Greenspan's Last Bubble Has Popped: Gold - by Gary North

Greenspan's Last Bubble Has Popped: Gold
by Gary North

"Greenspan gaveth, and Bernanke hath taken away."

Put a different way: "Ludwig von Mises was right. The Federal Reserve System is wrong." (This rule is always correct – as Mises used to say, with "apodictic certainty.")

I knew gold's decline was near. Also silver's. How did I know? Because I understand Mises' theory of the business cycle. The central bank inflates. This creates a boom. This creates sectoral bubbles. Then the central bank ceases to inflate. The bubbles will pop. The economy will go into a recession.

On Monday, March 17, I posted this article on my website, www.GaryNorth.com: "How to Short Gold and Still Keep Your Gold Coins."

I had asked a specialist in commodity futures to write it the previous Friday. He sent it to me on Saturday. I scheduled it for automatic posting at 12:01 Monday morning.

That article must have seemed strange all day Monday. Gold was at $1,005. In the aftermarket, it rose to $1,029. Then it fell back.

Why did I have this article written? Because I have believed for months that the Federal Reserve's policy of monetary deflation would at last break the commodities market, which I believed had all the characteristics of a bubble. This was the last remaining Greenspan bubble.

On Friday, March 14, I wrote this article: "In December, I Predicted Disinflation. Now It's Happening. Is Your Portfolio Hedged?" It was posted on Saturday. I reported on the most recent figure for the Consumer Price Index for February: 0% price inflation. I wrote this:

There are good reasons to invest in gold and silver. Inflation hedging in 2008 is not one of them.

I realize that what I have been saying is opposed to almost everything you have read. All I can say is that February confirmed my predictions. We will see if March does. And April.

Next time someone rants and raves about mass inflation, sit tight. Be polite. Don't believe it. Someday, yes. Not in 2008 or 2009. Probably not in 2010. This recession is going to see to that.

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On that same day, March 15, I posted this article: "What Is This Gold Chart Signaling?" I wrote:

The general commodities boom is adding fuel to the fire. Of course, this can reverse along with commodities in general. Recessions push down commodities prices. I have discussed this before.

When you buy coins, buy for the long haul. If you are buying bullion stored off shore, you should be prepared to sell half your holdings – not all at once – if gold moves down. Pick a price move and stick with it, such as $50. Sell 10% of your holdings for every $50 move down. If you are in a gold ETF, the same rule applies.

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These articles, posted on Saturday, were the background material for the article on Monday on how to short gold.

On Monday, the base metals fell sharply: copper, zinc, lead, and aluminum. I wrote an article predicting that gold would be next. I posted in on Tuesday. It was titled, "What Base Metals Are Saying About Gold." I wrote:

Hold gold bullion coins. These are for hedging against disaster. They are held to pass down to children. Don't buy them as a hedge against inflation in 2008. There is neither monetary inflation nor price inflation today. The CPI in February was flat: 0%.

In a recession, short-term credit is king. This is why the T-bill rate fell on March 17 to 1.11%.

If you are not sure which way gold is going, but you want to hold your physical position, you can short gold. What you lose in one account, you will make in the other. This is a break-even strategy.

Don't sell yet, but get ready emotionally to sell. If gold falls to $949, sell 10% of your bullion position, or short enough bullion to protect 10% of your investment. Sell 10% on $50 moves downward: daily closing prices.

Consider this: events that would push gold up to $2,000 would collapse the stock market. But a recession could drive down both gold and stocks. It's safer to sell gold and use the money to short stocks. I don't see the stock market rising and gold falling for months on end.

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By that point, I was convinced that the bull market in commodities had ended. Gold would soon follow. So, I wrote a long essay that explained in detail why I thought that it was time to sell gold or short it. It was posted on Wednesday, March 18. I opened it to the general public, so that everyone could see the logic of my warning. I titled it: <a href="http://www.garynorth.com/public/3263.cfm" target="web">"Every Investment Strategy Needs an Exit Strategy, Even Gold. Do You Have One?"</a>

I made it clear in that article that I was using Mises' theory of the business cycle to make my prediction.

I believe in the Austrian School's theory of money, including the business cycle. I have written a short book on this. I am not so committed to a position proclaiming the ever-rising price of gold that I am willing to abandon Mises' theory of the boom-bust cycle in order to hold such a position.

