Subscribe for 12 months with recurring billing - $199

Buy 12 months of subscription time - $199

 

Search Gold Prices
Gold Price
[Most Recent Quotes from www.kitco.com]
Our RSS Feed

Gold Updates by Mail

Enter your email address:

Follow Us on Twitter
Thursday
Jun242010

For the Last Time, Is Gold in a Bubble?

Gold Price What bubble 25 June 2010.jpg


Jeff Clark, Senior Editor, Casey’s Gold & Resource Report

While a few mainstream outlets are coming around to at least acknowledging gold’s stellar run, most remain skeptical or outright bearish. And the blasphemy they purport is that gold is in a bubble.

Let’s settle it, right now, and shut these naysayers up.

 

Gold returned 10 (and as much as 14) times your money in the 1970s bull market, and the Nasdaq advanced over 1,900% during its run. Our current gold price is up about 400% (when measured on a daily basis, not monthly as in the chart).

In fact, the Nasdaq gained 182% in the final year of its peak, and gold surged 80% in four weeks during the blow-off top of January 1980. None of this is happening to our current gold price.

Note to doubters: we’ve got a long way to go before we start legitimately using the “bubble” word.

Besides, the fact that these skeptics aren’t buying – and don’t even own any gold in the first place – is further proof we’re not in a bubble. Ever notice none of them claim to own it?

And they definitely need to catch up on world affairs. The World Gold Council (WGC) reported that Russia, Venezuela, the Philippines, and Kazakhstan all bought gold in the first quarter. Central bank sales, meanwhile, remain depressed.

Russian President Medvedev won’t quit his quest to move international reserve assets away from the dollar. And his country’s central bank is backing up his words; it increased its gold reserves by $1.8 billion and decreased its currency reserves by $6.6 billion so far this year.

China, the world’s largest gold producer, already buys all the gold produced within its country. But the WGC recently forecasted that overall gold consumption in China could double in the coming decade, a demand that production certainly won’t be able to match.

The Iran/Israel showdown appears closer almost every week. As further evidence that each side is preparing for conflict, Saudi Arabia recently agreed to permit Israel to use a narrow corridor of its airspace to shorten the distance for a bombing run on Iran – all done with the agreement of the U.S government. Simultaneously, the UN Security Council imposed a new round of sanctions on Tehran. Nobody appears to be backing down.

And the current run in gold is with no inflation. Core CPI has fallen to the lowest level since the mid-1960s – but what happens when inflation does set in? And what if it’s as bad or worse as the 14% rate we got in the ‘70s? Sure, deflation is the immediate concern, but with a U.S. federal debt of $13 trillion, unfunded future liabilities exceeding $50 trillion, and a current budget deficit of over 10% of GDP, a massive debasement of the dollar is virtually ensured, triggering an onslaught of inflation. It’s coming.

With all these concerns, these guys don’t want to own gold?

Bubble, schmubble. Stocks are vulnerable, bonds are toast, currencies are fiat. Other than cash, where are you going to put money right now?

Gold could correct, of course, and I frankly hope it does. I’m not counting on it, though. The price is just as likely to head the other direction. But if it does temporarily fall, while the bubble-heads are smirking, I’ll be buying.

Someday I think we’ll be reversing roles.

----

How far could gold and silver fall? And precious metal stocks? Check out our annual Summer Buying Guide in the current issue of Casey’s Gold & Resource Report, which identifies buy zones for all our recommendations. You can try it risk free here...



Have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.



Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more.


Silver-prices.net have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

Wednesday
Jun232010

We Cannot Afford to Double Dip

Double Dip Casey 24 June 2010.jpg

By Alex Daley, Senior Editor, Casey Research

Talk of a double-dip recession is seemingly increasing these days. Home sales have dropped like a brick since the end of the special tax breaks for buyers. Weekly job reports are showing much larger rises in unemployment claims than previously expected by whoever it is that decides what exactly is expected – 427,000 new filings in just the last weekly report.

The problem this time around, however, is not just the economy itself. The problem is that our supposed saviors are all out of tools to help the economy climb out of the deep, dark hole we now find it in. The tool belt of any monetary regime is limited to begin with. Nothing more than loosening up the debt purse strings with unrestrained interest rate policy and some additional lending from the central coffers to add to liquidity. These tools are the economic equivalent of performing reconstructive dentistry with a sledgehammer and monkey wrench, effective but not exactly precise.

