Gold in 2011 – Is It Too Late to Buy Gold Now?

We’re seeing lots of interest from newcomers to the metals markets currently, mostly wondering if they are already too late to buy Gold (or Silver) and as this article is as relevant now as when it was first published 6 months ago (and correct, getting more correct every day) we thought it should get some more exposure.

Gold at the Foothills of a Market Mania

By: Jeff Berwick

The connotation of “foothills” is a perfect way of stating precisely where we are at in the collapse of the US Dollar based global financial systemand the return of the king, gold as money.  It is perfect because while we are certainly seeing a movement towards a mania, with gold hitting fresh all-time highs in US Dollar terms on almost a daily basis  we are still far from reaching the top of the mountain.

We have begun a) to enter into the mania stage but b) we are still a long away from reaching its peak.  Here are arguments and proof for both statements.

Indications that the beginning of a Mania Has Started

We borrowed the following illustration (below) from Dr. John Paul Rodrigue of Hofstra University because we thought it gave an excellent depiction of the progression of most manias.  It should be pointed out, however, that we don’t necessarily see gold as being in a “typical bull market”.  What we believe we are witnessing is the return to gold as money after decades of suppression.  However, we believe that the mania phase of this progression will transpire.  The part of this graph that does not make sense in terms of gold is the part after the “New Paradigm” is reached.

It is our belief that once we reach the new paradigm, it actually will be the new paradigm.  There will not be any denial nor “return to normal” because returning gold to functioning as money is in itself a return to normal.

That is not to say that certainly gold will likely overshoot, by a great amount, its “true” value at the height of the collapse of the US Dollar based global financial system in terms of its value in comparison to other goods.  And there will be a time when it will make sense to sell some or all of your gold in favor of other assets.  But for our purposes lets use this chart to try to approximate where we currently are in the mania stage of gold.

In our opinion the “Stealth phase” was the phase between 2001-2004 when absolutely no one but a few, such as The Dollar Vigilante’s all-star Senior Analyst, Ed Bugos, were pounding the tables to buy gold and gold stocks – but no one listened.

For those that have been invested in this sector since 2004, you will recognize the period from 2004-2009 as being the awareness phase.  Many junior precious metals stocks, such as Osisko Mining (T.OSK) and literally hundreds of others were all of a sudden going from $0.25 to $5 and doing massive $50 million+ financings with savvy institutional investors.

And, for those of you who lived through the brutal sell-off of 2008, you will recognize that as being the “first sell off / bear trap” on the chart below.

And that brings us to August of 2010, which began the very first baby-steps into the mania phase. You can see all the signs of it around us now.  Gold is mentioned more and more in the media and it has begun to start making all-time highs on a regular basis.

The dumb money, governments and central banks, are finally starting to catch on to what is happening.  The central bank of Bangladesh bought 10 metric tonnes of gold from the IMF last year,  this is on top of 212 tons of gold the IMF sold the previous year to the Reserve Bank of India, the Bank of Mauritius, and the central bank of Sri Lanka.  And Saudi Arabia, Russia and the Philippines have recently announced big additions to their gold reserves.

Even Jim Cramer now likes gold.  If that isn’t proof we have begun the mania phase we don’t know what is.

Gold No Where Near Peak

But how can we be sure that we aren’t very close to the peak in the precious metals market?  Nothing is certain in life but there are numerous indications that we are still early on in the mania phase.

First, Nick Laird who runs the superb gold-data website, Sharelynx.com, and is a subscriber to The Dollar Vigilante, gave us permission to use a chart he put together comparing gold & silver at its current levels to 50 historical bubbles.

As you can see, if we are near the top then this was one of the most disappointing bull markets in bubble history!  In fact, just to match the gold & silver bull market of the early 1980s gold would have to quadruple in price from here to $5,200 per ounce.  And we think this bull market will be much stronger than the 1980 bull market.

What Will “The End” of the Bull Market Look Like?

When you see this.. THEN we’re sellers..

We dug up a copy of the front page of Canada’s Globe & Mail Newspaper from January 4th 1980.  You can view it here.  This is what the end of the last bull market in gold looked like.  The news story features countless stories of line-ups starting very early in the morning with many people even admitting to having called in sick to work just to line up to try to buy gold coins.  And from Toronto to London to Paris they were all sold out and there was an “absence of sellers.”

