John Embry Describes What A Bubble Market Looks Like
Click here to listen to the interview.
John Embry: Chief Investment Strategist for Spott Gold & Precious Minerals Fund - John joined SAM as Chief Investment Strategist in March 2003, with a focus on the Sprott Gold and Precious Minerals Fund. He plays an instrumental role in the corporate and investment policy of the firm. Mr. Embry, an industry expert in precious metals, has researched the gold sector for over thirty years and has accumulated industry experience as a portfolio management specialist since 1963. John was named Vice-President, Equities and Portfolio Manager at RBC Global Investment Management, a $33 billion organization where he oversaw $5 billion in assets, including the flagship $2.9 billion Royal Canadian Equity Fund and the $250 million Royal Precious Metals Fund, the #1 ranked fund across the country for its 2002 net performance of 153%
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Close Call For US Banks
Germans Load Up On Gold And Silver
Germans appear to be a little quicker learners than their American counterparts.
EU rescue costs start to threaten Germany itself
The Telegraph
The escalating debt crisis on the eurozone periphery is starting to contaminate the creditworthiness of Germany and the core states of monetary union.
Credit default swaps (CDS) measuring risk on German, French and Dutch bonds have surged over recent days, rising significantly above the levels of non-EMU states in Scandinavia.
"Germany cannot keep paying for bail-outs without going bankrupt itself," said Professor Wilhelm Hankel, of Frankfurt University. "This is frightening people. You cannot find a bank safe deposit box in Germany because every single one has already been taken and stuffed with gold and silver. It is like an underground Switzerland within our borders. People have terrible memories of 1948 and 1923 when they lost their savings."
The refrain was picked up this week by German finance minister Wolfgang Schäuble. "We're not swimming in money, we're drowning in debts," he told the Bundestag.
Germans appear to be a little quicker learners than their American counterparts.
EU rescue costs start to threaten Germany itself
The Telegraph
The escalating debt crisis on the eurozone periphery is starting to contaminate the creditworthiness of Germany and the core states of monetary union.
Credit default swaps (CDS) measuring risk on German, French and Dutch bonds have surged over recent days, rising significantly above the levels of non-EMU states in Scandinavia.
"Germany cannot keep paying for bail-outs without going bankrupt itself," said Professor Wilhelm Hankel, of Frankfurt University. "This is frightening people. You cannot find a bank safe deposit box in Germany because every single one has already been taken and stuffed with gold and silver. It is like an underground Switzerland within our borders. People have terrible memories of 1948 and 1923 when they lost their savings."
The refrain was picked up this week by German finance minister Wolfgang Schäuble. "We're not swimming in money, we're drowning in debts," he told the Bundestag.
America’s Day of Reckoning
from Rick Ackerman's daily commentary
And what of the U.S., which is arguably in worse shape than Europe? Some might say we’ve been whistling by Euroland’s graveyard, but the truth requires a more cynical observation. For in fact, the Fed and the White House have a strong motivation to play up Europe’s problems as much as possible, since greater scrutiny of our own problems will only bring on America’s financial day of reckoning more quickly. To be even more cynical about it, Moody’s increasingly frequent downgrades of sovereign eurodebt seem timed to intercept cycles of weakness in the dollar. If such collusion exists, however, it has barely slowed the rise of gold, the financial system’s polygraph, even on days when the dollar appears to be “strong.” Since the first week in November, the Dollar Index has risen by nearly seven percent while Comex gold has declined by about 4%. While it’s possible that carry-trade unwinds will cause the dollar to rise even more in the days and weeks ahead, we should not mistake this purely technical action for strength. On fundamentals, the dollar can only head lower over time, and we therefore see little reason to fear overweighting in bullion. In assessing the condition of the world’s currency system, and judging the odds of its failure, gold is manifestly incapable of error. No matter how bullion acts on a given day, we shouldn’t doubt that it enjoys enormous support from buyers around the world, especially those with large dollar reserves that are at risk. For that reason, and innumerable others, periods of weakness in gold and silver assets should be regarded as buying opportunities.
from Rick Ackerman's daily commentary
And what of the U.S., which is arguably in worse shape than Europe? Some might say we’ve been whistling by Euroland’s graveyard, but the truth requires a more cynical observation. For in fact, the Fed and the White House have a strong motivation to play up Europe’s problems as much as possible, since greater scrutiny of our own problems will only bring on America’s financial day of reckoning more quickly. To be even more cynical about it, Moody’s increasingly frequent downgrades of sovereign eurodebt seem timed to intercept cycles of weakness in the dollar. If such collusion exists, however, it has barely slowed the rise of gold, the financial system’s polygraph, even on days when the dollar appears to be “strong.” Since the first week in November, the Dollar Index has risen by nearly seven percent while Comex gold has declined by about 4%. While it’s possible that carry-trade unwinds will cause the dollar to rise even more in the days and weeks ahead, we should not mistake this purely technical action for strength. On fundamentals, the dollar can only head lower over time, and we therefore see little reason to fear overweighting in bullion. In assessing the condition of the world’s currency system, and judging the odds of its failure, gold is manifestly incapable of error. No matter how bullion acts on a given day, we shouldn’t doubt that it enjoys enormous support from buyers around the world, especially those with large dollar reserves that are at risk. For that reason, and innumerable others, periods of weakness in gold and silver assets should be regarded as buying opportunities.
Media Touts The Dollar
Got a little chuckle from the following at Bloomberg this morning. Guess they think all is going to be okay. We have printed our way back to prosperity. LOL
Gold May Decline in New York as Stronger Dollar Reduces Demand
Nov. 29 (Bloomberg) -- Gold may fall in New York after the dollar rebounded against the euro, curbing demand for the metal as an alternative investment.
The dollar climbed to a two-month high against the euro as European governments handed Ireland an 85 billion-euro ($113 billion) aid package. The U.S. currency has gained as concern that military action on the Korean peninsula will escalate boosted demand for the dollar as a refuge. Gold, which typically moves inversely to the greenback, reached a record $1,424.30 an ounce on Nov. 9.
Got a little chuckle from the following at Bloomberg this morning. Guess they think all is going to be okay. We have printed our way back to prosperity. LOL
Gold May Decline in New York as Stronger Dollar Reduces Demand
Nov. 29 (Bloomberg) -- Gold may fall in New York after the dollar rebounded against the euro, curbing demand for the metal as an alternative investment.
The dollar climbed to a two-month high against the euro as European governments handed Ireland an 85 billion-euro ($113 billion) aid package. The U.S. currency has gained as concern that military action on the Korean peninsula will escalate boosted demand for the dollar as a refuge. Gold, which typically moves inversely to the greenback, reached a record $1,424.30 an ounce on Nov. 9.
Russia's Central Bank Buys 600,000 Ounces of Gold In October
With the 20th of the month falling on a Saturday, The Central Bank of the Russian Federation updated their website for October on the business day prior to that... which was yesterday the 19th... a habit which I'm grateful for. They reported adding another 600,000 ounces of gold to their official reserves, which now stand at 24.9 million troy ounces. Year-to-date, the Russians have added 4.6 million ounces of gold to their reserves. That's a lot!!!
From what I remember of Russian gold production in 2009... it looks like they're buying everything that they're digging out of the ground... and maybe a bit more. This is basically an 'up yours' gesture from Russia to the west's central and bullion banks. The Chinese government is doing exactly the same thing, except they do it in secret. One has to wonder when their next big announcement of an increase in gold reserves is going to come... and how much it will be.
With the 20th of the month falling on a Saturday, The Central Bank of the Russian Federation updated their website for October on the business day prior to that... which was yesterday the 19th... a habit which I'm grateful for. They reported adding another 600,000 ounces of gold to their official reserves, which now stand at 24.9 million troy ounces. Year-to-date, the Russians have added 4.6 million ounces of gold to their reserves. That's a lot!!!
From what I remember of Russian gold production in 2009... it looks like they're buying everything that they're digging out of the ground... and maybe a bit more. This is basically an 'up yours' gesture from Russia to the west's central and bullion banks. The Chinese government is doing exactly the same thing, except they do it in secret. One has to wonder when their next big announcement of an increase in gold reserves is going to come... and how much it will be.
Listen To The Preacher!
by David Tanner
I've got a friend out on the left coast, Norman Willis, that has a ministry named Nazarene Israel. Norman is a great bible teacher as well as a student of history and current events. Below I am reprinting a little bit of one of his recent updates to his readers. (I will not be posting anything else until Wednesday so that this post will have every opportunity to be discovered by those who do not visit my site on a daily basis.)
It's a sad state of affairs when a minister of the gospel can give you a better lesson on economics than the media or academia. But then again, as I think about it, why should this be surprising? Was not Daniel a trusted advisor to Babylon and Persia. Was not Joseph a trusted economic advisor to Egypt?
Actually, if the truth be told, my decision ten years ago to go into the gold business was not a product of my college education and superior intelligence (and good looks), but simply from the leading of the Holy Spirit.
Anyway, I encourage you to check out Norman's site after you finish reading the following:
Trust: and then Prepare in Him.
by servant@nazareneisrael.org
Yehezqel (Ezekiel) 33:6
6 "But if the watchman sees the sword coming and does not blow the trumpet, and the people are not warned, and the sword comes and takes any person from among them, he is taken away in his iniquity; but his blood I will require at the watchman's hand."
I choose my words carefully, and try hard to avoid doing or saying anything that might panic people (as I do not think that would be responsible). However, YHWH tells us that if we see a sword approaching and say nothing, then we are liable. That would obviously do no good for anyone, so having prayed about this for some time, I feel I need to send out this email.
In a nutshell, it is common knowledge that Satan and his servants are working hard to establish a secular New World Order. In the post "See That You Are Not Troubled", we can see the New World Order approaching rapidly. Many believe the New World Order will finally be brought to power through a large-scale economic crash, coupled with food shortages. From my limited vantage point this appears to be a very realistic scenario; and the stage is almost set. For those who have eyes to see and ears to hear, it is time to get ready.
Reference the post "The End is Not Yet", I do not believe that America will disintegrate or descend into total martial law, because America and Israel are still prophesied to fight together in a war against a common Islamic aggressor (and win, praise YHWH). However, a variety of ' Biblical scale' events are getting ready to unfold worldwide; and an economic crash, food shortages and a major devaluation of the US dollar do seem very realistic at this time.
How did the dollar get to the point of being devalued, and how did the nation get to the brink of economic collapse? The problem, in a nutshell, is that the nation has over-spent itself. The situation is analogous to a man who has bought the world on credit and can no longer make the payments.
The problem is that while an individual can declare bankruptcy, a nation cannot. The only real recourse that a nation has when it reaches the uttermost limits of its ability to pay on credit is to crank up the printing presses, and print its way out of debt. However, this leads essentially to inflation, or even hyperinflation. We seem to be headed that way. The only reason the economists currently talk about deflation is because of the large negative adjustment that took place when the housing market collapsed. There was a huge crash in real estate, and it has over-compensated for increasing prices in the rest of the market.