And as Goldman Sachs recently pointed out to a number of its clients, the world’s leading developed nations have all but exhausted the few tools available to them:

Interest rates in the top 10 economic nations are hovering just above zero, and it’s not like they can go any lower than that, as much as banks would welcome having to pay back less than they borrow.   

And government net lending has increased so dramatically that government debt is spiraling from out-of-control to just plain ridiculous. All at a time when revenues are dropping from the slowdown and creditors, having been burned a little by Greece and afraid of what’s to come with Spain, Italy, Ireland, California, New York, and others, are starting to raise red flags to the borrow-and-spend policies of our collective governing bodies. 

For the first time in a long time, developed governments in Europe and the U.S. face the specter of sub-AAA credit ratings and rapidly rising costs of borrowing more (ratings that, frankly, had they been put in place by the inept agencies years ago when they were initially deserved may have had repercussions that would have helped us avoid many of today’s problems). Between rising borrowing costs, the already hefty budgetary burden of paying prior debt interest, and the ever-expanding rolls of government employees, legislators can hardly keep up on the bills these days, let alone inject any more into the economy.  

The irony, of course, is that by unloading a full clip from the assault rifle when trying to “save” the economy, the governments of the OECD nations have actually created a catch-22 situation. One wherein they not only have no tools left to manipulate the markets against a further slowdown, but also where they have created monetary policy so extreme that undoing it would be more disastrous than the fallout would have been had they not stepped in in the first place.

Austerity budgets from Greece and Spain have included massive layoffs of government rank and file, severe wage cuts, or both, potentially reducing tax revenues and consumer spending. California is following suit with its proposed 23,000 teacher layoffs, which are arriving on the back of 30,000 previous layoffs just last year. New Jersey is furloughing tens of thousands of state workers and capping raises. NY is furloughing 100,000 more and needs to cut $9.2 billion from the budget still.

As the walking bankrupt states and cities continue their budget slashing – down from criminally high levels such as Miami, where the average city worker nets $76,000/year compared to the $29,000 average for private citizens of the metropolis – it will only exacerbate the returning slowdown. Fewer households with cash to spend in the private sector. Rising mortgage defaults and foreclosures as the workers face the grim reality that a state paycheck doesn’t come with a 30-year guarantee these days. Declining tax revenues at all levels. And more people on the already busting-at-the-seams federal unemployment files, which remain at all-time highs.

Speaking of the U.S. federal government, their guaranties of Fannie and Freddie Mac loans are now estimated to cost anywhere from $250 billion to $1 trillion to taxpayers in the end, far above the net cost of any of the other bailout measures and potentially more than is possible to pay. The price tag is so steep, many conservatives are starting to call for repealing the institutions’ charters altogether and letting the private market have at them. The U.S. federal government is simply buried over its head in obligations.

The government is all tapped out. And yet the economy continues to slow.

If you are among the camp who wished the government would have never stepped in to begin with and called out the seemingly obvious truth that they could only worsen the situation by flailing so wildly to contain it – the double dip is coming, and you are about to be proven right and get your wish at the same time.

It’s the price we are all about to pay for letting our politicians get away with budgetary murder year after year, including letting them try to “save” us the last time around.
----

Betting on rising interest rates is a slam-dunk opportunity if there ever was one. Learn what Casey Chief Economist Bud Conrad has to say on this topic and which investments will profit once interest rates start going up. Click here for more.






Have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.



Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more.


Silver-prices.net have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

Tuesday
Jun222010

The UK Budget: The Party is finally Over

UK Budget 23 June 2010.jpg

The British government has just delivered one of the toughest budgets in living memory, signaling that the borrow and spend lifestyle enjoyed under New Labour has finally hit the wall.

With the GDP running at 11%, Britain's budget deficit mirrors that of the club med countries such as Greece as the previous Labour government borrowed, printed and spent in an attempt to remain popular and keep their precious seats in Parliament. The new chancellor is looking to cut the GDP to just 1% over the next five years, for a reduction of approximately £135 billion. Anyone who has watched the sit-com 'Yes Prime Minister' will be aware that this move is easier to talk about than to actually implement, so we will see in twelve months time just how far the UK has progressed along this path of austerity.