That is what the end of a mania looks like.

Now, take a look at this headline from the Calgary Herald on September 14th.  “Calgarians Rush to SELL Gold After Record High Hit“.  They were lining up to sell gold!  Nothing could make us feel more content in our position on gold than headlines such as this.  When we start seeing headlines that Calgarians are lining up to buy gold, then we may start to look around for an exit.  But it’s obvious we are a long way from that.

Just How High is Gold Going to Go in 2011 – 2012?

2010′s most popular post was musing about how high silver is going to in 2011, with James Turk for backup. When that was written Gold was at $1280 and Silver was at under $21, and not very many people took James Turk’s call that seriously..  With JP Morgan now struggling to hold silver below $34 per Oz, more people are listening now  ..so lets look at what the future holds for Gold in 2011 – 2012 as well now.

Jeff Clark, BIG GOLD writes: After stellar years for both gold and silver, what prices will precious metals hit in 2011? Here’s an analysis based strictly on their price behavior in the current bull market.

First, take a look at the annual percentage gains that gold has registered since 2001 (based on London PM Fix closings):

Excluding 2001, the average gain is 20.4%. Tossing out the additional weak years of ’04 and ’08, the average advance is 24.8%.

So we can make some projections based on what it’s done over the past 10 years. From the 12-31-10 closing price of $1,421.60, if gold matched…

• The average rise this decade, the price would hit $1,711.60
• The average rise excluding the three weak years = $1,774.15
• Last year’s gain = $1,858.03
• The largest advance to date (2007) = $1,875.09

But what if global economic circumstances continue to deteriorate? What if worldwide price inflation kicks in? And what if government efforts at currency debasement get more abusive?

If Doug Casey is right..

..a mania in all things gold lies ahead – what if that begins in 2011?

Here’s what price levels could be reached based on the following percentage gains.

• 35% = $1,919.16
• 40% = $1,990.24
• 45% = $2,061.32
• 50% = $2,132.40
• 1979′s gain of 125.7% = $3,208.55

It thus seems reasonable to expect gold to surpass $1,800 this year, as well as reach a potentially higher level since the factors pushing on the price could become more pronounced.

Here’s a look at silver.

As you can see, silver had its biggest advance in 2010. The average of the decade, again excluding 2001, was 27.5%. And also tossing out the ’08 decline, the average gain is 34.3%. So, from the 12-31-10 closing price of $30.91, if silver matched…

• The average rise this decade, the price would hit $39.41
• The average gain excluding 2008 = $41.51
• Last year’s advance = $56.22
• The 1979 gain of 267.5% = $113.59

So, $50 silver seems perfectly attainable this year. And that’s without monetary conditions worsening. [BuyGoldSilver.org say "and $60 Silver too!"]

It’s titillating to ponder these advances for gold and silver, especially when you consider we might be getting close to the mania. And if we are, that should do wonderful things to our gold and silver stocks, too.

I would add one caution: the odds are high that there will be a significant correction before gold begins its march to these price levels. In every year but two (’02 and ’06), gold fell below its prior-year close before heading higher. And here’s something to watch for: in every year but one (’08), those lows occurred by May.

In other words, a buying opportunity may be dead ahead. And if you buy on the next correction, your gains on the year could be higher than the annual advance.

source:http://buygoldsilver.org/2011/03/just-how-high-is-gold-going-to-go-in-2011-2012/

Gold demand rises as China takes over as largest investment market

PERTH (miningweekly.com) − Gold demand increased by 11% year-on-year to 981,3 t, worth $43,7-billion, in the first three months of 2011, driven mainly by strong growth in the investment sector and momentum in the Chinese and Indian jewellery markets, the World Gold Council (WGC) reported on Friday.

Investment demand, comprising demand for bars and coins, as well as exchange-traded funds (ETFs), grew by 26% to 310,5 t in the quarter. China displayed the strongest growth and is now the world’s largest single investment market.

WGC MD for the Far East, Albert Cheng said that near term inflationary expectations and rising income levels were likely to support the investment case for gold in China.

The main investment in the three months to March came from bar and coin demand, which increased by 52% year-on-year, to 366,4 t. In value terms, this represented a near-doubling of demand to $16,3-billion, from the $8,6-billion in the first quarter of 2010, commented WGC MD for investment Marcus Grubb.

