Golden Dreams & Delusions: The Story about Gold You Haven't Heard (PART 6)

Continuing from PART 5

 

Forecasting Gold and Silver Pricing is a Guessing Game

It seems like every day we hear about some guy making gold and silver price forecasts, and these forecasts are invariably ridiculously high.

Some of these hacks insist that gold is headed to $5000; others say $10,000; some even say $20,000. I’ve even heard one clown “predict” $57,000!

How about $1500 silver? Sure! Why not!?

 

Maybe if I “forecast” $100,000 gold the media will line up to interview me.

Or maybe I should make up some stories about how I had the opportunity to coach someone with a great track record who “lost his touch.” But after I worked with him I turned him into the best he has been ever!  

Sorry, but I can’t reveal the name of this amazing trader. I can only tell you how great he was and how I was able to make him great again.

This should bring me loads of cash from the desperate and stupid people who believe this bullshit.

The following video proves that every snake oil salesman wants a part of the gold rush gravy train.

 

Hey Tony, stick to dancing on stage and yelling. But stay the hell out of the investment world you BS artist.

Now I’m going to tell you something that you probably have never heard before. No one can truly forecast gold prices because there is no fundamental basis for such forecasts, unlike the case with other assets which produce a stream of cash flows (or expected cash flows sometime into the future).

Thus, gold charlatans aren’t providing legitimate price forecasts for gold and silver because it is impossible to forecast pricing for these metals other than by use of technical analysis.

Instead of issuing legitimate forecasts for gold and silver, they are selling you snake oil hoping you will buy it because that means a nice 4 or 5% commission when you line up to buy gold.

Let’s see…if you buy say 10 ounces of gold at $1500 per ounce, a measly $15,000 in gold, it’s probably going to run you a nice $750 in fees. And that’s a modest transaction from one individual.

How many of these transactions do you think you would have each day if you pumped delusional gold articles all over the Internet each day?

Doesn’t the gold-selling business sound like an easy way to make a small fortune? If you have no ethics, by all means you should become a gold dealer.

Of course, the gold charlatans also make these ridiculous “forecasts” for gold and silver because if they are able to convince enough sheep that the price of gold will top $20,000 then it just might if enough sheep buy enough.

The entire mechanism represents a dishonest attempt to create a self-fulfilling prophecy based on the wave of manipulation of facts, creation of lies and delusional claims made by the gold charlatans.

The fact is that gold has no economic characteristics that can allow one to determine a price target based on a valuation analysis. Again, this is a fact.

While technicals can be used to help determine entry and exit points for trading purposes, they cannot be used to forecast highs for either of these metals. While you can use technicals to determine trading levels for gold and silver, there is no way to determine the top until months or even years after it has already formed.

Although gold has entered a bearish intermediate-term trend, it has not yet reversed its long-term bullish trend. In reality, the retracement in gold and silver pricing is actually healthy for those who wish for the bull market in precious metals to persist.

Because it is impossible to know in advance whether gold has peaked during its current bull market cycle, we advise gold investors to wait for conservative entry points and take profits according to the technicals, adjusted for fundamental events which are likely to affect gold pricing. 

But you aren’t going to get those entry points in this article. We don’t giveaway our research because it has real value, unlike the trash you see littering ad-based websites.

Again, the problem with investing in precious metals (especially gold) is that they do not generate cash flows (unless you trade them). Thus, it becomes more risky to take new positions with higher prices, especially when the bull market has persisted for several years because eventually, this bull market will come to an end.

What this means is that while we view attractive entry points in gold/silver between ********** (conservative) and ********** (aggressive), the reality is that the gold and silver bull markets could come to an end at any time. And no one would realize this until several months if not years later when gold and silver are significantly lower and trending downward. 

So how are these guys coming up with gold price targets of $5000, $10,000, $20,000 and $57,000?

Perhaps they are using fundamentals. Wrong.

While many of these shills refer to the “fundamentals driving gold pricing,” the fact is that there are no real fundamentals that determine gold pricing other than supply and demand. Even then, measuring supply and demand can be very difficult if not impossible due to the inability of knowing what the real movers of gold pricing are doing; the central banks and Wall Street.

Thus, there are no real fundamentals behind gold pricing. Perhaps there are some with silver, but certainly not with gold.

So where are these guys getting these price targets?

Straight out of their ASS. This is a fact.