The following PowerPoint presentation discusses how the same kind of thing took place in Argentina recently. Although it used to be the world's Number #2 economy, Argentina experienced 3000% inflation around a decade ago. The sobering part is that America is following the exact same pattern, and appears to be perfectly on track for the same sort of crisis. The present administration's quadrupling of the already burgeoning deficit only served to 'sign and seal' a coming inflationary crisis.
http://www.nazareneisrael.org/Home/Recomended/PowerPointPresentations.aspx
We do need to prepare. But more than anything, we need to be right with YHWH. First and foremost we need to trust in Him, and do what He says. And if He should lead us to pray, and then to prepare, let us do all that He instructs, to be ready to provide not just for ourselves, but for others of His people as well.
May YHWH be with us, bless and guide us all.
In Yeshua’s name,
Amein.
by David Tanner
I've got a friend out on the left coast, Norman Willis, that has a ministry named Nazarene Israel. Norman is a great bible teacher as well as a student of history and current events. Below I am reprinting a little bit of one of his recent updates to his readers. (I will not be posting anything else until Wednesday so that this post will have every opportunity to be discovered by those who do not visit my site on a daily basis.)
It's a sad state of affairs when a minister of the gospel can give you a better lesson on economics than the media or academia. But then again, as I think about it, why should this be surprising? Was not Daniel a trusted advisor to Babylon and Persia. Was not Joseph a trusted economic advisor to Egypt?
Actually, if the truth be told, my decision ten years ago to go into the gold business was not a product of my college education and superior intelligence (and good looks), but simply from the leading of the Holy Spirit.
Anyway, I encourage you to check out Norman's site after you finish reading the following:
Trust: and then Prepare in Him.
by servant@nazareneisrael.org
Yehezqel (Ezekiel) 33:6
6 "But if the watchman sees the sword coming and does not blow the trumpet, and the people are not warned, and the sword comes and takes any person from among them, he is taken away in his iniquity; but his blood I will require at the watchman's hand."
I choose my words carefully, and try hard to avoid doing or saying anything that might panic people (as I do not think that would be responsible). However, YHWH tells us that if we see a sword approaching and say nothing, then we are liable. That would obviously do no good for anyone, so having prayed about this for some time, I feel I need to send out this email.
In a nutshell, it is common knowledge that Satan and his servants are working hard to establish a secular New World Order. In the post "See That You Are Not Troubled", we can see the New World Order approaching rapidly. Many believe the New World Order will finally be brought to power through a large-scale economic crash, coupled with food shortages. From my limited vantage point this appears to be a very realistic scenario; and the stage is almost set. For those who have eyes to see and ears to hear, it is time to get ready.
Reference the post "The End is Not Yet", I do not believe that America will disintegrate or descend into total martial law, because America and Israel are still prophesied to fight together in a war against a common Islamic aggressor (and win, praise YHWH). However, a variety of ' Biblical scale' events are getting ready to unfold worldwide; and an economic crash, food shortages and a major devaluation of the US dollar do seem very realistic at this time.
How did the dollar get to the point of being devalued, and how did the nation get to the brink of economic collapse? The problem, in a nutshell, is that the nation has over-spent itself. The situation is analogous to a man who has bought the world on credit and can no longer make the payments.
The problem is that while an individual can declare bankruptcy, a nation cannot. The only real recourse that a nation has when it reaches the uttermost limits of its ability to pay on credit is to crank up the printing presses, and print its way out of debt. However, this leads essentially to inflation, or even hyperinflation. We seem to be headed that way. The only reason the economists currently talk about deflation is because of the large negative adjustment that took place when the housing market collapsed. There was a huge crash in real estate, and it has over-compensated for increasing prices in the rest of the market.
The following PowerPoint presentation discusses how the same kind of thing took place in Argentina recently. Although it used to be the world's Number #2 economy, Argentina experienced 3000% inflation around a decade ago. The sobering part is that America is following the exact same pattern, and appears to be perfectly on track for the same sort of crisis. The present administration's quadrupling of the already burgeoning deficit only served to 'sign and seal' a coming inflationary crisis.
http://www.nazareneisrael.org/Home/Recomended/PowerPointPresentations.aspx
We do need to prepare. But more than anything, we need to be right with YHWH. First and foremost we need to trust in Him, and do what He says. And if He should lead us to pray, and then to prepare, let us do all that He instructs, to be ready to provide not just for ourselves, but for others of His people as well.
May YHWH be with us, bless and guide us all.
In Yeshua’s name,
Amein.
Paper Money Is Immoral
Richard Russell - All Fiat Currencies Will Fail
With gold near record highs, in his latest commentary, the Godfather of newsletter writers Richard Russell stated, “It's obvious that Bernanke with the help of QE2 wants to drive longer-term interest rates down and at the same time push asset prices (particularly stocks and real estate) higher. Because of the sheer size of Bernanke's new spate of money-creation, some analysts are describing QE2 as "a whole new ball game."
November 11, 2010
Russell continues:
“Over the coming eight months the Fed will buy $600 billion of US Treasuries, but that's not all. The Fed will also buy up to $300 billion of agency debt which will be coming due. That means that roughly $900 billion of new money will be entered into the system, all of this new money created via computers and out of thin air.
So the question I'm asking myself is this: Will Bernanke (in the face of international criticism) back down on his strategy of defeating the forces of deflation by printing money?
My immediate answer to this question is that Bernanke will NOT back down. Bernanke is a true, dyed-in-the-wool Keynesian, and he's already apologized on the part of the Fed for allowing the money supply to shrink during the Great Depression of the 1930s.
To back down now would mean that Bernanke, in effect, was conceding that his whole strategy of quantitative easing has been misguided. To back down now, would mean that Bernanke was giving in to the forces of deflation. I can't see that happening. I think Bernanke would quit his chairmanship at the Fed before he gave in to the discipline of Austrian economics.
The second question I have been thinking about is whether fiat currencies, and I mean all of them, are going to survive? As subscribers know, I believe currencies created by government fiat are a fraud, and that they are both illogical and immoral. I believe that ultimately, fiat currencies, all of them, are doomed. Every fiat currency in history has died, and today's fiat currencies will be no different.”
Richard Russell - All Fiat Currencies Will Fail
With gold near record highs, in his latest commentary, the Godfather of newsletter writers Richard Russell stated, “It's obvious that Bernanke with the help of QE2 wants to drive longer-term interest rates down and at the same time push asset prices (particularly stocks and real estate) higher. Because of the sheer size of Bernanke's new spate of money-creation, some analysts are describing QE2 as "a whole new ball game."
November 11, 2010
Russell continues:
“Over the coming eight months the Fed will buy $600 billion of US Treasuries, but that's not all. The Fed will also buy up to $300 billion of agency debt which will be coming due. That means that roughly $900 billion of new money will be entered into the system, all of this new money created via computers and out of thin air.
So the question I'm asking myself is this: Will Bernanke (in the face of international criticism) back down on his strategy of defeating the forces of deflation by printing money?
My immediate answer to this question is that Bernanke will NOT back down. Bernanke is a true, dyed-in-the-wool Keynesian, and he's already apologized on the part of the Fed for allowing the money supply to shrink during the Great Depression of the 1930s.
To back down now would mean that Bernanke, in effect, was conceding that his whole strategy of quantitative easing has been misguided. To back down now, would mean that Bernanke was giving in to the forces of deflation. I can't see that happening. I think Bernanke would quit his chairmanship at the Fed before he gave in to the discipline of Austrian economics.
The second question I have been thinking about is whether fiat currencies, and I mean all of them, are going to survive? As subscribers know, I believe currencies created by government fiat are a fraud, and that they are both illogical and immoral. I believe that ultimately, fiat currencies, all of them, are doomed. Every fiat currency in history has died, and today's fiat currencies will be no different.”
James Turk: Gold 8000, Hyperinflation sure, Prohibition possible
Gold is in a 2nd stage of a bull market. We will see a more rapid price appreciation than in the past years. Price target untill 2015: 8000 Dollar. Price manipulation has come to an end. Gold as natural alternative to currencies. Chances of hyperinflation 100%. Gold prohibition possible.
By Michael Mross
For James Turk its quite clear, that the price of gold is maniupulated. “By doing so it makes the Dollar look better because gold is the only natural competitor towards the Dollar. If you keep the goldprice low it makes the Dollar look better then it really is”.
According to Turk, the caping of gold won’t last for ever. Just like the gold caping in the 60ies finally gave way in the 70ies its quite clear to him that the goldprice caping of the past serveral years if giving way here. Thats why the goldprice is starting to rise so rapidly.
Turk:”Goldprice manipulation is ending now, because they are finally losing control. Some central banks that not agree with the caping of gold are starting to buy right now. The concerns about the dollar are rising very rapidly and as a natural alternative people are turning to gold because there is no save currency anymore.
Back in the 70ies you could buy the Deutschmark, the Swiss Franc, - now the Deutschmark doesn’t exist, the Swiss Franc is now tight to the Euro – and given the fact that the Euro is based on Dollar reservers, the Euro is going down with it. So the only alternative currency now is gold and silver.”
Turk believes, that the fair price for gold would at least double from the current level. His longer term price forcast between 2013 and 2015 is 8000 Dollar per ounce, a prognosis that he did already in 2003. If gold went from 35 $ to 800$ it could well go from 350 (in 2003) to 8000$ says Turk.
“In order to protect yourself you have to go to gold”, says Turk. “The fact of the matter is that there is a lot paper out there and very little gold. It only takes a small amount of people to move into gold to have a big impact on the goldprice. Just like it did back in the 70ies: Gold finally broke free at 35 Dollars and went from 35 to 200 in the course of three years. My guess is that in the next couple of years gold ist going to 2000-3000$ before its going to 8000$ in 2015.”
According to turk a gold confiscation could be possible if the price goes too high and reflects an alarm signal that there is something wrong in the financial system. “America did that in 1933 but they didn’t prohibit ownership outside the united states. And there may be a prohibition sgsin in the future. So you need to diversify geograficly, different countries, different political systems and hold your gold at different places around the world. In that way you can medicate the risk of confiscation.”
Turk believes that the chances of hyperinflation is 100%. The US is on the road to hyperinflation. They are doing things that other countries that have hyperinflated their currencies have done. They spended to much money, forcing it to borrow more money than the market is willing to lend to them. In that case it is turning to the central bank and they are buying that debt and turn it into currency. And that is what ulimately destroys a currency and leads to hyperinflation. There is a fancy name: they call it Quantative Easing, but the reallity is, that its printing money.
Gold is in a 2nd stage of a bull market. We will see a more rapid price appreciation than in the past years. Price target untill 2015: 8000 Dollar. Price manipulation has come to an end. Gold as natural alternative to currencies. Chances of hyperinflation 100%. Gold prohibition possible.
By Michael Mross
For James Turk its quite clear, that the price of gold is maniupulated. “By doing so it makes the Dollar look better because gold is the only natural competitor towards the Dollar. If you keep the goldprice low it makes the Dollar look better then it really is”.
