next to nothing.  There is no opportunity cost to just leaving money under the mattress, AND THAT IS WHERE A LOT OF MONEY OUGHT TO BE INSTEAD OF IN AMERICA'S INSOLVENT BANKING SYSTEM (or in stocks, bonds, and real estate!). 
You, my fellow Americans, are not being paid enough to keep your money in a U.S. financial institution that begrudgingly pays you 0.2% per annum for the privilege.  This is a safe place to keep money?  Bank of America?  Wells Fargo?  Citibank?  Chase?  I personally will boycott banks and money market funds in the near future when interest rates return to more historically sane levels as a form of payback for robbing me of any interest income for the last 4.5 years.  To cheat a customer for the use of their asset is tantamount to ROBBING THEM in my humble view.  Try 8% for 90-day cash in a system that is insolvent when pre-2008 accounting principles are applied.  The FASB has basically become a bevy of Accounting Prostitutes, no offense to you Ladies of the Night out there!

I will put my excess "cash" in gold and silver and colored diamonds AND  CONTINUE TO KEEP MY WEALTH OUTSIDE OF A SYSTEM THAT TREATS ME LIKE DIRT EVEN AFTER MY TAX-DOLLARS HAVE BEEN USED TO TEMPORARILY BAIL IT OUT AND TO REWARD THOSE THAT BROKE THE BANKING SYSTEM IN THE FIRST PLACE.  And don't ever forget the $3 Trillion of Garbage that Uncle Bernanke has assumed on the Federal Reserve Balance Sheet that you are also on the hook for either now or later.  The Government Motors, Chrysler, and AIG bail-outs were equally misguided and inappropriate; you are either a capitalist Democracy or you are not. As we know all too well from Obama's Green Energy Reign, THE GOVERNMENT DOES A FRICKING TERRIBLE JOB OF PICKING WINNERS AND LOSERS IN THE PRIVATE SECTOR.  Let the bad businesses survive along with the rotten banks and you can look forward to a Japanese style depression where even an Ocean of Yen will not set the economy back on track.

As Steve Forbes so eloquently put it in a recent interview, when you misprice an asset, the system eventually provides less, not more, of it.  THAT CAN BE SAID OF CREDIT IN THE WORLD ECONOMY TODAY.  If, for instance, you make mortgages to still-impaired borrowers at 3.75% today without any cushion for default or the nascent ravages of budding inflation, THERE WILL BE LESS MORTGAGE CREDIT PROVIDED IN THE ECONOMIC SYSTEM.  Lenders are just not being compensated for the risks they are taking to lend money to debt-burdened borrowers, and POST-CYPRUS, THIS INCLUDES BANK DEPOSITORS WHO HAVE NOW BEEN DEFINED BY GOVERNMENTS AROUND THE WORLD AS UNSECURED CREDITORS.  Back on the easy-money 2013 mortgage front, the Federal Housing Authority steps into the void created by the exit of Fannie and Freddie and puts you the taxpayer once again on the hook for the mortgages that are bound to be coughed up in the unfolding DOUBLE DIP we are already within!  THE STATE IS ONCE AGAIN THE GUARANTOR OF LAST RESORT OF DEBT THAT NEVER SHOULD HAVE BEEN CREATED IN THE FIRST PLACE AND WHICH NEVER SHRANK IN OUTSTANDING BILLIONS AFTER THE PANIC OF 2008.  Quite the contrary, mortgage and total global debt, private and public, JUST KEPT GETTING BIGGER AND BIGGER AND BIGGER like the gallons and gallons of water that the Apprentice's brooms and buckets brought endlessly to the fray.  If you think the Panic of 2008 was bad, wait until the Panic of 2013 unfolds WITH SOME $11 TRILLION MORE IN TOTAL DEBT IN THE WORLD TODAY, PARTICULARLY AT THE SOVEREIGN GOVERNMENT LEVEL.

How are these can-kicking governments going to bail themselves out when they were the lender of last resort during the last go-around????  Could it be Slovakia, like the Eastern European Serbia that saw the start of World War I with the toss of a homemade bomb, be the spark that ignites the derivative tinder laying in Trillions of Trillions of Dollar sums around the world?  Greece and Cyprus have now set New Millennium fiscal precedents as MICE THAT ROARED.  Slovakia would be a perfect contender in this System Buster category growing more populated by the quarter.  ( An audit of Fort Knox gold would provide the same result! )

I guess there was a Fed-Speak Leak in the Wall Street Journal today about the Bernanke Federal Reserve gradually pulling back the punchbowl (one the size of Yankee Stadium!) of ZIRP Money by fits and starts depending on market reaction is an attempt to quell the growing rumbles of dissatisfaction with Fed monetary policy. 
I think that even a 3-year old would know by now that printing money to keep interest rates artificially low to attempt to stimulate moribund economic growth in a debt-collapsed economy just does not work.  There is little demand for credit at any price when consumers, 70% of our maladjusted economy, have debt coming out of their ears.  But I think the bond market is going to take the Monetary Responsibility Ball away from the Fed and force the issue, Dove or Hawk sitting in the Fed Chairman's or Chairperson's seat.  I am watching the 10-year Treasury Note yield getting ready to pierce the whopping 2% threshold again and think that the turn in interest rates upward has already begun ANEW.  Pretty sure that Bill Gross of PIMCO has come to this same conclusion.  Markets as big as the Treasury market don't need a Fed Chair-whatever to tell them where bonds or notes should be priced.  Debt markets have always been very diligent at setting prices and, hence, yields, and it is only in recent times that Sovereign Governments thought that they were smarter than $Trillion markets at setting interest rates.  I really think a Global Bond Market Panic in 2013 is going to take the ball away from Central Bankers, and put some more rationality back in the setting of debt prices and yields.

IT WILL BE A LOSS OF CONFIDENCE EVENT THAT SHAKES BOND INVESTOR'S ABILITY AND DESIRE TO LEND ENDLESS SUMS OF DOLLARS, OF YEN, OF EUROS, OF YUAN, AT RATES THAT FUNDAMENTALLY DO NOT PROVIDE ANY CUSHION FOR THE REAL RISKS OF BEING A LENDER.  We now know that default risk exists for sovereign debt, just ask Greece debt holders that got pennies on the dollar for owning this toxic paper.  So default risk gets priced back in, then comes devaluation risk since every country has an unpublished goal to devalue their domestic currency in order to attempt to save any remaining export industry AND TO MAKE GOVERNMENTAL DEBT SERVICING EASIER WITH DEVALUED DOMESTIC CURRENCY.  The currency wars are already well into their 3rd innings, just take Japan as the Devaluer in Chief.  Now add in a dash of Inflation Risk since only Bernanke and Obama have been able to keep their own costs of living at 2.5% over the previous year, no one else.  Tax increases that do not show up in the CPI or other gauges of inflation are going to continue in 2013 to bite consumers in their wallets, and broke governments are desperadoes that will suck the last drop of blood out of their victims even if it extinguishes them ( the victim, not the governments ).  I would say that Americans are going to be faced with at least a 5% reduction in after-tax income in 2013 even with the top line of Gross Income staying flat as it has done so well for the last several years.  Add in another dash of State and Local tax increases with my beloved Virginia Governor raising the Sales Tax to 5.3% for the majority of Virginians from 5.0% on July 1st.  I think he eliminated the VA Excise Tax on gasoline at the same time, but you would have to be driving around all the time and sleeping in your car to break even on this one.