Cheng also stated that increasing prosperity in China, the world’s most populous country, coupled with their high affinity for gold would serve to drive demand in the long term.

China is already the second-largest gold consuming market in the world and the WGC said that demand from that country would double in the next ten years.

Jewellery is still the most dominant category of the Chinese gold market, accounting for almost 64% of the demand last year.

In its ‘Gold Demand Trends’ report for the 2011 first quarter, the WGC said that China’s jewellery demand jumped 21% year-on-year to a record $142,9 t, while demand from India – the main pillar of jewellery demand – rose 12% to 206,2 t.

Together, the two countries accounted for 63% of the total first-quarter gold jewellery demand.

Globally, jewellery demand reached 556,9 t, equivalent to $24,8-billion in value terms, in the first quarter. This represents a 7% increase from the 521,3 t in the same period last year

SUPLLY SLIPS

Supply of the precious metal declined to 872,2 t from the 912,1 t in the first quarter of last year.

Grubb said that the decline was owing to a sharp increase in the net purchasing of gold by the official sector and a fall in the supply of recycled gold, which was down 6% year-on-year, to 347,5 t.

Mine production increased by 44 t year-on-year, at a growth rate of 7% from earlier levels. The WGC said that the increased production came from across a range of countries and reflected a combination of new project start-ups, expansions and the restarting of suspended operations.

African operations contributed about one quarter of the increase in first-quarter mine production.

Accumulate as much silver as you can

To simply follow the silver price without trying to understand the extreme stress in the global paper currency system today would be folly. 

Since August 15, 1971, when Nixon closed the gold window, the world has been floating on a sea of fiat currencies, supported only by its one reserve currency, the U.S. dollar, which is nothing more than an I.O.U.

During the days of the true gold standard, a country was required to disgorge its gold reserves if it ran consistent trade deficits. Of course, these days, in the absence of the gold standard, countries have been at liberty to print as much currency as they deem fit.

This has led to a scenario of competitive devaluations. We are now at a point where the smart money is losing its faith in this paper currency system, and is viewing it as a giant, Ponzi scheme, the likes of which the world has never witnessed before.

The U.S. dollar has abused its privileged status as the reserve currency via extremes in fiscal and monetary policy. We are now at a breaking point. Make no mistake about that. To protect itself, real wealth is starting to abandon the paper Ponzi system in earnest. Smart investors are accumulating real money, namely, gold and silver.

It may behoove us all to bear in mind the difference between money and currency. The Merriam-Webster Dictionary defines currency as something (as coins, treasury notes, and bank notes) that is in circulation as a medium of exchange. A medium of exchange, and nothing more.

No implication is made regarding its value. The same dictionary defines money as something generally accepted as a medium of exchange, a measure of value, or a means of payment. For something to be considered to be money, therefore, it must be perceived as a thing of value.

After an evolutionary process spanning centuries, during which time things such as grains, cattle and sea-shells had their brief day in the sun, only gold and silver emerged as things of true value that could be considered as money. In the context of the present silver situation, it is well known that both, gold and silver, are the only assets that have been in a raging bull market for a decade or so.

Some months ago, supplies of silver started to tighten, and silver went into backwardation. This means that prices for silver futures were lower than spot prices for the metal. This, in turn, means that people were not willing to accept future promises of silver delivery on futures exchanges.

They wanted their metal at the present. Something else happened, too. Some silver longs on the Comex started to ask for delivery of physical metal, rather than settle their contracts in cash, or roll them over into the next delivery month. The Comex was caught with its pants down. (At the time of this writing, the Comex had about 33 million ounces of silver to deliver against more than 600 million ounces worth of silver contracts.)

Even if a tiny fraction of the longs took delivery, the Comex would have been busted, and their paper fraud would have been exposed. In other words, the Comex has insufficient silver to deliver, by a wide margin. It must be remembered that many of the players on the Comex, such as hedge funds and other managed accounts, are only interested in paper profits. They are not interested in taking physical possession of the metal, which, in reality, is their folly.

Their only interest is in showing high profits to their clients, so they can earn 20% or so of the profits they generate. On the short side of the silver trade are bullion banks, who, in cohorts with the Federal Reserve, want to preserve what is left of the declining dollar. If gold and silver rise against the dollar very rapidly, there may be a cascading effect, and we may see a waterfall collapse in the dollar.