Gold is ideal for Mises' inflationary crack-up boom, although not as good as a home with a garden in the country and a few thousand gallons of diesel. This is not the crack-up boom. There has to be monetary inflation for a crack-up boom to occur. Today, there isn't any.

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On that day, gold, silver, and platinum fell like stones. Gold was down almost $50. It breached the $949 figure. So, I took my own advice. I sold a chunk of my gold. I did not sell all of it. But I decided that it was time to begin taking profits.

I report all this to let you know that what I am going to tell you here, I told my site's members before it happened. I saw this one coming.

WE ARE IN A DEFLATION

I define deflation as "a decline in the money supply." Deflation produces price deflation.

Precious metals' prices do not normally rise in a deflation. When they do, it's because they are in a bubble. Deflation will pop the bubble.

Deflation has now popped the bubble.

I have repeatedly warned my readers that the Federal Reserve was deflating. I have warned for a year that under Bernanke, FED policy had changed, that he was determined to whip inflation, and that the FED was barely inflating – in the range of 1% a year. If you have read my reports, you knew about this shift long ago.

I kept saying that all forecasts based on the useless and misleading M3 figure would turn out to be wrong. M3 has always vastly overrated the rate of monetary inflation. The FED was correct in scrapping it in 2006.

So, to make my position crystal clear one last time, I posted this article on February 18: <a href="http://www.garynorth.com/public/3118.cfm" target="web">"What the Federal Reserve Is Doing to Solve the Credit Crunch. This Is Getting Little Publicity."</a> I began the article with these words: "The Federal Reserve is deflating." Then I offered evidence. I opened this article to the general public.

I realize that you have read article after article about Federal Reserve inflation. All of them were wrong – not a little wrong or sort of wrong, but completely wrong.

We now see the effects of deflation: a CPI of 0% and a falling gold market. Housing is falling. This has not happened since the Great Depression.

The T-bill interest rate fell to 0.61% on Wednesday, March 18. I have not seen T-bill rates under 1% in my adult lifetime. We are seeing a frantic dash to liquidity. This is a deflationary mentality. In the Great Depression, T-bill rates fell below 1%.

WILL THE FED INFLATE?

Of course the FED will inflate. But it is not inflating now. This is why gold is falling now, and why real estate is falling now.

Will gold come back? Yes.

The question is: How far will it fall?

The other question is: Will you sell gold now and buy back more later?

I don't mean sell all of it. I mean sell some of it and sell more of it as the price falls. Then buy gold when you think inflation has returned. Sell gold mining shares first. Then sell bullion. Then sell a few coins. Sell the coins last, and maybe not at all. You can short gold to protect the value of your coins. The money you lose in holding the coins is offset by the profit you make by shorting.

The FED has been in deflation mode ever since last August. We are now seeing the results. The equity markets are falling. Treasury bonds have risen.

It is going to take a complete reversal of FED policy to re-inflate this economy. The solvency of major firms and investment banks is at risk. Mere fiat money at (say) 6% per annum will not save them. The capital markets are unraveling too fast.

I do not recommend getting rid of all your gold because there are still offsetting factors, such as war with Iran, a falling dollar, a major terrorist attack, a major purchase of gold by a central bank.

There is another factor: the bullion banks. They have borrowed gold from the central banks for an annual interest payment of 1% per annum. They have used the money from the sale of this borrowed gold to buy bonds. Rising gold prices threaten them with bankruptcy. They don't have enough money to buy back the gold and return it to the central banks.

In a deflation, gold falls and bond prices rise. This two-fold action will save the bullion banks. These banks are where the elite invest their money. They will be able to unwind their positions. They can sell their bonds and re-buy gold if they want to.

If I were them, I would want to.

What is happening is a dream come true for the bullion bankers who borrowed gold to get money to invest in bonds.

If they start buying gold to repay the central banks, this will put a floor under gold. That's why I think gold will not collapse in price to $100 or anything like that. But I think it will fall enough for the carry trade in gold to be unwound quietly.

That's why I recommend selling 10% of your gold in response to $50 downward moves. I don't know where the bottom is.

CONCLUSION

This recession is going to be a bad one. You need to protect your investments against deflation. I still recommend foreign currencies. I have for years.

I think your first line of self-defense is your job. If you lose your job, you are in big trouble. You will have to sell your assets in a fire sale economy.