Mix this witches' brew slowly over a raging Monetary Fire where the Fed tries to reverse decades of monetary heroin injections with a twinge of monetary drug withdrawals to keep American Seniors from storming the palace, and VIOLA.  The Gates of Monetary and Economic Hell have opened!!  A crash or panic is a'coming in 2013.  If I am too early, then you get your subscription money back in Japanese Yen.

Okay, now for the part you have been slogging through this tirade for:  GOLD AND SILVER HAVE BOTTOMED AND ARE "BUYS" NO MATTER WHAT THE NIGHTLY NEWS TELLS YOU ABOUT SOME PRECIOUS METALS BEAR MARKET.  Ain't no bear market sports fans because we have seen both metals do 20% retracements and more time after time during this bull market and prior ones, and the trend of the super bull soon resumes.  We are on the cusp of that resumption of the upward trend.

Why?  Physical demand is off the charts, and the paper shorts have now been dominated by the Speculator category of COT report statistics and these Johnny-Come-Lately are seldom if ever right.  But it is the elimination of physical gold and silver from the warehouses of the Comex and the LBMA that speaks volumes about the unfolding change in the mechanism for price setting in these two critical monetary metals markets.  At a time in the not-distant future, probably by early Fall, the physical stocks of both Gold and Silver at these two major price fixing arenas will be so low that futures contracts will no longer be allowed to be settled in physical gold or silver.  The futures exchanges will no longer serve as a convenient and economical means for taking physical possession of either gold or silver.  A cheap financing mechanism in effect will no longer exist.  AND ONCE THE EXCHANGES BECOME CASH-SETTLEMENT ONLY WITH 100% MARGIN ( ask Jim Sinclair to explain that one, haven't figured that out yet except to think that the exchange will then offer 100%financing through margin, i.e. no money down, mega-leverage, butt hanging on the railroad tracks! ), THE FUTURES EXCHANGES WILL CEASE TO BE THE PRINCIPLE SETTERS OF PRICES IN EITHER GOLD OR SILVER BULLION.  Volume will recede substantially for these rule-bending, insider-trading floor shows and it will be Spring again in the Arctic.  And the Obama Administration might even provide a morsel of truth at a press conference or in sworn testimony to Congress!!!


These Large Speculators are basically the Bentley driving Hedge
Funds who have a terrible records at calling turning points in Gold.
They have piled on more short positions than at any time since
2007, and based on Monday, May 20th trading, they are getting
their privileged clocks cleaned as I type.  Couldn't happen to a
nicer bunch you say?!!  STAY THE COURSE AND SELL THE SECOND
HOME TO BUY MORE GOLD AND SILVER.  Probably made the 2nd,
final bottom in both precious metals today.  Huge intra-day
reversals today, a near-perfect bottom indicator on huge volume.

Price will be set between Central Banks, large private sales, and through an internet based trading system that will give real time bids and asks to any bullion participant around the globe.  "Change we can believe in" is really coming this time!  Where have I heard that before?!!!  Not sure how this will all work out, there are more knowledgeable guys out there on this topic than the Sage, but the panic move a la Goldman and Morgan with New York Fed financing to shake investors' confidence in Gold and Silver as Dollar Substitutes has backfired like a Hellfire missile.  Perversely, the April 12th and 15th take-downs of both Gold and Silver through massive short selling sanctioned by the Comex and the London exchanges was actually a death knell for the survival of such price-fixing operations.  Notice I did not say price-setting operations!!!!  Why would physical demand surge as the price falls precipitously over just a two-day period??!!  There is no lack of demand for both gold or silver; buyers were just waiting for a lower entry point after 2011 peaks of $1920 for Gold and $49 for Silver.  Buyers are swarming bullion dealers all over the world to get rid of currencies that they know are headed for much, much, much lower levels of Purchasing Power.  Bullion on the physical front, if sold at all, and WCM has had zero buy-backs of either gold or silver since April 11th, just went from weak hands to strong hands.  Expect prices to recover shortly and set new highs by summer of 2014.  Price action has been very favorable of late, and morning sell-offs are usually met with afternoon recoveries.  Not the sign of a bear market at all, just the reverse.  And Jim Sinclair has said that the lows are already in, so send him the hate mail if this does not prove to be true. 


Backlogs remain in most WCM Silver products but we work them down like beavers building a dam. 
THE END IS HERE.  Slovakia is about to hurl a financial bomb into the complacency of the Global Bond Village.  May not be that tiny country, my apologies in advance to its countrymen and countrywomen, but it will be a sovereign government default that triggers the maelstrom that will come to be known as the Sage's Panic of '13.  Guaranteed or you get a free trip to Buffalo in February of 2014, free peanuts included.  Lock and load.

THE SAGE OF WEXFORD, windy as ever, but confident as ever in what he speaks.





July 17, 2013:  Central Bank High-Wire Act Will Not End As Well As Nik Wallenda's Efforts Over Grand Canyon.


You already know the answer.  Just look at the U.S. economy in July of 2013 and you can see an economic engine still sputtering if not stalling after over $4.5 Trillion in Federal Reserve balance sheet expansion via money printing and after over 4 years of keeping money FREE at the Federal Funds level.  Free money!  No wonder stock, bonds, and now real estate have experienced increasingly speculative money flows during this same Obama "Recovery" time period.  Would you put a rookie pilot at the helm of a Dreamliner passenger plane??!!!  Americans and other nationalities never seem to learn from the lessons of history!  One bubble after the other, thank you very much Super-Academic Bernanke!  And of course his mentor, Greenspan, will not escape the sharp barbs of historical reflection on his own bubbles! 


Okay, you in the back of the class:  "What is wrong with
this picture??!!!"  Eventually, reality catches up with
foaming-at-the-mouth retail stock investors!!


