We’re in the Money!

But first a word from our Mr. Greenspan

“Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.”

—Alan Greenspan, former Federal Reserve chairman, 2004… and then he casually takes off in 2006 just before a “once in a 100 year event”


We mentioned a few months ago that we expected to see the
Gold/S&P ratio below parity and it has come to pass. Gold 912. S&P 909.

We also wanted to see the Dow/Gold ratio in single digits. As of this morning we’re in the money!

Lease rates for gold and silver are rising steadily. Gold is at its highest rates since 2001. Lease rates signify interest from borrowers to entice owners of precious metals to relinquish their holdings, but no can do. Banks and investors are now hoarding like there’s no tomorrow. High rates show on a tightness in the market, and while we have had this in the recent past with silver, it is now showing up in gold as well.

Gold is rallying, but without all the attention you’d expect, and that’s a good thing. Hopefully it will stay this quiet at least until gold takes out its all-time high of 1,030.

78.49%! That’s my overall return for the year in Dow Shorts. Sure there are some long-term investors out there who’d probably threaten to kill me, or maybe blow down my bank (if I had one) but crisis is opportunity. Especially those who see the opportunity before the crisis hits.

I do expect markets to bounce here, acting as a decoy to destroy the sentiment of just a few more investors. I will not be covering however, as the spread between bid/ask for the ProShare ETFs right now are insanely high. I will hold just a bit longer, probably till the next capitulation whever it may be.

Someone sold. Isn’t it amazing how may “long-term investors” there are out there who are convinced that they could handle market decline until we have one. “Oh, I eat volatility for breakfast”. Then it shows up and their like “Aaaaaaahhhhhh! What do wo do now?” (The two quotes mentioned were actual quotes).

Good times! (well, not really)

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