You need to do whatever it takes to increase your value to your employer.

March 22, 2008

Gary North [<a href="mailto:garynorth@garynorth.com">send him mail</a>] is the author of <a href="http://www.lewrockwell.com/north/mom.html" target="web">Mises on Money</a>. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, <a href="http://www.garynorth.com/public/department57.cfm" terget="web">An Economic Commentary on the Bible</a>.

Copyright © 2008 LewRockwell.com

http://www.lewrockwell.com/north/north615.html

Question, What effect would minting $20 dollar silver coins have on our economy, and would you think it would have more value than a $20 dollar paper note?

You need to do whatever it takes to increase your value to your employer.

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This means more to me than any talk of some fool's gold. Even big biotech is laying off. My own company is offering a voluntary severence to about 3000 of us and many are taking it. Even so there may still be a layoff in the near future. I haven't been playing the corporate game very well these past few years. It's all about perception, selling yourself, and using others to make yourself seem valuable.

I didn't take it; didn't even think about it. I know keeping my job is the most important prep I can make at the moment.

I agree with parts of this article but not all of it. I don't believe the Fed is in deflationary mode. I believe it's actions of late are highly inflationary. Unfortunately for the Fed, the financial institutions, and, finally, us, the credit bubble is collapsing and taking the inflation of the last several decades down with it--this, of course, being the REASON for the desperate reflating measures of the last few months.

I am not convinced that the Fed with ultimately succeed in reflating on a grand level one more time. However, I am also not convinced that there is not room for a little more reflation success over the next couple months or so, supporting another rise in the metals over the short term. The public psychology has not changed enough yet to support a complete collapse just yet, in my opinion. And demand for the precious metals is still very high, in part due, perhaps, to misguided assumptions that higher prices of some items (and disregarding much lower prices on many others ) means that that inflation will continue indefinitely.

The next 6 to 18 months will tell the tale.

Nonetheless, if one is sufficiently liquid, and well-prepped in all other areas, a good amount of silver and gold on hand is a good idea as precious metals hold their value well relative to other assets during a deflationary period, although expecting a degree of depreciation in them, like we have seen the last week, would be wise.

Yes, Gary ---- But....



I have learned a lot from Gary over the years. But, this time I think he is looking too "micro" and forgetting the "macro".
It is a bigger world today and most of the precious metals buying is coming from markets other than the U.S. - markets/countries that are indeed inflating their currencies at a greater rate than the US M3.
THE DOLLAR IS NOT RISING TO ANY GREAT EXTENT - if Gold declines and the Dollar does not rise Gold is falling even faster in price in terms of the foreign currencies.
Are the foreign buyers going to sell because the US Dollar price of Gold has corrected. I doubt it - this is an opportunity to add to their holdings at bargain prices
Does anyone doubt the Fed will inflate one way or the other? (Google "Money as Debt" - a great video that explains that inflation is a permanent fixture in our system - unless the Fed wants a complete collapse of the system.)
MY GUESS IS - that the new FASB reg's that must be met by March 31 - and the prompted the sale of anything that is up in price and that has a Bid in order to strengthen ratios and "paint" the End Of Quarter reports.
IF GARY IS CORRECT - I would rather hold Gold in a deflationary environment where all "promises to pay" are at risk as the system implodesand the promises are repudiated.

This Scary Gary article will really muddy up the water for a lot folks.

Bottom Line: The Fed is inflating the dollar, make no doubt about that, the Fed has increased supply via interest rate cuts and monetizing of debt and, along with less demand now to be holding depreciating dollars, that then lowers their value worldwide, and that's why you've seen ever rising dollar prices for real goods. Simple over supply & lessoning demand at work here eroding the buying power value of all dollars and the bottom line for all dollar denominated investments.

People are looking for alternatives now that will, if not greatly appreciate, at least better hold their value than the dollar.

The interest to move to gold as an alternative store of one's wealth, instead of only eroding dollars, while it has increased, people actually doing so has not really even begun amongst the tens of millions of American families entrenched solely in dollar denominated mutual funds, 401k's and bonds.

