"Dan, so how does the disconnect get resolved? It seems like to safer way to go is to believe the stock price action, which is forward-looking, rather than the POG. Hard to know what to do at this point...
Safer? Forward looking?
Not to my way of thinking. Day traders, swing traders, mo-mo traders.... Hardly what I would characterize as a 'forward looking' lot.... <GG>
Semantics aside, I prefer to think of it as more of a variance than a disconnect as the two will surely come back into harmony if given time to do so.
I am unshakeable in my belief that the PoG firmly rules this roost. I also believe that the PoG is the speaker of the truth and the variance will be resolved in the direction traveled by the PoG because that is where the big guys, the insiders, the informed, and the moneyed choose to play. An oversimplification to be sure, but one that, imo, is as assured as it is simple.
If I may quote one of my older postings:
It wasn't but a few months ago that I was playing the semi eqpts et al from both sides and having my head handed to me on a regular basis. I freely admit to being the world's absolute worst market timer.
It now seems that on most days I am only vaguely aware of the color that NASDAQ is wearing.
I made a LOT of money in the PM's this year. I lost more than a lot of money in non PM's.
Now I only believe the PoG! I also believe US Dollar! They don't lie to me. They may be intimidated at times by the forces of the PPT or whatever title de jour "they" may be sporting on any given day. But they don't lie. It's real hard, imo, to make the PoG tell a lie for any period time. It would take a lot of moolah to convincingly break the price of gold. It would take an AWFUL lot of moolah to keep it there for any appreciable length of time. 'They' have tried.... many times. It would take the coordinated action and bankroll of all the usual suspects, the Feds, the CB's, bullion banks, hedgers, and short sellers, to name but a few to push the Pog back to lower levels. This worked for almost 20 years. The reason it won't work now is that from Greenspan and the CB'ers on down, the rules have changed. Reinflation has become 'policy.' Support for a strong dollar is virtually non existent. Their support will be limited to assuring as orderly a decline as possible. In time, if not now the CB'ers will be paying premiums to reestablish their bullion inventories. IMO, The countries that end up having the highest % of physical gold in relation to their fiat paper money float will be the global winners because they will have something of estimable value with which to back their shrinking in value currency. I hope the USA smartens up real quick, but as of now, my money is on China and the Arab nations to lead the league in vault filling. All imho, and getting ready to don my flame retardant bull suit with the XXXL Golden Horns.
The Pog will lead the way and the PM stocks will follow. It's the nature of the beast and right now the beast is telling me it wants to go higher. I believe it.
Most of my friends are bullish on gold.... Many of them have sidelined themselves.... A few somehow got themselves short....
I think trying to play the PM wiggles is a 'fools game' when weighed against the potential long term payoff that awaits those that can exercise a high degree of patience.
Ham, It works for me and if you're bullish and own some decent to good PM's, it'll work for you as well.
Good luck to you, Dan
P.S. I see we just hit a very truthful $375 on the PoG. <VBG>
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