THE NADLER RETORT


What Jon Nadler Doesn’t Want You to Know About Gold


By TJA
May 28, 2009
Gold – since 1999, it’s what I’ve been suggesting that you invest in. It was $255 an ounce then, and few people gave it any chance of competing with stocks, bonds or real estate. It was so “yesterday.”

Back then, adding to the dismal outlook of gold were Establishment naysayers, the most prolific of which was Andy Smith, then of Mitsui Precious Metals. Andy Smith was absolutely scary. He was bright and extremely articulate. And, he was highly connected to the gold cabal – he was one of their most prized disinformation mouth pieces. When gold finally surpassed $300, and then $320, Andy Smith confidently proclaimed that gold was a dead-end investment.  When it surpassed $400, Smith predicted that it would eventually sink below $200. As you know, gold didn’t stop at $400, or $500, or $600. It has surpassed $1,000 before its current respite.

My point? Andy Smith is now but a soiled footprint in the history of gold investing. He became the laughing stock of the precious metals investment community. Accordingly, he’s not been heard from in many years now.

Enter Andy Smith II: JON NADLER

Who is Jon Nadler? And, why is he the resident Kitco “disinformation specialist”? You’ll seldom find a negative article about gold investing that he isn’t quoted in, or a negative article about gold that he doesn’t reference. Why? Is he stupid, dishonest or both? You be the judge.

In Nadler’s daily Kitco missives, there are negative gold issues that he hammers with regularity;
  • Declining gold jewelry consumption in a global economic slump.
  • Declining Indian gold consumption
  • Substantial increases in supplies of scrap gold
  • The International Monetary Fund (IMF), one of the largest holders of gold, MIGHT sell a substantial amount of its gold holdings.
Are they significant issues? Yes, of course they are. But, Nadler conveniently overlooks countervailing issues that are just as significant, and much more numerous. What issues does Nadler deliberately avoid informing his readers about?
  1. Some of the world’s largest gold exporters (Australia and Africa) have been experiencing steady declines in gold output. SEE: South Africa Mining Output Falls by Most in a Decade, South African gold output declines 7.6% and Australian Gold Production Falls Behind United States


  2. Two of the world’s largest gold producers (Russia and China) are hoarding all or most of their own gold production to bolster their central bank’s gold reserves. Translation? That’s a significant amount of global gold output that is NOT hitting the open market!!! SEE: China Gold Reserves Apparently Doubled and Russia Backs Return to Gold Standard to Solve Financial Crisis


  3. Even smaller gold producers, wary of a US Dollar collapse, are beginning to look at diverting gold production to their central banks, rather than to the commercial market. SEE: Venezuela's Central Bank Corners Local Gold Production On Weak Dollar Expectations


  4. The IMF, though it has openly stated its wish to sell substantial sums of gold, can only do so with US Congressional approval – a major point that Jon Nadler NEVER seems to want to mention. And, each IMF member nation is entitled (by charter) to the proceeds of such a sale. Yes, the US is the largest contributor of gold to the IMF. SEE: IMF Gold Sale


  5. If IMF gold is in fact sold in significant quantities, it will likely never hit the commercial market. Why? The Chinese, the OPEC states, or a combination thereof, will likely buy whatever gold the IMF agrees to auction. Translation? An IMF gold auction will NOT undermine the price of gold. SEE: Gold Sees Next Demand Boom From Central Banks and IMF Gold Sales to Have ‘Limited Impact’


  6. Hedge Funds and ETFs are now exerting tremendous upward pressure on gold, counter-acting years of downward manipulation by surrogate banks of the US Federal Reserve. SEE: Hedge Funds Making Big Bets on Gold


  7. “Scrap gold” (from pawned/reclaimed jewelry) inventory is at significant levels, but is easily neutralized by record levels of investment purchases of gold coinage and bullion. SEE: Gold Coin Minting Hits 40%, Two-Decade High


  8. Gold miner buybacks of gold – in reducing or eliminating their gold production hedge positions, have been taking MILLIONS of ounces of gold out of the commercial market EVERY YEAR – a subject that Jon Nadler is conspicuously silent about. SEE: $1.25 Billion Knock for AngloGold, and De-Hedging Still Favored by Gold Producers


  9. The COMEX gold & silver price-fixing scheme is rapidly coming to an end. Jon Nadler denies this scheme exists (what a surprise!), but savvy investors know otherwise. SEE: Comex Gold Trading Is A Paper Game: Jim Rogers and Did the ECB Save COMEX from Gold Default?

 

“When a major derivatives dealer goes begging for gold, to the ECB, it is very strong circumstantial evidence that not enough physical gold is available for purchase on the OTC wholesale market. Up until now, bearish gold commentators have steadfastly denied that wholesale gold shortages exist. Instead, they have insisted that all shortages are confined to retail forms of gold. Now, when combined with the circumstantial evidence, however, common sense tells us that they are wrong.”

 

  1. The US Dollar is resuming a downward spiral that will catapult gold to heights never before attained. Nadler ridicules any notion that any degree of hyperinflation is likely. In fact, Nadler is an almost daily mouthpiece for Establishment projections of a prolonged deflationary environment. But, there are others who assert otherwise:

 

U.S. Inflation to Approach Zimbabwe Level, Faber Says

“I am 100 percent sure that the U.S. will go into hyperinflation,” Faber said. “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.”