Out of 100 middle class American families, how many would you say have actually cashed in any investments or taken CD's or cash out of any bank accounts and gone and gotten some gold/silver coins? One out of 100 is probably way too high, so then the question is; what will happen to the price of gold/silver and available inventories when even twice as many do as have already, not to mention ten or 20 or 50 times as many as they figure out their investments, even when appreciating in inflated dollar terms, can't keep up with the dollar buying power depreciating even faster.

BTW, in the last great depression, which was certainly deflationary by all accounts, gold did quite well then, too, as seen by this article at...

http://www.gold-eagle.com/editorials/great_crash.html

What Did Smart Money Do In the 1929 Crash and Aftermath?

During the same bear market period smart-money moved from the plunging equity markets (i.e. financial assets) to hard asset investments, like Homestake Mining - which is used heretofore as a surrogate for all gold stocks.

The stock price of this gold mining company soared relentlessly upward during the entire bear market. Homestake Mining stock rose continuously from $80 in October 1929 to $495 per share in December 1935 - which represents a total return of 519% (excluding cash dividends) during the devastating bear market period.

Contemplate and appreciate the monumental difference in investment returns during a serious bear market. Smart-money invested $10,000 in Homestake Mining (hard assets) in late 1929 - which increased in value to almost $62,000 by December 1935. This represents a compound rate of return of 35% per year in appreciation alone!

It is meaningful to note that in late 1929 the value of Homestake Mining was about $80 per share. Moreover, during the next six years Homestake Mining paid out a total of $128 in cash dividends. In fact the 1935 dividend alone reached $56 per share. That's almost a 70% dividend yield payout (basis 1929) in only one year! Indeed, hard asset investments (gold mining shares) were islands of economic refuge during the grueling years of the Great Depression.



Unfortunately, those innocent souls who remained invested in stocks - and had a buy and hold strategy - saw their initial $10,000 investment slowly dwindle to only $3,600 by late 1935. This represented a devastating capital loss of almost two-thirds of their investment savings. T H A T'S R I G H T! The hapless naive investor with a buy and hold strategy in financial assets lost the greater part of his original stake. Pathetically, he could ill-afford to risk - let alone lose - his precious capital during the many long despairing years of the Great Depression.
_______________

Now, I'm not suggesting investing in equities, but if I did it'd be gold/silver mines and maybe oil and ag products.

Regardless, the above is instructive of where real value might still be found, come inflation or deflation or stagflation, in fact, in most any environment but a really strong dollar, which we seem to be clearly racing away from.

- Shane

PS - As always, acquiring family preps, supplies and barterable goods is higher up the to-do list, ahead of gold/silver.

Yes, Gary ---- But....



I have learned a lot from Gary over the years. But, this time I think he is looking too "micro" and forgetting the "macro".
It is a bigger world today and most of the precious metals buying is coming from markets other than the U.S. - markets/countries that are indeed inflating their currencies at a greater rate than the US M3.
THE DOLLAR IS NOT RISING TO ANY GREAT EXTENT - if Gold declines and the Dollar does not rise Gold is falling even faster in price in terms of the foreign currencies.
Are the foreign buyers going to sell because the US Dollar price of Gold has corrected. I doubt it - this is an opportunity to add to their holdings at bargain prices
Does anyone doubt the Fed will inflate one way or the other? (Google "Money as Debt" - a great video that explains that inflation is a permanent fixture in our system - unless the Fed wants a complete collapse of the system.)
MY GUESS IS - that the new FASB reg's that must be met by March 31 - have prompted the sale of anything that is up in price and that has a Bid - in order to strengthen ratios and "paint" the End Of Quarter reports.
IF GARY IS CORRECT - I would rather hold Gold in a deflationary environment where all "promises to pay" are at risk as the system implodesand the promises are repudiated.

Well put shane, my2scentsathome, BlueNewton.

The Treasury Secretary this week, speaking for the Working Financial Products Group, aka the Plunge Protection Team, said they would not allow a failure of a major bank/broker.

This can only means they will inflate as much as possible.

The US dollar is already 15% backed up by mortgage related securities of unknown value. By next week that figure will be 25%, and who knows after that. Could there possibly be deflation where the currency is based upon some bizarre second level mortgage derivative valuation?

I think not.

For a long time, I have been perplexed regarding the decreasing/increasing value of gold in inflationary/deflationary environments.

It seems to me that a deflationary environment, which results in contraction of the monetary stock, should benefit gold appreciation. My reason for saying this is simple: gold is money - as less money is in circulation, money increases in value.

