21. The govts would respond by closing all major financial institutions. Hyperinflation would be born in 24 hours unless GOLD was brought into the ultra-immediate picture. There isn’t much gold to buy, so the public would be stuck watching every asset they own go into a tailspin.

22. Will it happen? I don’t know, but I do know this: Many of you sent me what you termed “portfolios” right around Dow 6500. I was horrified as I read the emails. These were huge price plopped shortsales into vast arrays of securities shorted into those lows. While holding no longs and buying nothing! We know what happened while I bought the Dow there. On the scorecard. Yet most in the gold community now have no short side equity bets, no short side bets on the bond market, not even one share. You are responding to price, yes, but in the wrong way. I am aggressively shorting the Dow, here and now. Most of those who shorted it in monster size at Dow 6500 are now wasting time arguing about whether it could go a “bit higher” or not. Who cares, I don’t. When it breaks they’ll chase it like lemmings and the banksters will whip them up and down, like a bullwhip on a poodle. I like to run a 70-30 model in all major asset classes. Meaning I’m willing to carry up place risk capital equal to 30% of my longside bets on the bear side of the equation. That may involve shorting a bit of gold or buying the US dollar. I prefer the latter, because you are buying an asset, rather than placing a bet. Here’s a look at the drastically overbought condition of the Dow on the daily chart, right now:

Dow Daily. Watch this blue uptrend line carefully!

23. I believe the dropping volatility indexes are coming to the end of their drop, and there won’t just be a pickup in volatility, but an explosion, as the public is jolted out of their slumber as the banksters go all out in their attack on the very credibility of the major govt bond markets, the credibility of their ability to make good on their guarantees. As we enter the 3rd stage of the gold bull market, the biggest error the gold community is making, in my mind, is continuing to feed themselves the fantasy food of coming public participation in the gold market. The public will sell even more gold as the bull unfolds. Take the picture you have on your mantle of the coming giant lines of the public, lined up to buy your pet portfolio of gold juniors. Throw it on the floor and stomp on it. It’s a nonsensical picture fuelled by wants, not reality. The public is financially dead. They can’t financially or emotionally buy 10 cents of bullion. The thought of buying or pouring money (that they would have to borrow) into massively risky gold juniors is totally abhorrent to them and no amount of price increase will work to change their mind. Those of you trying to educate family and friends about “quality juniors” are taking some serious risk as these people are in no condition whatever, neither financially nor emotionally, to take the action you want them to take. It’s time to look out your gold window and face reality. The public is selling gold, not buying it, in a frenzied attempt to raise cash to pay bills. They are selling that gold at huge markdowns (the worst I heard was $400 an ounce for actual American Eagles) at glorified pawnshops. These pawnshops are doing enormous business, and some are adding multiple truck terminals to haul away the daily loot.

24. There is no coming “greed” portion of the gold bull. This is the greatest crisis since 1929, and I think it’s much, much worse, because the levels of debt via the otc derivatives are much, much worse. Institutions will buy your juniors, and buy them in size, but not until the banksters show them that govt bonds, the biggest fuel of all for the gold bull, are totally on fire. If YOU believe in the gold bull, you must believe in the bond bear, and you must be prepared for extreme volatility of gold price action as the bear becomes the new gold theme. The bond bear will be countered by govt action, the action of new Quantitative Easing. If the govt fails in that countering, you are probably best to throw your gold in the garbage and move to a tropical island, because it’s mad max time if they fail. The Dow is more likely to close down permanently long before it ever falls to numbers like 1000. The banksters are preparing to attack the bond and equity markets and give birth to the 3rd phase of the gold bull market, ushering in price volatility that will be even more violent than the power of the actual upmove, which itself should be mindboggling. You need to do what it takes to make yourself emotionally stronger. 1085 took many of the gold community out. Few bought. Most sold. The coming urges to liquidate will be many times stronger than you just experienced at 1085, as the bond market comes into play as the dominant gold price factor, because the liquidity flows in the bond market are gargantuan. I guess that brings me back to that pesky little question:

Courtesy: www.gracelandupdates.com

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