GOLDBUGS AMEX Goldbugs Index (GOLD)

[al44]

little blurb from Frank Veneroso. I regard Mr Veneroso as one of the top few who have a real handle on the gold market. The link is to the whole article, but I just pasted the small section from Mr V.

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http://www.stockhouse.com/Columnists/2008/November/17/Issue-No-1-To-adopt-or-adapt-Ticker-Trax


Frank Veneroso, a somewhat secretive market strategist, probably qualifies as both early adopter and adapter. Frank, when I first met him about five years ago, had largely been keeping his investment ideas to himself and a small group of select and wealthy clients. At the time, Veneroso was operating out of several locations, and I was fortunate in that one of the man’s offices was just up the block from where we were brewing my beloved CBS MarketWatch along the outskirts of San Francisco’s Financial District.

At the time, Frank V. believed strongly that governments were performing a kind of intervention in the flow of the planet’s money – largely by depressing the price of gold. On the WWW, I can still find some of that reporting I did on Veneroso. Click here to see it.

I am fortunate to catch up briefly with Frank Veneroso, who was absolutely spot-on about the sharp decline in values for commodity prices after hard assets notched a new high this past June. I believe he is based in New Hampshire these days. I asked him about gold coins and the premiums these coins are holding as investors start to seek alternatives to the planet’s currency exchange system, which is erupting on a daily basis.

Veneroso told me Monday (today) he does not follow the “physical gold market” that coins represent. But he feels good about adapting his “wildly bullish” view of gold when he saw the fiscal turmoil coming up the road.

In June, he says, “I was wildly bearish on commodities. I warned that the world would come apart and the commodity bust would take down gold and gold stocks and that a nuclear winter was coming in base metals and the other non-gold metal stocks would enter that nuclear winter. Of course I was too early. Anyone with any real understanding of the fundamentals had to be. And then of course when the bust came it was the worst in history.”

Veneroso continues, “It is not over for the base metals and other commodities. When the manipulations that went on come out, there will be a second leg to the revulsion. The biggest manipulations in history (they are). As for gold, I am wildly bullish. But the hedge funds remain big net longs. That worries me because there is huge fraud in the hedge fund sector. When that comes out, the investors will pull out almost all their money from that sector.”

And more from Frank V.: “But that aside, the U.S. is on a path of quantitative easing that the world has never seen. All economies will super ease. But the U.S. will be the worst. It is amazing to me that this is not issue No. 1 in financial markets. The hedge funds and investment banks have all gone super bullish on the dollar. This is just another hedge fund investment bank craze with a lot of herding and manipulation. They keep talking about a shortage of dollars when the U.S. is the world’s mega debtor and the world’s mega current account deficit economy. They keep talking about the dollar as a safe haven when the locus of economic weakness and financial crisis is here and the Federal Reserve is clearly on a path to debase the dollar because of the debt deflation here.

And finally: “It’s as crazy as the case they made for commodities in the first half, when the world economy was weakening, supply and demand responses were well under way and prices had gone higher in real terms than in any prior cycle in history. This is the last desperate bubble for this failing crowd. And when they are exhausted the dollar will fall very hard and gold will be released to the upside. That is all I know,” Mr. Veneroso says.

This is all we know and all we need to know. I believe that.