According to Turk, the caping of gold won’t last for ever. Just like the gold caping in the 60ies finally gave way in the 70ies its quite clear to him that the goldprice caping of the past serveral years if giving way here. Thats why the goldprice is starting to rise so rapidly.
Turk:”Goldprice manipulation is ending now, because they are finally losing control. Some central banks that not agree with the caping of gold are starting to buy right now. The concerns about the dollar are rising very rapidly and as a natural alternative people are turning to gold because there is no save currency anymore.
Back in the 70ies you could buy the Deutschmark, the Swiss Franc, - now the Deutschmark doesn’t exist, the Swiss Franc is now tight to the Euro – and given the fact that the Euro is based on Dollar reservers, the Euro is going down with it. So the only alternative currency now is gold and silver.”
Turk believes, that the fair price for gold would at least double from the current level. His longer term price forcast between 2013 and 2015 is 8000 Dollar per ounce, a prognosis that he did already in 2003. If gold went from 35 $ to 800$ it could well go from 350 (in 2003) to 8000$ says Turk.
“In order to protect yourself you have to go to gold”, says Turk. “The fact of the matter is that there is a lot paper out there and very little gold. It only takes a small amount of people to move into gold to have a big impact on the goldprice. Just like it did back in the 70ies: Gold finally broke free at 35 Dollars and went from 35 to 200 in the course of three years. My guess is that in the next couple of years gold ist going to 2000-3000$ before its going to 8000$ in 2015.”
According to turk a gold confiscation could be possible if the price goes too high and reflects an alarm signal that there is something wrong in the financial system. “America did that in 1933 but they didn’t prohibit ownership outside the united states. And there may be a prohibition sgsin in the future. So you need to diversify geograficly, different countries, different political systems and hold your gold at different places around the world. In that way you can medicate the risk of confiscation.”
Turk believes that the chances of hyperinflation is 100%. The US is on the road to hyperinflation. They are doing things that other countries that have hyperinflated their currencies have done. They spended to much money, forcing it to borrow more money than the market is willing to lend to them. In that case it is turning to the central bank and they are buying that debt and turn it into currency. And that is what ulimately destroys a currency and leads to hyperinflation. There is a fancy name: they call it Quantative Easing, but the reallity is, that its printing money.
Richard Russell: Speculative Phase Of Gold Bull Lies Ahead
“I’m going on the thesis that the highly speculative phase of the gold bull market lies ahead. Now I’m depending on my experience with other bull markets:
1.Most great bull markets go higher and further than almost anybody thinks possible.
2.Most bull markets progress in three psychological phases.
3.I believe the first phase of the gold bull market has passed. It’s over. This is the phase where students of great values take their initial positions.
4.I believe we are deep into the second phase of the gold bull market. This is the phase where the institutions and funds join in the bull market show.
5.Often, more money is made in the third or speculative phase of a bull market than is made in the first and second phases combined. This can mean that the late-comers to bull markets often make a fortune, more than those who had the courage to buy early in the game, but they have to have fortitude to sit in the highly volatile second/third phases.
6.Obviously, I could be wrong, but I believe that gold and silver are both still a buy.
7.I’ve said this before, but I’ll repeat it. You do not trade in-and-out in a confirmed primary bull market. You take an early position and add to your position as the bull market progresses.
8.Great bull markets don’t usually provide marvelous entry points. Those who are waiting for the ideal or “safe” place to enter the bull market in precious metals may have a long and frustrating wait.
9.In a great primary bull market, you just “shut your eyes and buy.”
10.Are you buying right or are you buying wrong? Great bull markets tend to bail you out of your mistakes. Perfect timing is nearly impossible in a great bull market. You’re either in or you’re out.
11.Great or fabulous primary bull markets may come along once or maybe twice in a generation. I believe the bull market in precious metals is just such a one — a once-in-a-generation bull market. We may never see another one to match this one in our lifetimes.
12.I started writing Dow Theory Letters 52 years ago in 1958. Three times I’ve staked my reputation and my business on a bullish market call. The first instance was in 1958, when I told my subscribers that the third phase of the bull market lay ahead, and it was time to load up on stocks. I said so in my first Barron’s article. That call and that article put me in business. I thank Barron’s late, great editor Bob Bleiberg (who had faith in me and went out on a limb for me).
In late-1974 at the end of that horrendous bear market, I told my subscribers that I thought the bear market was over, and it was time to buy stocks.
In the year 2000 I told subscribers that I thought the bear market in gold was over, and that it was time to buy what was left of the gold stocks and “put ‘em away.” I told my subscribers that we should treat the gold shares (many under five dollars) as perpetual warrants. “Buy ‘em and forget them.”
13.Lucky thirteen. I’m confirming what I said in 2000. Buy gold and silver, put ‘em away and sit tight. The great speculative phase of the precious metals bull market lies ahead. My advice is concentrated in four words — Buy, and be patient.”
“I’m going on the thesis that the highly speculative phase of the gold bull market lies ahead. Now I’m depending on my experience with other bull markets:
1.Most great bull markets go higher and further than almost anybody thinks possible.
2.Most bull markets progress in three psychological phases.
3.I believe the first phase of the gold bull market has passed. It’s over. This is the phase where students of great values take their initial positions.
4.I believe we are deep into the second phase of the gold bull market. This is the phase where the institutions and funds join in the bull market show.
5.Often, more money is made in the third or speculative phase of a bull market than is made in the first and second phases combined. This can mean that the late-comers to bull markets often make a fortune, more than those who had the courage to buy early in the game, but they have to have fortitude to sit in the highly volatile second/third phases.
6.Obviously, I could be wrong, but I believe that gold and silver are both still a buy.
7.I’ve said this before, but I’ll repeat it. You do not trade in-and-out in a confirmed primary bull market. You take an early position and add to your position as the bull market progresses.
8.Great bull markets don’t usually provide marvelous entry points. Those who are waiting for the ideal or “safe” place to enter the bull market in precious metals may have a long and frustrating wait.
9.In a great primary bull market, you just “shut your eyes and buy.”
10.Are you buying right or are you buying wrong? Great bull markets tend to bail you out of your mistakes. Perfect timing is nearly impossible in a great bull market. You’re either in or you’re out.
11.Great or fabulous primary bull markets may come along once or maybe twice in a generation. I believe the bull market in precious metals is just such a one — a once-in-a-generation bull market. We may never see another one to match this one in our lifetimes.
12.I started writing Dow Theory Letters 52 years ago in 1958. Three times I’ve staked my reputation and my business on a bullish market call. The first instance was in 1958, when I told my subscribers that the third phase of the bull market lay ahead, and it was time to load up on stocks. I said so in my first Barron’s article. That call and that article put me in business. I thank Barron’s late, great editor Bob Bleiberg (who had faith in me and went out on a limb for me).
In late-1974 at the end of that horrendous bear market, I told my subscribers that I thought the bear market was over, and it was time to buy stocks.
In the year 2000 I told subscribers that I thought the bear market in gold was over, and that it was time to buy what was left of the gold stocks and “put ‘em away.” I told my subscribers that we should treat the gold shares (many under five dollars) as perpetual warrants. “Buy ‘em and forget them.”
13.Lucky thirteen. I’m confirming what I said in 2000. Buy gold and silver, put ‘em away and sit tight. The great speculative phase of the precious metals bull market lies ahead. My advice is concentrated in four words — Buy, and be patient.”
Casey Research Chief Economist Bud Conrad:
"QE1 only bailed out the big banks so they could buy $400 billion in government debts. New loans actually declined, so it was no help to the public and thus didn't help the general economy. QE2 is a direct subsidy to the federal government and will not help the consumer. It will debase the currency. Neither party gives you a realistic chance to fix the amount of government debt that is too big to ever repay. So protect yourself with gold, energy, and agriculture investments."
"QE1 only bailed out the big banks so they could buy $400 billion in government debts. New loans actually declined, so it was no help to the public and thus didn't help the general economy. QE2 is a direct subsidy to the federal government and will not help the consumer. It will debase the currency. Neither party gives you a realistic chance to fix the amount of government debt that is too big to ever repay. So protect yourself with gold, energy, and agriculture investments."
When to Sell Gold
By Terry Coxon, Senior Editor, Casey Research
By now you have plenty of reason to congratulate yourself for having boarded the gold bandwagon. The early tickets are the cheap ones, and you’ve already had quite a ride. The best of the ride, I believe, is yet to come, and it should be very good indeed. It should be so much fun that your wallet may start to feel a bit giddy – which can be dangerous. So it would be wise to consider, now, how things will be and how they will feel when the current bull market in gold reaches its “end of days.” Because it will end.
Buying at the right time is the key to building profits. Selling at the right time is the key to collecting them.
The 1980 Peak
In 1980, gold briefly touched the then record price of $850 per ounce. In terms of purchasing power, that would be $2,400 in today’s dollars. And for the value of the world’s entire gold stockpile to attain the same share of the world’s total wealth that it represented at the 1980 peak, the price would need to reach $5,800 per ounce.
But so what? Before you can look to those numbers for guidance about what the peak in gold’s bull market will look like, you need to consider how the process that drove the earlier bull market compares with what is happening today.
The earlier bull market was driven by price inflation in the world’s reserve currency, the dollar, that reached an annual rate of 14%. The more expensive it became to use dollars as a store of value (i.e., the more rapidly the dollar’s purchasing power was declining), the more attractive gold became as an alternative way to store value.
The dollar is still the world’s reserve currency. (And not just for central banks. Among individuals and private businesses that want to diversify out of their home currency, the dollar is still Number One.) And the force driving the bull market in gold is once again price inflation. But this time it isn’t actual price inflation that is on the mind of gold buyers around the world. It is the potential for price inflation that is building up. That build-up is coming from:
•Rapid expansion in the U.S. monetary base through the Federal Reserve’s asset purchases. Most of that expansion has yet to be reflected in a growth in the U.S. money supply. It is still sitting, like a charge in a capacitor, waiting for something to set it off. There was no similar liquidity bomb stored in the U.S. economy's closet during the years leading up to 1980.
•Unprecedented growth in federal government debt, which adds to the political attractiveness of price inflation. There were federal deficits during the 1970s, but nothing like today's – just enough to give the party out of power at any time something to talk about.
•The accumulation of U.S. Treasury debt and privately issued dollar debt in the hands of foreign investors. U.S. debt to foreigners wasn't a factor in the years leading up to gold's 1980 peak. This time around, it could be a powerful force for accelerating inflation. Even moderate inflation could spook foreign investors. Their sales of Treasuries and other dollar-denominated IOUs would push down the foreign exchange value of the dollar, which would raise the cost of imports coming into the U.S., which would further stimulate price inflation. A nasty feedback.
And foreign holdings of U.S. debt operate as a second vector feeding the political attractiveness of dollar price inflation. Depreciation of the dollar can be framed as a clever way to shortchange foreign creditors. "It hurts THEM, not US" would be the slogan.
