Unlike Some Soap Operas, The Gold Story Has More Chapters

 |  Includes: GLD, SLV
by: Steven P. Orlowski

Ah, poor Susan Lucci and the US Credit Rating. The much ballyhooed downgrade of S&P's credit outlook for US debt from stable to negative and the cancellation of two landmark soap operas were necessary actions and both were far overdue. There is not one person who has any rudimentary understanding of finance who doesn't recognize the dire situation for the United States and of American daytime television. For American investors it is the incessant "Win one for the Gipper" cheerleading on the financial news channels that has many John and Jane Does actually surprised by the decision to lower the outlook.

Watching the un-knowledgeable ninny's on CNBC discuss the change Monday morning was hilarious, not elucidating. One of the nameless talking heads dared propose that a country that can print its own currency ad infinitum technically can never default. Really? Thank goodness for the one guest who hit the nail on the head by saying that paying off debt with intentionally devalued currency is a technical default.

Furthermore, it was pointed out that the countries with TRILLIONS of US dollars in their pockets are not stupid. They are aware of the scam hence the lack of participation in the treasury auctions. On Bloomberg radio that morning Former Federal Reserve Governor Robert Heller stated emphatically that there "will" be a crisis of US debt. Thank you Mr. Heller.

As far as gold and silver go I would suggest the trend higher will continue, however a meaningful pullback is long overdue. Frankly, I would welcome one enthusiastically. Remember 2008, when gold retreated from $1000.00 per ounce back to $700.000. Loud proclamations regarding the end of the gold bull market were everywhere. The "Goldbugs" who were accused of being fanatical and wrong were getting their just desserts with the 30% decline. Wrong they were not as gold doubled from those 2008 lows to more than $1500.00 per ounce today.

The story is the same now as it was then only stronger. The difference is that those considering the likelihood of the dollar being replaced as the reserve currency are not just on the blogs and websites of the fanatics, they are the mainstream media. This is not a conspiracy theory, this is reality. Hang on to your gold. If we begin to experience that pullback maybe take some profits, but be ready to get back in. Unlike soap operas on daytime television, the gold story is not ending and it's sure to have years to go.

Disclosure: I am long DGP, GDXJ, CEF.