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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold, Where We’ve Been…And Maybe Where We’re Going

Commodities / Gold and Silver 2010 Mar 14, 2010 - 09:51 PM GMT

By: David_Vaughn

Commodities

Best Financial Markets Analysis ArticlePresently there are about 5 billion ounces of gold floating around out there some where.  More and more investors are adding gold to their portfolios as insurance. Gold has become the 3rd largest asset held by world central bankers. And many families are adding gold to their personal portfolios as they come to discover that all is not right in Alice in Financial Land.


Charts, charts, charts.  Ever notice how so many writers use charts, charts, charts?  And more charts.  I’ve often wondered if this is just an easier way to make an article longer without actually saying more. Charts, charts, charts, charts.  I want to hear verbal dialogue.  But then.  That’s just me.  Most charts don’t mean anything anyway.  Because the next month the charts will be going in the opposite direction.  I’m doing the same!  Filling the air with charts.

In the decade between 2000 and 2010 we witnessed gold climbing from a low of around 255 an ounce.  For the next decade, 2010-2020, where is gold heading?  At this point I am not even concerned if gold continues the wild climb it experienced last decade.  The important theme I see as we march into these next 10 years is that gold will maintain a degree of stability and will no longer drift with the winds.  Sure, there will be fluctuation, oscillations, up and down, that’s normal. 

Patrick J. Buchanan, 12-29-2009   “No nation in modern history, save for the late Soviet Union, has seen so precipitous a decline in relative power in a single decade.”   “At the end of the first decade of the 21st century, the question is not whether we will preside over the creation of a New World Order, but whether America's decline is irreversible.”

But what is more important is that as time progresses forward gold is no longer questioned and considered a worthless asset.  There is speculation that the world may create a new currency.  If this comes to pass it more than likely would solely encompass Europe and the United States.  I don’t believe the Chinese and about 2 or 3 other world regions will join the band wagon. 

The seeds of future wars are beginning to take root.  The United States, Canada, Denmark, Norway, Russia, and even China are considering how to divide up the resource rich Arctic.  As the Arctic ice continues to melt China will acquire an ice free Arctic expanse. 

So, if each region wishes the other competing regions to recognize their currency there will have to be a common denominator between each region’s currencies that has real worth that will be respected by other world regions.  US paper is going to continue to lose its value dramatically in the next few years.  It’s inevitable.  Too much growing debt that will never be able to be repaid.

I won’t be surprised if gold does climb higher, but it is no longer necessary now.  It has won respect where it is and that respect will only grow as the world’s standard of living decreases.  We had a snow blizzard in the Carolinas just recently.  Paralyzed the entire infrastructure.  At least 2 inches must have descended from the sky.  Will the south ever recover?

Our great nation is beginning to show its age and its grey hairs are getting greyer by the day.  This great financial wear and tear will just continue on and on until it hits another brick wall.  Our golden era is behind us.  Unless you are part of the super rich.  Their wealth grows, but not the wealth of the average upper middle class Americans.

Have you noticed how so many with pride have claimed that we are now a service oriented country and no longer a country that produces anything…via factories?  An entire nation turning from a manufacturing state to a service state. How sweet.  Let’s be sure we understand what a service economy is.  More greeters at Wal-Mart, more McDonald’s hamburger technicians.  Service naturally means to serve others.  So now we are becoming servants to the wealthy foreign investors increasing their colonization on American soil.

Hear about the recent 8.8 earthquake that hit Chile?  A NASA scientist said that the earthquake may have  changed the entire Earth’s rotation.  What?  And scientists say this earthquake may even have shortened the length of days on earth. This quake was reported as the 7th strongest earthquake in recorded history.  According to research scientist Richard Gross, at NASA's Jet Propulsion Laboratory, Pasadena, California, the length of an earth day may now be shortened by 1.26 milliseconds. I noticed the sun went down earlier today.  Did you notice the same thing? 

