Hold. Steady. Wait until you see the whites of their eyes, vigilantes!
Weeks like this are what us dollar vigilantes live for. After all, we long sold out of the old and dying financial system. Let those in denial keep holding Dow and S&P stocks. They may even think they are up on their stocks over the last ten years. Poor fools. In real terms they are down over 80%. The sad part is they keep consuming and borrowing as though the “good times”, before 2007, will soon be returning. After all, that's what the government and media keeps saying. Green shoots! No double dip!
We know better.
We hold at least 30% of our assets in gold and silver bullion. That has tied us over very well. Gold is up more than $500 (more than 40%) since we launched last July and is at record highs. Silver has more than doubled.
We also have been advising subscribers to keep a sizeable cash position of late. 20-25%. We've even recommended that cash to be kept in Canadian dollars, Australian dollars, Yen or Swiss Franc as well as the US dollar so even the cash portion has done well. And now we are sitting comfortably and waiting to see how much the market sells off gold stocks, so we can look to buy in cheap.
We also have 15% of our portfolio in gold mining majors and 15% in junior gold mining stocks. Some of that position has been hurt this week, but we'll take it. That is because of our large cash position. We are only 50% invested at this time in the gold stocks (versus our cash position)… so any irrational pullback – and this is irrational with gold at all-time highs – is looked upon by us as a golden opportunity.
TDV Senior Analyst, Ed Bugos, will be updating subscribers this weekend on when and how we will take advantage of this bout of weakness.
Many will be asking if the TSX Venture Exchange (a reasonable proxy for junior mining stocks) is about to have a 2008 style crash.
Ed will be responding to that question also this weekend.
But, from the dollar vigilante's perspective, everything that happened this week adheres to our overall theme.
The US Government not only didn't make any cuts in their “deficit cut plan” but they actually all but guaranteed that the deficits will continue unabated, further hastening the default of the US Government or hyperinflation of the US dollar. In fact, by enabling a “Super Congress” in the debt deal they've almost singlehandedly turned the US into a dictatorship – without anyone even realizing it.
Meanwhile, across the pond, the seams are tearing rapidly now on the European Union. Greece… Ireland… Italy… the big ones haven't even yet started to crumble… Spain, France…. It shouldn't be too long before the euro is just another fiat currency relegated to the dustbin of history.
From an economic standpoint, we have been warning that we have been in the eye of the hurricane since 2009 and that we were about to hit the inner wall on the other side of it – and this one is going to make 2008 seem like a cakewalk.
Being properly positioned for the coming trying times will be critical. Ed Bugos will be sending a full update to subscribers this Sunday.
If you aren't already a subscriber, this is some of the pertinent information we offer. Ed Bugos survived the 2008 crash by being almost completely out of the market in 2007. He'll be telling subscribers this weekend whether or not he thinks we are in for another big crash or not in the gold mining stocks. Being properly positioned in this crucial time could be the difference between major gains or massive losses. Subscribe to TDV today to make sure you have access to the info and analysis you need to survive the storm.
