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Banks
are failing across the country at a growing rate.
Actually,
the truth is that the US banking system is close to collapsing. And
what’s happening with gold? Gold recently struck an all time high
as it climbed to a record 1,278 dollars!
Investors,
and just those with plain common sense, are buying more and more gold helping
to send the price of gold ever higher! As never before everyone and his
or her brother is recognizing that gold is the appropriate investment as the
world crumbles around us. Also, gold will be the best investment when
government eventually induces inflation and only gold will outpace inflation
enormously. You sure will not want to have your savings in dollars as
those days are almost here.
How
do you like the recovery so far this year, 2010? Funny, I haven’t
seen it either. Most economic and financial reports are continuing to show
a deteriorating economy. It’s always a shame that no one is
willing to pass any legislation to encourage American companies not to
relocate over seas. The economy is like a balloon with a slow leak that
continues to let out air at a consistent rate.
The
fall of 2008 was dramatic, but not everyone could tell that fall 2008 was the
beginning of the end. Consumers gradually are beginning to recognize
things are really falling apart all around us. But losing ones job and
watching your house crumble in value generally awakens even the sleeping
sluggard.
Today,
the best employer is the government outpacing private sector wages and
benefits. How bad? 70k including benefits for private sector
jobs. And government jobs? Including benefits just around 130,000
dollars. Yes, that’s hard to digest. China slowly is
questioning their long term practice to be the primary banker for the
US. Actually, the greater US population is becoming more worried about
their own battles to keep up with the bills and to survive. Personal
survival is today a greater concern than making money. Their 401K plans
are worthless and the equity in their homes is now long gone.
Again,
the only option that the government will have left to get out of all of this
debt will be to devalue the dollar and allowing inflation to thrive.
People are not buying and housing is getting weaker by the day. There
are close to 1,000 banks on life support and probably half of these banks
will fail.
The
truth is that in any financial catastrophe there is always a great transfer
of wealth to a small minority. Wish we could all be part of that
infinitesimal minority. Are we entering a new age where the principles
of finance, personal rights and government control are a tightening noose
around our neck? And that noose is getting tighter and tighter.
Anyway, for the common middle class the noose is getting tighter. But
don’t worry. Because the middle class is disappearing.
Between 1990 to 2000, we lived in an artificial goldilocks’
economy. Between 2000 and 2010 we began to see cracks in the prosperity
myth. A new age is descending upon us. Whether good or bad its
here now.
The
life that we witnessed in the 70s, 80s and our parents experienced in the 50s
and 60s is gone forever unfortunately. That age is but a chapter for
future history books. The visible faces we observe on our TV screens
each evening are merely the misguided puppets of this new reality.
Gold
was around 251 dollars an ounce during the reign of the bubble gum age when
all was colorful and wealth eternally bounced higher. But since those
days we have witnessed the gold barometer climb to over 500%. If this
does not represent a shift in consumer confidence, I don’t know what
does. The investment world, central banks, and other financial bigwigs
around the world have definitely changed their outlook concerning gold.
Of
course, the question now is how high will gold eventually climb?
Don’t know that one. But I can say with certainty that the higher
the gold price climbs then the weaker our economy will become. And our
standard of living is for certain plummeting. It is a definite fact
that overall spending habits have changed dramatically since the big crash of
2008. The enormous economic stimulus has only gone into the hands of
the already wealthy banks and financial institutions. And they are not
letting that money out of their hands. And they are holding onto this
money as insurance for what lies ahead.
The
number of foreclosures continues to ascend ever higher. The official
government rate of unemployment is around 10%. There are other private
studies that have calculated unemployment at 25%. Take your pick.
Either number is bad. Why is the ownership of gold encouraged during
times of financial uncertainty? Physical gold is insurance.
You don’t sell it until the need really arrives. And trust
me. That time will come. Gold is and forever will be a form
of insurance when our paper economic world collapses.
Jim
Cramer is losing confidence and is encouraging his listeners to start buying
gold. In the past few years, almost 11 million jobs were lost in the
US. Clearly, the way to prosperity in the future will be to get a
government job. That’s an interesting thought. All
employment will be in the government sector. So what about private jobs
in the private sector? There won’t be any. The last
American job will transfer to Asia. And then I don’t know whom
the US government is going to tax. Nobody will be left to tax.
It’s funny how liberal politicians never seem to understand this simple
fact.
Too
many large banks, financial institutions, including the automobile industry
have been infused with money that can never be paid back. It’s
difficult to even imagine the fantastic new debt created just since the beginning
of the past couple of years. Anyone even know how all this debt is
going to be paid for? A tremendous increase in inflation eventually
will be upon us to minimize the total sum of all this piled up debt.
Maybe if each one of us could kick in a spare million bucks from our back
pocket we could get all this debt knocked out. Do you carry a loose
million bucks in your back pocket? You’re right. We only
dream about that pile of dough.
The
common majority of investors still do not follow the gold market. But they
will…eventually. The US economy is facing an ugly reality.
A 1930s style Depression now encircles our borders. Between 1929 thru
1933 there were false signs leading the people to believe occasionally that
recovery was just around the corner. And today the sun may take a brief
peek from behind the dark clouds. Only to just as rapidly sprint back
behind the dark sky. A little euphoria here and there while the ship
sinks deeper into the depths of the sea.
.So
if physical gold is held as insurance where is there left to make an
excellent return on your money? Individual gold mining stocks can go to
the moon in an environment like we are in today. Remember, own physical
gold for insurance and own gold or silver mining stocks for speculation.
Also, don’t be too cheap to purchase a few gold newsletters.
There are some excellent analysts who really know the gold market well and
have made their subscribers a lot of money. Doug Casey and John Doodey
are considered by many to be the best precious metals experts.
With
the continued rise in the creation of paper money via every new stimulus
plan, don’t think for a moment this will not add big time to
inflation. Gold historically does quite well in an inflationary
environment. It rises very quickly and outpaces every other asset and
investment.
Mining
stocks will climb to stars!
One
thing to always look for in a mining stock is to see if a feasibility study
has been done. A feasibility study will show drilling results and cover
a multitude of other facts important in assessing the company’s long
term viability.
2,000 PLUS GOLD PRICE AHEAD!
David Vaughn
Editor,
Gold Letter, Inc.
www.goldletterdv.com
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