US Dollar Collapse Imminent?

In case you hadn’t noticed, all recent, vigorous Establishment efforts to keep the US Dollar afloat are now paying diminishing returns. The US Federal Reserve is now OPENLY doing what it had been doing deceitfully for several years; it’s buying US Treasury Bonds that Asians and Arabs are losing interest in buying. (SEE: China Warns Federal Reserve Over 'Printing Money' - China has warned a top member of the US Federal Reserve that it is increasingly disturbed by the Fed's direct purchase of US Treasury bonds.)

The one-year US Dollar Index chart below illustrates the Dollar pump-up that preceded the 2008 US Presidential election. That succeeded in facilitating the dramatic decline in oil/gasoline prices BEFORE the US election – making it a “non-issue” in the election. It was a brilliant move, but had no chance of surviving the “gravitational pull” (massive US indebtedness) sucking the US Dollar down to an eventual worthless valuation. As the chart suggests, the US Dollar is heading back toward pre-election lows, and from there we’ll likely see global fears of a Dollar meltdown come to fruition. Why? SEE: US to Borrow 46 Cents for Every Dollar Spent  and Financial Rescue Nears GDP as Pledges Top $12.8 Trillion and The government took on $6.8 trillion in new obligations in 2008, pushing the total owed to a record $63.8 trillion

 

 

 

“Radical Extremist Gold Bugs”

Recently, Jon Nadler has resorted to further insulting serious gold investors by calling them “Radical Extremist Gold Bugs.” Why would a guy, supposedly a “gold analyst” for a precious metals seller (Kitco), resort to ridiculing gold investors by calling them childish names?  Folks, this is the way that Establishment disinformation specialists attempt to, “keep the peasants and rabble down.” The audacity of the unwashed masses to not trust what the likes of Nadler have to tell us!!! Such people (you and I) need to be scorned and ridiculed whenever we question the self-anointed "Oracle of Gold," Jon Nadler!!!

Sure, Nadler will tell you that you should maintain a 5-10% investment core of gold. That’s timeless wisdom, the wisdom of our forefathers, not Nadler's wisdom. Where else would Nadler suggest that you invest the remaining 90-95% of your wealth? Why, in the usual “paper” investment holdings that Bernie Madoff would’ve also approved of. Stocks, bonds and even real estate have been LOSERS in recent years and are LOSERS going forward. SEE: After A 'Lost Decade,' Popular Belief In Stocks' Superiority Is Under Fire, and Foreclosure Woes Mount for Those With Good Credit

Nadler does like Gold ETFs, which should absolutely scare you away from such an investment medium!!!

Lately, the higher gold has gone in recent weeks the more shrill Nadler has become. He recently predicted that gold would fall to $850 (or lower). WRONG!! He predicted gold would wallow in a tight range, not surpassing $900, then $950. WRONG!! That’s Nadler’s predictable style. When gold is climbing, he squeals like a “stuck pig,” proclaiming that there’s no logical reason for gold to climb. When gold slips, he’s gleefully insulting all who’ll listen about how he “told-you-so.”

Not content to malign gold investors, Nadler has recently targeted silver investors. In recent weeks, Nadler has been adamant about an impending “over-supply” of silver. Is there an opposing view? Of course, but don’t expect to get it from an Establishment mouthpiece like Jon Nadler. SEE: Largest Silver Players Positioning For Tight Supplies, and 'Silver Is Misunderstood. Silver Price Can Go to $25'

Nadler: “This is Armageddon”

Nadler, long a naysayer about the possibility of the economic calamity that we’re witnessing unfold, now concedes that, “this is the Armageddon that everyone predicted.” Why would he concede that? Because, as he continues that line of reasoning, he sarcastically asserts, “see how normal things are?”  Nadler would have us believe that the full extent of financial damage has already been done to the US economy and that almost everything is “up” from here. Is that a deliberate lie, or is it a foolhardy miscalculation on his part? Why does it even matter? Because we haven’t hit bottom yet – we have a substantial degree of downward slide left before “Armageddon” arrives. We likely won't begin to know where the "bottom" is until we find out where the bottom is for the US Dollar.

SEE: IMF Warns Over Parallels to Great Depression

"The International Monetary Fund has warned of 'worrisome parallels' between the current global crisis and the Great Depression, despite the unprecedented steps already taken by central banks and governments worldwide."

 

 

 

 

BOTTOM-LINE?

Nadler is predictably wrong most of the time.

Like a broken clock, he’s right twice every day as a consequence of probability.

 

Soon, Jon Nadler will find himself as irrelevant and as defanged as his predecessor (Andy Smith) now is. In the meantime, if you seek frivolous entertainment, seek out his meaningless daily commentary on the Kitco website.

 

You can expect gold to ebb and flow its way to $1,200 or more by the end of 2009. There will be dips (profit-taking) along the way, but as this missive illustrates, there is nothing to fear in the current economic climate with gold. Shallow disinformation, not matter how relentless or determined, can’t impede the onslaught of gold. 

 

TJA