Instead of corporations making capital expenditures to expand their operations and hire more workers, they are taking on record amounts of debt at below-inflation-rates and using this "free money" to buy back their own stock.  Reduce the number of shares outstanding and without any revenue or even earnings growth you have a reduction in the much-watched & much-vaunted Price to Earnings per Share Ratio! So stocks are labeled "cheap" even with flat to declining revenue growth which we seasoned investors that have over 40 years of investing experience know is a sign that earnings growth is soon to go flat to negative next!  Hark back to October, 1987 or March, 2000 if you want to see the environment in which a liquidity-driven market is ripe for a catastrophic blow-off phase that ends in an inevitable 40% to 70% decline in stock prices.  We have already passed that stage here in 2013, and are just waiting for the other shoe to drop in the bond market or in Southern Europe or in Over-Leveraged-Finance-Land and the top we have been forming for months now gives way to a Sickening Waterfall Decline.  Got the picture??!!!


Wow, what a money maker stocks have been since the
Year 2000!!  134 points on the S&P 500 divided by 1550
equals 8.65% + 30% for dividends or a total return of
39% divided by 12.5 years equals 3.1% or less than the
rate of true inflation during this same period. Whoopee.


Please see the 2000 to Present charts of Gold, then
Silver below.  Gold has gone from around $250 mid-
year 1998 to $1285 today or a gain of 414%.  Silver,
even as Morgan-Goldman have attempted illegally
to suppress the price at every turn, has soared from
around $5 per oz. in mid-year 1998 to $19.50 today.
Using my Cray Supercomputer, that is a stock-burn'n
gain of 290%.  Wow, am I the lucky one for having
virtually no positions in stocks beginning in 2000!
Only a Wall Street stockbroker would be telling you
today that the Gold/Silver Mega-Bull is dead!!!!!

Now, The Sage of Wexford, a.k.a., ME, has been saying for years that an end to the 30-year Plus Bond Bull Market is going to be the kiss of death to both the Fed's insane, misguided efforts and the speculative flows into stocks, bonds, and, yes ....... once again, into real estate.  House flipping has come back as an investor past-time in certain metropolitan real estate markets, and with mortgage rates still below 5%, who could be surprised aside from Ben Bernanke.  During the past year, from July, 2012 to this month, the 10-Year Treasury Note, backed up from an absurd 1.50% interest rate to 2.715%.  This reversal or bottoming in yield has to have wreaked havoc in the Second Quarter bank earnings calculations where large holdings of U.S. Treasuries have supplanted Loans to Businesses and Consumers during the Obama Recovery; if it were not for free money from the Fed to permit speculative trading by these same banks, the recent quarter would have been a blood-bath for the nation's banks in the stock market.  Ask any skipper that if the boat is lopsided in its cargo, then a capsize is destined to happen!  Regardless of what Bill Gross says about buying Treasuries at this level, a man who has no choice in running mega-bond funds but to invest some portion of investors' capital in bonds, I WOULD SHORT THE SOCKS OFF OF BONDS IN HERE.  NOT INVESTMENT ADVICE ...... I NO LONGER AM IN THAT BUSINESS.

Just an expression of the dire straits the bond markets here and around the world are soon to find themselves in with declining economic growth, and, hence, with declining ability to service debt AND INCREASING INTEREST RATES AT THE SAME TIME DUE TO THE GARGANTUAN LEVEL OF BONDS SLOSHING ABOUT THE GLOBE WITH MORE TO COME.  No shortage of bonds in the world, so why should their prices be so high and their yields so low??!!  Flight to safety?????  GIVE ME A FRICKING BREAK.  Don't ever, ever forget about Credit or Default Risk when you purchase a bond or bond fund or ETF!  The bond is only as good as the issuer's ability to make complete and timely interest and principal payments, pure and simple.



Although I avoid quoting Government Statistics about inflation and the economy due to the fact that they are mainly bogus and politically driven, I can say with certainty that my own cost of living has increased over 10% in the last year by comparing unit costs on virtually everything that I purchase at the lowly consumer level.  Once again, I want to thank the Governor of Virginia, who must have arm-loads of Rolex watches to lug around by now, he is such an ethical man, for the 6% increase in Virginia Sales Tax to 5.3% in Frederick County.  A Republican Governor raising taxes during a depression ..... how right on message!  Tea Party here I come, EVEN IF CONTRIBUTIONS ARE KEPT NON-TAX-DEDUCTABLE BY THE ROUGE I.R.S.  How about doing what is good for the country, Elephant Men, instead of what you think is going to be good for the Party!  Immigration reform comes to mind here, and I have the rails all ready for McCain, Rubio, Graham, Boehner to give them a swift, but uncomfortable ride out of town.  But I digress.

Mr. Obama and Gang:  a picture is worth a thousand words.  Now try to tell the average person on the street they are better off today than when The Anointed One first took office in January, 2009.  A man who has never run a business better not be attempting to run or gravely influence the biggest economy on the planet!!!


Far be it from me to deny 11 Million illegals the copious benefits of American citizenship that I will be funding well into retirement when they have so proven their regard for American law and customs.  By the end of 2015, there will be millions more unemployed college graduates that will be more than happy to take the jobs of those who are in this country illegally.  With over $1 Trillion in Student Loans outstanding, YOU AMERICAN SHEEPLE OUT THERE HAVE A VERY VESTED INTEREST IN THESE COLLEGE GRADS GETTING JOBS AND BEING ABLE TO ATTEMPT TO PAY YOU BACK FOR THEIR EDUCATIONS.  Yes, America, you are on the hook for all those Liberal Arts degrees that merely qualify a 4-year graduate to flip burgers at the local McDonalds and little else in the Obama Economy of 2013.

As a Nation, you cannot choose which laws you will abide by and which you will violate and still hope to maintain a civil and democratic society.  Anarchy comes to mind for any State that permits and perpetuates a dual-standard on the enforcement of existing laws.  Prez Obama and Eric Holder ..... I have enrolled you both in Summer Law School since post-bar exam you have abrogated your statutory duties to the American People in your persistent failures to adhere to the Rule of Law.  You both must have memorized the answers to pass the bar, because you have sorely forgotten the basic principles of American Law, especially those set out in the United States Constitution.

BACK ON TRACK:  Inflation is not a dead issue in my book, and will eventually spurt forth such that even the Government Liars will have to show a doubling or tripling in the reported rate to maintain some semblance of credibility.  Money printing inevitably ends in hyper-inflation EVEN DURING A DEBT COLLAPSE.  Scarcities of goods develop during a Depression with Currency Devaluation ( DCD ) because consumers begin to hoard physical goods that will cost increasing units of currency with progressive devaluation.  Goods in hand become more valuable and with greater utility than keeping units of currency.  Hence, prices eventually shoot to the moon, and the scarcity factor is reinforced by more and more hoarding.  Weimar Germany is the classic, modern-age study in this phenomenon.  Some bullion hoarders similarly hoard dry goods and ready Cash Dollars for the eventual Bank Holiday in America that leads to the whole domestic economy grinding to a temporary halt when vendors cannot get paid for delivered goods.


