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May 19, 2010 / Hal (GT)

Gold down today.

If you were looking at the free widget for tracking gold and silver today on your desktop you have watched a sell off of over $30 dollars in gold and 84 cents in silver.

Also, if you’ve been reading for a short period you know that there were a few who thought we would see a sell off, Peter Grandich and Jim Sinclair being the two incredibly smart guys I’m thinking about. Grandich thinks we are probably looking at the bottom of it here or rather near it in the least.

I’ve a couple of things worth your time today. Here is the absolute must read:

ALEA IACTA EST by Egon von Greyerz – Matterhorn Asset Management

It means, The Die is Cast, and you can stop here go read it now. Here’s a snippet to wet your intellectual and financial taste buds:

The table below [you’ll have to visit the link above to see it] shows debt as a percentage of GDP for various OECD countries. The official debts (in red) are massive and unlikely to ever be repaid in real money. Total debts (grey bars) include unfunded liabilities such as pensions and health care. Spain has the lowest total debt to GDP of 250%. Germany and the UK have around 400%, the US over 500% and Greece over 800% debt to GDP. These figures are absolutely astronomical and prove that most governments in the world will be totally incapable of repaying their debts or funding the pensions or medical care which they have committed to. It doesn’t matter however much governments cut expenditure or raise taxes, all these countries are insolvent and nothing can save them.

Next is a great short piece by Jim Sinclair: Stand Your Ground

This article of news is encouraging:

Gold sales for Indian festival rise 11 per cent

“Our sales have doubled over the previous year,” said Sanjay Jethwani, Partner of Meena Jewellers. “One customer alone spent more than Dh200,000. The boost in demand demonstrates a strong appetite for gold jewellery.”

I also found Wednesday David Engstrom’s post today on Lear Capital to be timely and right on the golden money: Gold at $2000 – The Trudge Report

Presto!  Just days ago (April 26) the Dow closed at 11,205 causing all the marketeers to eye Dow 12,000 as though it was a certainty.  Then, in a flash (May 7) it closed at 10,380, but that was an accident.  Today, so far, it has traded as low as 10,350.  That may change by the time I finish this writing.

With the Dow shedding about 7% of its value, the last few weeks have seen as much volatility as ever in all the indexes and now everyone wants to know, “why?”  As one anlayst pointed out this morning, a strong dollar is not a friend to the markets and of late, the dollar is showing Atlas-like strength.  This week’s Barron’s Magazine confirms with its cover headline “Stronger than Ever.”  So where do the markets go from here?  What does all this mean for gold?

Oh, before I go, I just saw this and read through it. It’s a great read from Trader Dan at Sinclair’s Mineset in response to an eMail: Trader Dan’s Mailbox

“I own gold. It is insurance. It affords me peace of mind. But I’m also a speculator. I own futures options and mining shares. As of today, I quit.”

Until the next time.


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