All those factors are working to make price inflation distinctly more severe than it was in the 1970s, which argues for a higher peak price for gold. When the metal does surpass its 1980 peak in purchasing power, the event is likely to be widely reported in the press. I suggest that you not attach any significance to the event. It won't be time to sell.
Sell Signals
But the time to sell will come. Here are the signs I'll be looking for.
Gold and gold-related financial products will be commonplace.
Even today, most financial institutions still hold the "barbarous relic" attitude toward gold. Yes, you can get GLD through any stockbroker, but with a few exceptions, the brokerage firm's heart isn't in it. They offer GLD for the same reason even the best seafood restaurants have a steak on the menu – they know someone will ask for one, even though that's not what they are in business to serve.
Before the bull market is over, that attitude will change. Mainline brokerage firms won't just have gold-related products available, they will advertise them. They will boast about them. They'll claim to specialize in them. And it won't be just the brokers. Your local bank will offer gold-related CDs. Your insurance company may be offering life insurance denominated in ounces.
Gold going mainstream won't mean that the bull market is over, but it will be a sign that it's getting long in the tooth. An early warning signal.
You'll be hearing gold chatter wherever people talk about investing.
The inhabitants of Financial News TV Land will be talking about gold approvingly, and each of them will be trying to suggest he was early in recognizing the gold bull market. You won't be able to get through a golf game or a cocktail party without someone talking about gold. Even your brother-in-law will want to explain it to you.
The gold standard will become respectable.
Today advocates of the gold standard are seen as standing to the good side of whacko, but not by a big margin. But as gold attracts more converts in the investment world, the politicians will want to associate themselves with it by proposing some brand or other of gold convertibility for the dollar. Respectability for the gold standard will be a sign that a majority of the people who are going to buy gold already have.
Other things will look cheap to you.
When gold nears its peak, even if you suspect that that's what's happening, you won't feel certain about it. But when you start seeing investments – probably conventional stocks – that look like strong bargains, treat those sightings as a sign it's time to start selling gold. You know the reasons that led you to buy gold. If you are tempted to sell part of your holdings to buy something whose low price seems to give it better prospects, then you probably will be selling at the right time. You could be selling to the last new buyer.
----
With gold now over $1,400 an ounce, where do we go from here? To stay updated on the gold bull market and the strongest gold stocks… and find out how high gold might go… and be alerted when it’s time to sell and collect your profits… check out BIG GOLD – Casey’s monthly advisory on all things precious metals and large-cap gold stocks. At only $79 per year, it’s by far the best investment you can make. Click here for a risk-free 3-month trial with money-back guarantee.
By Terry Coxon, Senior Editor, Casey Research
By now you have plenty of reason to congratulate yourself for having boarded the gold bandwagon. The early tickets are the cheap ones, and you’ve already had quite a ride. The best of the ride, I believe, is yet to come, and it should be very good indeed. It should be so much fun that your wallet may start to feel a bit giddy – which can be dangerous. So it would be wise to consider, now, how things will be and how they will feel when the current bull market in gold reaches its “end of days.” Because it will end.
Buying at the right time is the key to building profits. Selling at the right time is the key to collecting them.
The 1980 Peak
In 1980, gold briefly touched the then record price of $850 per ounce. In terms of purchasing power, that would be $2,400 in today’s dollars. And for the value of the world’s entire gold stockpile to attain the same share of the world’s total wealth that it represented at the 1980 peak, the price would need to reach $5,800 per ounce.
But so what? Before you can look to those numbers for guidance about what the peak in gold’s bull market will look like, you need to consider how the process that drove the earlier bull market compares with what is happening today.
The earlier bull market was driven by price inflation in the world’s reserve currency, the dollar, that reached an annual rate of 14%. The more expensive it became to use dollars as a store of value (i.e., the more rapidly the dollar’s purchasing power was declining), the more attractive gold became as an alternative way to store value.
The dollar is still the world’s reserve currency. (And not just for central banks. Among individuals and private businesses that want to diversify out of their home currency, the dollar is still Number One.) And the force driving the bull market in gold is once again price inflation. But this time it isn’t actual price inflation that is on the mind of gold buyers around the world. It is the potential for price inflation that is building up. That build-up is coming from:
•Rapid expansion in the U.S. monetary base through the Federal Reserve’s asset purchases. Most of that expansion has yet to be reflected in a growth in the U.S. money supply. It is still sitting, like a charge in a capacitor, waiting for something to set it off. There was no similar liquidity bomb stored in the U.S. economy's closet during the years leading up to 1980.
•Unprecedented growth in federal government debt, which adds to the political attractiveness of price inflation. There were federal deficits during the 1970s, but nothing like today's – just enough to give the party out of power at any time something to talk about.
•The accumulation of U.S. Treasury debt and privately issued dollar debt in the hands of foreign investors. U.S. debt to foreigners wasn't a factor in the years leading up to gold's 1980 peak. This time around, it could be a powerful force for accelerating inflation. Even moderate inflation could spook foreign investors. Their sales of Treasuries and other dollar-denominated IOUs would push down the foreign exchange value of the dollar, which would raise the cost of imports coming into the U.S., which would further stimulate price inflation. A nasty feedback.
And foreign holdings of U.S. debt operate as a second vector feeding the political attractiveness of dollar price inflation. Depreciation of the dollar can be framed as a clever way to shortchange foreign creditors. "It hurts THEM, not US" would be the slogan.
All those factors are working to make price inflation distinctly more severe than it was in the 1970s, which argues for a higher peak price for gold. When the metal does surpass its 1980 peak in purchasing power, the event is likely to be widely reported in the press. I suggest that you not attach any significance to the event. It won't be time to sell.
Sell Signals
But the time to sell will come. Here are the signs I'll be looking for.
Gold and gold-related financial products will be commonplace.
Even today, most financial institutions still hold the "barbarous relic" attitude toward gold. Yes, you can get GLD through any stockbroker, but with a few exceptions, the brokerage firm's heart isn't in it. They offer GLD for the same reason even the best seafood restaurants have a steak on the menu – they know someone will ask for one, even though that's not what they are in business to serve.
Before the bull market is over, that attitude will change. Mainline brokerage firms won't just have gold-related products available, they will advertise them. They will boast about them. They'll claim to specialize in them. And it won't be just the brokers. Your local bank will offer gold-related CDs. Your insurance company may be offering life insurance denominated in ounces.
Gold going mainstream won't mean that the bull market is over, but it will be a sign that it's getting long in the tooth. An early warning signal.
You'll be hearing gold chatter wherever people talk about investing.
The inhabitants of Financial News TV Land will be talking about gold approvingly, and each of them will be trying to suggest he was early in recognizing the gold bull market. You won't be able to get through a golf game or a cocktail party without someone talking about gold. Even your brother-in-law will want to explain it to you.
The gold standard will become respectable.
Today advocates of the gold standard are seen as standing to the good side of whacko, but not by a big margin. But as gold attracts more converts in the investment world, the politicians will want to associate themselves with it by proposing some brand or other of gold convertibility for the dollar. Respectability for the gold standard will be a sign that a majority of the people who are going to buy gold already have.
Other things will look cheap to you.
When gold nears its peak, even if you suspect that that's what's happening, you won't feel certain about it. But when you start seeing investments – probably conventional stocks – that look like strong bargains, treat those sightings as a sign it's time to start selling gold. You know the reasons that led you to buy gold. If you are tempted to sell part of your holdings to buy something whose low price seems to give it better prospects, then you probably will be selling at the right time. You could be selling to the last new buyer.
----
With gold now over $1,400 an ounce, where do we go from here? To stay updated on the gold bull market and the strongest gold stocks… and find out how high gold might go… and be alerted when it’s time to sell and collect your profits… check out BIG GOLD – Casey’s monthly advisory on all things precious metals and large-cap gold stocks. At only $79 per year, it’s by far the best investment you can make. Click here for a risk-free 3-month trial with money-back guarantee.
What Will Cause Gold To Rise From Here?
By : Captain Hook
Treasure Chests.com
Gold is overbought from a conventional technical perspective; of this there is little doubt. So the question then arises, if this is to be so, as fundamentals for rising gold and silver prices become stronger by the day (see below), what will cause the prices of precious metals to rise further from here, or after a mild correction? Answer: A widespread (think currency wars) and accelerated currency debasement. And simply to catch up to previous inflation, never mind what is coming. This is of course the right answer, however it's not what will motivate people to actually buy gold and silver. No, that distinction will go to rising prices, which are on the way, coming soon to a theatre near you - literally. (I'm not sure how much higher movie ticket prices can go without affecting demand, but rest assured prices will keep rising until this is discovered.)
But never mind movie ticket prices, as this is discretionary spending, which will suffer as prices continue to rise. How about food and energy prices? You know, those things we need to live and that consume large chunks of our incomes, but are considered unimportant in government inflation statistics. These are the things that people will finally start to notice when prices rise sufficiently that the lifestyles of increasing middle class people are affected. This, is when the lights will come on for growing numbers, which will cause them to finally look at precious metals seriously and buy. Right now the public is selling gold because they think the price is high and wish to pay bills. These people will be shocked at their lack of vision in the not too distant future when they realize they should have been buyers and not sellers.
By : Captain Hook
Treasure Chests.com
Gold is overbought from a conventional technical perspective; of this there is little doubt. So the question then arises, if this is to be so, as fundamentals for rising gold and silver prices become stronger by the day (see below), what will cause the prices of precious metals to rise further from here, or after a mild correction? Answer: A widespread (think currency wars) and accelerated currency debasement. And simply to catch up to previous inflation, never mind what is coming. This is of course the right answer, however it's not what will motivate people to actually buy gold and silver. No, that distinction will go to rising prices, which are on the way, coming soon to a theatre near you - literally. (I'm not sure how much higher movie ticket prices can go without affecting demand, but rest assured prices will keep rising until this is discovered.)
But never mind movie ticket prices, as this is discretionary spending, which will suffer as prices continue to rise. How about food and energy prices? You know, those things we need to live and that consume large chunks of our incomes, but are considered unimportant in government inflation statistics. These are the things that people will finally start to notice when prices rise sufficiently that the lifestyles of increasing middle class people are affected. This, is when the lights will come on for growing numbers, which will cause them to finally look at precious metals seriously and buy. Right now the public is selling gold because they think the price is high and wish to pay bills. These people will be shocked at their lack of vision in the not too distant future when they realize they should have been buyers and not sellers.
"The world will soon wake up to the reality that everyone is broke and can collect nothing from the bankrupt, who are owed unlimited amounts by the insolvent, who are attempting to make late payments on a bank holiday in the wrong country, with an unacceptable currency, against defaulted collateral, of which nobody is sure who holds title." anonymous
The Uselessness of Politics
For a political athiest, I know that I have been posting a lot of articles about politics lately. Guess I am just trying to spread the gospel of common sense to anyone that will listen. Hey! Anyone out there?
Here's another guest commentary from over at Rick's Picks this week. I absolutely had to pass it on.
