GOLD = The Only Real Currency.
I just love how the naysayers explain that gold is useless. It is the only currency which is backed by itself and not by some self serving government body.
The question for many investors is whether money supply growth will continue. If you want the answer, just look at the current massive level of U.S. debts and the unfunded liabilities of Social Security and Medicare obligations.
Some say that it doesn’t matter when you purchase Gold and that you should buy it regularly always adding to your position, and that it represents the only true store of value.
Here is some of my thoughts on why you should own Gold in today’s world. Gold is a hedge against inflation and we have major inflation in the pipeline. The Bullion supply is declining rapidly. Gold is the only real currency that is capable of replacing the FIAT currency monstrosities now in use the world over. Gold is the only real safe haven and will continue to rise due to the major financial troubles globally. History shows that when the Government turns on their printing presses (and they are smokin right now) that the USD rolls over and starts to decline.
“Gold continues to benefit from destructive monetary policies which are being pursued globally,” said Peter Spina, chief investment analyst at GoldSeek.com. “As capital seeks to preserve its purchasing power, currencies once deemed more powerful than gold are now being questioned.” Accordingly, Gold’s “returning as the king currency and its scarcity will propel prices significantly higher,” he said, adding that gold prices could rise to as high as $1,200 this year, breaking its record high above $1,003 an ounce hit in March, 2008. (HEY that is my price target)
Ok, we have the USD that pulled back significantly after its climb into December, and which is now moving up to test its previous highs. And on the other hand, we have Gold’s steady climb from $200 to today’s 913 POG.
The GLD is right at the breakout area as many of the Gold stocks are. I think GLD is probably headed to $100+ in somewhat of a short order, which equates to $1,000 per ounce in the POG.
The GLD April $90 calls are trading at $6.25 and it’s a big time premium, but if GLD climbs to $100 you’re likely to enjoy a 50% to 75% return.
The Gold bugs are not complaining. Has anyone noticed? A lot of our “traditional” portfolio’s tanked. But The Market Guardian gang knew what to do and that was to hang on to our Gold.
One of my favorite plays is still Yamana Gold (AUY). I have been on the ride since the high $4′s. I believe a bright spot for Yamana is their management Led by Peter Marrone, President and Chief Executive Officer of Yamana, their management team consists of long-time Brazilian industry veterans who know the country and the culture. They’ve been very strong operators, showing the ability to increase production efficiently and quickly from acquired mines.
Leave a comment on your thoughts and strategy.
Good Luck
Any thoughts on silver? It looks like it could be turning the corner, and has been outperforming gold of late.
I’m with ya – I find it hard to believe that the precious metals won’t hold up well as the govts of the world try to inflate their way out of this mess.
Silver has been holding up very nicely. It has been forming a nice looking wedge, which generally indicates prices should continue higher over the intermediate term. As long as it stay and builds support above $12.00 I like it. I also own SLW
Good Luck
SLW looks like it’s consolidating nicely here. Looking at SLV, it could stand to settle down a bit and consolidate and/or pull back.
I love it, i am pumping cash into metals like a crack addict!