I personally am buying gold and silver at these artificially depressed levels because:

1.)  The Sage is brilliant but not smart enough to know when either GOLD or SILVER have reached a bottom in interim price movement.   Dollar cost averaging is an investment strategy for simpletons like myself.  Simple is good in an increasingly complicated world.  WHEN YOU GOT THE DOUGH, GO!

2.)  I can think of no other market where I feel comfortable placing my hard-earned money in a sea of financial fraud and pay-me-nothing interest rates in an insolvent banking system.  I will leave no large balances within the U.S. banking system, because Bail-Ins a la Cyprus are going to become the norm, especially as Deposit Insurance Funds run dry from insolvent Governments.

3.)  Maybe Monkey-See / Monkey-Do will assist my WCM bullion sales so that I can retire before age 90 without having to ever wear a Walmart Greeter's apron.

4.)  Something Nasty This Way Cometh as in the calm before the storm with clueless leaders around the world and equally clueless Central Banks and commercial bankers; I know from history that once the Comex and LBME are devoid of physical Gold and/or Silver in size to meet contractual requirements, the paper manipulators will be crushed by the ongoing rush to buy physical bullion.  Physical bullion buying around the world is setting new records today, and is unlikely to subside anytime soon due to worsening economic and fiscal solvency issues in some of the world's largest economies.  AND THAT INCLUDES THE UNITED STATES.

5.)  Backlogs of 3 to 5 weeks in physical silver with premiums at wholesale that are twice to triple normal levels do not justify a severely depressed Silver price of $20 per ounce.  Gold bullion products are destined to go into equally long backlogs with premium surges as early as September of this year.  90% Junk Silver, with a finite supply of same, comes in the front door one minute and goes right back out the back door the next minute; premiums in 90% are about 5 times normal, and historically they fluctuate between 35 cents under and over spot at the wholesale level.  These are just not normal times in the relationship between physical demand for both Gold and Silver bullion, and the paper-market depressed pricing that is being propagated by the criminal activities that are being allowed on the world's largest bullion exchanges.  These exchanges' days-in-the-sun are fading, however, as both Hong Kong, Shanghai, and Singapore emerge as stronger and stronger competitors to the manipulative, self-serving practices of the Western metals exchanges.  Money goes where it is treated best, period.

6.)  An exiting Federal Reserve Chairman who is now more worried about speaking fees and book deals than trying to right the damage he has done to America's economic and financial system is going to pull in the reins of Quantitative Easing.  He and every American with some semblance of a brain know that this Buy-Your-Own-Debt strategy, a simplistic, Ivory Tower approach that makes every Banana Republic on the planet look monetarily responsible, has been an utter failure, and he wants to show his future employers that he tried to do the right thing just before the Collapse.  Better late than never, huh, Bennie Boy!  Treasuries and mortgage-backed securities and anything with the handle, "bond", except for James Bond, are going to suffer mightily going into the Fall and toward year-end.  This on-again, off-again Q.E. Tapering Talk from the Fed shows just how uncertain our central bank is in its view of the current condition of the U.S. economy and financial system.  The Fed knows all too well that higher interest rates are the death knell for any permanent recovery for the economy, but also knows that capital flight out of Dollars due to insufficient yield and monetary/fiscal uncertainty is equally damaging to the Government's ability to sell its own debt.

7.)  The Debt Ceiling Debate for the Biggest Debtor the world has ever seen will be coming to a venue near you in the not-too-distant future.  Nothing could be worse for the U.S Dollar, U.S. Bonds of all stripes, and U.S. creditworthiness.  Gold and Silver will benefit greatly.  Super bull markets always take a breather before resuming their treks higher, and $5000 Gold and $160 Silver are still in my sights for market highs.

8.)  Consider buying both Palladium and Platinum in a world-market that is showing increasing scarcity with dwindling mine supply.  J.P. Morgan and Goldman-Sachs are not manipulating futures contracts in these two bullion markets, and probably cannot obtain the liquidity necessary in these much smaller daily trading volumes to make their footprints small enough to avoid public outcry.  These two metals are exhibiting the pricing behavior of commodities in increasingly short supply ....... how novel!

9.)  As to a requirement that the U.S. Dollar be in a definite downtrend for the precious metals to reassert their upward price action in a super bull market that will last 2 to 3 decades, I do not think a collapse in the Dollar is required for the next leg UP of this Super Golden Bull to begin.


I would hardly consider this 15-year picture of the Dollar's relative health vis a vis its overseas neighbors to be a sign of sustainable strength or a currency about to embark on a multi-year bull market.  Always remember that the Dollar Index is a snapshot of "relative value" where all fiat currencies are so compromised today that it is really a valuation contest amongst losers.  Flooding markets with tens of Trillions of Dollars of freshly printed currencies is not a recipe for strength or high relative valuations against other assets such as Gold and Silver.  With a modest spike after the 2008 Financial Collapse & Panic, this once-safe and secure currency has been in a trading zone that is now forming a wedge pattern, possibly a declining wedge.  Should the Euro break in the near-term due to an Italy or Spain or Portugal or Greece or France coughing up a giant debt-service-shortfall hairball, then this Decaying Dollar with newly printed Trillions floating about due to Bernanke's shenanigans, will look good by comparison.  ONLY A LESS UGLY CURRENCY IN A SEA FULL OF UGLIER AND VERY UGLY CURRENCIES.  Only cash under the mattress is a Dollar asset to own for that inevitable Bank Holiday.  The precious metals are far better to own because no government hack can create endless quantities of them at will and without regard to their resultant market price.


In summary, the super bull market in Gold and Silver is far from over as conditions that promulgated this bull market back in 2000 are becoming a stronger incentive to exit sovereign currencies and financial instruments and not a weaker one.  Just a multi-year correction that is being prolonged by illegal trading activities on the world's largest bullion exchanges, currently in New York and London.  SO ........ STAY THE COURSE, AND BUY MORE AT THESE DEPRESSED PRICES WHEN YOU CAN.  By this time next year, you will be very glad you did as you watch the rest of the investment horizon sink to levels not seen since 2008 and even 2000.  Bad times are here to stay; our Clueless Leaders and Bureaucrats, more interested in re-election or re-appointment than what is good in the long run for their countries, if they even know in the first place, are firmly behind the wheel of the Debt Collapse and Depression Titanic of 2013.  When Gold and Silver will soar to all-time-highs I do not know with exactness, but I DO KNOW IT IS IN THE NOT-TOO-DISTANT FUTURE.  Something nasty this way cometh.  BULLION INVESTORS WILL BE HANDSOMELY PAID FOR THEIR PATIENCE AND FORBEARANCE.  Giant oaks always take awhile to grow tall.

THE SAGE OF WEXFORD, I will always stand my ground and resist tyranny, lawlessness at all opportunities.  I was born a Free Man.  I expect to stay that way.