SOURCE Nothing will likely change our direction because too many people benefit from our corrupt and perverted system. Spare me the argument that it is not corrupt. The S&L crisis produced over a thousand jail sentences, and we haven’t even had an indictment. The S&L crisis cost $160 billion to repair. We passed the trillion mark a long time ago and are still speeding away. Sigh. The elite won’t allow justice because it would cost them dearly, and the poor won’t demand it because the elite keep providing promises for their silence.
Relief Thwarted
I am writing this prior to the elections. Maybe a majority of our new leadership will be spun from the Ron Paul bolt of cloth. Right. Even if fiscally conservative folks occupy more positions in Congress and Senate, all the other players are still in place, blocking their move. The ship is headed for an iceberg and no one can steer it away because there are so many hands holding the wheel.
The dollar is our Mussolini. And the dollar will be hung, upside down, drained of all. When that happens, all dollar-only denominated entitlements will be wiped out. Those juicy pensions, the ones that are so well marbled that they seem nearly too good to be true? Yeah, those will get neatly destroyed, too, with a hyperinflationary erasure. Every aspect of the economy that relies solely on the benefit of the fruits of fiat currency will be corrected. This includes many businesses, many that have miscalculated how dependent on the largesse they are. Government will have to shrink violently. There will be no money to pay for it, and the ruse of “we have to go deeper in debt to get out of debt” will be rejected.
And then the real drama will begin. A nation will be full of desperate folks and a very small percentage of the elite rich. A hobbled government eliminating services. I have no idea how that will turn out, but I don’t think it will be neat or tidy. I just hope the angry mob knows who to blame.
Got gold?
For a political athiest, I know that I have been posting a lot of articles about politics lately. Guess I am just trying to spread the gospel of common sense to anyone that will listen. Hey! Anyone out there?
Here's another guest commentary from over at Rick's Picks this week. I absolutely had to pass it on.
SOURCE Nothing will likely change our direction because too many people benefit from our corrupt and perverted system. Spare me the argument that it is not corrupt. The S&L crisis produced over a thousand jail sentences, and we haven’t even had an indictment. The S&L crisis cost $160 billion to repair. We passed the trillion mark a long time ago and are still speeding away. Sigh. The elite won’t allow justice because it would cost them dearly, and the poor won’t demand it because the elite keep providing promises for their silence.
Relief Thwarted
I am writing this prior to the elections. Maybe a majority of our new leadership will be spun from the Ron Paul bolt of cloth. Right. Even if fiscally conservative folks occupy more positions in Congress and Senate, all the other players are still in place, blocking their move. The ship is headed for an iceberg and no one can steer it away because there are so many hands holding the wheel.
The dollar is our Mussolini. And the dollar will be hung, upside down, drained of all. When that happens, all dollar-only denominated entitlements will be wiped out. Those juicy pensions, the ones that are so well marbled that they seem nearly too good to be true? Yeah, those will get neatly destroyed, too, with a hyperinflationary erasure. Every aspect of the economy that relies solely on the benefit of the fruits of fiat currency will be corrected. This includes many businesses, many that have miscalculated how dependent on the largesse they are. Government will have to shrink violently. There will be no money to pay for it, and the ruse of “we have to go deeper in debt to get out of debt” will be rejected.
And then the real drama will begin. A nation will be full of desperate folks and a very small percentage of the elite rich. A hobbled government eliminating services. I have no idea how that will turn out, but I don’t think it will be neat or tidy. I just hope the angry mob knows who to blame.
Got gold?
Everything Down Except Gold
The following is an excerpt from an interview with legendary investor Rick Rule. Source
Daily Bell: Dollar going up or down long term?
Rick Rule: Long term it is hopeless. Hopeless. I think it is going much lower. It is widely reported that what you are seeing now is a race to the bottom. We have talked about this in prior interviews. The world's reserve currency is still the United States dollar and the United States is still, despite the fact that it is weaker, the world's mouth. We are the consumer that everybody looks to and if the Chinese are determined not to let the Renminbi appreciate too much against the dollar, the rest of the world has no choice but to appreciate.
Japan can't lose her competitive position relative to China in the US export market, so they have to devalue. From my point of view, all currencies go lower. I see the only currencies in the world that don't have a domestic political constituency for devaluation being gold and silver.
___________________________________
Rick Rule began his career in the securities business in 1974, and has been principally involved in natural resource security investments ever since. He is a leading investor specializing in mining, energy, water, forest products and agriculture. A popular public speaker, Mr. Rule is a featured presenter at investment conferences and resource investment forums throughout the world. Rick Rule has originated and/or participated in several hundred transactions over the past 30 years, including both debt and equity in private, pre-public and public companies. These private placement activities have involved companies on six continents.
The following is an excerpt from an interview with legendary investor Rick Rule. Source
Daily Bell: Dollar going up or down long term?
Rick Rule: Long term it is hopeless. Hopeless. I think it is going much lower. It is widely reported that what you are seeing now is a race to the bottom. We have talked about this in prior interviews. The world's reserve currency is still the United States dollar and the United States is still, despite the fact that it is weaker, the world's mouth. We are the consumer that everybody looks to and if the Chinese are determined not to let the Renminbi appreciate too much against the dollar, the rest of the world has no choice but to appreciate.
Japan can't lose her competitive position relative to China in the US export market, so they have to devalue. From my point of view, all currencies go lower. I see the only currencies in the world that don't have a domestic political constituency for devaluation being gold and silver.
___________________________________
Rick Rule began his career in the securities business in 1974, and has been principally involved in natural resource security investments ever since. He is a leading investor specializing in mining, energy, water, forest products and agriculture. A popular public speaker, Mr. Rule is a featured presenter at investment conferences and resource investment forums throughout the world. Rick Rule has originated and/or participated in several hundred transactions over the past 30 years, including both debt and equity in private, pre-public and public companies. These private placement activities have involved companies on six continents.
Fact: Gold Will Hit $10,000
by David Tanner
The latest round of Quantitative Easing (money printing) by the Fed is just another nail in the coffin for the dollar. One cannot prop up an economy by destroying its currency, and the printing of another $600 billion with nothing to back it guarantees us that gold's future is bright and shiny!
History has proven that when paper money systems collapse, the participants always return to gold as a standard. When the president of the World Bank, Robert Zoellick recently suggested such a return, we can be sure that the end is near, or at least in sight.
Gold's safe haven credentials have been increased by World Bank president Robert Zoellick's suggestion that leading economies should consider readopting a modified global gold standard to guide currency movements. G20 economies should consider using gold as a reference point for market expectations of currency values, inflation and deflation as they reform the global monetary system, Zoellick wrote in an opinion article in the Financial Times. While textbooks may view gold as "old money," markets use it as an alternative monetary asset, Zoellick wrote. His comments come after the Federal Reserve's announced plans to buy $600 billion in Treasurys which has led to concerns about the dollar and the emergence of inflation and possibly stagflation. source
Now, considering the fact that there only exists about $5 trillion in gold, and about $4 trillion of that is already "in use" in the form of jewelry, investment, etc. then you can begin to understand how a return to the gold standard will drive its price skyward.
Again, consider the fact that we just printed a half a trillion dollars out of thin air, backed by nothing. When the world begins to return to gold-backed currency, a nation will have to hold gold in reserve before it can just "print" money on a whim. When that day comes, and every nation on earth is demanding gold for its reserves, there will be tens, possibly hundreds, of trillions of dollars chasing less than $1 trillion of available gold.
Supply and demand baby! Economics 101. Let the bidding wars begin!
On that day, gold will rise in price to ten, if not a hundred, times its current price. That is why I say gold $10,000 is guaranteed! I only say that because I don't want to sound to radical. LOL! If I said what I REALLY thought, the above headline would read "Fact: Gold Will Hit $100,000."
by David Tanner
The latest round of Quantitative Easing (money printing) by the Fed is just another nail in the coffin for the dollar. One cannot prop up an economy by destroying its currency, and the printing of another $600 billion with nothing to back it guarantees us that gold's future is bright and shiny!
History has proven that when paper money systems collapse, the participants always return to gold as a standard. When the president of the World Bank, Robert Zoellick recently suggested such a return, we can be sure that the end is near, or at least in sight.
Gold's safe haven credentials have been increased by World Bank president Robert Zoellick's suggestion that leading economies should consider readopting a modified global gold standard to guide currency movements. G20 economies should consider using gold as a reference point for market expectations of currency values, inflation and deflation as they reform the global monetary system, Zoellick wrote in an opinion article in the Financial Times. While textbooks may view gold as "old money," markets use it as an alternative monetary asset, Zoellick wrote. His comments come after the Federal Reserve's announced plans to buy $600 billion in Treasurys which has led to concerns about the dollar and the emergence of inflation and possibly stagflation. source
Now, considering the fact that there only exists about $5 trillion in gold, and about $4 trillion of that is already "in use" in the form of jewelry, investment, etc. then you can begin to understand how a return to the gold standard will drive its price skyward.
Again, consider the fact that we just printed a half a trillion dollars out of thin air, backed by nothing. When the world begins to return to gold-backed currency, a nation will have to hold gold in reserve before it can just "print" money on a whim. When that day comes, and every nation on earth is demanding gold for its reserves, there will be tens, possibly hundreds, of trillions of dollars chasing less than $1 trillion of available gold.
Supply and demand baby! Economics 101. Let the bidding wars begin!
On that day, gold will rise in price to ten, if not a hundred, times its current price. That is why I say gold $10,000 is guaranteed! I only say that because I don't want to sound to radical. LOL! If I said what I REALLY thought, the above headline would read "Fact: Gold Will Hit $100,000."
Practicing Politics In an Age of Chaos
(This week, Rick’s Picks will be featuring commentary from some forum regulars who for the most part are mad as hell and not going to take it any more. Today’s commentary is from Tom Waldenfels, a former broker and semi-retired management consultant who goes by the handle “fallingman” in the forum. Tom is skeptical, to put it mildly, that the recent election is going to change things. If the voters want real change, he says, it can only begin with changes in the way they conduct their own lives. RA)
I’m writing this essay a few days prior to the election, but I already know how the vote’s gonna turn out. The new Congress will be composed of ... pause for dramatic effect … Republicans and Democrats. Doh! “Meet the new boss … same as the old boss.” We just got fooled again. Yeah, the balance will have shifted some and many of the newcomers are unquestionably more honorable human beings than the people they’ll be replacing. How could they not be? But, as Doug Casey says, “Political power tends to attract the worst people … the four percent of the population that’s sociopathic.” It ain’t like the Congress is goin’ all Jimmy Stewart on us. We’ll be stuck with essentially the same crew and pretty much the same “leadership” in both parties that we’ve had, rump movements notwithstanding. And how’s that arrangement been workin’ for us? As we say in the south … “Not too good.” Rome will continue to burn.
Corporatism will continue to rule the day. Promises will continue to be made that can’t be kept. The Constitution will restrain no one. Borrowed and newly conjured money will continue to be wasted on everything ranging from the merely idiotic and counterproductive to the truly criminal and completely insane. That’s until the whole system collapses, which will happen in an instant when it happens.
