-- Posted Tuesday, 17 August 2010 | Digg This Article
| | Source: GoldSeek.com
It’s difficult to take the pulse of the nation nowadays with all the events that have occurred on public stage these past couple of years.
Fundamentally, we are becoming a nation of haves and have nots. Either we own a home, have a good paying job with superior benefits or we have no job and our home is preparing to go into foreclosure. The middle ground is quickly eroding. For the lucky and chosen few they are maintaining good employment and coming home each evening to a nice neighborhood with a beautiful yard. And the fortunate see no rising storm ahead. Those difficulties occur to others, but not my family.
But, oh, the fantastic shock when you enter your place of employment where you’ve worked for 30 years and find you are no longer needed. Quickly you clean out your desk, 30 years of company rewards of achievement and all the odds and ends that collect in a desk drawer over the years. Then you are quickly escorted to the front door and watch 30 years of memories closing being you. And all those well deserved and hard won company achievement awards then mean nothing. And forget about leaning on your 401K for survival. That has been under water for years.
So, you’re now around 60 years old, you can’t afford to send your kids to college. Your wife lost her job a year and a half ago. The next step is down to the unemployment line. And forget about those government contrived numbers for the percentage unemployed. The real figure is probably closer to 16%.
Never in your life did you anticipate entering the realm of the unemployed. That happened to the bums that could not hold a job, but not you. And the first thing you learn in earnest while seeking another job is that no one wants to hire and employ a 60 year old geezer. The competition is tough enough for the 23 to 25 year old college graduates who are competing for your old job. And of course for about half the pay you earned. And, wow, are you going to miss those 5 year vacations, the strong union that protected your company rights.
But your neighbor still holding on to his job is cutting his grass and stopping occasionally for a glass of fresh tea filled to the brim with fresh ice from the refrigerator. And your neighbor will enjoy watching the sun go down in the evening as he plops a couple of t-bones on the charcoal grill.
But for those living on unemployment checks and once worked 20 or 30 years in a good profession that brought personal pride and respect…what do they now do? The charcoal burner and enjoining the setting sun have rapidly lost their allure. Their equity is probably upside down to where they can’t even consider selling their home to down size. The normalcy of their lives is over.
The printing of money will continue because governments know there’s not much else they can do except stimulate the economy and increase debt. Shame none of that money filters down to the poor folks and middle class. The big question among economists and politicians are we in a deflation or entering inflation? Inflation is always occurring and noticed by anyone living in the real world who pays bills and goes to the store and buys a gallon of milk. And as prices move higher and financial unpredictability grows who’s going to spend a lot of money?
John Doody is probably the most respected and knowledgeable gold analyst in the market. Anyone truly serious about following the precious metals markets should subscribe to his newsletter. It pays for itself over time. What does John say about inflation from his professional perspective?
John Doody, Gold Stock Analyst - “With much current debate about whether the US economy is headed for Deflation or Inflation (GSA falls in the Inflation camp…” “Everything that's being done creates inflation.”
Want further proof of the real state of the economy? Talk to a builder or a contractor. That’ll set you straight. The banks sure aren’t releasing the stimulus money they received from Uncle Sam. Too frightened to let it go. As it has been said repeatedly… get out of debt and convert your assets into physical gold.
If you want to speculate after acquiring a solid insurance plan built on physical gold then consider the senior gold companies, juniors or explorers. Just remind yourself that the mining stocks are not guaranteed bets, but speculation.
Many think 2008 was the climax of the financial crisis. Wish it was. In that year entire business models were wiped out and had to be reinvented and changed. In that time the entire spending habits of an entire world were altered. 2008 was merely the escalation of the snowball effect. The US and Europe continue to be happy that inflation seems to be no where on the table. Inflation seems to be no where to be found. Except to the general consumer. Home foreclosures continue to climb.
Any wonder gold continues around or above 1,200 an ounce? In the old days, circa 2005, bells were ringing when gold hit 500 an ounce. Inflation will produce its ugly head and gold and silver will represent the best asset to have acquired for protection. And what continues with China? Our personal bank for the Federal Reserve System? Well, it’s beginning to buy the Euro as its reserve currency of choice. Is there any comfort here? In the 1930s 10,000 new millionaires were created. Think outside the box.
John Doody, Gold Stock Analyst - "Bernanke and the Fed are pursuing a loose monetary policy with a 0% interest rate. There's actually no way we cannot end up in inflation." “Gold's going up now; it's going to go up more. One of the uses of gold is to protect your purchasing power from inflation, and it's done a damn good job!” “Gold has been a sanctuary in monetary crises and inflation for centuries.”
Around 6 trillion dollars of debt still needs to be wrung from the economy. Funny, that figure used to seem incomprehensible to imagine. Now we bandy about the word as if it meant nothing. Gold should continue to see radical growth as more and more consumers rush to get their assets out of paper and into something solid.
1,500? 2,000? 3,000? Who knows. But always remember your physical holdings are insurance and not to be played with or speculated with.
John Doody, Gold Stock Analyst - “People who predict $1,500 or $2,000 or $5,000 are foolish because there's no basis for that. I don't doubt gold will get to those levels, but I have no idea when. I find undervalued stocks now and profit as Mr. Market discovers them.”
I don’t see a US economic recovery in my life time and only a continuing rising level of fear, uncertainty and fright. These are generally the components leading consumers to place their assets in physical gold. Jim Cramer, Mad Money, believes now is the time to buy gold. Both Jim Cramer and Larry Kudlow agree that 10% plus of your portfolio should be in what they refer to as “the ultimate hedge” gold.
"What makes gold different is that, unlike paper money backed by the good word of the government, it has withstood the test of time for thousands of years…" "It is not the liability of any government. It has an inelastic supply curve. How many times is gold mentioned in the Old Testament? Try 391 times. How many times is paper currency mentioned from Noah, to Abraham, to Moses? None. Nada. Efes. Gornisht. Nihil. Rien. Nichts. Niente." Dan Burrows, dailyfinance.com/story/investing/what-gold-really-is-really-a-hedge-against-instability/19502342/?icid=sphere_copyright
Who’s’ going to write that big 2.5 trillion debt someday owed to China? You will. There is no stability today. Buy gold and silver while it’s still accessible.
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David Vaughn
Gold Letter, Inc.
David4054@charter.net
Gold Letter, Inc. The material presented is based on information and sources believed to be reliable but its accuracy or completeness cannot be guaranteed. Gold Letter, Inc accepts or assumes no liability for the foregoing material. There can be no assurances of the company reaching sales forecasts or projections as outlined in this report. Gold Letter, Inc. has relied on management for information and data presented in this report and has not verified its accuracy. The analysis contained herein does not purport to be a complete study of the featured company and any views expressed are as of the date hereof and are subject to change without notice. This report is for information only and entertainment purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security, nor should any information or opinions expressed in this report be construed as investment advice. Companies mentioned herein may carry a high investment risk; and readers should carefully review the companies thoroughly with their registered investment advisor or registered stockbroker. 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… gold letter, inc…
-- Posted Tuesday, 17 August 2010 | Digg This Article | Source: GoldSeek.com
