(updated edited version)

Ladies & Gentlemen I presently am in the middle of a work rotation and can’t devote much time to this, but I thought I would pen a few notes here. I fully understand that the following comments are NOT sponsored by the management of this site, and probably not accepted as valid, but I will deliver them to you anyway.

First off… Please don’t be a lunatic, do not use the 3X ETF’s as a vehicle speculative or otherwise. I personally believe the SEC should ban them. All it’s going to do is separate you from your money. I will part myself from Rambus here and side myself with Buffet. Please avoid them as they are reckless, you are signing a deal with the devil when you use them… I know Rambus always uses a disclosure when he mentions them, but I am simply telling you please…. avoid, avoid , avoid.

Here is what Buffet says about using margin:The good investors don’t need it and the bad investors shouldn’t use it. That really sums it up.

So JNUG lost 94% on the week last week… seriously

Here is my take of what went down last week. And those who refuse to listen to “conspiracies” should probably just move on from this post.

First off if you don’t think that there is a group of inside players in this country/world that doesn’t operate with shrewd money then you may have a hard time accepting this. If so I will tell you right now that you are a very naive individual. Occasionally this group steps in and engineers a market opportunity for themselves. I believe this is exactly just what happened Friday afternoon in the gold market.

The inside circle of banking interests likes to place investment grade positions into the market just before a major move begins… at discount prices. No they are not like us who read the tea leaves years in advance and discern the trend early on and establish positions early in Phase I before virtually anyone else knows. Unwashed, unprivileged retail investors like ourselves often need to suffer through years of basing action before the big move. No this big investment grade inside money class makes its move after the trend has become pretty clear. Shall we say its already obvious, but still before the public figures it out. Problem is price has already moved quite a lot from the original base. That’s the base that insightful savvy investors identified early on and established their positions early on in the trend… very painstakingly I might add.

But here is the thing… these big investment grade monied interests want to move into large scaled positions. Problem is the trend has now developed to the point that it’s impossible now to do that as there is now enough interest there that their scaled activities would run up the price. They know its now time, they can readily see it’s getting late in the game to establish positions… it’s time to make the move, but they can’t. The market is simply become too tight. They are going to have to engineer themselves an opportunity to get in at a discount price. This is impossible to you or me, but for them they have the wherewithal.

When one watches CNBC there is NEVER anyone there who knows ANYTHING about the PM sector worth listening to. These people do not show up on CNBC, but there are monied interests out there that are knowledgable about these things. I am telling you that these people were behind the waterfall decline you witnessed on Friday.

The Set-up: The bankers were in on the deal that was being put together last week to address the virus. It’s a huge bailout.. Monetary as well as fiscal. They know just how it will debase the currency. They know how bullish for gold it will ultimately be. So they wanted to take a MAJOR position in the hard money gold trade for INVESTMENT purposes. So this is what one would refer to as an OPERATION.

Raid gold for $100 which allows COT interests to cover their positions and know that it will trigger a margin call cascade. Retail investors loaded with crap vehicles like JNUG and NUGT will literally melt down and cause forced liquidation. Offside hedge funds will simply have to sell their margined positions before the close on Friday… absolutely have to, this is called forced liquidation. Keep in mind that the problem with ETF’s is they can have market caps approaching the size of the cumulative position OR EVEN MORE than the underlying securities!. What this means is that an inordinate amount of selling has to occur in those issues inside the ETF… That’s what we witnessed on Friday.

So the monied interests want in on the big investment grade companies… the FNV, GOLD, NEM, AU AGI, PAAS, etc. But they don’t see themselves as retail buyers buying at a market price… No they want to buy wholesale at large volumes well after the trend has already established an elevated price. How does one do that?… they do it by conducting a stop run raid

That’s exactly what we witnessed. A stop run raid. That’s where you run the stops as far as you can (one never knows just how low it will go) and once the bottom is reached you start buying on the way up.

Does that sound like what we witnessed on Friday?

Exactly, and it all happened within a 45 min period. Can you imagine what just happened! Big investment grade money got positioned into big cap quality names IN SIZE at discount prices way below the market… can you even comprehend what just happened!

All at your expense of course… welcome to the real world of finance and you are not included.

But now we will undergo a few days of market clean up characterized by sloppy trading. For the easy prey suckers that operated on margin or the ones who just don’t have the nerve to hang in there they will be shaken down perhaps a little bit more. But the stage is now set. The strong hands are now holding the big cap players… The bull market is about to resume after a major shakeout.