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Thursday, September 2, 2010

This Perma-Bear turning Bull

Don't get me wrong, the world financial system is sick, and will forever be so until honest accounting is restored for corporations.

However, I am optimistic on purchasing gold and gold miners here and now. We may be in for another round of spending. We have already seen announcements from Europe, and I'll bet anyone 5 bucks some shenanigans will be announced in the US as the elections approach.

There is no way I go long the general market, any long is risky. But I have and continue to like the extra bull market argument for gold. Gold is probably the ultimate ponzi-scheme, more so than the US financial system. For now, I trust that ponzi scheme more than the broader stock market.

So for me its gold, gold miners, silver, etc until further notice. I recommend everyone who is even considering buying into this area to subscribe to Gary of the SmartMoney Tracker. I resisted for quite a while, but now I am a full "ditto head" of Gary. I have no analysis on why to buy into this sector, Gary has a great newsletter rotating between a half a dozen reasons why it is a good idea.

Also check out Gary's latest commentary on the market. While I am quite a bit more cautious than Gary on the market optimistic outlook, it is a good read. And if he is right, yet another reason to go with Gary.

So in a way, I am an optimist. I am an optimist that the paper printing and corruption will continue until the bankers and governments are physically stopped. I am optimistic that because the root cause of the financial problems are being ignored, the problems will manifest in other ways. I am optimistic that before this very long crisis plays out to the end, near the final peak of the crisis precious metals will soar.

I am also optimistic that after the final crisis moment, which may be 5 years out, passes, precious metals will collapse in price as sanity is finally restored to the financial system. A good indicator of this about to happen is when sane accounting practices are restored.

In any event, I will review this viewpoint if/when the S&P 500 breaks above the April highs OR the S&P 500 below 1,000.

Good luck

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