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We�ve
really seen the price of gold and silver take off over the past couple of
weeks. At the time this article is being written gold is trading for around
$680 and silver is trading for around $14.50. We are quickly approaching my
short term target of a $700 gold price and a $15 silver price. Of course,
looking at it from a long term point of view this is just the beginning. The
reason I believe this to be true is because the price rise of gold and silver
is still largely off the radar if you ask the average man on the street. Due
to the fact that the mainstream media is nothing more than a government
mouthpiece the vast majority of people have no concept or realization of the
economic problems that could be coming down the road or what it means for
gold and silver.
One of the main reasons there are economic problems ahead is because of
the communist inspired central bank we have in this country known as the
Federal Reserve. The Federal Reserve has zero credibility. This institution
is run by a group of arrogant elitist Ivy League educated hacks that is being
used to centralize power and control over anything and everything. This
corrupt organization with a great deal of help from the mainstream media has
convinced people that the Federal Reserve fights inflation when in fact the
Federal Reserve is the very cause of it. In the minds of many Americans they
have actually been able to rewrite the past to make people think that 2+2=5.
Couple this with the fact that many economic statistics released by the
government are designed to mislead the public. One example is the core
inflation statistic which has been created specifically to make people think
inflation is lower than it actually is. George Orwell�s �Newspeak� is being implemented
nicely in the 21st century.
It has become increasingly more obvious that the Federal Reserve is going
to continue to devalue the currency. I still believe that the Federal Reserve
is going to keep the USD going just long enough until the new North American
regional currency is unveiled. For those who aren�t familiar with it, I am referring to the
Amero. If this turns out to be the case and judging from all of the evidence
of a forming North American Union I believe that it is, the Federal Reserve
won�t defend the
credibility of the USD. They�ll
just allow the currency to inflate to the point where we have a situation
similar to that of the late 1970�s
and the solution will be the new regional currency.
Back to gold and silver, when you consider that the Federal Reserve has
more than doubled the money supply since 2000 and the Dow has barely risen in
nominal value, that is a clear signal that we have a problem. While the
mainstream media pushes technology stocks like Microsoft, Intel, Cisco and
other high flying stocks of another era, it makes it even more obvious to buy
precious metals. Also if you are wondering our long term price target is for
Intel, we project that it is going to $7 to $9 a share before it bottoms out.
It is a sick joke that the mainstream media tries to sell people that the
general stock market is in bull mode. How is the general market in bull mode
when precious metals are clearly providing investors with higher returns?
Despite the solid performance of gold and silver they should actually be much
higher considering the manipulation and games the central bankers have played
with the prices.
Let�s face the
facts. We are in a long term commodity bull market that could last another
decade if not longer. Amazingly the gold to XAU ratio which I frequently keep
tabs of is at 4.71 which means that gold stocks are still cheap comparatively
speaking to the price of gold. Make no mistake about it, gold is eventually
going to be $1,000 an ounce and we�ll
probably see that in the next couple of years. I expect higher percentage
gains in silver during the same time frame with it likely going to somewhere
between $30 and $40 an ounce over the next 2 years. Obviously any sort of
price rise in gold and silver is bullish for gold and silver mining stocks as
they provide additional leverage to the price.
Another reason why I like gold and silver so much is because it provides
financial protection against the establishment hacks that run our central
bank and government. The establishment wants people to keep their wealth in
paper because it keeps them in the system. By purchasing gold and silver you
declare financial independence from the system and the establishment hates
that. The government doesn�t
have full control over gold and silver. They can manipulate the gold and
silver markets but they�ll
never have full control over them. This is why you always see the
establishment financial media look down upon gold and silver as investment
vehicles.
We know that the financial system in its current state is a fraud and is
doomed to fail. We know this because every financial unit that has been
created out of thin air has never worked. Only a currency based off of
something tangible can survive. A main feature of money is that it needs to
be able to store value. Digits on a computer don�t store value and nor do Federal Reserve
Notes. Speaking of which, a reader wrote me awhile back and argued that
Federal Reserve Notes should actually be called Federal Reserve Defaults.
This is actually correct because the Federal Reserve no longer allowed their
Notes to be exchanged for gold after 1971 as was originally agreed upon in
accordance with the Bretton Woods agreement. At that point in time the
Federal Reserve admitted that they got greedy and printed more money than
could be exchanged for gold. As a result, they defaulted on their promise and
hence these Federal Reserve Notes aren�t
really notes they are Federal Reserve Defaults.
Overall though, gold and silver is really showing some strength. We should
see gold break $700 and silver break $15 in the very near future. After gold
breaks $700 we should see it try to challenge the recent May 2006 highs. We
are certainly in for some exciting weeks and months ahead as the Federal
Reserve continues to rob us blind by inflating the USD.
25 February 2007
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