Global News

Monday September 06, 2010

Jackson's hole

There are many theories about investments and things do change from era to era; however, we are living in the here-n-now, so what's SAFE in these times within which we are living? Or, is there any safe investment? Obviously, I have been saying for a decade now that gold would exceed ,500 an ounce (most probably before the end of 2010 1Q) and race to ,500 by sometime in 2012. 

Remember that ten years ago gold was $0 an ounce. Today gold sits at the ,000 level. Let's look at the BIG THREE that will continue to propel gold:

1-The Death of the US$
The US$ is toast! Rumors have it that several countries are already preparing new currencies that they can trot out over the next 1-3 years in anticipation of the death of the US$. World Bank President Robert Zoellick said the United States should not take the dollar's status as the world's key reserve currency for granted because other options are emerging. Zoellick said global economic forces were shifting and it was time now to prepare for the fact that growth will come from multiple sources. "The United States would be mistaken to take for granted the dollar's place as the world's predominant reserve currency. Looking forward, there will increasingly be other options."

2-The Death of Low Inflation
Ben Bernanke says that inflation is under control. Don't believe it. Believe that he's trying to figure out how to drain the "liquidity swamp" without causing that feared "W" in economic parlance. There's really no way that one can open a down pillow, dump it's contents from the empire state building and then go down to the street and put all those feathers back in the pillow case. In other words the horse has long since left not just the barn, but the entire ranch. The only question is will inflation be 10% or more like 20%?

3-The Death of Peace & Security
If there is anything the stock market hates it is uncertainty. And with the Iran rhetoric increasing, with North Korea feeling more empowered, with Hugo Chavez buying as much military hardware as he can, with India ready to go to more sophisticated nuclear potentials, with America about to run from Afghanistan, and with an America that no one is any longer afraid of- we've got trouble right here in river city, spelled with a capital "T".

So, regardless of what Mahendra sees in the stars, what I see here on planet earth is nothing but fertile ground for gold to move from ,000 to ,500 an ounce and then who knows where from there.

Outrageous! Video Rating: 4 / 5