There’s Gold In Them Thar Crises!

November 6, 2011 | By | Reply More

There’s bad news, more bad news and then there is the good news, or at least for some of us. Starting with the bad news, as all we stock market players already know, Europe is in ever deepening mire with only the prospect of adding to its already horrendous debt burden as the only solution under consideration as a fix.

To find the trillions to fund the IMF means that the printing presses will be going flat out. China is unlikely to assist without the promise of onerous and privileged trade advantages that in earlier times would be considered outrageous and totally unacceptable.

With or without China, that this would be a short term fix is an understatement. The further bad news is that the United States is making no discernible progress in its attempts to avoid falling back into recession despite the likelihood of QE3 early in 2012 and no real progress in cutting back on government spending together with diminishing tax returns and increasing expenditure on unemployment benefits, etc.

And now for the good news

A classic movie, “The Treasure Of The Sierra Madre” starring Humphrey Bogart as a member of a team of would be prospectors undergoing just about every hardship and danger the script writers could dream up were kept going in their endeavour to find gold by one of the cast uttering the phrase “there’s gold in them thar hills”as they battled with bandits, hunger and thirst, the elements, being out of money and eventually with each other.

Our point is that for those of us who trade gold, these crises, which are increasing in frequency and magnitude, are opening up opportunities to prosper while the vast majority of professional and retail investors are facing a financial meltdown.

Of all the money  invested in stocks, shares, bonds, and commodities only one percent is in gold. It is hard to credit that this is almost an historic low in view of the turmoil and uncertainty that has engulfed financial  markets for past three years.

Precious metals are the only sector that has enjoyed a consistently  rising trend for more than five year at an average of around 20% p.a. , and still it is ignored by the mainstream!

Western central banks have ceased selling their gold while their counterparts in the more financially stable economies are actively buying the metal. Now Turkey, not renowned for its financial rectitude, is allowing its banks to use the value their of gold holdings as a significant part of their reserves to meet their regulatory obligations.

Sooner or later even the most conservatively entrenched investment institutions will have to seriously think about preserving the true wealth of their funds as we become ever more deeply engulfed in a sea of fiat currencies of diminishing value.

When that mainstream eventually switches on to precious metals as the only realistic preserver of their wealth we really will be in the beginning of a gold bubble and that will be the time to think of bailing out before its eventual burst. Until then the  long term gold and silver uptrend will stay in place with $4000 – $5000 a long term target.

In the meantime gold and precious metal investors can stay ahead of the game and rack up profits ahead of the pack. Follow the trend and don’t bet against it, buy the troughs and sell the peaks if you must, but never be short is our advice. Like we said “there’s gold in them thar crises!”

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