Gold is money

May 13th, 2010. Published under News. No Comments.

The Western financial world is officially in full panic mode. A nearly $1 trillion bailout of Greece confirms that fact. Our very own Federal Reserve is providing billions to the effort, but this is much more than a bailout for Greece. It is a bailout for banks holding Greek debt and the debt of other European nations teetering on default.

This bailout is not a fix or a cure for too much debt. People on both sides of the pond are simply spending more than they earn. The “fix” is a long painful road of consuming less and saving more, but that is not what this bailout represents. What the leaders of the Western World chose was the short painless path of money printing. You have to ask yourself where did they come up with nearly a trillion dollars in such a short amount of time?

If real assets were used for this bailout, it would not be done. Think about this for a minute. Let’s say for the American part of this rescue we had to put up half of New York State for collateral. Does the thought of that much prime land frittered away make you squeamish?  How about putting up 500 million barrels of oil out of the Strategic Petroleum Reserve? Too valuable you say? Then maybe a couple thousand tons of gold out of Fort Knox would be okay to use, after all, it’s just sitting there (I hope).  Doesn’t this sound absurd?  It sure does because these are real assets and printed money is not. This is why the U.S. Fed is using dollars created out of thin air to help bail out its banking buddies in Europe. It is the easy way out, at least at the beginning.

In the end, this kind of reckless desperation will cause every dollar you spend and save to be worth less. If the Fed prints too many dollars, then they’ll be just plain worthless. What do you suppose will happen when California, Illinois, Florida or any one of more than a couple of dozen U.S. states all gets into the same trouble as Greece? Do you think the Fed will let them fail or print more money and bail them out too? I’m going with a giant money printing bonanza right here in America. I covered some of this in a February post called “America Has Its Own PIGS.”

Gold buyers see what’s coming, and prices are being bid up.  Gold set a new all time high this week. Why? Money, or the buying power of money, is systematically being destroyed by current and coming bailouts. The new money is gold and Congressman Ron Paul agrees. He said earlier this week, “Gold, all of a sudden, started acting differently.  It started acting as a currency rather than just reacting to the value of the dollar or other commodities . . . Gold has been money for 6 thousand years and it’s going to remain that way, and it will rule the roost . . . It’s telling us that the dollar is actually very weak . . . when you measure it against gold.” Silver is also rising in price. When gold rockets high enough in price, then silver will also be considered money.

This so called bailout will just extend the game. The question is for how long? To be frank, I do not know how this will finally shake out. The two things you can count on for sure:  there will be some very big inflation–and gold is money. (more…)

15 Reasons Why Gold Should Reach $1500 in 15 Months

October 1st, 2009. Published under News. No Comments.

Beaumont, TX (PRWEB) October 1, 2009 — Mike Fuljenz, President of Universal Coin & Bullion in Beaumont, Texas points out that in September, 2009, Standard & Poor’s (S&P) Global Investment Policy Committee predicted that gold prices “could rise to the $1,200 to $1,500 ounce range over the next 9-12 months.” Can it happen? Will we see gold at $1,500 by year-end 2010 – about 15 months from this writing? Considering that gold was only $250 in early 2001, a rise to $1500 would cap a 500% gain in the first decade of the 21st century.

Mr. Fuljenz says, “Yes, it COULD happen. Here are 15 universal reasons why gold bullion might reach $1,500 within 15 months: (more…)

Gold price could hit $1,300/oz in 2011-BMO Capital Markets

September 8th, 2009. Published under News. No Comments.

BMO Capital Markets asserts the market has become quite divided on the outlook for gold and gold stocks with no clear consensus on the gold outlook.

Author: Dorothy Kosich
Posted:  Monday , 07 Sep 2009 

RENO, NV - 

BMO Capital Markets suggests the bear case could see the gold price retreating to US$750/oz in 2010 while the bull case hints the price could reach US$1,300/oz in 2011.

In a recently published report, BMO analysts David Haughton, Andrew Breichmanas and Bart Melek advised silver could outperform in a bull case gold scenario perhaps reaching $22.03 next year.  In a bear case, silver could be as low as $11.45/oz in 2010.

While the analysts expressed concern disinflation and a firm dollar could keep gold range-bound well into 2010, they advise, “The metal will likely be energized again late in 2010 amid a weakening greenback and rising inflation concerns, as the U.S. economic recovery takes root and as post-recession growth becomes entrenched. At that time, risk taking should accelerate and with it BMO Research expects a weaker dollar as capital increasingly moves away from the safety of the treasury market.” (more…)

If it’s not the Chinese, what’s driving the price of gold?

September 7th, 2009. Published under News. No Comments.

If it’s not the Chinese, what’s driving the price of gold?

ALEC HOGG: Well, that gold price is now trading at $990/oz. It has suddenly come to life. Paul Walker is the chief executive of GFMS, and he joins us from Paris. Paul, on Mineweb, Moneyweb’s international website today, Lawrie Williams wrote a story about China pushing the idea of buying gold to its 1.3bn population. There was a programme on Central China Television explaining to the public how easy it is to buy gold, and this is being interpreted – in some quarters, anyway – as part of the reason why the gold price seems to be sprinting towards $1000. Is that wishful thinking?

PAUL WALKER: Well, I don’t think as much as wishful thinking – it’s actually been a story that’s been around for some time. If you have a look at GFMS data on China, it’s been the one outstanding growth market throughout this bull rally. It’s outperformed every other gold market both in value and, most important, quantity terms from the perspective of supply and demand balances in this market. So it’s already to an extent in the price and there’s no doubt that growth in China, ongoing (more…)

The Boardroom Talk podcast: All about gold

March 20th, 2009. Published under News. No Comments.

MONEYWEB [Felicity Duncan]: Hello and welcome to Boardroom Talk Podcast. It is Thursday, the 19^th of March and I’m sitting in the studio with Alec Hogg who is going to give us some insight into the events of the week. Alec, let’s start talking about the gold price because there were some very interesting moves this week in that area.ALEC HOGG: Hmm, all over the place. Today was a big day for gold, last night when the Fed decided it was going to spend a whole lot more money, pulled out of thin air, gold bulls got excited, pushed the gold price up $35 and as we’re talking right now, coming from a level of around $890, it’s now trading $935 to $940. It was interesting on the radio show and the interaction we had with a couple of chief executives from the, well in fact the two biggest South African gold mining groups, both of whom are very bullish on gold. Most bullish is Nick Holland, the chief executive of Gold Fields Ltd. It’s interesting to note, I was going through our YouTube channel, that the interview we had with Nick Holland has been very well watched, in fact it’s one of our top five interviews.

(more…)