Today's Notes:

"Citigroup says gold could rise above $2,000 next year. According to an internal client note the US bank stated that gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity. Barclays Capital predicted that the gold price could rise as high as $1,500/oz. The bank is targeting $1,050/oz initially, followed by $1,120/oz. It advises holding long positions in the precious metal."
Source: here

Here is a very good, short article showing how overpriced the markets are, and how underpriced gold is.

“Over the last three months, banks put 63 percent of their new cash into Euros – not the greenbacks – a nearly complete reversal of the dollar’s onetime dominance for reserves, according to Barclays Capital. The dollar’s share of new cash in the central banks was down to 37 percent – compared with two-thirds a decade ago. Currently, dollars account for about 62 percent of the currency reserve at central banks – the lowest on record, said the International Monetary Fund.” Source: here

Again, based on the above comments, we see that the world continues to lose confidence in the dollar, which means that everyone who owns them is losing value. Who owns the dollar? You and I. Anyone who invests in stocks, bonds, mutual funds, annuities, real estate or bank accounts owns dollars. The only asset going up in terms of dollars at this time is gold.

And finally, the following quote by Al Korelin caught my eye this morning:

"Capitalism, as the basic business paradigm, no longer exists.

Capitalism made our country great and its disappearance is creating havoc in the United States by dramatically increasing our federal deficit; keeping our unemployment numbers high; and, obviously dramatically slowing down our economic growth.

To those folks who question the direction of gold prices in the near term I would say the following:

Since the days of the Old Testament people believed in the value of gold and silver and that belief still exists today. That is why smart people will continue to purchase gold and silver and the respective prices of these precious metals will not go down until we go back to the tried and true business paradigm of free markets and no government intervention."