-- Posted Wednesday, 19 April 2006 | Digg This Article
Well, how is gold these days?
Are you one of those still convinced this rise in the gold price is merely a short term rally that has reached its climax? If you follow the fundamentals you have to be aware the real forces destined to drive gold even higher have not even kicked in yet. So in other words we are barely at the beginning of a long term price appreciation of the gold price.
But let’s stop here and consider the forces in motion driving the gold price higher today and now. The facts are that the rest of the world is seeing something today that American investors as a whole are totally oblivious to. Or maybe American investors in their inflated over confidence just choose to go though each day wearing blinders.
Why do American investors wear “blinders” on their eyes keeping them from seeing the economic realities of today? Read the text below and you will understand why American investors refuse to recognize the growing financial mess this country is in now.
“In the mountain town where I used to live, we celebrated "Winter Carnival" — a midwinter, weeklong festival that included winter sports, ice sculpting and a good old-fashioned parade. I remember the big Belgian workhorses pulling sleighs loaded with hay down Main Street. Attached to each horse's headgear were blinders — big black wings — that cupped the horse's eyes, blocking part of its vision.” "Why do they always put blinders on the horses?" I asked my friend Sally, a knowledgeable horsewoman. "It seems sort of mean to me." "Oh, no, it's not mean at all," Sally said. "Blinders are helpful tools, and there are good reasons for using them.” "Horses have limited side vision because their eyes are situated toward the sides of their heads," she explained. "Because they're only seeing out of one eye or the other, sudden movements on either side can frighten them, causing them to bolt or shy away.” "Also, it's hard for horses to see what lies directly ahead, so it's difficult for them to focus down the road. By putting blinders on a horse," Sally continued, "a handler helps him focus straight ahead — on his job, his purpose and his destination." - click here!
Well, there is the answer folks as to why investors in this country wear blinders. It is because “…sudden movements on either side can frighten them…” And if folks remove these blinders heaven help the fright they would experience from looking at reality.
And by wearing these blinders the investor can “…focus straight ahead — on his job, his purpose and his destination." And what is that goal and destination the average American is seeking just over the hill? More debt and the false hope that good times will always be just around the corner…as long as you are invested “in the long term.” In the long term we’ll all be dead. Maybe we better start concentrating more on the activities of day to day.
Well, let’s pause here and take those confounded blinders off as the rest of the world has done and look at economic reality. The following Asian news text is a good indicator of how the world community views the US dollar today without the aid of blinders. Take your blinders off just for a moment here and comprehend well what you read below and do not ignore its message.
“Mumbai, April 16: Gold is expected to touch Rs 10,000 per 10 grams in the next five to six months because of the weakening of the dollar as the US economy is fast losing its sheen coupled with the constantly growing gold demand for the yellow metal.” “These findings are contained in a paper brought out by Assocham on "Yellow metal: its future pricing trends", which points out that the dollar has already lost its lustre by 40 per cent against the euro since 2001.” - click here!
Just curious to ask you here… Is this what you are hearing on the US evening news or the US cable financial channels?
"The trend is unlikely to be reversed in the future as the faith of the international community in the US economy has been shaken so much that it has reached saturation point. The US economy has started sagging and the trend has become so pronounced and visible that investors henceforth prefer to accumulate gold rather than dollar," says the study.” - click here!
Did I just read above that this trend has become “visible?” If it is visible to the rest of the world community why is it not also “visible” to US news networks and American financial analysts? I wonder if Katie will be able to see this “visible” trend when she begins this fall to report the news for CBS as the new network anchor?
“…the US dollar losing its pre-eminent position of most preferred investment instrument.” “The report says further that gold demand the world over is constantly shooting up and has neared levels around 4,000 tonnes per annum against its supplies which remain stagnant at about 2,250 tonnes per annum.” “Since the dollar is losing its glitter the emerging trend among the investing communities would be "to develop and widen the yawning gap for yellow metal accumulation which will naturally accelerate it price….” - click here!
The following email below is from a reader.
“Let me suggest you leave Katie Couric out of your commentaries. Your comments re: gold were very good, but this country is split 50/50 on politics. You will only lose readers making referral after referral to Katie's liberal bias. (And appearing to give the tone you are thrilled by it.)
This criticism was only meant to be constructive.”
Susan from NYC
Can I say something here?
Sure, I am a conservative and Katie Couric is a liberal. But does that mean I cannot treat her with deferential respect if I write about her? Let’s remember to practice what the venerable Rush Limbaugh has taught us to practice. And that is to always maintain “compassionate conservatism” with those who are our political adversaries. Can we not be “compassionate” towards those we disagree with politically? I would like to think that what separates the civilized from barbarians is the ability to engage in respectful dialogue with those we disagree with.
So people let’s cut this crap of getting all upset if our political opponents are treated respectfully and with kind and loving “compassion.”
We are above this I would hope. Let’s get over this need for bitterness and anger. The bottom line is that when you let your emotions take over you can’t think straight anymore and we all need a clear head to face these coming difficult financial calamities ahead of us.
