In the past two days, gold has dropped only -1.7% but the HUI gold bugs index has tanked a far greater -8.25% in just the past two days! Individual gold stocks, over just the past one to two weeks have tanked by an even much shocking margin, exceeding -20% and -30% losses, as you can see in the charts of Goldcorp, Alamos Gold, and Anglogold Ashanti below.
As I stated in my last two free newsletters (subscribe here), I expected these selloffs in the gold and silver mining stocks to occur, and I am on the verge of turning bullish again in gold and silver mining stocks. As I stated in the last newsletter, the two periods circled below are the only two times we’ve been invested in gold and silver mining stocks the entire year in 2015 thus far, and we’ve were fortunate enough, both times, to exit before the mining stocks started tanking again.
So is this the gold and silver mining stock washout for which we’ve been patiently waiting all year? Unbelievably, even though we started out the year with some of the lowest valuations in decades in gold and silver mining stocks, and it looked like a can’t lose opportunity for buying and holding gold and silver mining stocks the entire year, if you had done exactly this, you would now be sitting on huge loses year-to-date. In a highly banker-manipulated asset class, as is the case with gold and silver, there is only ONE thing that matters to formulating a solid strategy – understanding manipulation.
There will always be technical chartists that state, “Gold and silver are ripe to explode higher in price!” because of the extreme price undervaluation of precious metal assets, and there will always be historians that tell you, “This is the lowest valuation in 20 years!” but the truth of the matter is that bankers DO NOT TAKE ANY OF THIS INTO CONSIDERATION when manipulating and suppressing the prices of gold and silver assets. The only thing that matters to criminal bankers is to keep their Ponzi fractional reserve banking system going and to keep stock markets elevated for as long as necessary to exit the system before they reverse their positions and then short stock markets to make a killing on the downside. I’ve literally stated dozens of times, over the years, since I started my maalamalama blog in 2006, that bankers “paint” technical charts to create an expectation of certain price behavior, and then use these artificially-created and manipulated expectations to bankrupt as many people as possible and to reap as much profit for themselves as possible, especially when it comes to the asset class of precious metals.
If you look at the Hui gold bugs index: gold price ratio at the very beginning of this year, this is the chart you would have analyzed.
And if you looked at this chart at the very beginning of the year, it would have seemed logical at the very beginning of this year to have concluded that this year was going to be a massively positive year of returns for gold and silver mining stocks. However, analyzing fraud and banker manipulation is a dynamic game, as bankers are continually stepping up their games in their collectively executed fraud and manipulation throughout the year. For this reason, one can’t make an assessment, and sit on the laurels of this assessment, even if it turned out to be a solid assessment. One must constantly update one’s assessment of the banker fraud and manipulation game on a daily and weekly basis. As you can see, one of the periods of time we actually held gold and silver mining stocks this year for our fee-based members was at the end of this year into January of 2015. However, because I constantly analyze banker fraud and manipulation, I spotted many things in January that made me uncomfortable with continuing to hold our positions in the mining stocks DESPITE the more than 20-year low valuations in gold mining stocks that existed at the time. Therefore, I made the decision to SELL all of our mining stocks on about January 21st of this year.
The lesson here is that manipulation trumps logic, technical charts, and even history, as this year has clearly shown. Here is the hui:gold chart for this year in 2015.
One would have assumed if one were a logical thinking man, that the hui:gold ratio would have reverted to the mean after being at 20-year lows to start this year. However, instead of reverting to the mean, this ratio just kept heading lower and gold (and silver) mining stocks kept tanking this year. Consequently, this is the reason we have only been long in gold and silver mining stocks for 40 trading days this year, and during the rest of the year, shorted gold paper ETFs and silver paper ETFs multiple times. So after another year of waiting, do I feel frustrated? Absolutely not. Recall that in March, I stated that one of the most important attributes one must possess to see an investment strategy through to conclusion in a massive payoff is patience. The criminal bankers’ manipulation of gold and silver prices this year instructed me that I needed to remain patient, so we have remained patient all year. The last time I was this patient, since I launched my fee-based services in 2007, was way back in 2008, when the US stock market sold off by nearly 50% and we remained positive with small gains that year, as has been the case for us this year as well. What happened the following two years after we exhibited excessive patience waiting for just the right set-up in gold and silver assets? We returned +63.32% and +32.59% the next two years in our Crisis Investment Opportunities newsletter for a cumulative two-year yield of 116.55%.
I feel very strongly that we will exceed these yields in gold and silver mining stocks in the years ahead when we finally turn the corner once again. In the meantime, Wall Street bankers are plunging gold and silver mining stocks, because trust me, they have been eyeing this asset class and plan to utilize it to re-capitalize their bankrupt banks by reaping enormous gains on the ride higher with this uber-undervalued asset class. And when this turn comes, I plan on having all our fee-based members on board after our long stretch of patience. For more information, please come by and visit us at maalamalama.com.