September 17, 2013:  The Pit and the Pendulum by Edgar Allan Bernanke.

As my tired fingers fly across the keyboard I have made the executive decision today to make this my second to last "Bullion Market Insights".   The November, 2013 edition will be my last.  I have been pounding the keyboard out for over 13 years now, and, frankly, I no longer enjoy writing about the same dire economic and financial conditions that will inevitably make both Gold and Silver two of the best investment choices for the New Millennium.  As long as I am buying and selling Precious Metals, my loyal readers will know that I am still bullish on them.  There is little I see over the next 10 years that will change this perspective, especially in a world where central banks, governments, and speculators have gone nuts issuing and accumulating record amounts of eventually un-repayable or unserviceable debt.

I turn more to the dark side this month as I see nothing but dark clouds and pain ahead for the world's economies, financial systems, and unsuspecting populaces.  Edgar Allan Poe was always one of my favorite authors; I already know what some would say about this enjoyment of reading about the strange and the macabre, but at my advanced age of 64 and counting, I really don't give a hoot what they would say.  I have been firm and unyielding in my convictions as to what would happen to a country and world addicted to cheap money, endless debt, and ballooning asset classes such as stocks, bonds, and real estate; and I have always put my money where my mouth or pen was.  My WCM clients, overall, have done very, very well by following my lead and exiting traditional asset classes and re-investing primarily in tangible assets such as precious metals and colored diamonds since the Year 2000.

We are really more at the beginning of the unfolding catastrophe that self-serving politicians and bureaucrats have put us within THAN AT ANY END POINT, and let's NOT EVER FORGET what those on Wall Street have done to steal the retirement cushions of millions and millions of investors around the world, not to mention the very foundations of economies and financial systems.  There may still be jail-time yet for these over-paid, self-dealing charlatans since there is no statute of limitations on FRAUD.  If we could only restrict their political campaign contributions!


I am going to try to stick to a bullet-point presentation this month, as I tend to ramble as I get angrier by the keystroke from the ill-conceived and ill-executed actions of those who currently wield historic and unprecedented levels of power around the globe.  It is very hard to watch an alleged "Doctor" actually kill the patient.  So let's develop the parameters of the giant PIT that the world now finds itself in and that will make any exit strategy from its bowels virtually impossible at this advanced stage:

1.  The calamity I see directly ahead is really all about DEBT AND THE GROWING INABILITY OF NATIONS AND PEOPLES TO REPAY AND SERVICE IT

Yes, that four-letter word that allows humanity to have instant gratification in the acquisition of Things, but can lead to disaster when it grows to its current size in every country on the planet.  THERE HAS BEEN NO REDUCTION IN TOTAL DEBT SINCE THE LEHMAN COLLAPSE IN 2008.  There are lots of figures floating about the internet regarding total outstanding debt at the consumer, company, and governmental levels, AND THERE HAS BEEN NO MEANINGFUL RETRACEMENT THAT IS SO NECESSARY TO GET THE GLOBAL ECONOMY STARTED AGAIN AND FINANCIAL STABILITY TO BE RESET.  ( Kind of like that "Reset" button with Russia! )


So after much hand waving and shouting, we are really pretty much back at the balance sheet levels we were at in 2008, certainly for the American Consumer, but please add another $5 TRILLION AT THE NATIONAL DEBT LEVEL AND $3.8 TRILLION AT THE FEDERAL RESERVE LEVEL.  And some $400 to $600 Trillion in Over-The-Counter Derivatives has not been written down to market-clearing value around the globe, has NOT gone away, but has actually grown in this 5-year Obama Recovery Period ( ORP ).  Major U.S. and European banks are as compromised today as they were in Fall, 2008, you can change accounting standards until you are blue in the face, the bad debts are still on their books worth some 10 to 15 cents on the Dollar.  And you know how the Zombie Banks Routine ( ZBR ) has worked for the Japanese since 1989.  Could this be another reason that the growth in Commercial Loans has been negative over the last 18 months as we enter Phase II of the Greater Depression??!!  And we are sliding downward in the economy my loyal readers; there never really has been any economic recovery either as I have stated many times over the last several years.  Time will prove me right on all these counts, stay tuned!



2.  An American Populace that is addicted to having their fun now and delaying any subsequent pain for future generations.

Yes, we Americans as a group are a very spoiled lot.  We have been living high on the hog for decades now since World War II, and we have continually elected and re-elected politicians at all levels, Local, State, and National that would promise and deliver the most goodies for the least amount of discomfort to us the recipients of all this plenty.  We have lived well beyond our not-insignificant means to eventually pay for all of this STUFF, whether it be food stamps, free medical prescriptions, retirement benefits, you name it.  So we can look in the collective mirror and chastise ourselves for aiding and abetting the enemy, and THAT ENEMY IS THE SOCIETY THAT WANTS IT ALL AND FOR EVERYONE REGARDLESS OF CONTRIBUTION TO THE KITTY ......... BUT DOESN'T QUITE WANT TO PAY THE BILL WHEN IT COMES DUE.  And sports fans, that bill has come due.

I truly hope this runaway wreck of a train called the Federal Government gets shut down in the next 30 days.  Now, I am not putting on my black Poe cloak when I wish this, but the spending of money that we will never have in a million years to pay back has got to stop at some point and if the American people are dumb enough to blame one party over the other for getting us to this point, then they also deserve the pain and suffering that will come with a Government Shutdown in 2013.  Rest assured that no Social Security check, Disability check, or Veteran's Benefit check will go unpaid during this calamitous hiccup, but we are so obese in our current spending at the National level that even a sharp slap on the back cannot dislodge the pork stuck in our collective throats.

DOING WHAT'S RIGHT FOR THE COUNTRY MEANS BEING THE BAD GUY SOMETIMES, AMERICA!  Your parents were the bad guys when they disciplined you with a belt or grounding in the days of yore ( totally passť in today's "anything goes society" ), but in the end the discipline you learned prepared you for an adulthood swamped with responsibilities!  YOU LEARNED THAT YOU COULD NOT HAVE EVERYTHING WHEN YOU WANTED IT, AND PATIENCE AND SAVING HAD THEIR JUST REWARDS.  Totally passť in 2013 America!

3.  A world that has now become addicted to CHEAP, CHEAP MONEY that is priced via yields or rates well below the true rates of inflation anywhere in the world.

Now this is where Edgar Allan BERNANKE and his predecessor, Sir Alan Greenspan, come back into view.  Aside from crushing the spending abilities of millions and millions of citizens that rely on INTEREST INCOME to participate in DISCRETIONARY SPENDING and the resultant very, very negative effects on economic recovery and growth in an aging world, artificially set interest rates a la the U.S. Fed and Central Banks around the planet misprice MONEY and cause a mis-allocation of resources that severely compromises the normal workings of an economy and financial system.