Likewise, an inflationary environment should favor gold as a store of value while the currency is being debased.

Obviously, it has not turned out to be that simple. During the depression, gold apparently increased in value (which is interesting since gold and Dollars were interchangeable). And note that the Dollar increased in value too, since there were fewer Dollars in circulation.

In contrast, since 1971, gold has been disconnected from the Dollar; and so, the Dollar's value is whatever the currency markets say it is (it has lost nearly 90% of its value since the delinking of gold/Dollar).

When the gold bubble popped (in 1980, it dropped precipitously from $860 per ounce), the price of gold remained substantially above the $35 per ounce of 1970 . . . as I remember it, gold stayed over $500 per ounce for some period of time.

But the de-linking of gold/Dollar has not benefited gold in the same proportion that the Dollar has declined. My sense is that the Dollar has declined at a much steeper rate than the rate at which gold has appreciated. I think that the reason for this disparity is that Dollars are used as our standard currency, while gold is no longer used as a medium of exchange - hence, there has been less demand for gold than would be if it were used as an exchange medium.

So, . . . where do we go from here ???

As I see it, an economic environment consisting of declining inflation, declining interest rates, and a stronger Dollar are all factors that contribute to a long-term decline in the value of gold vs. the Dollar.

But what creates a stronger Dollar? Long term, I think an appreciating currency reflects the economic fundamentals of the U.S. Quite frankly, our economic fundamentals look dismal. We have continual exporting of our jobs (our highest paying jobs) and our industries overseas, while our government continues to drain wealth from our economy. Our two biggest growth industries are medical care and government; virtually all other industries are in decline.

I personally believe that we are witnessing a deflationary environment - the reduction in home prices is a big part of it. Combine this with the contraction of the credit markets, and we have a substantial destruction of wealth. And I don't know that the Fed is really able to mitigate this scenario, since pushing new money into the system is really like pushing on a string. I think that the Fed's injections are really creating mal-investment, rather than moving capital to economically sensible investments.

Even though we may be in a deflationary spiral, I see only a further weakening of the Dollar - this is because there is nothing behind the Dollar except a declining U.S. industrial and asset base. Gold and other commodities should continue to do well in the face of a declining Dollar.

JMHO. . .

I'm just taking all this type of information in, including all these insightful comments. I think there is going to emerge soon a Unifying Theory tying all the data together for this unique period of time, into a coherent explanation. Deflation, Inflation, Bubble this or that, M3 increase or decrease, asset appreciation, Fed and CB manipulation, T-bills behaviour, or anything else simply grouped together will not give us the perspective we need. I think it is instead just a source of confusion and disagreement right now,somewhat paralyzing a commanding view and corresponding action.

I think a general explanation for what is happening will have something to do with the divergence of the real and financial economies, production of wealth vs. dissipation of wealth, maintenance of physical assets and commodities, eventual collision of real and financial economies ( M3 convolvement ), and external claims and offerings.

HOWEVER, I further think shane has an intuitive, inspired oversight of the general situation which allows him to give fantastic practical advice that will ultimately prove to be just what was needed, whether or not a rigorous description ever emerges. Good old "Kentucky windage" intuition has always been better than perpetually argued and developing theories, anyhow.

Thanks, all.

Well, I thought this thread would generate some discussion. The markets are tough for speculators and I think that Scary Gary is talking mainly to speculators. Frankly, I'd love it if silver dropped to $5 and gold to $250. I could then load up and add to my long position.

When silver hit $20 a few days ago, I almost sold a chunk of mine. I figured I’d be able to buy it back at a lower price. But, then I realized that this downturn was just paper PMs and actual physical supply may be in short supply. So, I just relaxed and held on. Besides, silver would have to drop to around $4 before I would have to begin worrying about capital losses.

As the crisis continues, we are going to get additional confirmation that no matter what the FED does, it won’t be able to re-inflate the economy. For me, the tipping point came with the Bear hedge funds failure last summer. But, I still think there is time to re-position oneself in a beneficial manner. However, the time is very short.

IMHO, it is critical to eliminate as much debt as possible. If you are in debt, I would recommend selling whatever can be sold and using the proceeds to pay down debt. Next, have food, water and where possible fuel for one year. And, finally, make sure you are spiritually, mentally, and physically prepared for hard times that will require hard work. If you aren’t quite ready in these areas, make it your goal to be ready and work on it on a daily basis. If you do, you will feel good knowing that you have done everything within you power to prepare and this knowledge will be comforting to you.