At the time of writing, the dollat index had fallen below 74, and the only level left to protect was the band between 71 and 72. Below that was an abyss.

Once the dollar got there, it could have gone down to 60, marking the beginnings of a complete collapse. The Comex, in order to protect its own clients, the bullion banks, and the dollar, decided to raise the margins on silver contracts an unprecedented five times in three weeks.

This was the degree of fear at the Comex – that the silver market could bring the Exchange down, along with its bullion banks. So they decided to cut the legs from under the hedge funds. Unable to come up with the extra margins, the hedge funds were forced to liquidate.

However, the supply-demand situation in silver has not changed, Supplies are still tight. But by increasing margins by frightening amounts, the Comex has revealed its hand. It has shown the world that they are mortally wounded, and that they are fighting back with everything they’ve got

Here is what I think will happen next. The hedge funds, as a group, will have learnt their lesson. They now know how to beat the Comex. They will now go and buy physical silver in the market, and abandon the Comex. The next time the bullion banks short silver, there will be none left to deliver. There is a short window you have in which to accumulate as much silver as you can. There may never be another opportunity like this one.


source:http://www.commodityonline.com/news/Accumulate-as-much-silver-as-you-can-38824-3-1.html

Gold and Oil Bull Runs to Return in 2012: Analyst

Gold and oil will resume their uptrend – but maybe not just yet – Eugene Weinberg, commodity analyst at Commerzbank, told CNBC.

CNBC Molten gold

For all its huge oscillation, gold is actually up only around 5 percent this year, but looking at the longer term investors would still have made circa 60 percent from ownership over the past two years.

Weinberg believes gold could be treading water for the next couple of weeks or months but could be set to make new all-time highs by the end of the year. Even the withdrawal of  the quantitative easing prop, which has boosted demand for global commodities futures, will not dent the longer term story for gold, he said.

Silver on the other hand, is not in such a strong position: "Silver is not money like gold, it is more of a commodity… it will remain under pressure in the next couple of months and probably only return to above $40 next year," Weinberg said.

However, the longer term bull story for crude  remains strong on the back of Middle Eastern political issues and lack of supply growth.

Weinberg noted that soft manufacturing figures and other data releases over the past couple of weeks have played their part in denting short term crude demand. He also said that indirect factors, including increased inventories elsewhere in the commodity complex, such as copper, are beginning to weigh.

"The next leg upwards for crude though will not be prompted by higher demand but by lower supply," says Weinberg. He believes supply constraints have been underestimated with the huge costs of mining and drilling across the commodity spectrum not fully factored in.

It is within the OPEC cartel, which controls around 40 percent of the world oil market, where supply bottlenecks will occur. Saudi Arabia and the rest of the Middle East will have much higher financing needs in the future.

"Financing needs point to much higher prices. Saudi Arabia can live with $80-$90 per barrel this year but triple digit prices will be needed in the future to fulfil financing and social programs," he said.

“Ten years ago Saudi could cope with $20 a barrel but with higher prosperity for the country as a whole, people want a larger share of this. Recent Middle Eastern tension in a symptom of this,” warned Weinberg.

source:http://www.cnbc.com/id/43075769

Eleven factors that provide strength to gold

By Jeff Nichols
The future price of gold is a function of past and prospective world economic, demographic, and political developments.


Gold’s Bullish Building Blocks

There is no simple answer or single reason why gold has been moving from strength to strength for some ten years now. Here’s my list of eleven factors fueling gold’s ascent:

- First, U.S. Federal Reserve policy characterized by low or negative real interest rates and unprecedented central bank monetary creation.

- Second, the U.S. federal budget impasse, rising U.S. sovereign debt, and eroding U.S. creditworthiness.

- Third, the ongoing and expected future depreciation of the U.S. dollar in world currency markets.

- Fourth, accelerating global inflation – with high and rising agricultural and industrial commodity prices leading the way.

- Fifth, fear of sovereign debt defaults and bank failures in one or more of Europe’s "periphery" economies. These countries, despite tax increases and deep spending cuts, continue to see their debt ratings and ability to refinance both government and private-sector bank debt deteriorate. Moreover a widening economic schism across the continent calls into question the viability of Europe’s common currency, the euro.

-Sixth, the continuing civil war in Libya and political unrest across North Africa and the Middle East – and the threat to future oil supplies.