Of note, is that VAT will be increased to 20% from 17.5%, higher taxes, benefits to be cut and slashing spending such as departmental budgets to decrease by 25% in real terms over the next four years. So, the two million or so new jobs created under the previous government are now under threat, a saving of 25% must surely involve the loss of jobs for some. We can only hope that these people can find some entrepreneurial spirit and find something useful to do. There is also a two-year public sector pay freeze along with £11 billion in cuts to welfare spending, including a three-year freeze on child tax credits.

The Chancellor, George Osborne, emphasized the taxpayers' huge liabilities in terms of public-sector pensions commitments, whereby the country would need to find billions of pounds a year by 2015.

Fitch Ratings commented that the U.K.'s emergency budget should materially strengthen confidence in the country's public finances and its triple-A rating providing the government can deliver on its planned measures. Well, its a question of wait and see, but those words should help to reduce the possibility of a downgrade.

"The specific measures announced today are substantial and enhance confidence in the U.K. public finances," Fitch said.

Finally, listening to discussions on various UK Radio stations the commentators reckoned another 500,000 people will be made unemployed over the next six months. The party is definitely over with the hangover cure being administered by the new government. In our opinion this had to be done and hopefully the UK will come out of it fitter and slimmer, however, in the short term it will be very hard indeed all round.

Its not just the UK thats up against it, you are going to here that word austerity more and more wherever you are.

Have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.



Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more.


Silver-prices.net have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.


Thursday
Jun172010

Dollar Loss is Golds Gain

USD Chart 18 June 2010.jpg

A week or so ago we suggested that the US Dollar may well have run its course and will now look to take a breather. That breather appears to have arrived so we now expect the USD to take tea with the 200dma before eventually heading even lower. Without another blast of bad news from the eurozone expect the dollar to weaken as the printing press has already inflicted much damage.

As we said recently, sooner or later the focus will return to the dollar as the investment community becomes immune to the constant stream of bad news emanating from the fatally wounded eurozone. Europe is still up against the wall of unrest being brought about by the politicians, rightly or wrongly implementing austerity measures in order to reduce debt. Many will have to forfeit state benefits including wage reduction, delayed and reduced pension payments, job losses, etc. These measures will not be accepted easily as we have already witnessed in Athens and other major cities across the world as demonstrators let their feelings be known. And as we also know, the politicians will try and print their way out of trouble as they have now clearly demonstrated. At one time we harbored the thought that Germany might hold the line and be the country to stand firm and uphold the European Unions own rules on fiscal responsibility, silly us!

As bad as this picture looks, it is putting in a performance that will ultimately support gold prices and eventually have people running around like headless chickens in their attempts to get their hands on real money. A way to go yet but you can feel it building up as gold gathers strength for a push through the $1250/oz level into unknown territory.

Over the next week or so we will be taking another look at our portfolio and weeding out the laggards and re-deploying the funds into vehicles that we believe can move a little faster. So, while you are waiting for the new all time high take some time to do a critical review of own stocks and be prepared to make some tough decisions. When the mania stage finally gets here you need to have positioned yourself to the best of your ability in order to maximize your profits. Talking of which our purchase of some Call Options in Silver Wheaton Corporation over on www.silver-prices.net is now showing a paper profit of 37.79%, getting us off to a reasonable start.

Have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.



Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more.


Silver-prices.net have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.




Wednesday
Jun162010

UK gets a Regulatory Face Lift

Delboy as Batman 17 June 2010.jpg
You know it makes sense


So here we have it, Merv the Swerve who didn't see the banking crises coming and then took the wrong action by committing tax payers money to save the likes of the Northern Rock and George the boy scout in the driving seat of UK PLC, what can we say?

We can say this: get your money out of the pound pronto.



This is an excerpt from MarketWatch -- New U.K. Chancellor George Osborne on Wednesday undid the regulatory shakeup that Gordon Brown made in 1997, announcing that the Bank of England and a new agency would take virtually all of the powers away from the Financial Services Authority.

