Start Here

May 2013 Intelligent Investor Part 1 Opening Statement

Commodities continue to correct as we expected. As readers will recall, we were on the leading edge in predicting the correction in commodities more than two years ago.

At that time, with the CRB approaching 700, we discussed three possible correction destinations that we felt would be determined by the economic progress; one at 400, 450 and 500.

In contrast, many sources were insisting that commodities would soar due to continued quantitative easing.

What is remarkable about this is that these individuals have remained sour on the global economy and thus should have realized that weakening demand would outweigh any inflationary effects of loose monetary policy. This anecdote once again points to the limited if not delusional mindset of these reckless individuals, the list of which is much too long to mention here.

During our initial analysis warning of the commodities correction in February 2011, we stated that even the lowest support at 400 would not signal a reversal in the long-term bull market in commodities. We have already tested the 500 support and we feel that the 450 is possible in over the next several months. 

In recent publications we have been discussing the fact that gold does not protect against inflation. Moreover, given the various economic events and geopolitical risks, the price of gold should have been rising over the past two years. Instead, gold has remained in a worrisome bearish trend. Not even the persistence of quantitative easing has been able to resurrect gold pricing.

In defense of shrinking support for gold, the usual suspects have continued to spread myths, delusions and lies about the economy, the stock market, and gold. Unfortunately for them, investors are beginning to wake up. 

As subscribers are aware, we have been warning about the high price of gold and its limited days as a bull market asset. We have discussed this in reference to its perceived safe haven status, which as we previously noted has now all but vanished.

Last month gold suffered from one of the largest two-day sell-offs in history. As panic spread, the gold charlatans quickly went into hiding. A few days later after the slide stabilized, they were once again out in full force trying to lure more naïve investors into this non-productive asset by conjuring up all kinds of delusional conspiracy theories to explain why the price had collapsed. According to these con men, gold and silver were now at ridiculously low prices and the selloff represented an amazing buying opportunity.

This article continues.

To continue viewing this entry please sign in to your Client or Member account.


Restrictions Against Reproduction: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the copyright owner and the Publisher.

These articles and commentaries cannot be reposted or used in any publications for which there is any revenue generated directly or indirectly. These articles cannot be used to enhance the viewer appeal of any website, including any ad revenue on the website, other than those sites for which specific written permission has been granted. Any such violations are unlawful and violators will be prosecuted in accordance with these laws.

Article 19 of the United Nations' Universal Declaration of Human Rights: Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.

This publication (written, audio and video) represents the commentary and/or criticisms from Mike Stathis or other individuals affiliated with Mike Stathis or AVA Investment Analytics (referred to hereafter as the “author”). Therefore, the commentary and/or criticisms only serve as an opinion and therefore should not be taken to be factual representations, regardless of what might be stated in these commentaries/criticisms. There is always a possibility that the author has made one or more unintentional errors, misspoke, misinterpreted information, and/or excluded information which might have altered the commentary and/or criticisms. Hence, you are advised to conduct your own independent investigations so that you can form your own conclusions. We encourage the public to contact us if we have made any errors in statements or assumptions. We also encourage the public to contact us if we have left out relevant information which might alter our conclusions. We cannot promise a response, but we will consider all valid information.


0:00
0:00