Dear Subscriber,
Gold supply is getting tighter and tighter! Despite higher and higher prices, gold mine output fell last year to a 12-year low!
Gold investment demand is hotter than ever. I’m talking both big investors and small. Central Bank mints around the world are running full blast trying to keep up with demand.
And it’s not just here in the U.S. The British Royal Mint increased its consumption of gold by more 75 percent during the first quarter "amid a surge in demand for bullion to diversify investments."
A flood of red ink in Washington is destroying the value of the dollar. The fiscal deficit could top US$2 trillion in 2009 — a whopping 15 percent of gross domestic product. That would increase by one-third the total stock of federal government debt outstanding. What’s more, the deficit will probably be even larger next year.
You know who’s disgusted by this? Our foreign creditors, that’s who. The U.S. dollar is sputtering and stalling, as foreign central banks around the world, led by China, say they want a new, supranational currency to replace the greenback as the world’s reserve currency.
Of course, after this kneecapped the dollar last week, the Chinese rushed to say, “Well, we don’t mean right away.” Some consolation that is!
But the U.S. dollar has been in trouble for a while. And in the past two years, the dollar’s slide is just one force that has helped gold rack up gains of 43 percent!
Does Doom Loom for the Dollar?
One thing’s for sure — such a development would cripple the dollar. And it would turn up the heat under already sizzling gold prices!
China is expected to buy gold bullion, using some of its $1.95 trillion in foreign exchange reserves. China has too many dollars, and too little gold! As of right now, China’s gold holdings are roughly 1.8% of its foreign exchange reserves — much lower than other dominant nations, like the U.S. at 78.3% and Germany at 69.5%.
The problem is the sheer size of China’s foreign reserves — $2 TRILLION worth. If China decided to hold 5 percent of its current reserves in gold (the international average is 10 percent) it would need to buy more than 3,000 tonnes of gold — or about one full year of global production.
What do you think that would do to the gold price? It would send it through the roof!
Some analysts even believe that China will sell some of its U.S. Treasuries to fund the purchase of gold to further drive the price of the commodity up. By selling U.S. Treasuries, the U.S. dollar will further weaken.
But the good news is there is a great way to protect yourself against the coming financial hell-storm: GOLD.
Irresistible Forces Are Lined Up to Push Gold Higher!
Importantly, this is just one of multiple forces I see lining up to push gold higher. Any one of them is bullish for the yellow metal — together, they could send gold smashing through overhead resistance to soar to $1,300 an ounce — and beyond!
Is Gold the Ultimate Currency? Yes!
Gold has been used as money throughout history, and has some great things going for it ...
1) Permanence — Gold does not tarnish and is immune to the ravages of water and even most acids. Unlike paper money, it will not decay, shred, break or be eaten by mice in the basement.
2) Convenience — Can you carry a little more than eight pounds in a bag? Then you can walk around with $100,000 of gold. Not that you would want to do that, but it shows how handy gold is. Try walking around with $100,000 worth of real estate in your pocket.
3) Real wealth — Most importantly, the good-time Charlies in Washington can’t print gold.
Ride The Coming Rally in Precious Metals
If you want to protect yourself from the global economic earthquake bearing down on us, and if you want to potentially maximize your profits in gold, don’t wait around.
Sean
0 comments:
Publicar un comentario