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When are Gold and Silver going to start a huge parabolic move up? I, 
personally, think that we are sitting at the cusp [of such happening] as we speak on an intermediate-term basis….Below are… the fundamentals and technical set-up [to that end].
So writes Goldrunner in edited excerpts from his most recent newsletter to subscribers (excluding his illustrative charts which are only available to subscribers) posted here with permission.
This post is presented compliments of www.munKNEE.com (Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
Goldrunner goes on to say in further edited excerpts:
1) The U.S. and other countries NEED Gold vastly higher to balance their balance sheets – there is no other way to deal with their huge debt loads except a Deflationary Depression. They have chosen a Stagflation Depression since a Deflationary Depression would be the end of the Fed.
2) The U.S. still has about $87 Trillion of debt that is not yet on its balance sheet according to Amerman. In order to get the debt onto the U.S. balance sheet, it would require the Fed to print a lot more Dollars.
3) Periodically for the last century, or so, the U.S. has devalued the Dollar to get out of these messes, and the DJIA to Gold ratio has approached a 1 to 1 ratio. In the early 30’s the Dollar was devalued 75% as the price of Gold was mechanically raised from $20 per ounce to $35 per ounce. In the late 70’s the USD was devalued about 75% via Dollar printing, mostly through the bank multiplier system. This time the Dollar printing must come via debt monetization/ QE. The point of the ramp up in debt monetization has to be timed to the cycle since the first real parabolic move up in Gold like in 1979 will start the clock ticking for when all of the debt must be on the U.S. Balance Sheet.
4) All of the talk about the Economy recovering is complete crap. The massive debts are still there, haunting the economy. All of the unfunded debts ($87 Trillion?) must be defaulted upon, one way or the other. The Fed is printing Dollars to cover around 60% of the U.S. expenses. The coming US Dollar Devaluation will likely approach the 75% level, and it will affect everybody in the States – bank accounts, Bond holdings, Stock holdings, Pension Plans, Life Insurance Policies – practically everything will be devalued by the same percentage as the USD. Only items with intrinsic value have a chance to rise enough to neutralize the Great Devaluation, and a few items will likely outperform.
5) We expect the price charts to continue to track those of the late 70’s fractal, since the Dollar Devaluation is fractal. Gold will be the inverse of the U.S. Dollar Devaluation – it has to be since Gold is the ultimate constant value and is denominated in Dollars in the U.S.. Because of this, Gold will be the first item that fully reflects the Dollar Devaluation like the late 70’s. This will allow physical Gold holders to rotate out of full valuation due to Dollar Devaluation into asset classes that lag like in the late 70’s. For instance the DJIA Stocks did not reach full re-pricing in devalued Dollars until the economy eventually recovered so that earnings and dividends recovered.
6) Silver and the PM Stocks carry more leverage than Gold at this point in the cycle so they will likely outperform going forward like the late 70’s where the PM Stocks made a final huge move after Gold and Silver topped. This was mainly because reserve valuations lag the rise in the price of Gold and Silver with companies bidding up those resource valuations late in the cycle.
Some are suggesting that “GLD” and other ETFs have hurt the Gold stocks this time around. That is crazy because we know that the PM Stocks traded much like today in…[the late 70’s] due to the shorting of the PM Stocks at this point in the cycle. GLD simply tracks Gold.
Those choosing to invest in PM Stocks do so mainly for two reasons:
- they are more comfortable with owning Stocks, or
- they want the leverage to Gold that the PM Stocks will offer.
The leverage of the PM Stocks to Gold comes from 2 sources:
- The coming parabolic moves in Gold, like the 70’s, will be “multiples” of the cost to mine it, giving leverage to the PM Miner stock pricing.
- The extreme coming price rise for resources in the ground, like the 70s, will propel PM Stock reserve valuations, higher. That is why the shorts will need to cover.
7) The short-term fundamentals are now screaming “Bottom.” The Gold shorts are “going long” per the COT numbers while the always long small specs are going hog wild short….
8) The Central Banks have been heavily buying so they will own Gold to cover the balance sheets problems. They have placed a solid bottom under the price of Gold that has supported the sideways correction in Gold. They only have till Gold reaches the lower log channel bottom to do so, and we are almost there.
9) ……[The information in this point reserved for subscribers.]
10) The current horrid sentiment toward the PM Sector as we reach the termination portion of this correction is to be expected as JS is pointing out. Most countries need Gold much higher as the cycle plays out so they are all aggressively devaluing their paper currencies…The paper currency indices will trade sideways in price while their values will move sharply lower to the tune of 70%, or more. Think about it – $87 Trillion Dollars are the needs for the U.S. according to Dan. We don’t have it, and we can’t get it in taxes – we have to print it all!
We have discussed [in previous articles]:
1) The Fractal relationship of Gold, Silver, the PM Stocks, the DJIA, the USD Index, Copper, and other price charts between…[the late 70’s] and today….
2) The Fractal comparison between today and 2005….
3) The Dollar Printing via the Fed Monetary Base Chart is…again breaking out to the upside. The correction in the Fed Monetary Base is over as the next run in debt monetization is now in progress, and it will drive the price of Gold vastly higher!
Conclusion
So, what is my answer to the question in the title? The fundamentals of massive Dollar printing, the COT numbers, the new expansion in the Fed Monetary Base, and the cycle all point up. Most PM investors are panicking, down. This is what JS has been ranting about, does it not?
- A Plea From Jim Sinclair: You Are Being Played – Do NOT Give Up Your Gold!
- Jim Sinclair: This is War – Don’t Play Their Game – Stand Firm – Stay the Course – Gold is Going to $3,500
…It looks to me like we are waiting for many of “the PM Bulls” to get off at the 3 Fan-line Station so Gold, Silver, and the PM Stocks can rip higher, leaving many to chase the PM Train.
Editor’s Note: The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
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