The Powers That Be
In the meantime, the Fed will continue to pour the whiskey, trash the clownbuck, and lie about everything from its true mission, to how much gold the U.S. holds. The Military Industrial - Wall Street - Big Bank - Big Oil - Big Pharma - Big Medicine - Big Ag complex, with their wholly-owned media mouthpieces, faux-education establishment, and corrupt two-party front men, will continue to parasitize us. The insider “elite” will be able to do damn near anything they want, continuing to concentrate their power and expand their influence, with no one being held to account or brought to justice.
If you missed the recent Dylan Ratigan clip on the crimes in progress in the financial world and the lack of any real response from the government, you owe it to yourself to take five minutes, if for no other reason than to watch him skewer that cretin, Chris Dodd. Why GE and Microsoft allow Ratigan to speak the truth on their network is beyond me.
Toilet Regulations
Now, some of my “progressive” friends might contend that what I’m saying just proves we need to reform the system -- promote campaign finance laws, get some good people in there, and pass some tough measures that prevent the abuses. Hey, I don’t disparage their motives, but it’s not as if we live in some kind of regulation-free, anarcho-capitalist world and regulation is a sparkly new idea. We literally have tens of thousands of laws and hundreds of agencies regulating everything from who can legally arrange flowers for a living to how much water a toilet can flush.
And yet, the Congress won’t even authorize a real audit of the Fed. Bernie Madoff and the Social Security Administration run Ponzi schemes with impunity. (It took a private citizen, Harry Markopolos, to expose the crime in Madoff’s case.) JP Morgan is able to annex Bear Stearns, rape Jefferson County, Alabama, and suppress silver prices at the Crimex. Not one peep. Goldman managed to screw a whole country, Greece, not to mention its own customers, and they’re busy working on the U.S. from the inside. Countrywide. Lehman, and the rest of the mortgage lenders and securitizers engaged in wholesale fraud, and the regulators and regulations failed to rein them in. Why? Because the whole regulatory apparatus is just for show. The government just pretends to protect us. Sarbanes-Oxley … Dodd-Frank … the SEC … FDIC … CFTC … PBGC. Ha, what a joke! And don’t even get me going on the FDA. The fox has free run of the henhouse and is eating the chickens as we speak.
Collapse, and Soon
Look, the only real progress ever made in the political realm over the centuries has been toward greater individual freedom and smaller, more decentralized government, not toward bigger, more intrusive government. And yet, the clamor to add more parasites to the Federal payroll and exercise more and more control continues. The result? Every day, it gets harder for honest people to do business. Big government ain’t workin’. At least, it isn’t working for me and you. If you’re one of the fascisti, it’s working just fine.
I have a theory. People will be willing to participate in the electoral charade as a way to express their anger and frustration only as long as their lives are passably normal. The game will change once our daily lives are turned upside down. I take this descent into chaos as a given, by the way. To me, the fall of 2008 was merely a prelude. I expect a full-out collapse, and soon. For what’s it’s worth, I give it a couple more election cycles, and then the fury comes out sideways and gets expressed in more hands-on, up-close-and-personal ways.
That will likely take us in one of two eventual directions. We either embrace a “strong leader” -- a creation of the combine -- who can restore order and “make America work again”… at the expense of all our remaining civil liberties. Odds … maybe 90-95%. Or, we simply abandon the effete and bankrupt central government and concentrate on making things work closer to home -- and to hell with the empire. Don’t ask me for details. I don’t have any. But doesn’t the Republic of Texas have a nice ring to it? Devolution. Bring it on.
Not that the Feds are all that keen on losing their sovereignty. Remember how hissy Lincoln got over the whole opt-out thing. But if we’re going to get free of the poisonous influence of the “money power,” it won’t be by taming them from the inside or battling it out with them in the streets. This revolution will have to be peaceful and principled. We’ll have to withdraw our consent … our support … our cooperation … our business … and do it en masse.
What Can We Do?
Fat chance, right? Mao famously said political power comes from the barrel of a gun, and maybe he was right. He sure looks right on the surface. Hence, the 95% odds. But what about Gandhi? What about MLK.? Something as simple as non-participation in the form of a boycott can be pretty powerful. What can we do? Just this: reject the bankers’ credit; tune out the pharmaceutical peddlers and avoid the absurd disease care system whenever possible; eat real food and tell the likes of Monsanto to take a hike; shun the polluted Mainstream Media; lay down arms in the endless “war” on nouns … cancer, drugs, terror. Politely refuse to play.
If we have a chance of reviving the American ideal, it’ll be by turning our backs and walking away from the sham political process and the corporatist noose, allowing a thoroughly rotten system to collapse of its own weight, It’s going to disintegrate sooner or later whether we like it or not. It isn’t worth saving and it can’t be reformed. The die has been cast.
That’s a tall order to fill, given the dumbed-down population and the nanny-state free lunch we’ve gotten used to, not to mention our need for political saviors, but I’m grasping at straws. From here, it looks like some sort of principled refusal to participate in the game any longer and a new self-reliance is the only hope we have.
Rick Ackerman
Subscribe to Rick’s Pick
Rick Ackerman is the editor of Rick’s Picks, a daily trading newsletter and intraday advisory packed with detailed strategies, fresh ideas and plain old horse sense.
(This week, Rick’s Picks will be featuring commentary from some forum regulars who for the most part are mad as hell and not going to take it any more. Today’s commentary is from Tom Waldenfels, a former broker and semi-retired management consultant who goes by the handle “fallingman” in the forum. Tom is skeptical, to put it mildly, that the recent election is going to change things. If the voters want real change, he says, it can only begin with changes in the way they conduct their own lives. RA)
I’m writing this essay a few days prior to the election, but I already know how the vote’s gonna turn out. The new Congress will be composed of ... pause for dramatic effect … Republicans and Democrats. Doh! “Meet the new boss … same as the old boss.” We just got fooled again. Yeah, the balance will have shifted some and many of the newcomers are unquestionably more honorable human beings than the people they’ll be replacing. How could they not be? But, as Doug Casey says, “Political power tends to attract the worst people … the four percent of the population that’s sociopathic.” It ain’t like the Congress is goin’ all Jimmy Stewart on us. We’ll be stuck with essentially the same crew and pretty much the same “leadership” in both parties that we’ve had, rump movements notwithstanding. And how’s that arrangement been workin’ for us? As we say in the south … “Not too good.” Rome will continue to burn.
Corporatism will continue to rule the day. Promises will continue to be made that can’t be kept. The Constitution will restrain no one. Borrowed and newly conjured money will continue to be wasted on everything ranging from the merely idiotic and counterproductive to the truly criminal and completely insane. That’s until the whole system collapses, which will happen in an instant when it happens.
The Powers That Be
In the meantime, the Fed will continue to pour the whiskey, trash the clownbuck, and lie about everything from its true mission, to how much gold the U.S. holds. The Military Industrial - Wall Street - Big Bank - Big Oil - Big Pharma - Big Medicine - Big Ag complex, with their wholly-owned media mouthpieces, faux-education establishment, and corrupt two-party front men, will continue to parasitize us. The insider “elite” will be able to do damn near anything they want, continuing to concentrate their power and expand their influence, with no one being held to account or brought to justice.
If you missed the recent Dylan Ratigan clip on the crimes in progress in the financial world and the lack of any real response from the government, you owe it to yourself to take five minutes, if for no other reason than to watch him skewer that cretin, Chris Dodd. Why GE and Microsoft allow Ratigan to speak the truth on their network is beyond me.
Toilet Regulations
Now, some of my “progressive” friends might contend that what I’m saying just proves we need to reform the system -- promote campaign finance laws, get some good people in there, and pass some tough measures that prevent the abuses. Hey, I don’t disparage their motives, but it’s not as if we live in some kind of regulation-free, anarcho-capitalist world and regulation is a sparkly new idea. We literally have tens of thousands of laws and hundreds of agencies regulating everything from who can legally arrange flowers for a living to how much water a toilet can flush.
And yet, the Congress won’t even authorize a real audit of the Fed. Bernie Madoff and the Social Security Administration run Ponzi schemes with impunity. (It took a private citizen, Harry Markopolos, to expose the crime in Madoff’s case.) JP Morgan is able to annex Bear Stearns, rape Jefferson County, Alabama, and suppress silver prices at the Crimex. Not one peep. Goldman managed to screw a whole country, Greece, not to mention its own customers, and they’re busy working on the U.S. from the inside. Countrywide. Lehman, and the rest of the mortgage lenders and securitizers engaged in wholesale fraud, and the regulators and regulations failed to rein them in. Why? Because the whole regulatory apparatus is just for show. The government just pretends to protect us. Sarbanes-Oxley … Dodd-Frank … the SEC … FDIC … CFTC … PBGC. Ha, what a joke! And don’t even get me going on the FDA. The fox has free run of the henhouse and is eating the chickens as we speak.
Collapse, and Soon
Look, the only real progress ever made in the political realm over the centuries has been toward greater individual freedom and smaller, more decentralized government, not toward bigger, more intrusive government. And yet, the clamor to add more parasites to the Federal payroll and exercise more and more control continues. The result? Every day, it gets harder for honest people to do business. Big government ain’t workin’. At least, it isn’t working for me and you. If you’re one of the fascisti, it’s working just fine.
I have a theory. People will be willing to participate in the electoral charade as a way to express their anger and frustration only as long as their lives are passably normal. The game will change once our daily lives are turned upside down. I take this descent into chaos as a given, by the way. To me, the fall of 2008 was merely a prelude. I expect a full-out collapse, and soon. For what’s it’s worth, I give it a couple more election cycles, and then the fury comes out sideways and gets expressed in more hands-on, up-close-and-personal ways.
That will likely take us in one of two eventual directions. We either embrace a “strong leader” -- a creation of the combine -- who can restore order and “make America work again”… at the expense of all our remaining civil liberties. Odds … maybe 90-95%. Or, we simply abandon the effete and bankrupt central government and concentrate on making things work closer to home -- and to hell with the empire. Don’t ask me for details. I don’t have any. But doesn’t the Republic of Texas have a nice ring to it? Devolution. Bring it on.
Not that the Feds are all that keen on losing their sovereignty. Remember how hissy Lincoln got over the whole opt-out thing. But if we’re going to get free of the poisonous influence of the “money power,” it won’t be by taming them from the inside or battling it out with them in the streets. This revolution will have to be peaceful and principled. We’ll have to withdraw our consent … our support … our cooperation … our business … and do it en masse.
What Can We Do?
Fat chance, right? Mao famously said political power comes from the barrel of a gun, and maybe he was right. He sure looks right on the surface. Hence, the 95% odds. But what about Gandhi? What about MLK.? Something as simple as non-participation in the form of a boycott can be pretty powerful. What can we do? Just this: reject the bankers’ credit; tune out the pharmaceutical peddlers and avoid the absurd disease care system whenever possible; eat real food and tell the likes of Monsanto to take a hike; shun the polluted Mainstream Media; lay down arms in the endless “war” on nouns … cancer, drugs, terror. Politely refuse to play.
