The number one investment flaw is often revealed when investors panic in response to banker raids on gold and silver. In many aspects of life, being ruled by one’s emotions can often cause one to land in hot water. This is not to say that one should be devoid of all emotion and act like a robot, because no one likes a stiff and unfeeling person. However, as with life, balance is necessary. Yin and yang. Unfortunately, many of us, as investors, fall victim to the pitfall of making decisions from a raw emotional place, instead of a place balanced by logic, far more frequently than we would like. Even in martial arts training, letting one’s emotions get the best of oneself during a confrontation could be dangerous, whether one allows crippling fear to delay response and reaction time, in which fractions of a second make a huge difference, or allows anger to cause lapses in judgement that leaves one vulnerable to counterattacks. Furthermore, I learned that adrenaline surges that accompany the onset of anger are followed by adrenaline dumps that cause one to become unexpectedly and easily tired, a dangerous predicament during a prolonged confrontation.
In vlogging about this recent and ongoing gold and silver raid, I’ve discovered that emotions also prevent us from making prudent decisions in investing as well and I would label succumbing to emotions when making investment decisions as the number one investment flaw. Though all of us have heard time and time again that investing is an emotional activity, too often, many of us become so emotionally and inflexibly committed to a position that we never waver from our stance, even when we know that there could be a huge possibility of our stance being wrong, rather than to simply step away from the situation for a second, calm our minds, and make rational, logical decisions. Even though I detest the immoral, criminal banker raids against spot gold and spot silver prices that are, without doubt, a misanthropic attack on the freedom of humanity (as an attack on sound money helps elevate the status of counterfeit fiat currencies in the public eye), none of us who are long gold and silver, even if it is just physical gold and silver, should have to relegate ourselves to idly standing by without taking any counter measures against this abominable banker-executed manipulation. Just ensure that you do not react to such raids with undue emotions that constitute the number one investment flaw likely to result in poor decisions.
However, I sometimes receive strong negative reactions to revelations that we opened up short positions against paper gold and paper silver ahead of massive banker raids in order to protect current open positions we may have in physical gold/physical silver/PM stocks. Because I know that such protests are emotionally and not rationally driven, I am only discussing these instances for illustrative purposes so we can all learn how allowing emotions to be the driving factor of our decisions can lead to self-inflicted wounds in the arena of gold and silver investing. Furthermore, because I am such a strong advocate for the abolition of our current fraudulent, immoral fractional-reserve, fiat currency systems in favor of a sound money system, some people mistakenly believe that there is a conflict of interest in shorting paper gold and paper silver and being an advocate for sound money.
For example, people have occasionally written us, stating their disbelief, that we, of all people, would short paper gold and paper silver. There are those that have expressed even stronger emotional responses, claiming that, by shorting paper gold and paper silver in advance of banker raids, we are helping bankers push down gold and silver prices. If we actually believed we had any influence over the direction of gold and silver prices, then we would, of course, constantly write about our belief in much higher gold and silver prices ahead all the time, so we could lift prices higher. Furthermore, we will explain below that people that enter long positions in fraudulent banker gold and silver derivative products very likely are the ones aiding bankers in the suppression of gold and silver prices. In any event, allow me to explain why both of the aforementioned protests are patently untrue and rather just an irrational emotional response, and a reflection of the number one investment flaw.
To begin, bankers have these raids planned and coordinated well in advance of when they execute them. Whether we protect our open positions by hedging them with shorts against paper gold and paper silver, these strategic hedging strategies literally have zero effect on how far and how deep and long the banker attack on spot gold and spot silver prices will run. In fact, if bankers decided to end their spot gold and spot silver price raid at a time when we still had open shorts against paper gold and paper silver, then they could easily reverse prices and smash our open shorts if they so desired. Our open shorts serve the purpose of throwing off profits to hedge other open positions but certainly do not contribute to falling gold and silver prices. Furthermore, we only used these shorting strategies against paper gold and paper silver, and never advocated that our clients sell down their physical gold and silver stacks, as we foresee much higher prices in future years. Thus, we don’t see an ethical problem with shorting fake paper derivative gold and silver products.
In addition, if a great deal of people open up short positions against paper gold and paper silver and the trade becomes too lopsided, besides from such actions driving up option prices to prices in which they are unlikely to be very profitable, bankers still will identify opportunities in very lopsided trades, even in the midst of their ongoing raids, to minimize the amounts they have to pay out on these open short positions. For example, they may ramp up prices at market open to scare people out of their positions and then spend the rest of the trading day pushing prices down, they may illegally utilize HFT algorithms to quote stuff and quote spoof, thereby preventing any true price discovery and consequently creating massive intra-day price distortions that should never exist. I’ve covered these topics in much greater detail on my blog in previous years, so I’m not going to delve further into how bankers do this. However, to anyone that knows what to look for, the fact that bankers are committing such unethical immoral acts to prevent fair price discovery in options trading is quite obvious to a trained eye, on many occasions.
