Clive Maund and others want us to believe that there is a connection between the S&P500 and the Gold Market. That if the S&P500 crashes the PM index is “not likely to be up is it”? He indirectly implies that the government will be unable to prevent the crash. The Gold market, on the other hand, is unlikely to be government supported is it Clive? Rather the opposite wouldn’t you agree? Could they, and would they if they could, instigate another Gold crash similar to 2008. Possibly, maybe even necessarily, but it will be at great cost. And the cost would be measured in tonnes. Tonnes of Bullion shipped East and 500 tonnes now supposedly in the vaults of GLD. Even if GLD does not have the Gold Bullion they’ve dramatically increased their Gold liabilities which is a reflection of the strength of the market.

Clive Maund and others are advising their clients to sell shares at the bottom of a thirty year price range and to hold fiat cash which is guaranteed to depreciate. Nimble traders might well pull this off, assuming it occurs, but look again at Maund’s two charts. The S&P500 crashed to just below 750 in November 2008 and then rose 200 points into the New Year. The XAU chart shows a very similar pattern. But then look at the divergence. From Jan 1/09 the S&P500 crashed 30% to 666. The XAU, on the other hand, which began the year at 124.80 should have, following Maund’s logic, crashed below its Oct 2008 low of 63.52. Instead it trended higher to around 140 at the time the S&P finally bottomed. Well Clive, here is a case when the S&P500 crashed and the XAU was up. How many investors were able to get these trades right? Did Clive Maund? Did Jim Puplava? Would you?

The function of a Bear Market is to separate you from your money. The function of a Bull market is to separate you from your shares. We are in a powerful Gold Bull Market. Are you about to be fleeced out of your position? Wouldn’t it be more prudent to just sit tight?