-Seventh, the growing affluence of the emerging-economy nations and the associated growth in gold demand – especially the two big population countries, China and India.

-Eighth, central bank buying by countries under-invested in gold and overexposed to U.S. dollars.

-Ninth, the development and maturation of new gold investment channels, especially gold exchange-traded funds, that make it easy for investors to buy physical metal.

-Tenth, the legitimization of gold as an investment class and the expansion of investor interest among retail and, importantly, institutional investors – including hedge funds, pensions, endowments, and insurance companies.

-Eleventh, no more than marginal growth in world gold-mine production for at least the next five years – while some of the gold-mining nations, including China and Russia, absorb more of their own production for domestic jewelry consumption, investment, and additions to central bank reserves.

Together these bullish factors are responsible for a growing gap between new mine supply and aggregate demand – a gap that can be closed only by much higher prices in the years ahead.

US Dollar, QE 3
The U.S. economy still faces significant and painful adjustments in the years ahead following many years of profligacy, years in which our government sector and many private households simply spent more than we could afford, on things we didn’t need, with money we didn’t have.

To counter the negative economic effects of fiscal tightening, the Federal Reserve, for all its rhetoric to the contrary, will be compelled to step even harder on the monetary accelerator. For this reason, I think we are likely to see another round of quantitative easing (QE3) with implications for future inflation, the U.S. dollar exchange rate, and the price of gold.

In fact, I think the Fed and U.S. Treasury are intentionally targeting a weaker dollar (to stimulate the domestic economy through the trade balance) just as they are targeting a higher inflation rate (to erode the real value of our debt as a percentage of nominal GDP).

I believe we may move gradually toward a multi-currency system where an array of national currencies, possibly along with IMF Special Drawing Rights and maybe even gold, will function with much less dependence upon the U.S. dollar.

Interest Rates and Gold
Investors need not be worried about the increase in interest rates in EU,UK, China, India, Brazil or the likelihood that US may raise rates in 2012. Whenever policy rates begin to rise, it will be too little, too late, to stem the upward march in the yellow metal’s price. In the case of economies that introduced monetary tightening, the real 'inflation-adjusted' interest rates remain quite negative. So there is every reason to believe investors would continue to buy gold as their currency loses purchasing power.

Food Infation and Gold
Higher economic growth and higher disposable income in developing economies is sure to put pressure on agriculture and food prices creating a food inflation. These natioins will also be pursing commodity-intensive infrastructure development that utilises steel, copper, aluminium, cement etc. So, high and rising global food prices are, in part, a monetary phenomenon . . . and, in part, they are demand driven as millions of consumers eat better – but, in recent years, there is still more to the rise in food prices. At times of inflation gold continues to be safe investment bet.

Agricultural inflation is also a consequence of weather-related problems in some of the planet’s most important grain-, corn-, and rice-producing regions: Too much rain, or too little, combined with record heat waves in some places, has taken a big bite out of food production. Now, dryness and weather-related planting delays are threatening poor harvests again in the 2011-2012 crop year.

Oil prices

Many oil analysts had been warning that oil prices would be heading much higher even before the outbreak of political unrest and revolution in North Africa and the Mideast, due to the growth in demand for oil from both the emerging economies, namely China and India again, and from some of the oil-producing nations themselves.

So, it looks like households around the world – in the United States, Europe, India, China, Latin America, and Africa – will have to endure rising prices for food, energy, and other commodities for a host of complicated reasons beginning with but not limited to excessive monetary growth from one country to the next. Whatever its cause, accelerating global inflation spells higher gold prices ahead.

China, India and gold

Much of the growth in China’s gold demand over the past few years has been a result of the government’s liberalization of the domestic gold market, its encouragement of private gold investment, and the development of new investment vehicles and channels of distribution. Chinese demand for Gold ETFs could also rise after the launch of the first gold exchange-traded fund that invests in overseas gold ETFs. Despite monetary tightening, the real interest rates in China continue to be high causing demand to rise for the yellow metal.

As in many other countries, Indian gold investment is benefitting from securitization and the growth in gold exchange-traded funds. First introduced in 2007, there are now 10 gold ETFs with physical gold held on behalf of investors totaling more than half a million ounces (about 15.5 tons) when I last checked a few months ago – and holdings will likely grow as more mainstream stock-market investors participate.