Even more exciting is the fact that the earthquake shifted the earth’s axis.  Maybe by as much as 3 inches. I noticed this also as I fell out of the tub that morning as I was reaching for the soap. The following below is a good one.

Well!  A new report out says the United States mess is even worse than it seems.  Imagine that?  It seems like those ole’ deficits just may rise close to 10 trillion bucks by 2020… the end of this decade.  Yes, the folks in office say they are now a little more pessimistic about the state of the US economy.  And why is that?  I thought all these folks had to do was speed up those hard working printing presses.  And they think the economy may be slowing down?  Interest rates may rise?  Private spending may slow down within the economy?  So what?  We have all those good ole’ service jobs.  We know that as we retire Wal-Mart will happily employ us as a greeter at the front door.

For the fist time in history public sector jobs pay more on average than private sector jobs.  Around 60 grand average working for the government and for working in a US private factory the average pay is around 50,000.  And those US government public service employees are also more heavily unionized than those in private sector jobs.  Now who is the master and who is the servant?  I think that’s obvious.

The common tax payer working a white collar job or working in a sewer is now the slave of the US government. And there’s this little fact that our standard of living just might be a little less by the end of this decade.  By the year end I think it is being estimated that the US budget may hit around 1.5 trillion US.  Real wealth always follows production of real goods produced in factories. 

Continuing massive job losses indicate the so called “economic recovery” proclaimed by Washington remains a farce.  Americans just may never see life return to the fair-haired days of pre 2000.  So far 20 US banks have failed in 2010.  Don’t know why these banks don’t start printing their own money.  The Fed does.

Jim Sinclair continues to predict a climbing gold price as high as $1650 and above. And Jim continues to believe and warn that the US dollar is becoming more and more worthless?  Jim, this is America.  Bad things don’t happen here….I don’t think.  Jim, are we really in uncharted seas as you say?  Is international financial turmoil really just around the corner?  Jim is so worried and paranoid he probably locks his front door every night.

Just kidding about Jim.  Jim Sinclair is the gold market guru.

Jim Sinclair, February 2010 - “By default or design we are going to a one-world currency and a one-world central bank of central banks.” “There are presently 3 major currencies. That is the US dollar, the euro and gold.”  “The probability of moving towards a one world currency in stages over the next 5 years is a reality.” “Reduce all your currency positions into strength. Buy gold in all its forms other than US or Euro based in weakness. Gold will trade at $1650 and above. The US dollar continues its march in phases towards worth-less and worthlessness.”  Respectfully, Jim
 
Continue to keep your head clear when considering precious metals companies to speculate in.  John Doody and Doug Casey are probably the 2 most reputable and knowledgeable in the precious metals field.  Subscribe to their publications.  Sure, they’re not cheap.  But nothing ever worth while is free. 

Remember that physical gold represents insurance you apply when the house burns down.  Precious metals, gold and mining stocks are strictly speculation.  So keep your pants on when speculating in gold stocks.  But sleep well as you consider your physical gold buried in the back yard.

Barron’s recently included an article predicting gold may yet climb 1,300 an ounce.  I say leave gold where it is.  Anything over 400 sure looks better than the day’s when gold hovered around 250 an ounce. George Soros, via Soros Fund Management, is rumored to be buying gold.

Excellent Gold Stocks to Buy

David Vaughn
David4054@charter.net

The future legacy of the United States will be the refined art of financial leverage.

© Copyright 2009, Gold Letter Inc.

“The Worldwatch Institute, an organization that focuses on environmental, social and economic trends, says the current rate of global demand for resources is unsustainable.”  

The publisher and its affiliates, officers, directors and owner may actively trade in investments discussed in this newsletter. They may have positions in the securities recommended and may increase or decrease such positions without notice. The publisher is not a registered investment advisor. Subscribers should not view this publication as offering personalized legal, tax, accounting or investment-related advice. The news and editorial viewpoints, and other information on the investments discussed herein are obtained from sources deemed reliable, but their accuracy is not guaranteed. © Copyright 2009, Gold Letter Inc.

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