Bullish Case For Gold (and Silver) Is Now Complete

Contrary to the wisdom of B.S. Bernanke; bubbles do not go up and up forever, and just weeks after assuring Americans of essentially infinite growth, the U.S. housing bubble (and U.S. economy) collapsed. Conversely, in the previous Bloomberg article we’re alerted to the fact that the price of gold just hit a “34-month low of $1,180.50 on June 28th”.

And there we have it: straight from the propaganda machine itself. U.S. equity prices are sitting (once again) at bubble-highs, while the price of gold is near a 3-year low and “sentiment” is “bearish”. Add in the Ultimate Market Maxim (“buy low, sell high”), and the Corporate Media has made the strategy of any rational investor crystal-clear.

The U.S. equity markets are currently in a rigged bubble, thanks to $1 trillion per year of Fed funny-money pumping them up. The same propaganda machine assures us that this time (after 4 ½ years of false-promises) that the Fed is definitely going to start “tapering” that money-printing in the near future (this time).

At that point, the sound we hear is the “pop” of another U.S. asset-bubble blowing up. Thus (rational) investors should bail out of those U.S. fraud-markets now (locking in their profits), and move into the undervalued gold market – before gold prices shoot right back up again.

How do we know that the price of gold must rebound? The Corporate Media provides the answers there as well. The previous quote already acknowledged strong “physical demand” – i.e. demand for real gold. The “bearish sentiment” to which the Bloomberg talking-head refers is (of course) only directed toward the paper-called-gold being (fraudulently) flogged by the One Bank.

Thus we have strong demand for (real) gold, while false bearish sentiment artificially (and temporarily) depresses the price. But the propaganda machine has still more ammunition for gold bulls, in a separate Bloomberg article published on the same day. Here we find out that the world’s largest gold miner is conducting a fire-sale as it fights for its survival:

Barrick Gold Corp. (ABX) plans to either sell, close or curb production at 12 of 27 mines as the world’s largest gold producer tries to bolster profitability after reporting the industry’s biggest write-off…

To be a little more specific than this Bloomberg quote, this $8.7 billion “write off” is equal to roughly half the market cap of the entire company. And as a result, future production from nearly half the mines of the world’s largest gold-producer is now in doubt. Even in any best-case scenario here, we are looking at a significant drop-off in supply from the world’s largest producer.

This comes fresh off the heels of a separate article showing U.S. gold mine production falling 5% month-over-month from March to April, and with the year-over-year numbers also being lower. Clearly the destruction wreaked by the One Bank in the gold sector with its savage price-manipulation is now directly impacting supply, with similar developments in the silver market.

Combine strong demand with waning supply (along with a sudden “run” on physical gold), and  the result is that Comex gold inventories have collapsed by more than two-thirds.

Our bullish case for gold (and silver) is now complete – with most of the ammunition supplied by the Corporate Media itself. The world’s best “safe havens” for the last 5,000 years are currently undervalued, with strong demand, plummeting supply, and inventories on the verge of complete collapse.

Meanwhile, in the largest Chump Market in the world (U.S. equities markets); we now have another asset-bubble – which yet again is totally ‘invisible’ to all the media talking-heads and their “experts”. With all these experts assuring us that these U.S. bubble-markets are going to keep going higher and higher, we know the bubble is about to burst.

Thus, while not needing any more bullish drivers, we know that there will soon be a panicked stampede of Chumps out of U.S. equity markets (after the bubble bursts) looking for a new “home” for what’s left of their investor dollars. The logical destination for those panicked investors would be either the world’s best safe-havens or the world’s most-undervalued assets.

Fortunately for investors, both of those avenues lead directly to precious metals.

This article is brought to you courtesy of Jeff Nielson From Bullion Bulls Canada.

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