Furthermore, none among us should have any ethical problem shorting paper gold and paper silver products that claim to be 100% backed by physical gold and physical silver, but yet state in their prospectuses that nothing written in the prospectus should be taken to be true and ensures that no one but the criminal banker custodians of these funds is allowed to verify that any physical gold and physical silver is actually backing these products. I exposed the very likely scam of the GLD and SLV ETFs 8 years ago in this article. Though I would never go long gold and silver with these products, I don’t have problem shorting, on a short-term basis as a hedging strategy, what is very likely a fraudulent product that should not even be allowed to sell any shares to an unsuspecting public that may hold such shares. In fact, since bankers are very likely taking cash from clients that purchase (go long) such likely fraudulent products, and then turning around and utilizing this cash to suppress gold and silver prices, those that are long such products are more likely to be the ones assisting the bankers’ mission to suppress gold and silver prices.
To be balanced, we do receive some thank you notes after we predict large drops in spot gold and spot silver prices from a few people that accordingly took logical hedges in advance of these drops. However, by the fact that we often receive more negative emails from people that believe our exposition of a likely deep banker raid on gold and silver prices actually helps such a scenario manifest, than positive thank you notes from people that heeded our warning through action, this allows us to deduce that most people are being driven in their choices in the gold and silver arena primarily by the emotion of hope. Hope is not always a positive emotion, and it can be a negative emotion if it paralyzes someone to inaction and to ignore warnings of likely large drops in the gold price and silver price. Again, I would like for nothing more than large spikes higher in gold and silver prices to occur rather than large drops in price, but if we spot large drops as the likely course for the short-term future, it is best to execute some sort of strategy to hedge against these drops. in the end, if you continue stacking real physical gold and physical silver as you should, shorting fake paper derivative products as a hedge should have no bearing on the efficacy of your long-term wealth preservation strategies. Learning to remain unemotional in investment decisions, thus avoiding the number one investment flaw, is by far, in our opinion, the best strategy to embrace.
A must for all gold and silver investors, especially given the price volatility artificially created by banking cartels in PM assets, is to be able to separate our emotions from our decisions. We would all do much better to understand that banker raids will be part of the equation in the gold and silver arena as long as fake gold and silver derivative products that have zero relationships to supply and demand dynamics of physical PMs exist. Consequently, as gold and silver investors, we should all accordingly plan for such events when the data points to strong possibilities of their occurrence, as it did for the past couple of months. There is no point in selling false hope to the public with messages that the banker raid has bottomed, just to make people feel better, if this is not our belief based upon the data. Instead, it is imperative upon all of us to learn how to remove the bulk of emotions from our decisions. By doing so, we can weather such banker-driven raids on spot gold and spot silver prices with minimal discomfort by utilizing appropriate strategic hedges.
Lastly, let’s address the question of whether anyone in the world knows when gold and silver prices are going to head lower or rebound, and if anybody that predicts lower or higher gold prices is just engaging in a pure guessing game. The banking cartel 100% knows if gold and silver prices are heading lower or higher, as they execute their HFT algorithms in derivative markets to drive prices lower and higher. Outside of the shadows in which this banking cartel operates, many conclude that everyone else is just guessing. Again, this only true to some extent. By observing the movements and decisions of bankers in gold and silver derivative markets, one can make very educated guesses with high probabilities regarding whether their plan is to keep taking gold and silver prices lower or whether they are preparing to take gold and silver prices higher again. While it is impossible to be 100% correct in this regard as unpredictable events, like an unexpected Chinese State decision to move gold prices higher, or a major global bank bankruptcy, could foil an ongoing banking cartel’s desires to continue to move PM prices lower, the ability to make accurate predictions regarding future gold/silver prices is not pure guesswork by any means.
In the end, this banker raid on spot gold and spot silver prices, as long as it has been, as we are heading into the eight consecutive week of this raid, unless this week concludes with higher gold and silver prices, will prove to be just another hiccup, though a very long hiccup, in the upward progression of gold and silver prices that will manifest in the years to come. In the meantime, though this is easier said than done, with volatility always a factor in gold and silver asset prices, make it a point not to be ruled by emotions but to make decisions based upon the most realistic price scenarios.
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Coming Next: The Next Countries in Which the Banker War on Cash Will Escalate in 2017
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