If we have a chance of reviving the American ideal, it’ll be by turning our backs and walking away from the sham political process and the corporatist noose, allowing a thoroughly rotten system to collapse of its own weight, It’s going to disintegrate sooner or later whether we like it or not. It isn’t worth saving and it can’t be reformed. The die has been cast.
That’s a tall order to fill, given the dumbed-down population and the nanny-state free lunch we’ve gotten used to, not to mention our need for political saviors, but I’m grasping at straws. From here, it looks like some sort of principled refusal to participate in the game any longer and a new self-reliance is the only hope we have.
Rick Ackerman
Subscribe to Rick’s Pick
Rick Ackerman is the editor of Rick’s Picks, a daily trading newsletter and intraday advisory packed with detailed strategies, fresh ideas and plain old horse sense.
Did the mid-term elections affect the price of gold?
In the run-up to and after the announcements of the results of the U.S. mid-term elections the gold price barely moved. On the surface we can therefore conclude that the mid-term U.S. elections did not affect the gold price. But whether the Republicans or the Democrats won is not an issue for the gold market. What is an issue for precious metals is, can the U.S. government govern in the monetary area sufficiently to invigorate the U.S. economy and should they wish to do so, strengthen the U.S. dollar?
We found the result pointed to an emasculation of the government’s power on the monetary front. Far too much of a burden has fallen on the shoulders of the Federal Reserve, an institution with only limited powers to resuscitate the U.S. economy. Government should shoulder that role, supported in this by the Fed. Government does not appear to now have the capacity to resolve the economic problems of the U.S. This tells us that the enormous steps needed to be taken to strengthen the U.S. dollar are not going to be taken, so a fall in the U.S. dollar is widely expected. The difference for the dollar now is that its fall can be precipitous and not simply a repeat of the fall in the last two years. Control over the dollar’s value for the next two years appears to have slipped from the grasp of the U.S. monetary authorities. This is extremely positive for the gold price.
In the run-up to and after the announcements of the results of the U.S. mid-term elections the gold price barely moved. On the surface we can therefore conclude that the mid-term U.S. elections did not affect the gold price. But whether the Republicans or the Democrats won is not an issue for the gold market. What is an issue for precious metals is, can the U.S. government govern in the monetary area sufficiently to invigorate the U.S. economy and should they wish to do so, strengthen the U.S. dollar?
We found the result pointed to an emasculation of the government’s power on the monetary front. Far too much of a burden has fallen on the shoulders of the Federal Reserve, an institution with only limited powers to resuscitate the U.S. economy. Government should shoulder that role, supported in this by the Fed. Government does not appear to now have the capacity to resolve the economic problems of the U.S. This tells us that the enormous steps needed to be taken to strengthen the U.S. dollar are not going to be taken, so a fall in the U.S. dollar is widely expected. The difference for the dollar now is that its fall can be precipitous and not simply a repeat of the fall in the last two years. Control over the dollar’s value for the next two years appears to have slipped from the grasp of the U.S. monetary authorities. This is extremely positive for the gold price.
Jason Hommel Article
Here's a recent article by a friend of mine Jason Hommel.
Obama: Silver Salesman of the Year!
October 29th, 2010
(Two years running!)
Obama is an amazing gun salesman and silver salesman. He's caused the gun sales by being a gun grabbing liberal. He's an even better silver salesman than gun salesman though, since the sales of US Mint Silver Eagles has just about trippled on his watch, but I'd never even heard him mention the subject of silver. That's quite a feat!
Politics this year has just not gripped me like other years.
I'm optimistic for the future of the nation because there is a Tea Party backlash against out of touch Washington spending, socialism, and the continued erosion of our God given liberties that are recognized in the US Constitution.
But the truth of the matter is that I hardly care who wins.
If liberals stay in charge, they will make things worse for the rest of the nation that probably deserves such punishment from God, and the dollar will go down, and it will mean higher prices for silver and gold.
If Tea Party Republicans get elected, their movement is still likely too small to make much of a difference, and they might raise more awareness of the importance of honest money, which will be bullish for silver and gold prices.
Thus, if you have silver, like I do, then either way the elections go, you win!
=====
Silver's gone up 760% for the period of the last ten years, which works out to an annual average of 24%. That fairly beats out any other major monetary investment class, and it's only money, the best investment that there is, since it's the very definition of liquidity and money.
=====
And yet, the tiny silver market still only has about $2 billion of new investor money flowing into it annually. It is tiny, tiny, tiny in the scale of world finance, and stands to gain about 30% per year, or more, on average, for decades to come.
The silver market is so small, and so few people are following it, that it's taken me literally ten years to figure out something very basic, because there are so few people following this market who would be available to bring this to my attention earlier than now. This realization is that even tiny increases in the rate of inflation of new money will cause massive increases in the eventual dollar prices of silver, because the paper money market is already so obscenely large, and the silver market is still so ridiculously small.
=====
I strongly advise you to take possession of real gold and silver, at anywhere near today's price, while you still can. The fundamentals indicate rising prices for decades to come.
Here's a recent article by a friend of mine Jason Hommel.
Obama: Silver Salesman of the Year!
October 29th, 2010
(Two years running!)
Obama is an amazing gun salesman and silver salesman. He's caused the gun sales by being a gun grabbing liberal. He's an even better silver salesman than gun salesman though, since the sales of US Mint Silver Eagles has just about trippled on his watch, but I'd never even heard him mention the subject of silver. That's quite a feat!
Politics this year has just not gripped me like other years.
I'm optimistic for the future of the nation because there is a Tea Party backlash against out of touch Washington spending, socialism, and the continued erosion of our God given liberties that are recognized in the US Constitution.
But the truth of the matter is that I hardly care who wins.
If liberals stay in charge, they will make things worse for the rest of the nation that probably deserves such punishment from God, and the dollar will go down, and it will mean higher prices for silver and gold.
If Tea Party Republicans get elected, their movement is still likely too small to make much of a difference, and they might raise more awareness of the importance of honest money, which will be bullish for silver and gold prices.
Thus, if you have silver, like I do, then either way the elections go, you win!
=====
Silver's gone up 760% for the period of the last ten years, which works out to an annual average of 24%. That fairly beats out any other major monetary investment class, and it's only money, the best investment that there is, since it's the very definition of liquidity and money.
=====
And yet, the tiny silver market still only has about $2 billion of new investor money flowing into it annually. It is tiny, tiny, tiny in the scale of world finance, and stands to gain about 30% per year, or more, on average, for decades to come.
The silver market is so small, and so few people are following it, that it's taken me literally ten years to figure out something very basic, because there are so few people following this market who would be available to bring this to my attention earlier than now. This realization is that even tiny increases in the rate of inflation of new money will cause massive increases in the eventual dollar prices of silver, because the paper money market is already so obscenely large, and the silver market is still so ridiculously small.
=====
I strongly advise you to take possession of real gold and silver, at anywhere near today's price, while you still can. The fundamentals indicate rising prices for decades to come.
Gold IS Insurance
The idea that anyone could own all the gold in existence is another red herring. News flash: Most of the gold in the world simply isn't for sale... and probably never will be, at ANY price.
And for those who don't yet own gold -- or who don't own enough gold -- the yellow metal is not a standalone retirement plan, an "all in" investment, or something to plunge one's entire net worth into. It's a form of insurance, plain and simple.
Buying gold is no less sensible and prudent than buying fire insurance on your primary residence -- especially when gleeful pyromaniacs like Tim Geithner and Ben Bernanke show every inclination of burning down your monetary house.
To talk about gold as a lousy investment versus, say, Exxon Mobil or farmland, then, is just another bait and switch. Who says you can't own all three?
And of the three, which has the most historical value, ease of conversion, and natural reputation as a "neutral currency?"
Justice Litle
Taipan Publishing Group
Justice Litle is the Editorial Director of Taipan Publishing Group, Editor of Justice Litle’s Macro Trader, and Managing Editor to the free investing and trading e-letter Taipan Daily. His articles have been featured in Futures magazine, he has been quoted in The Wall Street Journal and has even contributed regular market commentary to Reuters and Dow Jones.
The idea that anyone could own all the gold in existence is another red herring. News flash: Most of the gold in the world simply isn't for sale... and probably never will be, at ANY price.
And for those who don't yet own gold -- or who don't own enough gold -- the yellow metal is not a standalone retirement plan, an "all in" investment, or something to plunge one's entire net worth into. It's a form of insurance, plain and simple.
Buying gold is no less sensible and prudent than buying fire insurance on your primary residence -- especially when gleeful pyromaniacs like Tim Geithner and Ben Bernanke show every inclination of burning down your monetary house.
To talk about gold as a lousy investment versus, say, Exxon Mobil or farmland, then, is just another bait and switch. Who says you can't own all three?
And of the three, which has the most historical value, ease of conversion, and natural reputation as a "neutral currency?"
Justice Litle
Taipan Publishing Group
Justice Litle is the Editorial Director of Taipan Publishing Group, Editor of Justice Litle’s Macro Trader, and Managing Editor to the free investing and trading e-letter Taipan Daily. His articles have been featured in Futures magazine, he has been quoted in The Wall Street Journal and has even contributed regular market commentary to Reuters and Dow Jones.
Why Is Gold Rising?
Here is a short excerpt from the most recent copy of The Delaire Report that answers the above question perfectly.
Gold is an international currency and it is amoung the most liquid assets in the world. It can be readily bought or sold 24 hours a day in one or more markets around the world. And, the price is very transparent and can be seen anytime no matter where you are.
We are now entering a golden era as people begin to lose faith in their own currencies. When this happens, they turn to gold as well as silver because these precious metals are the only currencies with an intrinsic value. This mistrust of these fiat currencies are the first signs that the global currency system is faltering and if the current currency system collapses, no matter how much “paper” money you have in your bank, it can all become worthless. But, gold has an intrinsic value, and in the last 5000 years, it has never become worthless. While I sincerely hope we do not see such a collapse, I think it wise to take some precautionary measures such as owning gold. When individuals become disdainful of their own currencies and everyone else’s they turn to gold.
Here is a short excerpt from the most recent copy of The Delaire Report that answers the above question perfectly.
Gold is an international currency and it is amoung the most liquid assets in the world. It can be readily bought or sold 24 hours a day in one or more markets around the world. And, the price is very transparent and can be seen anytime no matter where you are.
We are now entering a golden era as people begin to lose faith in their own currencies. When this happens, they turn to gold as well as silver because these precious metals are the only currencies with an intrinsic value. This mistrust of these fiat currencies are the first signs that the global currency system is faltering and if the current currency system collapses, no matter how much “paper” money you have in your bank, it can all become worthless. But, gold has an intrinsic value, and in the last 5000 years, it has never become worthless. While I sincerely hope we do not see such a collapse, I think it wise to take some precautionary measures such as owning gold. When individuals become disdainful of their own currencies and everyone else’s they turn to gold.