At the annual Mansion House speech, Osborne said the Bank of England would get powers to have a "big picture" of the financial system, as the tri-partite system that divided authority between the central bank, the FSA and the U.K. Treasury gets unwound.

Under Osborne's plan, a regulator will report to the Bank of England which will have oversight of banks, investment banks, building societies and insurance companies. In addition, an independent financial policy committee will be created at the Bank of England to look across the economy at the macro issues that may threaten economic and financial stability and take effective action in response.

A new consumer protection and markets authority also will be established, Osborne said. He expects the new regulatory system to be in place by 2012.

For his part, Bank of England Governor Mervyn King embraced the new role, in what puts him in a similar position to U.S. Federal Reserve Chairman Ben Bernanke.

King is the effectively the last man standing from the Northern Rock collapse of 2007, which triggered the first bank run in the U.K. in more than 150 years.

King also rejected criticism the U.K. central bank has been too complacent over inflation, which has been running well above its 2% target.

"The MPC judges that spare capacity in the economy will press down on inflation," King said. King also explained how the U.K. central bank will tighten monetary policy -- with rate hikes from the 0.5% level preceding the sale of assets it's bought under its quantitative easing program.


A quick look at the resume of Mr Osborne shows just what a heavyweight he isn't!

Born and educated in London, George studied modern history at Oxford University, where he became joint editor of the University magazine Isis.

After a short spell as a freelance journalist, George joined the Conservative Research Department in 1994 and has since dedicated himself wholly to politics. Chancellor of the Exchequer, May 2010

and thats it? The mind boggles.....


Have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.



Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more.


Silver-prices.net have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.


Monday
Jun142010

Greece downgraded and the UK slower than expected growth

Greek Downgrade 15 June 2010.jpg


(Bloomberg) — Greek stocks and government bonds tumbled on mounting concern the nation may struggle to meet its debt commitments as public finances deteriorate.

The benchmark Athens Stock Exchange General Index dropped as much as 6.1 percent, its biggest intraday decline since Nov. 26. The yield on the government two-year note rose the most since 1998. Fitch Ratings cut Greece one step to BBB+ today, the third-lowest investment grade. Standard & Poor's yesterday put Greece's A- rating on watch for a possible downgrade, signaling it may be reduced within two months.

"Greek bonds were already tanking on the S&P negative outlook and Fitch gave their fall a boost," said David Schnautz, a fixed-income strategist at Commerzbank AG in Frankfurt. "It's a long-term sustainability problem. Now the government has to tell the Greek public that something needs to be fixed."
Greece, the lowest-rated country in the euro region, is struggling to shore up its finances amid a year-long recession. Gross domestic product shrank 1.7 percent in the third quarter from a year earlier, the National Statistics Office said Dec. 4.

The socialist government of Prime Minister George Papandreou, elected in October, plans to cut the budget deficit to 9.1 percent of gross domestic product next year, from 12.7 percent this year. The measures, including a partial freeze on public-sector pay, "are unlikely by themselves to alter Greece's medium-term fiscal dynamics," given the prospects of high deficits, debt and sluggish economic growth, S&P said yesterday.


The Global Financial Crises reported the UK over-estimate as follows:

David Cameron 15 June 2010.jpg
David Cameron

Britain's newly-created independent Office for Budget Responsibility has revealed the previous government had over-estimated the UK's economic growth forecasts.

The British economy is set to grow 2.6 per cent in 2011, not the 3.25 per cent predicted by the previous chancellor, Alistair Darling, in March. The new government says it is damning evidence that the financial mess left behind by Labour is even bigger than thought. The new growth forecasts suggest higher unemployment and a harder time for Britons ahead. It prepares the ground for harsh austerity measures expected to be announced during next week's emergency budget.

Things look to be going from bad to worse in eurozone as the news stream continues to flow with less than encouraging news on all fronts. It looks to us as though the Greeks will be battered into submission and either take the austerity medicine or leave the euro and go back to having their own currency. Either way the wolves will keep the pressure on them.



Have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.



Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more.


