Best of the Week
Most Popular
1. Best Cash ISA Savings Account for Soaring UK Inflation - February 2018 - Nadeem_Walayat
2.Gold Price Forecast 2018 - February Update - Nadeem_Walayat
3.Bitcoin Crypto Currencies Crash 2018, Are We Near the Bottom? - Nadeem_Walayat
4.Trump Bubble Bursts, Stock Market Panic Dow 1175 Point Crash Analysis - Nadeem_Walayat
5.Gold Corrects, Bitcoin Markets Crash, Whilst Stocks Plunge - Nadeem_Walayat
6.US Treasury Bonds: Fuse to Light the Bonfire - Jim_Willie_CB
7.Dow Falls 666 Points As Cryptocurrencies Crash And Krugman Emerges From His Van - Jeff_Berwick
8.Stock Market Roller Coaster Crash Ride Down to Dow Forecast 23,000 - Nadeem_Walayat
9.Trading the Shadows - Oil, Dollar, Stocks, Gold Trend Analysis - B.R. Hollister
10.Stock Market Analysis: Baying for Blood - Abalgorithm
Last 7 days
The Latest US Debt Blow - 22nd Feb 18
6 Tips For Seamless Business Foreign Exchange - 22nd Feb 18
How to Anticipate Stock Market Trend Changes - 21st Feb 18
Gold Miners’ Rally? What Rally? Watch Out for More Fake Moves! - 21st Feb 18
5 Big Drivers of Higher Inflation Rates Ahead - 21st Feb 18
Goofy Indictments Divert Attention from Criminal Abuses at the FBI and DOJ - 21st Feb 18
Bitcoin or British Pound ‘Pretty Much Failed’ As Currency? - 21st Feb 18
Stock Market Waiting for the Fed - 21st Feb 18
National Identity Demands Restrictive Immigration - 21st Feb 18
Best Opportunities for Freelance Technical Writing Jobs - 21st Feb 18
4% US 10-year Treasury Note Yield Will Be a Floor Not a Ceiling - 20th Feb 18
Governments Are LYING about Their Gold Activities while Mining Companies Cower - 20th Feb 18
No Silver Lining Here - 20th Feb 18
Semi Conductor Stocks SEMI Bearish? - 20th Feb 18
The Prisoner Promised Land - 20th Feb 18
Best Car Dash Cam Review: Z-Edge S3 Dual Dash Cam - UNBOXING (1) - 20th Feb 18
How Inflation Reduces The Real Value Of Social Security Net Of Medicare Premiums - 19th Feb 18
Could Stellar Lumens be a Challenger to Bitcoin for International Payments? - 19th Feb 18
US-China Trade War Escalates As Further Measures Are Taken - 19th Feb 18
How To Trade Gold Stocks with Momentum - 19th Feb 18
Is a New Gold Bull Market on the Horizon? - 19th Feb 18
Stock Market Decision Point! - 19th Feb 18
An Inflation Indicator to Watch, Part 1 - 18th Feb 18
Get on Top Of Debt Before It Gets on Top of You - 18th Feb 18
Will the Stock Market Make a Double Bottom? - 18th Feb 18
5 Reasons Why Commodities Are the Investment Place to be in 2018 - 18th Feb 18
1 Week Later, Stock, Bond Market Risk Remains ‘On’ as 2 of 3 Amigos Ride On - 17th Feb 18
Crude Oil Prices: A Case of Dueling Narratives? - 17th Feb 18
Free 1000 Youtube Subscribers Services - YTpals, Subpals, SubmeNow Test - 17th Feb 18
How to Trade as We Near March Stock Market Top - 16th Feb 18
Bitcoin as Poison - 16th Feb 18
GDX Gold ETF Weathers Stock Market Selloff - 16th Feb 18
Casino Statistics and Demographics - 16th Feb 18
IS Today Thee Stock Market Turn Day? - 16th Feb 18
Huge SMIGGLE Shopping HAUL, Pencil Cases, Drinks Bottles, Back Packs, Toys.... - 16th Feb 18
Tesla Cash Keeps Burning at $320 a Share - 15th Feb 18
Big Conflict Ahead in the Financial Markets - 15th Feb 18
Stocks Extend Rally Off Friday's Low, But Short-Term Exhaustion Near - 15th Feb 18
Stock Market Out on a Limb... - 15th Feb 18
Things Only a True Friend Would Say About Gold - 14th Feb 18
Global Debt Crisis II Cometh - 14th Feb 18
Understanding Crude Oil Behavior - 14th Feb 18
Stock Market is Getting Scary... - 14th Feb 18

Market Oracle FREE Newsletter

Urgent Stock Market Message

2008 Huge Profit Opportunities in Gold and Natural Resources

Commodities / Resources Investing Jan 04, 2008 - 01:57 AM GMT

By: Money_and_Markets

Commodities

Best Financial Markets Analysis ArticleLarry Edelson here. Already, in just the first trading day of the year, crude oil broke through the $100-a-barrel mark for the first time ever! Meanwhile, gold rose above $860 an ounce, flirting with a new all-time high!

Are these signs of more upside ahead? I sure think so! And today I want to tell you why.

The subject is simply too big to cover in one issue, but here's an overview of what I see in the coming year. Let's start with three important forces that will affect the markets in 2008 ...