Money piles into stocks even as corporate earnings growth recedes in a receding economy, and leveraged investing via margin debt reaches new highs BECAUSE MONEY IS SO CHEAP AND AVAILABLE FOR THIS CHASING OF STOCKS.  There is the chasing of YIELD in a rate environment never before seen to be so low, in the 1% to 2% to 3% region while Man-On-The-Street INFLATION rages in the 6% to 9% region all day long in America.  Americans are back to buying new vehicles with nothing down and 0% to 2% loans out for 5 to 6 years.  Can they afford these vehicles out of savings if they lose their jobs.  Of course, not.  Nothing is put aside for a rainy day, partially because the banks and money markets are still robbing us of any reasonable compensation for the USE OF OUR MONEY.  Edgar Allan BERNANKE take a bow.  Might as well spend it!  Or chase stocks, bonds, or real estate with it!  Free money leads to free-wielding investing and spending on things and stuff that would not be acquired in a more normal interest rate environment.  If the cost to carry an investment or purchase increases, the propensity to spend declines to a level that supports more prudent decisions.  I WILL WRITE THIS ON BERNANKE'S TOMBSTONE IF I AM ABLE TO OUTLIVE HIM.





Why we would have ever thought that these academic/political class/ex-Lawyers would ever have come up with solutions in the first place is astounding to me, but Americans and other peoples seem to put this blind trust in GOVERNMENT in the Nanny State of today to cure all ills.  Actually, these elected and un-elected individuals have contributed more to the demise of our way of live than any other class of citizens, but that topic will prove itself in the weeks, months, and years to come.  Let's just suffice it to say that the proverbial bloom is off the rose, and Americans for one have now given their Fed Chair, President, and Congress of VOTE OF NO CONFIDENCE in recent polling, and this sea change will swing the pendulum away from allowing Government to impinge on every aspect of our lives ........ and in the process, SPENDING MONEY WE DON'T HAVE TO DO SO.

In fact, the public blow-back has been so strong of late, that even on Mount Fed, the God of Money, Edgar Allan BERNANKE, has gotten a thunderbolt strike on his ivy-tower head THAT FLOODING THE WORLD WITH FRESHLY PRINTED DOLLARS IS NOT WORKING and is actually creating the THIRD WORLD BUBBLE IN THE LAST 20 YEARS.  Now I know these clowns at the helm of the Ship of Money can see an economy barely growing at less than 2% per annum currently AND the Labor Participation Rate at 1978 levels, and scratch their heads that free money is not the panacea they thought it was.

NEWSFLASH FOR THE FED:  Have to have lenders who want to lend it; banks are still broke so they arbitrage the cash, and have to have qualified borrowers who are not wearing pampers they are so afraid of losing their jobs and drowning in the sea of debt they have already flooded their personal balance sheets with over the last 13 years.  THERE IS VIRTUALLY NO SAVINGS WITHIN THE OBAMA RECOVERY ECONOMY.  American Consumers still want to spend every excess Dollar they obtain, and they indeed have paid down virtually no debt worth mentioning since January, 2009.


Okay, maybe not ZERO Savings, but notice the trend since The Anointed One took office!

So this week we enter the Kabuki Theater play of FED TAPERING LITE where this academic/banker class of non-businesspeople at the U.S. Federal Reserve try to pull away the punch bowl from the drunk speculators in financial and real estate asset classes without causing the roof to cave it.  You see, Edgar Allan BERNANKE still wants a bronze statue in the public square, guess everyone wants to be loved these days, so he is trying to slightly close the door TO U.S. DOLLAR PRINTING BEFORE HE EXITS STAGE LEFT.  It is truly the left door, because he has been no conservative in his stewardship of the largest economy in the world and its once-sound monetary system.  $10 Billion of fewer Taxpayer Dollars spent each month to buy our own Treasury Debt, BANANA REPUBLIC STYLE ........... YIPPPEEEEE EYE AYE.

But I guess you have to start somewhere so that the Cheap Money Addicts on Main Street and Wall Street don't go into interest rate shock.  And you want to be able to tell your Poe-like grandchildren that you tried to do the right thing at the very end, BUT THOSE PESKY MARKETS WOULD NOT COOPERATE!!  Those free markets are a beast when you are trying to corral their every move!  Woe is Thee.

SIDEBARLike trying to corral cats in the U.S. House of Representatives.  Fireworks are a'coming Citizens, get your ring-side seats!  Cuts in the growth rate of Government spending are coming whether Lefties want them or not.  Unlikely an actual decline in Government debt in our lifetimes, but at least those pesky Tea Partiers will attempt to salvage some semblance of FISCAL SOLVENCY for their grandchildren, the Socialists' grand-kiddies be darned.  Never a good time to take away some feed from the Government Trough; riots have been known to happen.  In fact, I just bought a Remington 870 shotgun, 7-round, because that is what Vice-Prez Looney-Bin BIDEN said I should get instead of an AR-15!!  We see how that switch in armament works in reality.


This is also where currencies come into play in whether they are gaining or losing against one another based on underlying fundamentals and interest rate differentials for the issuing countries.  Even while the Dollar, a Sometimes Better-Looking Hag in a Sea of Witches, has gained of late in relation to other currencies as a Lesser Evil, not as a "good" currency, the real relationship will be to Gold and Silver going forward.  Dollar strength means nothing on its face because it is all relative in currency-land.  It is how Gold and Silver are priced in Dollars that really sends the message as to Dollar viability and soundness.  Stay the course.  It has been tough since around September, 2011, I know, but we did get a little spoiled with 400% and 500% gains in our two Sister Metals, so a pause is not unexpected or unhealthy for a super bull market.  All of us enlightened ones have been able to buy more metal at lower prices over this two-year slump, with Wall Street types jumping with glee that the Yellow Dog is down for the count so that they may off-load more paper garbage onto the maddening crowds.  Down, but not out!

2.  Markets through physical volume trading eventually take over from the manipulators in paper futures markets .

Turning back to Gold and Silver, the Pendulum in price discovery will begin to turn, once again, firmly in the favor of those who had the forethought to accumulate physical Precious Metals.  Americans, Chinese, Russians, Indians, and other awakened peoples continue to accumulate both Gold and Silver during the corrective period we have been in.  We can once again thank JP Morgan-Chase and Goldman Sachs for providing us with cheaper Gold and Silver, I have no doubt and neither does the CFTC that has failed to act once again to stop market manipulation.  But in the end, with the physical stock at the bullion exchanges at totally insufficient levels versus the amount of shorted Gold and Silver awaiting delivery in a panic, the physical market will increasingly set the price on all of the non-paper exchanges and resellers around the globe.  Investors have lost faith in the price discovery mechanism exhibited on major futures exchanges, and will take their trading elsewhere like Shanghai and Singapore where fair and open markets have begun to operate in size.  Money goes where it is treated best.  I have said this a thousand times, and it applies today more than ever.

