-- Posted Monday, 4 December 2006 | Digg This Article
The price of gold grows stronger every day.
But that is what I said would eventually happen months ago as the year drew to a close wasn’t it? I’m not perfect but I try to make well calculated predictions as I am able to. And I just could not see the gold price getting weaker instead of stronger.
Where were you? I didn’t see you in San Francisco. Yes, the gold show, remember? Oh, you forgot. Well, what can I say? A lot of mining companies there at this show. Well over 200. Very, very crowded. You should have been there as you would have had a good time. Your loss.
If you are following the markets closely you will notice the dollar has begun a more serious slide as of late. It has begun. And more and more top financial professionals are recognizing these facts. The route out of the dollar will only grow over time but mark my words well that the process has begun in earnest.
Remember how I have written repeatedly on the arrogance and pride of the US today? I think the following email from a confident reader proves this point out well.
Dave,
“…you seem to be betting against the intelligence of the US consumer. This has historically been a bad bet, and I think it will continue to be a bad one.” “If others are stupid enough to lend us money at these rates, are we dumb for borrowing…?” “If the dollar falls, the rest of the world is going to take a bath in their dollar investment. The US will make a fortune on its international investments. And while I do not want this to happen, the rest of the world will be worse off than us.”
T. M.
I love what we just read. That is about like saying that if I file bankruptcy and cannot pay off the bank I’ll just laugh it off cause the bank will suffer more than me. Give me a break. When I read emails like these I know the US dollar is living on borrowed and expired time along with most American consumers.
Now let’s listen to reality and the real world. The text below from the venerable Bill Buckler best describes where we are in this present unfolding crisis.
Bill Buckler - “At its present level of 83.60, the USDX is still 3.60 points or 4.50 percent above the 80 index, which is the "Maginot line" of global finance. Breach that line and the entire structure which it supports is in dire danger. And if the line is breached, the longer the USDX stays below the 80 level, the greater the danger becomes - remember, the USDX has only traded below 80 for thirteen days in its 34-year history.” click
Are you understanding well what you are reading here?
Bill Buckler - “Finally, there is the lowest close ever recorded for the USDX - its 78.33 close on September 1, 1992. At any level below that, the US Dollar is in completely "uncharted territory". There would be resistance points - the 78.33 level which it had breached and above that the 80.00 level. BUT THERE WOULD BE NO SUPPORT POINTS AT ALL. NONE! The reason is simple, the FIAT US Dollar has never been lower than that 78.33 level. Below that, every currency trader in the world, every hedge fund, every derivative issuer, every banker, and every holder of US Dollars and US Dollar denominated instruments of any kind would literally be flying blind. The 80 level on the USDX has been the "floor" for the entire post August 1971 global fiat currency era. We don't know the precise circumstances in which that era is going to come to a close. We do know that if the USDX falls below 80 or, worse, below 78.33, the signal has been given loud and clear.” click
Now let’s stop here for a moment and think real hard. I talk over and over about eras and cycles. This present economic era began in the early 1970s. Now we are beginning to see this era unfold and come crashing to its end. I am not really sure what will be assembled when the pieces come all crashing down but the evidence is here that this era is indeed beginning to crash.
Let me repeat the portion of the text above that you really need to absorb and take home to the bank because the words I am fixing to repeat again you need to study real hard. Ready?
Bill Buckler - “…the lowest close ever recorded for the USDX - its 78.33 close on September 1, 1992. At any level below that, the US Dollar is in completely "uncharted territory".” “… THE FIAT US DOLLAR HAS NEVER BEEN LOWER THAN THAT 78.33 LEVEL.” click
We have a very wise email from Dana below.
Hello David.
“Recently, I had let you know that I experienced a 10 bagger in XXX. You graciously relayed this in last week’s commentary with the caveat that I should take some profits. Well, you rung my bell and I acted. Since it was a ten bagger, I sold 20% of my position, getting back 2x my initial stake. So, the remaining 80% is free and clear and it continues to rise. It is now better than a 14 bagger. It should rise to match XXX so I will hold for a 20 to 30 bagger. Deja vous…” “Anyway, it’s a rare thing to catch one of these events. Hope all is well with you and your family,
Dana D, Halifax
Dana, I congratulate you on your decision. Remember, it is never a true profit until it is sold and the money is under your bed. Dana, tell me the truth. Did your wife finally pinch your butt to get you to sell or did you do it on your own? It really doesn’t matter because you did the correct and conservative thing. Good job.
Again, what is important is that all of us have some type of selling strategy that works for us. A stock that we never sell never really has made us a buck. How do we know when the blasted thing is going to stop climbing and start falling? Best to have an exit and a selling strategy.
Do you comprehend yet how quickly the US dollar is disintegrating? Do you grasp yet the fundamentals? Let me share with you another interpretation below.
Peter D. Schiff – ““Unfortunately the technical outlook for the dollar, and by extension that of the entire U.S. economy and the financial markets it supports, is RAPIDLY DETERIORATING. The dollar Index, now trading near 83.5, has broken though some key support levels and the next test will likely be its all time record lows of just under 80. If that test fails, as it most likely will, look out below.” “Don’t make the mistake of thinking that this is somehow a problem for foreigners. It is Americans who will feel the losses the greatest, as it will result in substantial increases in both consumer prices and interest rates, and in declining asset prices, particularly for residential real estate. In the other words, what we own will be worth a lot less and what we need to buy will cost a lot more.” click
Don’t forget folks. I am not predicting the end of the world here as the world will continue. But what will necessarily change for a lot of folks will be their quality of life. There will be those who are prepared and do well and there will be those who were not prepared and go bankrupt. It is really about which side of the fence you will choose to be on and what will determine that is what you do today.
Dave,
“I just want to tell you an additional fact to your "lobster story" from late 19th century Germany. In Dresden, then one of the most beautiful cities in central Europe, the newly established union of house maids had a paragraph written into their exemplary contract: the maids did not have to accept salmon as their main dish more than twice a week. The river Elbe that later was heavily contaminated by Czech and Eastern German heavy industries, still was home to so many wild salmons that they were considered a poor man’s staple food. There are no more salmons to be found there today and the price of wild salmon is far ahead of what a maid today can afford on a daily basis. Might be the same in your country with the lobster. Regards from Germany.”
H. Uray
Uranium continues to only get stronger and stronger still.
“The likelihood of a major uranium mining renaissance is increasing as political support for increasing nuclear energy output is growing in the different corners of the world.” “…China and India already have a total of 62 NEW REACTORS either under construction, planned or proposed…” click
As of this moment uranium mining stocks are the only way to invest in the escalating price of uranium. And for those participating they are making a ton of money.
The following text below best describes the dollars fate.
“The dollar is coming under real pressure and this looks like the beginning of a sustained move,” said Ian Stannard, strategist at BNP Paribas.” click
Don’t forget to make money and subscribe to Gold Letter, Inc. to receive emailed reviews of under valued gold, resource and uranium mining companies. Now is definitely the time to be building a position in these markets.
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Send me an email if you have time to write over the holidays.
David Vaughn
Gold Letter, Inc.
David4054@charter.net
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. Authors of articles or special reports are sometimes compensated for their services.
© Copyright 2006, Gold Letter Inc.
-- Posted Monday, 4 December 2006 | Digg This Article