Force #1: Geopolitical turmoil — As the assassination of Benazir Bhutto demonstrated, Pakistan is going to be a big problem for the world in 2008. So are Iraq and Iran. Russia, too, will flex its muscles more. And I'm sure Venezuela will pull some tricks, even though Hugo Chavez's "president-for-life" bid recently failed.

The death of Benazir Bhutto may cause geopolitical turmoil in 2008.
The death of Benazir Bhutto is just one reason to expect geopolitical turmoil in 2008.

Add in our own U.S. elections — close races no doubt — into the mix, and you have a recipe for one of the more volatile political backdrops the markets have seen in years.

Indeed, according to my indicators, there will be more geopolitical turmoil in 2008 than there has been since at least 9/11!

Force #2: Real estate woes — Make no mistake, the subprime mortgage crisis is far from over. And falling real estate prices will continue.

This will continue to put strain on the world's financial systems. And it will force central bankers to continue throwing money at the problem.

Which brings me to ...

Force #3: Soaring inflation — I believe 2008 will be the year that inflation finally rears its head in the official numbers in a majority of sectors (much to Washington and Bernanke's chagrin).

Meanwhile, the dollar will continue to lose value, causing consumers to lose purchasing power month after month.

If I sound gloomy about 2008, it's because I am. I think 2008 is going to be a disaster for most investors.

But that doesn't mean you can't make money. In fact, if you take the right steps and look to the right investments, I think 2008 will provide huge profit opportunities . The secret?

If You Want to Get Rich, You Have to Ignore the Crowd

Look no further than China for proof of this concept. Almost everyone seems to get the China story wrong.

Six years ago the majority of analysts were predicting a crushing collapse in China's economy. "Too much bad debt in the banking system," they said.

Interestingly, practically none of them had ever been to China, nor did they understand how the Chinese banking system works.

I stood alone, telling everyone that the bad debts were phony. I explained that China's communist government meant the debts were not between public and private sectors because there was no private sector .

In other words, any debts that existed ... any unproductive loans and investments ... could be written off with the stroke of a pen.

Sure enough, that's exactly what happened over the last five years. Tens of billions in bad debts were written off because it was just one division of the communist government owing another division.

Add in China's huge export machine ... its $1.345 trillion in accumulated reserves ... its partial privatization of the banks to use other people's money as equity ... and now China's banks are some of the strongest in the world, with reserve capital far in excess of western standards!

China has tremendous financial leverage due to its vast exports.
China's vast exports give it tremendous financial leverage ...

Yet most analysts are still getting China all wrong!

A colleague of mine — one of the same people who used to make the banking problem argument — now tells me China is going to implode because of the wealth gap between rural and urban areas.

He cites some 80,000 official protests that erupted in 2007 as proof that China's 1.3 billion people are restless and unhappy, and that the empire is going to collapse.

Again, this analyst has never stepped foot in China. Nor has he done his homework. And I think he's dead wrong.

Yes, there were 80,000 protests in China in 2007, more than any other year of recorded data BUT 63,000 of them were not about the wealth gap. They were about environmentalism ... preserving traditional historic sites (which are being threatened by new infrastructure developments) ... and improving the health care system. They weren't even about democracy!

The other 17,000 protests? They were protests about farming issues, education, and social security. They weren't really about the wealth gap that my colleague and all the analysts in the West are now citing as the reason China will collapse.

So many analysts get China wrong it's mind-boggling. But that's what happens when they try to understand an economy without understanding its culture or going there first-hand to see, feel, and hear what's happening.

Heck, they can't even see what's happening right in front of their faces here in the U.S.!

Do you think most analysts recognize that the Dow Jones Industrial Average is in a steep bear market and has lost nearly 70% of its value since 2000? No way!

But that's precisely what's happened. If you measure the value of the Dow against the prices of tangible assets, sure enough, it has lost 70% of its purchasing power in the past seven years.

In plain dollar terms, that means $10,000 invested in the Dow in 2000 would purchase on average only about $3,000 worth of today's goods and services.

This is extremely important for you to understand. Probably only one or two seasoned investors out of every 100 understand this fact. And it is why ...

I Continue to Recommend Natural Resource Investments for the Year Ahead!

As I just told you, I think there's plenty of upside in China. That means both profits in select Asian shares as well as profits in natural resources investments.

Gold smashes through $860 an ounce, and closes in on an all-time high.

Reason: When demand for commodities rises, so do prices.

Now factor in the other forces I told you about — geopolitical turmoil, subprime woes, and rising inflation. Each and every one of those forces makes investors nervous, and send them running for protection, for real wealth and tangible assets.

They, too, point to huge profit opportunities in the natural resource markets — in select natural resource stocks and in tangible assets that flourish as the dollar continues to be devalued and as a new consumer class emerges in Asia!

So, if you think gold and oil are high now, just wait and see what the New Year brings!

Best wishes and Happy New Year,

Larry

P.S. For an in-depth look at all my 2008 forecasts, including my core recommendations for 2008, be sure to read the January issue of Real Wealth Report .

If you're not already a subscriber, don't miss this issue! Join now and you'll get it the second it's out, plus 11 more hard-hitting issues, all my flash alerts, and more!

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

aditya mahipal
05 Jan 08, 03:23
gold repots and data

very good article.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules