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Gold Will Perform Well No Matter What Happens

Commodities / Gold & Silver 2009 Aug 06, 2009 - 02:11 AM GMT

By: Graham_Summers

Commodities

Graham’s note: today we’re featuring commentary from Ron Coby, Chief Investment Officer at Coby Lamson Capital Management in Medford, Oregon. Ron’s one of the smartest traders I know and it shows in his firm’s track record: up 16% year to date. The following is an except from his book, The Upside of Down which you can purchase online here.


  • In this new century, gold is poised to repeat the 1970s. It will again have mini-bull and -bear market moves along the way, but the long-term secular move will be up—way up. If we experience true hyperinflation, then gold will match the percentage gain we saw in 1971 to 1981.

I do expect gold to easily top $2,000, and probably cross $3,000 per ounce, especially if central banks around the world continue to aggressively expand their money supply, as has been happening early on in the new century. However, along the way, gold will have severe price corrections as it works its way to $2,000 to $3,000 per ounce. This bullish secular move could last as long as the long secular bullish move in the Dow Jones Industrial Average (DJIA) from 1982 to 2008. There are just too many powerful tailwinds for gold, with central banks worldwide acting as “engines of inflation.”

At some point you’ll need to get on board and ride this bull market freight train of gains. As the inflation engines continue to rev up, with central banks around the world printing new money, the “gold bull train” will speed along like the “technology freight train” did in the 1990s.

It truly appears that regardless of which side the economic coin lands on, gold investors and speculators win. If the coin lands on “heads” for the bears, then the fear of loss will push money to the safe haven of gold. If the coin lands on “tails” for a worldwide economic super boom for the bulls, then the inflationary wildfires will light up the biggest boom of all, and that’s in the price of gold and the respective gold stocks.

If the U.S. Fed continues its policy of “short-term gain for long-term pain,” we will remain on an inflationary path leading to exploding gold values as well as the creation of new asset bubbles. If excess liquidity isn’t contained, then asset prices and the smoldering coals of inflation will ignite. The Fed will be forced to follow its late 1970s’ policy of choking the money supply. This will explode interest rates, and then the New Great Depression of the Twenty-first Century will unfold for reasons similar to the last Great Depression. How could this happen? If an unhealthy boom in unproductive assets collapses, then assets need to be liquidated to reduce the debt burden.    

In uncertain times, gold is sought as a safe haven for investors to retain value. As the United States has gone through two major asset bubble bursts already in the new century, gold prices have ignited to the upside. In an economy with rapidly rising inflation, all investors must protect themselves from an abracadabra money-creating Fed, and own gold. Hold on to your gold as a storehouse of value to preserve your purchasing power against inflationary government policies, both in the United States and abroad.

Graham’s recently put together a great FREE Special Report detailing an unusual means of playing the gold explosion. While most investors blindly pile into the gold ETF or buy gold bullion, this backdoor play allows you to buy the precious metal at an incredible $188 an ounce. If gold breaks above $1,000, the opportunity for triple digits gains is huge.

Swing by www.gainspainscapital.com/gold.html to pick up your FREE copy!!

Good Investing!

Ron Coby

Ps. If you’re interested in my book, The Upside of Down I’ll offer you a special 40% off its regular price of $20= $12 per book. You can order or contact me here.

Graham Summers: Graham is Senior Market Strategist at OmniSans Research. He is co-editor of Gain, Pains, and Capital, OmniSans Research’s FREE daily e-letter covering the equity, commodity, currency, and real estate markets. 

Graham also writes Private Wealth Advisory, a monthly investment advisory focusing on the most lucrative investment opportunities the financial markets have to offer. Graham understands the big picture from both a macro-economic and capital in/outflow perspective. He translates his understanding into finding trends and undervalued investment opportunities months before the markets catch on: the Private Wealth Advisory portfolio has outperformed the S&P 500 three of the last five years, including a 7% return in 2008 vs. a 37% loss for the S&P 500.

Previously, Graham worked as a Senior Financial Analyst covering global markets for several investment firms in the Mid-Atlantic region. He’s lived and performed research in Europe, Asia, the Middle East, and the United States.

    © 2009 Copyright Graham Summers - 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.

    Graham Summers Archive

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