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Whom do you believe?  Larry Edelson and his view that “gold will plunge below $1,500,” or Jim Sinclair and his prediction that “the bottom is in and gold is now moving toward $3,500?”

The rubber is about to hit the pavement.

Here is what Sinclair had to say, followed by Edelson.  I ask you again, whom do you believe?  The choice is yours.

Eric King interviews Jim Sinclair:

Eric King:  “As you predicted over the weekend, gold has pierced the $1,600 level on the upside, and it looks as though the physical buyers, the central banks and others, have begun to raise their bids and pressure the shorts.”

Sinclair:  “The thesis upon which the hedge funds have gone short of gold has now been destroyed.  This is the birth of a transition of the gold market to a cash market.  The paper markets will now be moving towards becoming cash markets.  It is the birth of an entire new era of trading in what, up until now, has been a paper-dominated market for gold when it comes to setting price. 

Ultimately, this will mean the end of the manipulation of the gold market because it will become 100% cash.  Paper, in gold, is about to exit as a business as the physical market retakes its rightful position once again, and the physical market makes the market price in gold.

This will be the beginning of a minimum $1,900 advance in gold.  This will represent more than a doubling of the current price of gold as all hell breaks loose, and this Cyprus catastrophe has a ripple effect around the world.”

Continue reading on KingWorldNews.com

And now, here is Larry Edelson:

The Next Inflation Surge: When Will It Come?

Monday, March 18, 2013 at 7:30 am

Right now, I remain bearish most commodity markets. The reason being, they simply have not fulfilled a short-term cyclical test of support. So, more downside is possible in gold, silver, oil, and an assortment of other commodities.

In fact, I expect we’ll soon see gold break down and plunge well below the $1,500 level and head even lower … silver crater through $26 and drop to below $20 … and crude oil plunge to below $70.

We’ll see food prices also get creamed. Sugar, coffee, cocoa, corn, wheat, and soybeans. Just about every commodity under the sun is soon going to sink further.

That’s because we’re not in the next phase of inflation yet. Rather, we’re in temporary deflation.

Deflation brought about largely because the only money that is moving these days is coming out of sovereign bonds and going into equities … and because taxes all over the world are headed up, threatening to send the rest of the capital that’s out there into hiding, rather than into business formation or investment.

Continue reading on MoneyandMarkets.com

He also says this too shall pass and inflation will come roaring back and gold will rocket higher.  The final chapter in Edelson’s book will mirror Sinclair’s but what about now?  Where are we headed in March 2013?

I just returned from attending a financial conference in St. Petersburg, FL where my son Andy Schectman was making a presentation.  I had a long talk with our friend Rick Rule, who recently sold his firm, Global Resources, to Sprott Asset Management.  Rick is one sharp individual.  Rick is about as bullish on gold and silver as you can be.  When people ask him “Why hasn’t gold gone anywhere lately?” he replies, “What do you mean it hasn’t gone anywhere?  Gold is up over 500% in the last decade.  If you walked down the street and a gas station had a sign on the window ‘gas on sale, 20% off’ would you stop and buy some, or drive on by?”

All of the folks at Sprott are super bullish.  However, for a vast majority of investors, the commonly held view is that “gold has no utility.  No one needs it.”  If I point out “The Dow has hardly gone up at all, in a decade, while gold is up over five hundred percent,” they come back with, “Gold is in a bubble.”

A close friend recently attended an investment lecture in Boca Grand, given by a prominent TV personality.  The auditorium was packed with ultra-wealthy individuals.  The speaker asked a question, “How many of you agree that gold is in a bubble?”  Every single person in the audience (except my friend) raised their hand.  I asked him, “Why didn’t you speak up?”

He replied, “Because I live on the island and have to live with these people.  They wouldn’t believe me anyways.”  The vast majority of very wealthy people I’ve met here in Florida, think exactly the same way.  I wonder if they will ever come around?  Probably not. Not even when gold is $3,500.  If they think gold is in a bubble NOW, of course they will see it as being in a bubble at $3,500.  Money and insight do not necessarily go hand in-hand.  Education is more than reading the New York Times, Washington Post and having a gray-haired money manager who wears a Brooks Brothers suit.

I have no problem making my views public.  As far as “gold having no utility” and “no one needs it,” I say it does have a utility.  Gold has been the world’s favored form of “money” for more than two thousand years.  Gold is still hoarded by central banks and kept as a “reserve.”  Matter of fact, they are accumulating more of it now than they have since the last bull market in the 70s.  There is enough investor demand for gold and silver to keep all of the world’s mints working round the clock to meet the demand.  And as far as “gold being in a bubble because it has crushed the stock market for a decade,” that is not a definition of a bubble; it reflects the poor performance of our economy for a decade.  Point out any bubble that has ended without a blow-off stage, a period when the asset’s price went vertical?  It always happens (gold and silver in the 70s; the stock market in the 90s; the real estate market in the 2000s – and now the bond market, the next REAL bubble to worry about.)

Gold has actually acted rather badly for the last half a year, but you can thank manipulation for that.  But it looks like the manipulation is letting up a bit and gold is once again on the move.  Bubble?  Not even $3,500 will constitute a bubble!  In fact, using John Williams’ data, and calculating inflation the same way it was under Jimmy Carter in 1979/80, gold would have to reach $9,000+ to equal its previous high of $850.  Bubble?  That’s a laugh.  Even though a majority of the wealthy people I’ve met down here would say yes, it is, I say a majority of the people down here will be wrong!

Take a look at Friday’s gold chart.  This is one volatile market!  Sinclair has promised extreme volatility.  Do not margin anything gold or silver!  Own your metals in the form of paid up physicals.  Then, the volatility will not hurt you.

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