I think we could easily see $1050 pretty soon.
That was quick ($1053 now). Got scared and sold all mine at $1033, doh Now I'm not sure when to get back in again.
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I think we could easily see $1050 pretty soon.
So how will this US debt crisis ultimately resolve itself? Let’s consider the options. It would appear from our analysis that the spending ‘promises’ are the crux of the problem now facing the US Government. If there isn’t enough new capital in the current environment to fund new Treasury bill issues (as we argued in “The Solution... is the Problem”), then there certainly isn’t enough capital to pay for the US’s unfunded future obligations. The choices, therefore, are bleak:
1. Default on Medicare promises. (Unlikely given the current debate in Washington to expand medical coverage.)
2. Default on Social Security promises. (Unlikely given the increasing average age of the voting public.)
3. Put forward a credible plan to balance the budget. (Unlikely given the most recent budget projections.)
4. Default on outstanding debt. (Unthinkable)
None of these options are feasible for the US Government. So they realistically only have one option left – to print their way out of their debt crisis.
We keep coming back to the numbers for the US debt, and they don’t add up. Even Alan Greenspan, former Chairman of the Federal Reserve, believes that the rising budget deficits in the United States are “unsustainable”. Because the US Government is printing dollars to fund their liabilities, it is highly unlikely that we will ever see a failed bond auction similar to that of Poland. The far more likely outcome, therefore, will be a US dollar crisis. It is for this reason that we have positioned our hedge funds and mutual funds so heavily in precious metals. At the end of the day, when the world finally realizes what the US has done to the world reserve currency, international investors will shift into an asset that no government can print. In our opinion the US dollar’s status as a ‘port’ in the financial storm has officially come to an end.
With what has happened in the world of late and what will be unfolding in the next 5 years or so those few investors who fully understand the impact the current economic situation is going to have on future inflation, the USD, interest rates, the stock market, physical gold and silver and gold and silver stocks and warrants in particular are going to be in the unique position of being the benefactors of currently unimaginable returns and wealth. All they need do, as I like to say, is "Just prepare and prosper!"
Back in the mid- to late 1970's, as gold went up from its 1972 low of $60 to $850 in 1980 (and silver to $50), gold and silver stocks realized absolutely amazing gains:
* Lion Mines - 1975 price: $0.07 / 1980 price: $380 i.e. an increase of 542,757%!!!
* Azure Resources - 1975 price: $.05 / 1980 price: $109 i.e. an increase of 217,900%!!
* Wharf Resources - 1975 price: $.40 / 1980 price: $560 i.e. an increase of 139,000%!!
* Mineral Resources - 1975 price: $.60 / 1980 price: $415 i.e. an increase of 69,067%!!
* Steep Rock - 1975 price: $.93 / 1980 price: $440 i.e. an increase of 47,212%!!
* Bankeno - 1975 price: $1.25 / 1980 price: $430 i.e. an increase of 34,300%!!
The percentage returns above, averaging 70,627%, seem totally unbelievable but they are verifiable. They were achieved by investing in the right stocks at the right time. Imagine, and the above companies were only a handful of the gold and silver stocks that generated such astounding returns.
To put things in perspective let's look at it this way. Had an astute investor divided a $10,000 investment equally among the 6 companies mentioned above in 1975 it would have grown to $7,072,700 just 5 years later! I can't imagine that ever happening again but that is what actually happened back then. It is absolutely amazing, isn't it? Even a 10,000% appreciation would have turned that $10,000 into $1 million dollars! Remember, it only takes a few good investment decisions in one's life to be exceedingly successful and that was such a time.
I know, I know, you think that was then and this is now and increases in excess of 500% let alone 1000% or more would never happen again. Well, that was not the case. Take a look below (chart compliments of Doug Casey's International Spectator) at what happened to the shares of mining companies during the mini-bull market in gold in 1993-1996. The larger producers did well (+84.2%) but look at what happened to a selected group of juniors during that 3 year period. The returns averaged 1,546.4%!
Then you must deal in gold priced in USD.the AUD going up now is not good for commodities. Gold in US$ is making huge gains, but is not making a dent in AU$. GOLD.AX is still at AUD$113 which is very low.
Also not good for Aussie gold mining companies.....
The big kicker will be if the USD tanks and the world looks to a reserve currency backed by something tangible.
Ian (is it Ian or "I an investor"?) by selling you showed you were not committed. Believe! and accept your human frailty (doubt) and get back in the pool.That was quick ($1053 now). Got scared and sold all mine at $1033, doh Now I'm not sure when to get back in again.
hmm,if the US dollar goes belly=up then where does that leave us in Australia-it's just not going to happen not as long as the 80/20 rule is still working it's way through the system,,..stuff gold..Ian (is it Ian or "I an investor"?) by selling you showed you were not committed. Believe! and accept your human frailty (doubt) and get back in the pool.
If you believe, as I do, that the USD has no future and don't wish to "night trade", and why would you? you can buy a single, long dated future contract. I'll admit this ain't easy for a property investor but I have enough "margin" ie "equity in the deal" with my broker that I can buy, assured that I will not be "called" after a bad session. As with all investments, as confidence and equity increases, so does your pot.
Ian (is it Ian or "I an investor"?) by selling you showed you were not committed. Believe! and accept your human frailty (doubt) and get back in the pool.
If you believe, as I do, that the USD has no future and don't wish to "night trade", and why would you? you can buy a single, long dated future contract. I'll admit this ain't easy for a property investor but I have enough "margin" ie "equity in the deal" with my broker that I can buy, assured that I will not be "called" after a bad session. As with all investments, as confidence and equity increases, so does your pot.