Silver-prices.net have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

Monday
Jun142010

Gold Prices Update 14th June 2010

US Dollar Chart 14 June 2010.jpg


As we mentioned recently the dollar may well have run its course for now having been the main beneficiary of the perils that have swamped the euro. This chart shows the US Dollar gradually heading south over this three day snap shot. Once the heat comes off the Euro the dollar will be next to go under pressure as the fundamentals look none too rosy.


Jim Rogers on CNBC 10 June 2010

Jim Rogers CNBC 10 June 2010.jpg


Short on stocks and long on Commodities thats Jim Rogers today. Other points of note in this interview included his comments on the Euro which he thinks could put in a short term rally only because everyone he knows is so negative on it which suggests to him a bounce could be on the cards.

A weak euro means more printing of money and ultimately more inflation and therefore he suggests that we should hold real assets, cotton, silver, natural gas, etc. Now, this next comment is very interesting, he said that if you are not a very good stock picker then you should stick to the commodity itself. So where do we go from here? Well, the first step regarding investment in this sector is to get your paws on the real thing, physical gold and silver. After that we can select some of the associated precious metals stocks, maybe place some cash with one of the funds or select a suitable vehicle for the implementation of options trading. The stocks do come with a myriad of risks including taxation which has recently popped up in Australia. A change of government anywhere in the world can bring about a new set of laws that were not even on the horizon when the project commenced.

You can always turn to a professional financial letter writer for advice in the sector that captures your interest and there are lots of them out there, but do try and get a recommendation from someone who has used the service over a reasonable period of time and considers it to be value for money.

From Jim Rogers to Jim Sinclair who has just sent us this missive:

The cat is clearly out of the bag concerning the forthcoming bankruptcy of 33 states of the USA.
 
This moronic New York non-solution to borrow from state pension funds, which now cannot meet their pension requirements, screams bankruptcy. The Administration calling for $50 billion for states and cities would appear to be confirmation of this financial phenomenon. The sign that the financial problems of the states of the USA are going critical and will make the EU situation look like kindergarten, in market terms, will be a stronger euro and stronger gold, sort of like now (9:09 EST).
 
A shift in the recent relationship between gold and the euro would signal that recognition by markets.


Jim Sinclair now has on offer a set of DVDs to guide you through the investment maze as follows:

Included in this two DVD set is a DVD Rom (accessible by computer DVD drive only) that is a searchable database of nearly two thousand articles over the last two years from Jim Sinclair, Trader Dan, Monty Guild and a collection of other JSMineset contributors. This is one of the largest collections of articles related to the Gold market available today on DVD and includes all charts we have posted over the last year and a half.

The second DVD is the much anticipated CIGA Meeting in Toronto from February 2010. This DVD includes over 3 hours of discussions with Jim Sinclair himself and is playable in any DVD player.

Please click here for more on this topic.


Finally we have this is a short clip from CNBC with Peter Schiff suggesting that we should be buying gold as it could go to $10,000/oz if governments keep producing money out of thin air, worth a watch.

Peter Schiff 14 June 2010.jpg


Have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.



Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more.


Silver-prices.net have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

Saturday
Jun122010

Why Won’t You Die, Damn it!

Gold Coins 13 June 2010.jpg


By David Galland, Managing Director, Casey Research

Back when I had more time, I would occasionally play Oblivion, a video game. A game so addictive, it’s been known to contribute to flunking out of colleges and the failure of marriages.

When persevering in a sword fight, your computerized opponents were prone to angrily muttering the phrase “Why won’t you die, damn it!”

That phrase pops to mind as I watch the global stock market continue to get hammered, as gold continues to battle the headwinds with impressive tenacity.

So why won’t the damn crisis just die – and with it, gold?

It’s not my intention to rehash the details of the events leading so many economies to this challenging place. Instead, I’ll cut right to the chase by stating my firm opinion that the reason this crisis is so persistent – why it won’t die anytime soon, and not without a lot of thrashing about – has to do with the debt at its core.

Earlier today, I was trying to explain the situation in terms appropriate to my son’s 13-year-old mind. I put it something like this…

Imagine if you made $12,000 a year working as a counter clerk at the local pizza parlor. Then imagine you had foolishly run up $12,000 in credit card debt, the proceeds of which you had frittered away on consumables that contribute in no substantive way to creating future wealth.