But it is just when physical buyers have lost patience with a recovery in a commodity market that that market begins to recover, so don't go too far from your computer or telephone over the next several weeks and months.  The pendulum always swings back, and there is nothing under the sun to suggest that the multi-decade's long bull market in Gold and Silver is anywhere near being over.  What has gotten better since Year 2000????????????????????????????????

3.  Interest rates are headed higher around the world as stocks and bonds will begin their inevitable declines from grossly overvalued levels.

The Federal Reserve this week is attempting to Lead from Behind like our Fearful Leader in the White House.  The Russians are laughing so hard at how Obama handled the Syrian mess they can barely get the Vodka toasts up to their lips!!  By reducing the amount of freshly-squeezed juice that they are putting into the system ( that we know about!!! ), the Federal Reserve is playing catch-up with the overall global bond market where yields have been increasing since at least May of this year.  You see, even us dumb retail investors can eventually tell when a Junk Bond or Treasury or Corporate Bond is not providing us with enough yield to counter Inflation Risk, Default-Credit Risk and finally Interest Rate Change Risk.  So the 10-year Treasury is headed for well over 3% before the Turkey goes in the oven, coming off of a totally ridiculous low of 1.9% earlier in the year.  This current yield is still well below the 5% to 6% inflation-break-even yield needed to keep us dumb-arse retail investors ahead of inflation, so eventually us dumb-dumbs are going to require this yield before we buy any more of the Largest Debtor in the World's paper. 

Now with the Fed potentially reducing its role as buyer of first resort for U.S. Treasuries in 2013, and I have seen numbers ranging from 70% to 90% of all new issuance going to the Fed, the market is going to have more Treasuries to buy whether they want them or not.  Yields will go up based on a reduced Fed back-stop to buying, mark my words.  The Doctor at the Fed is trying to wean the Drug Addict off of its Cheap Money Drug one basis point at a time, but there are always convulsions NOT ONLY DUE TO MARKET EXPECTATIONS, BUT DUE TO ACTUAL MARKET REALITIES.  We have already seen the negative price impacts to stocks and bonds and real estate merely from expectations of the dreaded Fed Taper.  Now we are going to see the impacts to the downside in prices of these traditional assets based on the reality of less and less Fed buying of Treasuries and mortgages.  STAY OUT OF MY MEDICINE, GOVERNMENT, AND STAY OUT OF MY BOND MARKET ALSO!  It has now been proven to all that think for themselves, that the Fed has failed in its mission of re-establishing the U.S. economy and financial system back to pre-2007 health and stability.  PRINTING MONEY WAS NOT THE ANSWER IN A DEBT COLLAPSE, MY OH MY OH MY.  Who would have thought that more of a drug would not cure an addict??!!  ( Of course, this very minute we know they chickened out of doing the right thing, but today's Fed decision just means the collapse back to terra firma is going to be that much more drastic when they do bite the bullet and reduce the I.V. flow to the addict! )

Turmoil in financial markets is always a recipe for flight to safety, and there are only a few assets left that make fundamental sense to own in another Financial Collapse that is just around the corner:  GOLD AND SILVER.  The Platinum Group of metals, Pt and Pd, are reacting to bottlenecks in supply right now, but could become monetary metals in the future.  How novel for a precious metals group to react to supply and demand and not have the dirty fingers of Morgan and Goldman in their markets to push their prices below market clearing levels.  Note how Goldman always poo-poo's an asset while they are in the process of accumulating it, and then when it has soared to the moon, they come out with buy recommendations to unload their hoard.  FREE MARKETS IN THE UNITED STATES, MY ARSE.  Another example for historians of the crumbling foundations of a once-great empire.  As went Rome into second-class oblivion, so now goes the U.S.  But we are still very "exceptional" the way we do things, like buying $540 Billion of our own Treasury issuance per annum.  Left pocket to right pocket, robbing Peter to pay Paul.


As the Sage rides his trusty steed Silver on the Golden Road to financial salvation, he waves his 10-gallon hat fondly to those who bid him safe travels.  See you in November.  The markets will be ablaze well before then.  But we already have our asbestos fire-suits.

THE SAGE OF WEXFORD, tired of monotonously beating the same old drum.  Now it is time to rock and roll.

POST SCRIPT:  OKAY THE FED DOES NOT HAVE THE GUTS TO TAKE AWAY THE PUNCH BOWL JUST YET SINCE ANOTHER MARKET POUNDER IS RIGHT AROUND THE CORNER, THE FEDERAL DEBT CEILING BATTLE.  What should be equally concerning to financial asset and real estate investors is that the Fed must also realize that the economy is weakening at this junction, not recovering or stabilizing, so they are loath to impose monetary tightening in any form upon the masses.  What a bunch of Pampers customers these Fed people are!!  Well, stocks are on a tear right this minute, but my predictions remain:  Stocks are headed for a very bad fall in the Fall since economic fundamentals continue to deteriorate.  Earnings growth is declining, not increasing, and most economies around the world are wobbly, teetering on the brink of recession.  Retail investors never came back from the Lehman collapse in 2008, and the institutions can only keep the Ponzi Scheme a la Madoff going for so long.  You eventually run out of buyers.

Market yields will resume their uptrend once this REFLEX RALLY party runs its course, because rates are being artificially suppressed by the Fed, an effort that never can be sustained without adverse consequences over the longer term.  Mortgage rates are unlikely to return to the historically low levels seen earlier in the year because the credit-worthiness of borrowers continues to be subpar, and lenders need more cushion in mortgage loans to address repayment problems down the road in a still-sick economy.  The "bloom" is still off the rose.

THE BUBBLE IS STILL ON, AND DOLLAR DEVALUATION VERSUS GOLD AND SILVER WILL BE THE END RESULT, NOT TO MENTION EVENTUAL INFLATION IN DOLLARS FOR THE U.S. ECONOMY.  Edgar Allan BERNANKE GETS SCARIER BY THE MINUTE; would bet money that Bernanke and Obama had a private meeting just before this Fed meeting.  The asylum has been over-run by the patients.

Gold and Silver also on a tear for they know the Emperor has no clothes.


November 16, 2013:  One Door Closes and Another Door Opens
( Last Edition of "Insights").

I have been pounding out this epistle virtually every month since 2000, and I am frankly tired of doing so.  I feel gratified that I have received a lot of positive feedback on this effort, and that I have steered many astute investors away from the rollercoaster ride of the financial markets since 2000.  While bullion investors have been on their own coaster ride since August of 2011, their net gains since 2000 dwarf stock market gains by multiples of appreciation versus inflation-eroded stock market gains not worthy of mention.  Not sure as to how the bond market has done over this period, there are so many subsections, but I am confident we beat the pants off of the debt buyers during this period also.   Only fancy colored diamonds have an appreciation record into the New Millennium that can compete with Gold and Silver with more of a 100% to 200% net gain range.