Thanks everyone for your timely comments. You are all the best people I know. So, keep a low profile and get ready.

M

Maher said:

As the crisis continues, we are going to get additional confirmation that no matter what the FED does, it won’t be able to re-inflate the economy. For me, the tipping point came with the Bear hedge funds failure last summer. But, I still think there is time to re-position oneself in a beneficial manner. However, the time is very short.

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No the Fed won't 'reflate' the economy, the economy is in a recession and getting worse daily. But it will continue to devalue the dollar, and in general, inflation wil occur.

As I have discussed elsewhere, one company after another is going to go bankrupt. The losses we saw at Bear Stearns, Citibank, etc., are going to continue.

There is even a chance that the much discussed victory by the Fed in arranging a Bear Stearns merger could be negated. Let's remember that JP Morgan can back out of this if BS losses billions $ more, which it will when Thornburg Mortgage, Countrywide, etc., eventually go bankrupt. The Fed was not, repeat not, authorized by any law to give a guaranatee to the BS merger with JPM, and someone like Ron Paul may bring that up in Congress.

I would advise against buying any stocks, except PM stocks, and even then don't buy on margin.

Are we headed into a deflationary recession or inflationary recession?

What does well in both?

Double_A said:

Are we headed into a deflationary recession or inflationary recession?

What does well in both?

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Gold/silver.

Are we headed into a deflationary recession or inflationary recession?

What does well in both?

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Yes, the question everyone wants to know. Maher has presented good evidence for long-term deflation. Others have made a case for inflation. And inflation followed by deflation is another possibility. So, I guess, for now, preparing for both is the only prudent course. Which, for us, means staying out of debt, paying ahead on the mortgage, stocking our food preps, and increasing our cash, silver, and gold holdings. We're also working on our emergency gear preps and buying extra clothing. Since we don't have the means to pay off the house or store a year of fuel, that will have to do, as I imagine is the case with most of us.

Bingo!


I wish I could find George Ure's chart from a few years ago that shows which investments do well in an inflation and a deflation.

Rucus Sunday said:

Yes, the question everyone wants to know. Maher has presented good evidence for long-term deflation. Others have made a case for inflation. And inflation followed by deflation is another possibility. So, I guess, for now, preparing for both is the only prudent course. Which, for us, means staying out of debt, paying ahead on the mortgage, stocking our food preps, and increasing our cash, silver, and gold holdings. We're also working on our emergency gear preps and buying extra clothing. Since we don't have the means to pay off the house or store a year of fuel, that will have to do, as I imagine is the case with most of us.

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A++

I dunno, with the bad news of some more banks going down, I think gold will still go higher.

rafter said:

I dunno, with the bad news of some more banks going down, I think gold will still go higher.

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That's a reasonable bet, especially as long as the dollar could go lower, IMO.

Nothing has fundamentally changed that has driven gold up 40% in last 12 months and has more than tripled it's price since 2002. In fact, the forces at play here have only increased and accelerated over time.

Personally, I think any physical in-hand gold acquired for under $1000 and silver for under $20 will be the envy of all soon enough.

We'll see...

- Shane

Time to buy and sell?

Reading Gary's article I thought about two things.

First he says the bullion banks as the "elites" are arranging the the price to go down so they can unwind bad trades. There is some truth to that as gold has obviously been manipulated for years. The question is how far China, India, Russia, the middle east countries will let them go. Do the Soverign funds have interest in the bullion banks they need to correct or desires to buy more gold at lower prices?

This brings up the second problem. After you sell, when do you buy back? Just like the stock market, the gold market has had days with significant moves up and down. Miss one or two of those days and your returns could be greatly affected.

I think if you still feel the long term price is up I would continue to hold. Trying to time the market or even ladder down may mean you miss the chance to buy back in at a later date without paying much more. I remmember alot of experts recco selling around $800 and after a slight drop saw the price rise steadily to above $1000 and were waiting for the price drop that never happened to buy back in.

Of course, I am no expert and am not a day trader. So take what I say with that knowledge. I do agree that the gold bull would seem to have a lot further to run unless the manipulators can do their magic.