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The one silver lining of an Obama victory is that it has galvanized and simplified my investment strategy for the long term: hold gold, silver and mining equities and watch your assets explode higher as the DOW crumbles and the dollar burns. As the Mogambo says, "this investment stuff is easy!"
http://www.youtube.com/watch?v=vKx4N...layer_embedded
The Obama victory does clear the path for gold and silver. A Romney victory may have temporarily raised the false specter that there would be some tightening of the fiat strings, but an Obama administration makes no such allowance for that scenario. Full speed ahead.
WHAT WILL THE PRICE OF GOLD BE IN JANUARY 2014?
By Jeff Clark of Casey Research
While I don't like making price predictions, and certainly ones accompanied by a specific date, it's hard to ignore the correlation between the US monetary base and the gold price.
That correlation says we'll see $2,300 gold by January 2014.
There are plenty of long-term charts that show a connection between gold and various other forms of money (and credit). Most show that one outperforms until the other catches up. But let's zero in on our current circumstances, namely the expansion of the US monetary base since the financial crisis hit in 2008
Here's the performance of gold compared to the expansion of the monetary base since January 2008:
http://r20.rs6.net/tn.jsp?t=ijzdvbla...Fimg%2F117.jpg
You can see the trends are very similar. In fact, the correlation coefficient is an incredible +0.94.(Click to enlarge)
Since the Fed has declared "QEternity," it's logical to conclude that this expansion of the monetary base will continue. If it grows at the same pace through January 2014, there is a high likelihood the gold price will reach $2,300 at that point. That's roughly a 30% rise within 15 months.
And by year-end 2014, gold could easily be averaging $2,500 an ounce. That's 41% above current prices.
Some may argue that there's no law saying this correlation must continue. That's true. And maybe the Fed doesn't print till 2014. That's possible.
But it's not just the US central bank that's printing money...
- European Central Bank (ECB) President Mario Draghi has declared that it will buy unlimited quantities of European sovereign debt.
- Japan's central bank is expanding its current purchase program by around 10 trillion yen ($126 billion) to 80 trillion yen.
- The Chinese, British, and Swiss are all adding to their balance sheets.
The largest economies of the world are all grossly devaluing their currencies. This will not be consequence-free. Gold and silver will be direct beneficiaries.
There are other consequences, both good and bad, of gold hitting $2,000 and not stopping there. We think investors should be prepared for the following:
- Tight supply. As the price climbs and attracts more investors, getting your hands on bullion may become increasingly difficult. Delivery delays may become commonplace. Those who haven't purchased a sufficient amount will have to wait in line, either figuratively or literally.
- Rising premiums. A natural consequence of tight supply is higher commissions. They won't stay at current levels indefinitely. Premiums doubled and more in early 2009, and mark-ups for silver Eagles and Maple Leafs neared a whopping 100%.
- Tipping point for a mania. There will be an inflection point where the masses enter this market. The average investor won't want to be left behind. Will that happen when gold hits $2,000? $2,500?
Jeff Clark is the editor of BIG GOLD, Casey Research's monthly advisory on gold, silver, and large-cap precious metals stocks. For ongoing guidance about physical gold and silver, as well as the large-cap precious metals stocks, try BIG GOLD today for just $129 per year, with 3-month money-back guarantee.The message from these likely outcomes is to continue accumulating gold - or to start without delay. Waiting will have consequences of its own.
People say that there's nothing certain in life except death and taxes. In my view, $2,300 gold is a close second.
QUESTIONS FROM OUR CUSTOMERS
Should I Invest in a Gold ETF instead of Gold Coins?
Exchanged Traded Funds, or ETFs, have become popular in recent years because they make investing in precious metals as easy as buying regular stocks. With an ETF, there is no physical product to store, so investors don't need to worry about securing a home safe or storage facility. This can translate to a lower cost of ownership for ETFs.
However, for those seeking to protect their wealth and savings from the unraveling dollar, investing in gold through ETFs can have some major disadvantages.
For starters, ETFs compromise your financial privacy. An ETF, like any stock, must be traded through a registered broker-dealer, whose license and "Know Your Customer" policies are regulated by the government. If you've ever started even a basic account to trade stocks, you're already familiar with the huge amount of personal information an authorized broker requires, such as social security number, yearly income, and employment information.
Also, with an ETF, anytime you buy or sell shares, the transaction is automatically reported to the government.
By contrast, purchasing physical gold can be a highly private transaction. When ordering from Euro Pacific Precious Metals, the only information we need to know are your name and shipping address. We are not required to report purchases to any government regulatory agency unless there is suspicious activity, like paying with large amounts of cash. For that reason, we do not accept cash payments.
Once you receive the gold, what you do with it is up to you. You are required to report any sales of precious metals to the IRS for capital gains purposes; however, under current law, Euro Pacific Precious Metals is not required to report purchases or buybacks for a wide variety of gold and silver products. Call and ask a Euro Pac Specialist for complete details at 1-888-GOLD-160 (465-3160).
Being able to put a physical coin in your pocket is one of the best reasons to invest in gold in the first place. If there is a shock to the financial system like 2008 or worse, you will have in your possession one of the most time-honored means of saving and trading wealth. Gold coins can be used to easily barter in an emergency, because gold is recognized as real money all over the world.
Many gold purchasers take great pleasure in knowing the have the ultimate form of money in their personal, physical possession. It cannot go bankrupt; it cannot default; it cannot be devalued; and there are no questions about inspecting or taking delivery of your investment.
ETFs certainly have their place in the market as instruments for short-term speculation, or for those who value convenience. But when you need a stable, secure, and private asset, nothing beats physical gold.
The Obama phone, will take enough physical silver off the market to create a short squeeze? o)(~
Perhaps not the phone alone; but the Obama suppository should tip the balance to silver overconsumption.Quote:
Originally Posted by Neuro
Well it will make the ass blue anyway, but I think they use paper silver for the suppository... ;DQuote:
Originally Posted by mamboni