I have mentioned in earlier editions that I was considering relocating to Iceland and then Norway (since Iceland has few trees and I am rather fond of these living things), but I have to wonder if I am shirking my responsibility as an American citizen born in Germany by not staying and trying to save my beloved Homeland from the ravages from within.  The United States as a country is in very dire straits.  You would not get this impression by listening to the general media, Washington, or our central bank, the Fed, but my loyal readers over the last 14 very productive years have a much more "enlightened" grasp of American reality than the vast majority of our population.  Unfortunately so for the latter.  Granted, my readers gleaned some of their wisdom from other venues, such as Jim Sinclair, David Morgan, and Ted Butler, but they fully absorbed what I put before them, AND ACTED ON THEIR HUNCHES AND CONVICTIONS. 

It is one thing to see the "light".  It is quite another to act upon this knowledge and to accumulate tangible assets such as physical Gold and Silver at every possible opportunity over a persistent period of many years.  My readers and clients have certainly swum against the tide of conventional wisdom.  It is not easy rowing a dingy up a waterfall of daily conventional tripe.  My hat, when I wear one, is off to all of you.  Keep up the good work.  Do your own homework.  Believe little that you get from the Mainstream Media.  Believe virtually nothing that you get from Government, unless it is very Local.  AND BELIEVE ABSOLUTELY NOTHING FROM THE SHILLS ON WALL STREET.  The Street is about to separate Americans from many of their investment dollars for the THIRD TIME IN THESE 14 YEARS.

Not only should you hold onto your Gold and Silver positions during this "manufactured crisis" in the precious metals market ( where have we heard that phrase! ), you should add to them when you can.  My target for Gold is still $5,000 per ounce, and for Silver a stock-busting $160 per ounce.  When?  Sooner than you think.  I know I have missed my forecasts of "when" and "how much" numerous times over the last 2 years, but I tend to under-estimate the abject lawlessness of Presidents, Legislators, and Central Bankers in vainly attempting to keep the latest and greatest Bubble of All Time going.  I should not have been surprised at a debt-laden country printing money to buy its own debt, but I am still surprised at the $4 Trillion to $5 Trillion to $6 Trillion off-balance-sheet that has been printed to do so.

We are firmly within the Second Phase of the Greater Depression.  The gargantuan failure of ObamaCare guarantees that the country will slip even further into economic decline in 2014 and 2015.  Did he lie or didn't he lie ...... who really cares as the Ship of State swirls down the Vortex.  Have not trusted the guy from Day One with his goal of "fundamentally changing the United States of America".  He has indeed done so just by turning the Health Insurance and Healthcare industries on their heads for insurance providers, medical providers, and patients.  I would have a very bitter taste in my mouth if I had pulled the lever for this guy in both 2008 and 2012.  And if by chance you fall into that "illustrious group", you are still empowered by the Constitution to act such that you become a part of the solution to this cancerous problem and not a part of the metastasizing problem.  I think we as Americans have been known to put our partisan hats aside for the good of the country.  There will be a lot of butt-covering by the authors of this ill-conceived, ill-planned, and ill-executed Legislative Monstrosity, but it is up to all of us to try to find solutions as Americans First.

THE MAJOR CONSTRAINT FOR US ACCOMPLISHING THIS EVENTUAL SOLUTION WITHIN THE NEXT FEW YEARS WILL BE BOTH THE ECONOMY AND THE FINANCIAL SYSTEM.  A healthy America can be magnanimous to embrace all of the Uninsured.  A fiscally-wounded America will not have the appetite or capability to do so.

We put men on the Moon shortly after Kennedy gave the siren call.  We can correct this Monumental Mistake if we all pull the oars together in the general direction of shore.  We sorely need a Uniter in the White House, not a Divider.  Not sure we will get that any time soon, but IT IS ALL ABOUT LEADERSHIP.  Pick yourself up, dust yourself off, and GET GOING AGAIN, AMERICA.  We are a Super Power when we reach consensus via compromise.  We are a Banana Republic when we fight endlessly amongst ourselves.  ( We are also a Super Banana Republic when the Federal Reserve buys 70% of all new debt issuance in our country! )

I have to give some more thought as to how I will communicate with readers going forward.  Possibly I will post truncated blurbs every so often when I just can't keep myself from returning "fire".  It is very hard to stay quiet when I see the once-great country that I grew up in during the 1950's and 1960's being ruined by a bunch of self-serving career politicians, Banksters, and Wall Street scam artists.  Incompetence always finds its natural level, and we can plainly see its work today in the good old U.S.A.

For now ..... Adieu

David W. Young, President
Wexford Capital Management
In business for almost 25 years now, a quarter of a century!



Warning, Warning, Warning:

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Sage is slowing down now that he is on Medicare!  But feels pretty good to be on the "receiving" end of the Public Dole instead of having been on the "giving" end as a worker bee since age 14, fifty-one years of serfdom.  Uncle Sam, a.k.a. Uncle Obama, wants you ...... to go on the take.  Helps with votes come November.




The information and opinions contained within WCM's "Bullion Market Insights" have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Wexford Capital Management, David W. Young or the Company's agents or assigns accepts any liability whatsoever for any loss arising from the use of this free newsletter or its contents. All periodic "ezine" articles posted on are strictly for informational purposes only. No statement or expression of any opinions contained within this electronic newsletter constitutes an offer to buy or sell any financial securities or surrogates mentioned herein. Readers are encouraged to conduct their own research and to perform extensive due diligence and/or obtain professional financial advice before making any investment decision, especially in the exceptionally volatile asset markets of today.  WCM's Principal, David W. Young withdrew the Company's Registered Investment Advisor status with the S.E.C. and the Virginia Division of  Securities in May of 2005 and no longer offers financial-asset managed accounts receiving continuous supervision of assets.  WCM's principal, David W. Young, was a Registered Investment Advisor in good standing from October, 1985 to May, 2005.  Furthermore, the company does not engage in any fee-based or compensatory provision of financial or investment advice.  The brokering of tangible assets sales via U.S. Rare Coins, Precious Metals Bullion, and Fancy Colored Diamonds is the sole business of Wexford Capital Management and the company cannot be construed under any measure as being in the "financial newsletter business".


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June 2, 2014, SageAdvice:   Complacency is a death knell to long-term investors.  Never think any trend will continue indefinitely as in UP for Stocks and as in DOWN for Precious Metals.  If we all have been such superb market-timers all these years, why aren't we on our own islands by now???!!! 

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