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Are you yet invested in gold? We are at the beginning of the biggest gold bull market in our life time & you are waiting for the go ahead from CNN &/or the cable money channels to give you the go ahead? Have you not noticed gold climbing from 252 an ounce to surpass 350 an ounce & that was a monumental leap?
Notice the gold chart above? Gold is preparing soon to advance to new highs. Will you be on board then? Oh. Sorry. You are still waiting for CNN to advise gold equities, huh? Well. Fox news recommended gold last year, but did you pay any attention? “…and American investors are clueless with respect to gold." "The gold market is in deficit, DEMAND IS GREATER THAN SUPPLY FROM THE MINES…" "The real test will be if it goes through $520-$525 (been there/done that!), in which case it probably runs up to $650…" "We're in a bull market for commodities, about one quarter the way through A 20-YEAR CYCLE." - click here! Still you sat & then gold climbed to surpass 400 an ounce & still you were unimpressed. And gold climbed to 450 an ounce & you did nothing. And now gold sits above 550 dollars an ounce having already made tons of money for many. And still you debate if this market is for you? Anyway, do what you will but regardless of what you do gold will continue to climb & wait for no one. “Why the commodities boom is different this time.” “This is a boom that’s going to run for a decade or more – which makes producers of energy resources and metals cheap at current valuations. Kenneth Rogoff, professor of economics at Harvard, even goes so far as to forecast: “FOR AT LEAST THE NEXT 50 TO 75 YEARS, PRICES FOR MANY NATURAL RESOURCES ARE HEADED UP.” “However, it’s not future demand growth that’s at the core of the bulls’ case for commodities – it’s that SUPPLIES ARE NOT GOING TO INCREASE ENOUGH TO MEET ADDITIONAL DEMAND.” “If you don’t already have a substantial share of your equity portfolio in energy resources, precious metals and base metals, do some switching into them now.” - click here! Text from the article below shows gold continues to develop steam in attracting new investment dollars. As the text below illustrates pension funds are now considering adding gold for diversification & as a hedge against future inflation. “Increasingly, leading pension fund managers are looking at the stellar price performance of commodities and deciding that they can ill afford to miss out on the action.” “…Calpers, the largest public sector fund in the US, with $205bn under management, is also pondering a shift of assets into the sector.” "We are looking at commodities mainly as a way to diversify our portfolio," says a Calpers spokesman. "It is especially advantageous for a long-term investor, and as a hedge against inflation." “ACCORDING TO ONE BANK, INVESTMENTS IN COMMODITIES PRODUCED RETURNS OF 43 PER CENT DURING THE FIRST NINE MONTHS OF LAST YEAR, SIGNIFICANTLY OUTPERFORMING BOTH EQUITIES AND BONDS.” "Adding commodities is especially effective at diversifying a fund's investments and counterbalancing equity volatility," says James Walsh, the head of strategy at Hermes. "All schemes with a substantial allocation to equities should seriously consider adding in commodities." - click here! The excitement of this new century seems to be wearing off for many. Much the same boredom was felt by those who lived a hundred years ago & were entering the then new 20th century. How boring was life at the turn of the last century? “Among the more scintillating facets of the surface of life as reflected in the newspapers on January 1, 1900, the Indianapolis Journal recorded that "A. P. Hurst, a drygoods salesman from New York, interviewed at the Bates Hotel last night," assured the world that "The shirtwaist will be with us more than ever this summer.” "The shirtwaist," the confident Mr. Hurst assured a world too supine in its submission to the dogma that change is a cosmic law, "the shirtwaist has come to stay." “In 1900, doctors had not heard of insulin; science had not heard of relativity or the quantum theory. Farmers had not heard of tractors, nor bankers of the Federal Reserve System.” - click here! Don’t even know what a “shirtwaist” is, but I have heard of insulin & tractors…&, yes, I’ve heard of the Federal Reserve. But getting back to our “time” gold continues to gain in prominence among the world’s financiers. The text below illustrates how Asia continues to increase their gold reserves. “Gold consumption in Saudi Arabia and UAE rose by 13% and 10% respectively last year. Egyptian consumption rose by 2% to reach 76 tons as UAE bought 106 tons and Saudi Arabia 160 tons. Higher prices have not deterred jewelry purchases.” “Asian nations held $2.3 trillion of reserves at the end of 2004, or ten times those of the G-7 nations. Presently China’s reserves are $818 billion. As we pointed out in the last issue, CHINA IS INCREASING ITS RESERVES OF GOLD BY ABOUT 650 TONS THIS YEAR.” “There are $23.6 trillion in bonds outstanding of which $8.2 trillion is public debt. US stocks are worth $35 trillion. IF JUST 1% OF THAT MONEY WAS CONVERTED INTO GOLD THAT WOULD BE $350 BILLION OR 19,800 TONS OF GOLD. That would be 13% of all the gold in existence and 8 times the annual production of mined gold.” “Those who need to pare down their dollar position the most before major devaluation starts are: Japan with $681.6 billion in US Treasuries; China $247.6; the UK $187.1; Caribbean banking centers $113.5; Taiwan $76.1; Germany $64.4; OPEC $63.8; Korea $61.4 and Canada $51.7 billion.” - click here! A reader emails the following comments below. “Please allow me first to introduce myself. My name is Bob S. I live in Bozeman, Montana with my lovely wife of 35 wonderful years.” Bob S Now first of all Bob above had more to say, but I wanted to concentrate on what was his first sentence which you just read above. Now what did Bob say? Bob says that he lives “…with my lovely wife…” Well of course Bob calls his wife lovely because if he calls her really ugly he’s dead meat. But Bob does bring up a good question here for all of us to consider seriously. And the question is how do you define “…lovely…?” Well, I’m almost 50 years old & learned long ago that loveliness comes from within & not from the outside. More & more prominent financial analysts are beginning to strongly recommend gold to their readers. Read below. “Gold Appears Poised to Break Out” “If Comex gold closes above my monthly pivot of $570.90 Friday, I expect prices to rise through March to set a new 52-week high -- indeed, THE CHART COULD GO PARABOLIC.” Investors and central bankers are continuing to buy more gold, and demand remains high for gold jewelry in emerging economies, with many families being first-time buyers.” - click here! Are you still looking for someone from the cable news media who is presently recommending gold equities as an investment? I have one for you. James Cramer is strongly recommending gold. Read on below. James Cramer - “It’s dawning on wall street that George W. Bush may be the first president since Lyndon B. Johnson who believes that we can have a guns-and-butter federal spending policy without creating a serious inflation spiral, if not outright government bankruptcy.” “Our only hope that financial disaster won’t strike sooner lies with the Chinese, who actually fund our deficit by buying our Treasuries—$242 billion worth, or 12 percent of all foreign holdings. If the Chinese decide to be good communists and stop buying our bonds, the Feds will have to raise rates to attract new investors and the reaper will be at our doorstep with interest rates more akin to those of South than North America. Right now, it’s not a problem. But in a year or two or maybe less, I perceive that the government will throw a bond auction and nobody will show, including the Chinese, until rates shoot up dramatically.” “ANY PORTFOLIO DESIGNED TO COUNTER GOVERNMENT-MANDATED INFLATION HAS TO BE BEDROCKED IN GOLD…” “I figure gold could reach $1,000 if the Chinese stop buying our paper. Once the levee to the Treasuries breaks, the easy high ground worth gaining will be gold.” “WHEN PAPER GETS DEBASED, YOU CAN’T HAVE ENOUGH MINERALS, GOLD OR OTHERWISE, IN YOUR STOCK BASKET.” - click here! Let’s repeat part of what James Cramer just told us as this is very important. “When paper gets debased, you can’t have enough minerals, gold or otherwise, in your stock basket.” Do you begin to see now why you must begin diversifying your portfolio with gold &/or silver stocks? Are you concerned that rising interest rates may be bad for the gold price? Don’t be. Read on below. “Global commodities demand may grow from strength to strength in coming years, driven by economic powerhouse China…” “Boston Consulting Group estimates total revenues from commodities trading globally for investment banks swelled to $7.2 billion last year, from $6 billion in 2004.” “U.S. Federal Reserve officials in February signaled a 14th straight increase in interest rates put borrowing costs near where they needed to be, but agreed they could not rule out more hikes, given inflation risks.” “RISING RATES MAY BE GOOD FOR GOLD, WHICH IS FAVORED AS AN INFLATION HEDGE…” “Canavan suggests a portfolio of gold and gold mining stocks.” "This may be boring for some investors and a cause of anxiety for others, but we believe this strategy is superior to attempting to time the market on a short-term basis," he said.” - click here! Read below as analysts suggest commodities (including gold) are entering a “super” cycle which is another way of saying gold is going to the moon. “NEW YORK — Mining companies - producers of everything from aluminum to gold- saw their shares climb Monday after CITIGROUP SUGGESTED METALS ARE ENTERING A "SWEET SPOT" OF VERY HIGH PRICES IN THE COMMODITY CYCLE.” “Research analyst John H. Hill offered a litany of reasons for the forecast. Metals have "shrugged off interest rate jitters, intermittent oil and gas selloffs, multiple bouts of profit-taking, seasonal demand slowdowns" - among other headwinds - "AND APPEAR TO BE ENTERING THE SWEET SPOT OF THE COMMODITY SUPERCYCLE AT EXTREMELY HIGH PRICE LEVELS…" - click here! Gold Letter, Inc. reviews gold & silver stocks. You may subscribe to Gold Letter for LIFE! Also, sign up for FREE report & examine our performance for past year. ? - click here! “Continue always to educate yourself on the markets & investing” Rick Rule, Global Resource Investment And where again is the price of gold headed? “Gold Appears Poised to Break Out” “If Comex gold closes above my monthly pivot of $570.90 Friday, I expect prices to rise through March to set a new 52-week high -- indeed, THE CHART COULD GO PARABOLIC.” - click here! Comments? Thanks for coming by & please do come back. David N. Vaughn
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