At the end of the day, unless one is able to attach a valuation to an asset, rather than investing, one is gambling. The proper term in the securities world is “speculation.” 

“Do as I Say, Not As I Do”

The one question I that remains unanswered by gold dealers is this…

If gold is such a great investment, why in the HELL are you spending loads of money trying to convince people to buy it? 

Why don’t you just hold on to what you have and ride the wave all the way to the top? 

The reason of course is because gold dealers know that the gold bull market is in its later stages and they don’t want to be stuck with a full bag when the price drops.

This point is well-illustrated by the ironic and fitting consequence of the losses suffered by the moron, Gerald Celente from his gold futures trading account held at MF Global.

If you are a gold bug then you probably know of Celente. Some of you probably heard about his losses from MF Global because he used the situation as a way to generate more PR for himself. But apparently, the guy is such an idiot that he didn’t realize that this stunt caused him to loss what credibility he had among sheep. Others new he had no credibility to begin with.

Despite his claims of being a “trend forecaster,” (which in my opinion as a professional research analyst is a bogus designation) he has been pumped all over the media.

Celente tells the journalists to announce that he is the number one trends forecaster in the world without worry because there is no such thing as a trends forecaster; it’s simply not a legit designation in the field of research.

Despite lacking any real track record to speak of other than mention of generic events that were already in progress, the media credits him as some expert, although even they aren’t quite sure what it is he is an expert in.

Despite the fact that Celente revealed the basis of his “trends forecasting research” as consisting of “reading a couple of newspapers every day and looking for broad-reaching trends,” Celente has convinced his sheep audience that he has credibility. Of course, he’s had a great deal of assistance from the media in this regard.

So in other words, Celente waits for some bozo in the media to write about a trend that is already present, and then he predicts the trend is coming. Nice.

Every time this jackal sits down for an interview, he is introduced as the “man who predicted this and that,” yet there is no record of it anywhere.

You aren’t going to find anyone like Celente. The guy looks, dresses and sounds like he was born, raised and continues to live in the gutter (someone please send this guy a leather jacket from this century!).

If I had a choice whether or not to believe Gerald Celente or Kevin Trudeau, I’m not sure who I would pick. It’s definitely a close call even though Trudeau appears to do more research than Celente.

But of course, Trudeau has also jumped aboard the gold rush bandwagon as well because as a good marketer, he always goes with the herd so he can scalp them.

Celente’s "credibility" is of tremendous importance because he has been one of the pitch men for gold dealers over the past few years.

Celente knows that if he wants airtime he needs to pitch buying physical gold. Like all professional marketers posing as “experts,” Celente does whatever it takes to get media exposure because that means money, money, money through exposure.

After insisting that people buy physical gold and hold it, Celente lost his money trading gold futures. While he claims he was going to take physical delivery, I am willing to bet this is not the truth.

Celente claims that he has “been trading gold since 1978…I buy gold futures with the intention of taking delivery.”

If that is the case, then Celente would have a warehouse filled with gold by now right? Otherwise, he would need to sell his physical gold over the years to gold dealers and face a 5% fee charge.

 

Do you REALLY think he has been trading gold futures for 35 years and taking delivery upon expiration, and selling his physical gold to dealers so he can buy more gold futures?

If that's the case WHY DID HE GET A MARGIN CALL?

Someone who trades gold futures on margin is not likely to intend to take physical delivery of gold once the contract expires. Margin is used to borrow funds you don't have in order to make a trade.

Excuse me while I pause to laugh…

Do you really trust what this man has to say, about anything? 

Celente is clearly lying, but you shouldn’t be surprised. Listen to the way he speaks.

Does this man sound like the “leading forecaster in the world” as Jones claims?  He sounds like a squeegee guy in NYC.

If we were able to examine Celente’s brokerage statements over the past few years, I am willing to bet you would see lots of gold trading and very little if any physical delivery.

I can say I was going to sell a stock before it crashed and no one can prove me wrong. The way I see it, Celente lost his money due to Karma after misleading millions of sheep about so many things, not the least of which includes buying physical gold.

Now to end Part 6 on a funny note, let’s have a look at Peter Schiff.

Notice, he states that consumption has nothing to do with economic growth and he is buying commodities.

Keep in mind that during the time this segment aired (early 2011), the commodity bubble was in the early stages of correcting and is still correcting more than a year later.

 

Read the seventh and final part of this 80-page series.