Managed Advance
With the Swiss announcement that they will no longer allow their currency to serve as the world's safe-haven investment going forward (See yesterday's post, Last Man Standing: Gold), one would have expected gold to skyrocket on the announcement. However, 5 minutes before the announcement, gold was sold off to the tune of $50 an ounce in less than two minutes.

This has become the norm as the world's central banks are no longer even trying to hide their attempts to keep gold from going ballistic. Although the massive "take-down" of gold just 5 minutes before the Swiss announcement serves as a warning that central banks are not going to let gold go ballistic in response to obviously bullish gold news, it also serves as a comforting reminder of the reverse: THEY ARE WILLING to continue to allow gold to maintain an orderly ascent at the rate of 20% - 30% a year as evidenced by the orderly/managed march gold has made for the last ten years.

Those are the paramaters of the game and anyone who thinks they they can do better in the stock market, real estate, treasuries or any other asset class is just not paying attention.

Since gold is the enemy to the worlds' governments being able to continue to print their currencies into oblivion, evey effort will be made by them to keep the gold bull under control for as long as possible. With that being said, there are only two possible outcomes to this game.

First, the central bankers may well continue to manage gold's climb at the rate of 20% to 30% annually, and thereby keeping the music playing and the deficit spending party going.

But the second outcome would have gold breaking out and overwhelming the banker's attempts to hold it down as the public finally figures out what is going on and begins buying. And this is exactly the type of event that yesterday's "take-down" of gold is aimed at preventing by injecting such extreme volitility in the market that gold "newbies" are afraid to even step a toe in the gold pool for fear of being caught in one of these massive sell-offs.

So, enjoy the ride because regardless of which outcome prevails, gold's going a lot higher!

(Here's a great article on the gold "take-down.")