Let me see here if I can give someone else an opportunity to practice “compassionate conservatism” by saying something polite about another liberal. I always admired the marriage of James Carville and his wife. Both these folks are 180 degrees opposite of the political spectrum yet they are happily married to one another.
Something to consider and possibly learn from I think.
“Cajun liberal James Carville, 53, and salty conservative Mary Matalin, 43, made their names as the nation's most combative couple. After duking it out on opposite sides of the 1992 presidential campaign, they got married, had a baby girl, settled into a cozy home, and made millions by agreeing to disagree -- on anything, nearly everywhere...”
- click here!
Let’s go back to part of what we just read above because it’s important. Read again the following excerpt below.
“…and made millions by agreeing to disagree…”
I like that comment. James and Mary agreed to live with their differences and even to profit by those political differences. Do you begin to see now why we must keep a clear head in these matters? It might cost you a lot of money if you don’t.
“…and made millions by agreeing to disagree…”
How can we take off our blinders and not only see the real world around us but also learn to engage in meaningful respectable dialogue with our opponents? We can learn a lot from James and Mary. Listen to their own words how they live with out blinders.
James: “I look at my wife and I think, #@%&*, I don't deserve this woman. There's hope for all the rest of you bald-headed, squinty-eyed guys out there!”
Mary: “The problem is, people look at us as if we're opposites. We're not. We're actually very similar people. We're both advocates. We're both passionate. We both like a good, fair fight. My opposite is someone who doesn't have a philosophy of life, someone who doesn't get fired up about anything.” “Even if we avoid most political topics, we still find plenty to argue about. But that's part of it. We're competitive. We challenge each other. My mother always told me I'd end up with someone I wouldn't always beat. She was right.”
James: “I got the same advice from everyone in my family. I needed someone who wouldn't dote on me -- someone who wouldn't take any of my crap.” - click here!
I really love the following quote below. Just read his biography recently and I found his philosophy so true to life.
"Success isn't built on success; it's built on failure, frustration and sometimes catastrophe." Sumner Redstone
Nothing of value in this world comes easily. Success is only built on the foundation of failure and great travail. And that is a fact. Life’s trials really have a way of weeding out the wimps from the winners. The winners pick themselves up right after they fail and they keep on trying. Are you a winner or a failure? You are a failure if you refuse to get your tail up off the floor after being knocked down by the vicissitudes of this world.
Uh oh. A new word we just used above – “vicissitude.”
“Middle French, from Latin vicissitudo, from vicissim in turn, from vicis change…”: “a favorable or unfavorable event or situation that occurs by chance… a difficulty or hardship attendant on a way of life, a career, or a course of action and usually beyond one's control…” - click here!
The following text below is a good example using the word “vicissitudes.”
“As the economy continues to head south and with it your 401 K make sure you have started a portfolio containing gold and silver stocks so as not to get caught up in the “vicissitudes” of a declining world economy.”
I was taking my turn doing parking lot duty at our church on Easter Sunday and was up on the large grassy hill next to the paved parking lot awaiting the extra throng of church goers who always show up for Easter service. And standing in the middle of the grassy hill was the largest and fattest Canadian goose I have ever seen.
“With the Ben Bernanke-led Fed having declared itself to be "data dependent," the inflation reports take on greater-than-normal importance for traders. But "these are tortured data," says Jeffrey Saut, chief investment strategist at Raymond James & Associates, suggesting that the PPI and CPI data don't adequately report the higher cost of goods. "What they are telling you just doesn't jive with what you see in real life…" - click here!
And getting back to that fat Canadian goose?
This old bird evidently had slept late this Sunday morning and when he awoke all his buddies had flown on with out him. The poor old goose kept looking around looking for his buddies but they were no where in sight.
Emanuel Balarie - “Even though gold prices have risen to over $600/ounce, investors are still failing to acknowledge that we are in a fundamentally driven precious metals bull market.” “…the same fundamental reasons that have driven the price of gold from its lows in 2001 will continue to drive it still higher in the years to come. As such, it is important for investors to note that we have only just begun, and it is not too late to participate in this gold bull market.” - click here!
And back to our goose?
This old goose turned and looked in my direction as if to say, “I’m lost and up the creek.” Yes, I replied back and told this bird he would definitely soon be up the creek if he did not fly away soon before the cars started parking where he was sitting on the grass. He finally got the hint and flew away.
“With the acceleration of worldwide production growth in an increasing number of emerging nations, the demand and price escalation of major commodities should come as no surprise.” - click here!
Now what did that ole’ fat Canadian goose have to do with what we have been talking about?
I suppose the moral of the story about the fat Canadian goose is not to sleep too late, but to pay attention. I wonder how many investors are presently sleeping through the news today and still not comprehending the gradual and serious change in today’s economy. Don’t be like that old fat goose that wakes up late only to find he has missed the boat and has been left behind.
“Gold futures climbed as much as $9 an ounce Wednesday to trade at their highest level since 1980 as continued high crude prices and the biggest jump in consumer prices in a year fanned inflationary fears.” - click here!
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Comments? Thanks for coming by & please do come back.
David N. Vaughn
Gold Letter, Inc.
David4054@charter.net
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-- Posted Wednesday, 19 April 2006 | Digg This Article
