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FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold and Gold Stocks Should Do Well During Economic Depression

Commodities / Gold & Silver 2009 Apr 16, 2009 - 09:57 PM GMT

By: Submissions

Commodities Best Financial Markets Analysis ArticleI. M. Vronsky writes: As you well know the financial press is overly harping the theme of another Great Depression. One can make a logical case that it will happen, as well as it will probably not happen. To be sure the Herculean efforts by the Obama Administration and China et all imply that we are at the very precipice of 1930s like scenario. Frankly, I do not believe another Great Depression will develop, but I do know gold stocks will do well one way or the other. In this regard I hope MARKET ORACLE might consider an old article of mine for publication as it proves gold and in particular gold stocks should do well in a Great Depression.


IMO the only way the US will avert another Great Depression is for the Fed to fanatically continue to pursue its Qunatitative Easying policy whereby its monitizes the burgeonging National Debt, needed by President Obama to finance a decade of One Trillion Dollar per year Budget Deficits. This effectively will explode the Money Supply into orbit, thus inevitably devaluating the currency. And if that is the road our governement is taking, gold and gold stocks will repeat their bullish performance of 1930-1935, when Homestake MIning soared n early 520%. Translating this to today, HUI would soar to almost 1900.

Is it deaj vu all over again...??

In the middle of the Great Depression, U.S. President FDR devalued the dollar by 69% vs the price of gold. During this period gold stocks soared to incredible highs, led by Homestake Mining. Below is a chart of Homestake Mining and an account of the period:

Homestake Mining share price (1924-1935)

Homestake Mining share price vs the DOW (1924-1935)

The Whole Story:"1998/99 Prognosis Based Upon 1929 Market Autopsy"

http://www.gold-eagle.com/editorials_98/vronsky060698.html

I. M. Vronsky
Editor & Partner - Gold-Eagle
http://www.gold-eagle.com

    I. M. Vronsky
    Editor & Partner - Gold-Eagle
    www.gold-eagle.com

    © 2009 Copyright Gold-Eagle - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

dzung
10 Feb 10, 21:42
depression or not

Sure, We may not have a depression. We will have prolong recession that will deplete all our energy, believe in a self contain society. Take any household that have mountain of debt will never be able to prosper until they have a plan of paying off debt and can follow through with it. America has no plan nor the will to pay off debt. The american people and government are acting as if debt is a good thing and our right to have. No debt can be pass on forever (unless we are willing to start WWIII with the bankers we borrow money from). Yet, we may not win this world war because everyone now have the nuclear technology we do. In short, if you can't wipe off your debt, or pay it off, your only if to declare bankrupt and live through the horror of the triple great depression.


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