Now, imagine someone was foolish enough to continue lending you money, so that you were able to spend approximately 40% over the amount you earned – or $16,800 in total, some percentage of which was the interest you were paying on your overhanging credit card debt.

Given that set-up, I asked, how could you possibly pay off your debt?

“Get a better job?” He responded.

A good answer, I thought. 

But stepping out of the metaphor to the actual players in this drama, the indebted nation-states, how do they get the equivalent of a “better job?” Which is to say, raise revenue?

Only one way, really. And that is to raise taxes. But taxes can only be raised so far before they hit a wall beyond which people simply won’t, or can’t, pay them. And raising taxes by a sufficient amount to count, in the teeth of an epic downturn, will only further hobble the economy.

For the time being, thanks to all sorts of machinations, the U.S. Treasury is finding lenders willing to buy its debt and keep things afloat.

But now jump back to the pizza counter help and imagine what would happen to his or her finances if (a) the foolish lenders wised up and refused to keep trading good money in exchange for highly suspect IOUs backed by nothing… while simultaneously, (b) the credit card company bumped the interest rate on the debt outstanding from 3% to 10%?

In a nutshell, this is the current set-up of things. While the specifics will vary depending on whether it is the flag of Greece, Spain, Portugal, the UK, the U.S., Japan, etc., which flies over the home turf, the fundamental realities of this being a debt crisis are immutable.

And, as the EU is now learning, intractable. Which is to say, the only way that this crisis will die is if the debt can be reduced to a manageable level.

Given the sheer scale of the debt problem, all the easy ways for that reduction to occur have long ago packed up and left town.

At this point, any real solution will likely involve all of the following:

1) Bond investors being wiped out, or at least suffering serious losses. Tough luck, a non-bond investor might be tempted to think. But before you do, make sure you checked the prospectuses of your money market funds and the paper being held in great piles in the financial institutions where you currently park your money.

2) Inflation. Why pay back $1.00, when you can pay back 50 cents?

3)A wholesale canceling of contracts. Okay, so you thought you were going to collect Social Security in your declining years – think again. And that nice government pension? Oops.

4) Higher taxes across the board. Congress is getting ready to quadruple the federal tax on oil. And the imposition of a VAT in the U.S. is a near certainty, albeit with all manner of politically convenient but ineffective provisions to make it look like the Democrats aren’t breaking their pledge to not raise taxes on the middle class.

5) Ultimately, defaults on sovereign paper. Like the indebted pizza jockey, once it begins to be hard to find lenders, and those that you can find are only willing to lend at much steeper rate, all that is left to you is to borrow enough gas to drive down to the nearest office of Dewey, Cheatem & Howe and start the process to declare bankruptcy.

In other words, this crisis is not going to go quietly to its dirt nap. Instead, the end will almost certainly be akin to a Viking funeral with the political equivalent of rape followed by a raging fire on a sinking ship. Riots in the street and a serious degradation in the quality of life of the majority of the citizenry are all but inevitable, followed by a sea change in the political landscape.

Then, and only then, can the world get back to the business of forgetting the lessons learned in order to repeat the cycle all over again.

As for gold, the fact that it has refused to die as the world’s only reliable form of money over the last seven millennia should give you the confidence to include it in your portfolio at today’s purportedly elevated levels. 
----

Jeff Clark, the editor of Casey’s Gold and Resource Report, has been saying it for years: Buy physical gold and silver. And if you want even greater gains, invest in solid, undervalued gold producers that can provide leverage of up to 4:1 to gold itself. Read more in our report, here.














Have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.



Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more.


Silver-prices.net have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

Thursday
Jun102010

Is the US Dollar Overbought?

USD Chart 10 June 2010.jpg


There are many distractions to take our eye of the US Dollar at the moment, the biggest one being the plight of the Euro closely followed by the plight of the British pound. Sooner or later the focus will return to the dollar as the investment community becomes immune to the constant stream of bad news emanating from the fatally wounded eurozone.