How High Can Gold Go?
by David Tanner
I often hear people say that gold has gotten too high in price to buy now. I also hear others say that gold is in a bubble right now and that it is sure to pop soon.
I agree, we are in a huge bubble right now, but it is not gold that is in the bubble, but everything else. Demand for gold, and its price always rises when paper money bubbles burst. Let's take a look at some of these past bubbles and how much the price of gold rose in those instances.
- From 1920 to 1923, the price of gold in German marks rose from 160/oz. to 48 trillion/oz.
UP 300 BILLION TIMES ITS ORIGINAL PRICE
- From 1945 to 1950, the price of gold in Japanese yen rose from 140/oz. to 12,600/oz.
UP 90 TIMES ITS ORIGINAL PRICE
- From 1948 to 1967, the price of gold in Brazilian cruzeiros went from 648/oz. to 94,500/oz.
UP 146 TIMES ITS ORIGINAL PRICE
- From 1970 to 1980, the price of gold in US dollars went from 35/oz. to 850/oz.
UP 24 TIMES ITS ORIGINAL PRICE
- From 1982 to 1990, the price of gold in Mexican pesos went from 8,000/oz. to 1,025,000/oz.
UP 128 TIMES ITS ORIGINAL PRICE
- From 1989 to 2000, the price of gold in Russian rubles went from 1,600/oz. to 8,120,000/oz.
UP 5,075 TIMES ITS ORIGINAL PRICE
Now, let's consider this current 10 year gold bull market that has gone from $250/ounce to $1,350/ounce.
UP ONLY 5.4 TIMES ITS ORIGINAL PRICE!
Still think gold is in a bubble? Or is it more reasonable to think that paper is still in a bubble that is slowly deflating before our very eyes? Careful which you choose..... your future will depend on it!
As international economist Nathan Lewis recently stated, "The “price of gold” may reach five thousand, ten thousand, a hundred thousand, a million, or a billion dollars per ounce. The gold bubble-callers will be frothing at the mouth, until they finally have the realization that there was never a bubble in gold, but only a crash in paper money.
Gold is money. Always has been. Probably always will be. This time it’s different? I don’t think so."
by David Tanner
I often hear people say that gold has gotten too high in price to buy now. I also hear others say that gold is in a bubble right now and that it is sure to pop soon.
I agree, we are in a huge bubble right now, but it is not gold that is in the bubble, but everything else. Demand for gold, and its price always rises when paper money bubbles burst. Let's take a look at some of these past bubbles and how much the price of gold rose in those instances.
- From 1920 to 1923, the price of gold in German marks rose from 160/oz. to 48 trillion/oz.
UP 300 BILLION TIMES ITS ORIGINAL PRICE
- From 1945 to 1950, the price of gold in Japanese yen rose from 140/oz. to 12,600/oz.
UP 90 TIMES ITS ORIGINAL PRICE
- From 1948 to 1967, the price of gold in Brazilian cruzeiros went from 648/oz. to 94,500/oz.
UP 146 TIMES ITS ORIGINAL PRICE
- From 1970 to 1980, the price of gold in US dollars went from 35/oz. to 850/oz.
UP 24 TIMES ITS ORIGINAL PRICE
- From 1982 to 1990, the price of gold in Mexican pesos went from 8,000/oz. to 1,025,000/oz.
UP 128 TIMES ITS ORIGINAL PRICE
- From 1989 to 2000, the price of gold in Russian rubles went from 1,600/oz. to 8,120,000/oz.
UP 5,075 TIMES ITS ORIGINAL PRICE
Now, let's consider this current 10 year gold bull market that has gone from $250/ounce to $1,350/ounce.
UP ONLY 5.4 TIMES ITS ORIGINAL PRICE!
Still think gold is in a bubble? Or is it more reasonable to think that paper is still in a bubble that is slowly deflating before our very eyes? Careful which you choose..... your future will depend on it!
As international economist Nathan Lewis recently stated, "The “price of gold” may reach five thousand, ten thousand, a hundred thousand, a million, or a billion dollars per ounce. The gold bubble-callers will be frothing at the mouth, until they finally have the realization that there was never a bubble in gold, but only a crash in paper money.
Gold is money. Always has been. Probably always will be. This time it’s different? I don’t think so."
Mainstream Money Manager Sees $10,000 Gold
Wall Street Journal
There are gold bulls. And then there is Shayne McGuire.
The 44-year-old pension-fund manager from Texas, who spoke recently at a gold conference in Berlin, caused a stir among the roomful of gold aficionados. His provocation: A book that predicts the price of the precious metal could soar to $10,000 an ounce, more than seven times its current price.
Like those who once boldly predicted $1,000 Internet stocks and a 36000 Dow Jones Industrial Average, Mr. McGuire is a lone voice among mainstream investors suggesting such an outsize price jump in gold's price.
Mr. McGuire's view isn't idle prognostication. He runs a $330 million gold portfolio at the Teacher Retirement System of Texas. Mr. McGuire's forecast, which he made in the recently released book, "Hard Money," makes him a very far outlier. Most on Wall Street consider the prediction outlandish.
Mr. McGuire was early to the gold trade. In 2007, he and a colleague persuaded the $100 billion Texas fund, the nation's eighth largest, to move into the metal. It was a novel strategy that made it one of the few large U.S. pension funds to have a fund solely devoted to gold.
At the time, gold was trading at around $650, less than half its current price.
In his 2007 pitch, Mr. McGuire argued that gold was "the most underowned major asset, widely seen as an eccentric, anachronistic leftover from the pre-information age that is best for 'end of world' types."
Not everyone at the Texas fund felt the same way. In one meeting, a pension executive sarcastically asked if anyone else in the room thought "the world was going to end?"
Indeed, most pension funds still steer clear of gold, investing just a fraction of 1% on average of their assets in the yellow metal, according to Alan Kosan, of Rogerscasey, an investment-consulting firm. Most pension funds consider gold too volatile and therefore too risky.
For his part, Mr. McGuire says gold is no longer only for those who think financial Armageddon is near. He expects gold to soar amid rising inflation, among other things. "The world does not need to end for gold to go hyperbolic," he says.
In his book, Mr. McGuire reasons that $10,000 gold is possible if enough other pension funds and big investors jump-start buying and move as little as 1% of total global stocks and bonds holdings into the metal. Such a migration into gold would equal enough demand to push prices up tenfold from their current level, he calculates.
He said he expects a series of fiscal crises to hit around the world. And then there is China, where he says that gold is "widely regarded as a basic savings asset."
Gold prices also are rising because of the ascendancy of exchange-traded funds, which are funds that track an index but are be traded like a stock. The largest ETF, under the trading symbol GLD, now invests $50 billion, an amount that Mr. McGuire believes could grow far higher if investors shift a small percentage of their investment funds into gold. At its current level, the stock-market capitalization of all gold ETFs is about $80 billion, roughly that of McDonald's Corp.
"Now that the value of modern money is becoming highly questionable, more and more people are turning to gold. It's not the new thing; it's a return to normal," he says.
The son of a foreign correspondent for Newsweek, Mr. McGuire grew up in Mexico and spends leisure time playing chess and reading history books.
He is a fan of the financial history of the 1930s, and quotes from Franklin Delano Roosevelt's first inaugural speech in 1933 about the importance of not overspending. Before joining the Texas pension fund in 2001, he was an analyst at Deutsche Bank and ING Barings.
His gold prediction is by far the most aggressive call he has made in his career, he says, but he says he ignores his doubters. "It seems like an aggressive call," Mr. McGuire says, "but it's really a comment on what governments have been doing to the monetary system."
Wall Street Journal
There are gold bulls. And then there is Shayne McGuire.
The 44-year-old pension-fund manager from Texas, who spoke recently at a gold conference in Berlin, caused a stir among the roomful of gold aficionados. His provocation: A book that predicts the price of the precious metal could soar to $10,000 an ounce, more than seven times its current price.
Like those who once boldly predicted $1,000 Internet stocks and a 36000 Dow Jones Industrial Average, Mr. McGuire is a lone voice among mainstream investors suggesting such an outsize price jump in gold's price.
Mr. McGuire's view isn't idle prognostication. He runs a $330 million gold portfolio at the Teacher Retirement System of Texas. Mr. McGuire's forecast, which he made in the recently released book, "Hard Money," makes him a very far outlier. Most on Wall Street consider the prediction outlandish.
Mr. McGuire was early to the gold trade. In 2007, he and a colleague persuaded the $100 billion Texas fund, the nation's eighth largest, to move into the metal. It was a novel strategy that made it one of the few large U.S. pension funds to have a fund solely devoted to gold.
At the time, gold was trading at around $650, less than half its current price.
In his 2007 pitch, Mr. McGuire argued that gold was "the most underowned major asset, widely seen as an eccentric, anachronistic leftover from the pre-information age that is best for 'end of world' types."
Not everyone at the Texas fund felt the same way. In one meeting, a pension executive sarcastically asked if anyone else in the room thought "the world was going to end?"
Indeed, most pension funds still steer clear of gold, investing just a fraction of 1% on average of their assets in the yellow metal, according to Alan Kosan, of Rogerscasey, an investment-consulting firm. Most pension funds consider gold too volatile and therefore too risky.
For his part, Mr. McGuire says gold is no longer only for those who think financial Armageddon is near. He expects gold to soar amid rising inflation, among other things. "The world does not need to end for gold to go hyperbolic," he says.
In his book, Mr. McGuire reasons that $10,000 gold is possible if enough other pension funds and big investors jump-start buying and move as little as 1% of total global stocks and bonds holdings into the metal. Such a migration into gold would equal enough demand to push prices up tenfold from their current level, he calculates.
He said he expects a series of fiscal crises to hit around the world. And then there is China, where he says that gold is "widely regarded as a basic savings asset."
Gold prices also are rising because of the ascendancy of exchange-traded funds, which are funds that track an index but are be traded like a stock. The largest ETF, under the trading symbol GLD, now invests $50 billion, an amount that Mr. McGuire believes could grow far higher if investors shift a small percentage of their investment funds into gold. At its current level, the stock-market capitalization of all gold ETFs is about $80 billion, roughly that of McDonald's Corp.
"Now that the value of modern money is becoming highly questionable, more and more people are turning to gold. It's not the new thing; it's a return to normal," he says.
The son of a foreign correspondent for Newsweek, Mr. McGuire grew up in Mexico and spends leisure time playing chess and reading history books.
He is a fan of the financial history of the 1930s, and quotes from Franklin Delano Roosevelt's first inaugural speech in 1933 about the importance of not overspending. Before joining the Texas pension fund in 2001, he was an analyst at Deutsche Bank and ING Barings.
His gold prediction is by far the most aggressive call he has made in his career, he says, but he says he ignores his doubters. "It seems like an aggressive call," Mr. McGuire says, "but it's really a comment on what governments have been doing to the monetary system."
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