When the Music Dies…

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“Bye, Bye, Miss American Pie.
Drove my Chevvy to the Levy but the Levy was dry.
Them good ol’ boys are drinking whisky and rye.
Singin’ this’ll be the day that I die.
This’ll be the day that I die.
The day, the music died.”

(Apologies to Don Maclean if the lyrics are not quite right)

The Gold market is at the moment a bit like the old parlour game of yesteryear, when we all played ‘Musical Chairs’ after dinner on Sundays, before wall to wall TV, and other distractions began to isolate us from each other – except via digital means.

The game – for those who don’t know – involves putting together enough seats for all the participants, while playing music, and then removing one chair.

When the music stops, the last one to sit, is out.

The game continues until all the participants are out except one, as each turn gradually reduces the number of chairs to one.

The gold market is gaily playing the game, blissfully unaware that the gold (Chairs) are being continually reduced and one day soon, the Bullion Bank Gold Vaults, will be empty, and one of the players will want to walk away with their chair.(Gold) and the chair won’t be there.

The day that happens, will be like the day in the song above.
For those unaware the music was a reference to the airplane crash on February 3, 1959, when Buddy Holly, Richie Valens and the other musicians disappeared off the radar on a snowy journey in the Mid-West.

The evidence is stacking up for all to see. Those with even a small stash of Gold and silver will be the lucky ones when the music stops.

Exhibits A, B, C, and all the rest are from a web-site I visit on occasion, King World News,  which in recent days has been just full of evidence that the number of chairs is quietly, and incessantly being reduced, as the Chinese take all the chairs east.

The day the music stops, will be like the story of the Emperor who was wearing no clothes, until the small boy pointed out the truth.

Gold (and silver) will be worth a whole lot more, no matter what Harry Dent Junior says:

See below:

“A 42-year market veteran who predicted the recent spike in gold ahead of time spoke with King World News about the catalyst that is going to create a massive spike in the price of gold.  John Hathaway, who is one of the most respected institutional minds in the world today when it comes to gold, and whose fund was awarded a coveted 5-star rating, also included a fantastic chart.”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/1/27_This_Will_Create_A_Massive_Spike_In_The_Price_Of_Gold.html

Some more interesting information can be found at the links below:

This is how Gold will trade as Inflation and Deflation fight it out.

What is going on with Germany’s Gold in fort Knox?

Stock Market Crash – 2014?

As I’ve mentioned on a number of occasions. When that happens, Gold, Gold miners, Silver and Silver miners will be worth several multiples of what they are now.

During the 1970s, which is the only recent time we have to compare it against. Gold went up 25 fold. From its base at $35.00/troy ounce in 1971, to 1980, when it became $850/oz. Silver went up over the same period 31 fold – 31 times… Just do the Maths…

Those who had bought in the period when it was disconnected from the monetary base on August 15th 1971, the day that Richard Nixon – “temporarily” closed the Gold Window, were ecstatic. Since then the monetary base has ballooned.

The charts in some of the links above should give the reader some idea of by how much, and how far the price will likely go.

If I might hazard a guess? I’d say circa $8,500. I chose this price back in early 2004, when I began reading about the economy in depth, I haven’t changed my mind in the intervening 10 years, and Silver I feel will get to circa $500.

Although many perceive silver as an industrial metal, it is used in very small quantities, and is constantly being used up. Historically it was more plentiful than Gold, by a ratio of circa 16:1. However, in the tech-sphere there is no alternative, and it has almost 10,000
uses – More than any other substance on the planet, apart from oil.

Seventy years ago, above ground stocks were five time greater than Gold. The reasons were mostly because it had been used as money for thousands of years, but after the depression years, governments increasingly sought to eliminate it from the currency. (Read “The Coming Battle” – available FREE – to get the full history)

Silver is an amazing substance – Its light reflectance makes it the undisputed king for mirrors. Its conductivity makes it indespensible for solders and joints in electronics. It is a fungicide, biocide, and viruscide making it increasingly useful in the medical field killing over 650 different bacteria, and with the drive towards solar power, it is used in the plastics, electronics, glass and PV-cells that convert sunlight to electricity. With China and other emerging nations increasing their renewable energy sources, and even Saudi-Arabia, attempting to wean itself off oil for power generation, the demand is only likely to increase.

If you want to buy some silver – there are several dealers. For UK citizens, you can still buy silver coins and bars from Liberty Silver at VAT FREE prices.

And if you are after silver miners, the UK charts have precious few.

Fresnillo (FRES)
and
Arian Silver (AGQ)

Gold Miners are manifold, and account for a large proportion of the FTSE 100, which accounts for why the FTSE hasn’t risen as far and as fast as its US counterpart.

Mwana Africa (MWA)  is a junior miner in several African Countries, with the only Nickel mine, smelter and refinery in the whole of Africa – BNC. After a dismal few years with the global financial crisis, and Zimbabwean economics and politics, the price looks set to rise substantially.

Randgold Resources (RRS:LN) is one of the major miners with a wide array of African Gold mines, and a Market Cap of almost £4Bn.

Fresnillo, is also a producer of Gold.

Rio-Tinto (RIO) is one of the huge global miners, and who own 55% of a company known on the Toronto Stock Exchange as “Turquoise Hill Resources” (TRQ:TSX)

TRQ is a HUGE Gold, Copper and Silver mine currently under construction in Mongolia. Although limited production is already happening.  A fall-out with the Mongolian government a year or so ago, who own 30% of the mine has meant its price has fallen from over $20, to just over $4, but as the price of Gold and other minerals recover, and the dispute with the Government is resolved, the price should recover dramatically. And given the HUGE resource it’s previous owner discovered, the upside is for me, potentially one of the best in the mining space.

Another Gold specialist I was given a hint about is not a miner, but a company that provides up-front finance in return for the right to buy the ore at a fixed price, for the life of the mine. This means their share price is highly leveraged to the price of Gold. Sandstorm Gold (SAND) trades on the Toronto Stock Exchange (TSX) and like RIO the market manipulation of Gold and Silver (and miners) has lowered the price to the point where I feel it now represents an exceptionally cheap opportunity.

For those with a gambling streak, Continental Gold (CNL:TSX) is a junior explorer, but has recently found some excellent results in its drilling campaign to prove up the resources at its Colombian Property

And for those looking for a little more security, the others on the LSE, should offer some upside:

Xstrata (XTA)
BHP Billiton (BHP:ASX),(BLT:LN)
(BHPBF:US)
Anglo-Gold Ashanti (ANG:LN)

I could go on, but any of the major Gold miners should do reasonably well when the inevitable happens.

As always I have to state these are not recommendations.

Please speak to your broker or financial adviser before purchasing, and of course the usual, share prices and other investments can go down as well as up. There are no guarantees in life. But if you like what you read, don’t forget to share it with your friends and associates. (Facebook, Twitter, LinkedIn, Pinterest, or wherever…)

W.

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