We could well be too early in making this call but it appears to us that the dollar may now have run its course and will now look to take a breather. As we can glean from the chart, over the last two months the Euro has been under the gun, resulting in a rally for the USD as the preferred currency. Also note the gap that is opening up between the dollar at '88' and the 200dma, which stands at '79'. The RSI, MACD and the STO are bouncing along at the top of their respective ranges and sooner or later they will return to somewhere more in the middle of their ranges. So the dollar now appears to be a tad overbought, in our humble opinion.

If we are anywhere near correct with this view and the dollar starts to correct we could see various money managers looking to lock in their current profits and place their bets in another asset class.

Three points if you can guess which one!

Have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.



Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more.


Silver-prices.net have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.


Tuesday
Jun082010

Gold prices nudge $1250/oz, are you prepared?

Gold Chart 09 June 2010 A.jpg


We will kick off with a quick at the chart for gold prices and what a great chart it is. Despite the bears constantly jostling to be the first bear to call a major correction for gold prices to drop back to the depths of the last decade, gold is just not listening and continues to strengthen as the demand for real value grows.

Gold prices popped up above the $1250/oz parapet today to survey the economic landscape before easing back to close at $1237.30/oz. Gold is now poised to to set another new all time high and when it does gold prices will be once again, be in unchartered waters. Also note on the chart that the 50dma and the 200dma are moving up in support of gold prices which is a positive sign. The MACD has just had a nice crossover, again a positive indication for gold. The RSI is heading north and as it is sitting at 62, it still has room for a little more upward movement. The Stochastic is in the overbought zone at the moment but hopefully it can move sideways as gold pushes ahead.

The difference this time regarding an all time high is that gold is already at all time highs in all the major currencies across the globe and is therefore starting to attract more attention in these countries, as nervous investors contemplate the advent of a double dip recession. With the exception of the US Dollar, paper money is losing its reputation as a store of value. The printing presses continue to inflate the money supply thus diluting the value of everyones savings and begging the question of just what is the point of holding cash as a store of value, huh.

The rally in the dollar is not because its fundamentals are sound, it is more a result of other currencies hitting the wall, particularly the euro, which in our humble opinion faces extinction in the not too distant future. The people of northern Europe will not tolerate forever their hard earned cash being transferred to the south in order to preserve a way of life which many regard as unsustainable. Spain has moved in terms of ordering a 5% pay cut for the public sector only to be met by a strike and threats of many more to come. Every time this sort of news hits the air waves investors are forced to reconsider the logic of holding euros and in greater numbers they will diversify into other asset classes, which for now include the dollar. Sooner or later their will be an event which grabs the headlines in the United States, the first state to default for instance, bringing into focus the very same questions that are being applied to the euro now and again investors will not be shy in making the decision to diversify still further. So where will they go? Well we are gold and silver bugs and have been for some time now so we cannot give you an unbiased answer as we are up to our necks in gold, silver, associated mining stocks, options trades and hold no other equities. We can tell you that we have no intention of touching the industrials as we are of the opinion that the broader markets could still drop by around 30% from here, which would take the DOW back to the 6000 level. But thats just us and we do see things through gold coloured glasses.


A snippet from BNN:

John Ing on BNN 09 June 2010.jpg
John Ing

Gold hit a record dollar high above $1,250 an ounce this morning as concern over Europe's economic outlook lifted risk aversion. BNN interviewed John Ing, President and gold analyst, Maison Placements Canada, to get his view on the current situation. John expressed his concern about the UK, France and the USA and also mentioned the geo-political tensions surrounding Israel and North Korea. The investment communities perception of the broader markets was that the recent oscillations resembled a casino as the DOW traded below 10,000 despite the mega bucks that had be poured into the system. Johns near term prediction for gold prices is $1350/oz and that some time this year gold will hit $2000/oz. We cant argue with that as the metals bull is gathering momentum.

Finally, according to our Collins Pocket Dictionary the word fiat as in fiat money is an 'order issued by legal authority, a decree or sanction'. Politicians can order an increase in the money supply but they cannot order gold or silver to double, as its just not possible. Therefore, the precious metals are in a unique position as the only true store of wealth. The move towards gold will accelerate in the coming weeks and months bringing the mania phase of this bull market ever closer, so be prepared for it.

Interestingly, in our dictionary the word fiat comes just above the word 'fib' to tell a lie!

Have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.



Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more.


Silver-prices.net have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.