There Are Now Hundreds of Paper Claims for Every Available Ounce of Physical Gold and Silver
September 13, 2016
Trader Scott’s Market Blog
This article from King World News has an interview with gold permabull John Embry from Sprott. And he is once again spewing on about the huge paper claims for gold/silver per oz. “theory”. This gentleman, along with many others have been wrong for so long now – how in the world is anyone still listening to them. From July 1999 to March 2008, gold went from ≈ $250 to ≈ $1040. And then it fell to ≈ $680 in Oct. 2008. And then it rallied to ≈ $1920 in September 2011, and then back to $1045 in December 2015. Not once during that whole time did I ever consider this paper vs. physical claim when I made buy and sell decisions. In Dec. 2015, when I made a large purchase of gold, I could have cared less about the paper vs. physical claims and I still don’t care. And during that WHOLE period there remained a huge number of paper claims vs. physical. What that has got to do with when/where (time/price) we should buy or sell, I have no idea. Of course, the funny thing is that I am again wildly bullish (LONG TERM) on the PMs, especially the miners. But these folks never believe that there’s a bad time to buy gold. I was publicly bearish on gold starting in late 2011, and consistently warned the readers and listeners of this great website (archived), and other places also, to avoid buying gold and to just be patient until at least September 2015. This whole time the permabulls kept bringing up the paper vs. physical “theory”. So right now it’s hundreds of claims per oz. So how high is too high? Thousands per oz.? Millions per oz.? How does that help anyone.? We must never, ever invest our hard earned/precious capital based on any emotion whatsoever, especially fear. Yes, when the other market participants are very fearful, then it might be (but it is definitely not necessarily) a great time to invest. But in this situation, we’re using others’ fears to our advantage.
But now, somehow, Mr. Embry and I do agree on one thing. The PMs are in a major bull market. But that’s about all that we agree upon market-wise. For instance from this passage from the interview, Mr. Embry says:
“This bond panic has resulted in stock liquidations in many world markets. Hopefully this will make the investment public more cognizant of the extreme risks that exist today in conventional financial markets — bonds, stocks, and real estate — all of which are in the throes of historic financial bubbles.”
What bond PANIC? A few percent. That’s a panic? And I am going to repeat as to the subject I have been refuting since hearing it first in the Summer of 2009, right after the spectacular, major low in stocks. There is NO BUBBLE in stocks. I have been saying that for over 7 years and I’ll keep repeating it – from year 2009 at 6500 on the Dow to 18,668 at the recent highs, these folks have been scaring people to death with their constant chirping of a stock market bubble. They have been wrong this whole time and yet, they somehow maintain their “credibility” with millions of people. Mind-boggling. However, that does not mean that we can’t have substantial sell offs in the stock market. Of course, we can. I am not remotely bullish about the stock market currently on an INVESTMENT basis. But it has zero to do with a supposed bubble. It’s simply that the RISK/PROBABILITY profile sucks. But when did we begin to have to characterize all markets by the terms crashes, panics, bubbles, etc. No wonder so many folks are so confused and fearful about what to do with their capital.
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Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day.Scott returned to markets over fifteen years ago where he continues as an independent trader.
September 15, 2016 @ 2:12 pm Randal Magnuson
The quotes of KWN about PM was like getting “some hair of the dog that bit you”… :)… when someone makes a living by talking up a market, like a barber…everybody needs a haircut (buy pm, all day, everyday)…when looking at track records I’ve begun to agree with Scott… and because of his suggestions… especially recommended reading. . (Wyckoff) alot of the noise about market manipulation blah blah. .. becomes irrelevant. .. nice post..
September 15, 2016 @ 7:47 pm traderscott
Randal, I know that you’re seeing the light. It’s heartwarming. The stuff that I talk about, the reason I “know” it is because I had blinders on about markets also when I started. I had to learn what to ignore. I’m just trying to make it a cheaper and quicker process for you and the rest of the readers.