The "Joe Six-Pack" Market Timing Method
by Rick Ackerman on October 6, 2010

The other day, we asked what kind of benighted Wall Street lackey would be so bearish on gold and silver these days as to advise their immediate sale. With nearly every central bank in the world on a monetary wilding spree, how, one might ask, could bullion prices possibly fall? And, yes, they will someday — in a big way. But that day probably lies well down the road, since there is almost no chance that a world hopelessly addicted to central-bank “free” money is about to go cold turkey. Europe’s move toward austerity is arguably the only fiscal threat to bullion’s powerful bull market right now, but at the end of the day it is no more a counterforce to global money-mania than a sand castle is to the pounding surf of a hurricane.

In any event, long before the supposed bubble in gold and silver bursts, the dollar would have to collapse, taking the global economy with it into a deflationary Marianas Trench. Until that day arrives, however, one would have to be crazy to think that the bull market in precious metals is anywhere near an end. For now, we’ll stick with a litmus test we proposed here earlier to determine when the bull market is ending. Specifically, we wrote that Joe Sixpack would be telling his poker buddies about mineralization levels in Ghana before bullion peaks. So far, though, as is plain to see, Joe Sixpack has not even discovered mining stocks, let alone Ghana core samples.