India and China are very important markets for gold, in part, reflecting their huge populations and growing wealth. But there are many other countries across Asia and the Mideast that share an historical, cultural, and even religious affinity to gold as a traditional monetary medium for saving and investment. Even gold jewelry in many of these countries is purchased for its investment characteristics, as a symbol of wealth and social status, and as an amulet or talisman bringing good fortune to its owner.

Central Bank Buying

Cetral banks collectively have taken a much more positive view of gold in recent years. Just last week, it came to light that Mexico’s central bank, the Banco de Mexico, purchased some 93.3 tons this past February and March. That’s about 3.5 percent of annual world gold-mine output worth more than $4 billion at recently prevailing prices. After net sales of roughly 400 to 500 tons a year over the prior decade, the official sector (including central banks, the International Monetary Fund, and sovereign wealth funds) became a net buyer of gold in 2009. Net official purchases may have totaled as much as 100 to 200 tons in each of the past two years, even allowing for the IMF’s 403 ton gold sales program, which ended some months ago.

My Gold Price ForecastGold prices to hit $1700 by end of 2011. I believe gold’s fortunes remain very bright. To begin with, gold’s key price drivers all remain supportive . . . and there are so many of them, so many reasons to expect the long-term trend will continue upward for at least another few years. 

source:http://www.commodityonline.com/news/Eleven-factors-that-provide-strength-to-gold-39044-3-1.html

Get ready. We are now entering the final stages in the collapse of the U.S. dollar...

You Still Have Time to Invest in Precious Metals

By Greg McCoach

Get ready. We are now entering the final stages in the collapse of the U.S. dollar...

And it's not going to be pretty.

The massive increases in money supplies will tank the value of the dollar and erode the very fabric of America's economic security.

As a result, gold and silver prices are will no doubt skyrocket, despite the short-term major volatility we've recently seen.

Many investors have been rushing to me asking if it's too late to buy precious metals with gold in the $1,500/oz range and recently spiking to nearly $50/oz. I keep telling them the same thing...

Despite whatever the price of gold or silver is today, both metals will be worth more than twice as much within 12 months.

That means $3,000 gold this time next year! After that, I think gold could break $6,500 an ounce.

And as you know, silver's gains will be much greater. When the bull market is all said and done, there's no doubt we could be looking at silver prices exceeding $600 an ounce.

And we can all thank the crooks in D.C. for it...

In his first ever press conference after a policy meeting two weeks ago, Bernanke told us all the ways he has saved our economy.

What a crock!

The Federal Reserve can't prevent the coming financial meltdown.

So far this year, the U.S. Treasury has raised $293 billion in net cash by selling debt securities. And so far this year, the Federal Reserve has purchased a net $330 billion of Treasury notes and bonds.

This translates to the Fed providing 100% of the net new cash the Treasury has raised this year — plus another $37 billion needed to mop up even more mess!

But who will buy Treasuries when the Fed doesn’t? China? Germany? Japan? You? Me?

Going to Hell in a Hand Basket

We are now getting very close and even accelerating toward the end game for the U.S. dollar and the American Empire as we know it. Have your life boats ready.

It won't be much longer before people really start buying both gold and silver to protect themselves from this enviable collapse.

The only way out of our dilemma, absent very large entitlement cuts, is to default in one (or a combination) of four ways:

1. Outright via contractual abrogation (surely unthinkable)
2. Surreptitiously via accelerating and unexpectedly higher inflation (likely, but not significant in its impact)
3. Deceptively via a declining dollar (currently taking place in front of our very eyes)
4. Stealthily via policy rates and Treasury yields far below historical levels (paying savers less on their money and hoping they won’t complain)

I would bet on a combination of deception, betrayal, and trickery.

Following the Smart Money

This past month, the University of Texas bought a billion dollars' worth of gold and is having it stored in a private depository. This is huge news.

More and more, the intelligent group of our population is starting to figure things out. Unfortunately, however, the unsuspecting masses are being led perfectly by the well-oiled government/media propaganda machine like sheep to the slaughter.

This is going to be a terrible reality for so many unfortunate Americans who have no idea as to what is coming shortly down the road.

And you can rest assured the politicos in Washington will do what all politicians do when they are trapped in such a manner: lie, cheat, steal, spin the facts, cover their asses at all costs, abuse their power, and misinform on a massive scale.

But even with the help of the government-controlled media, the time of consequences can no longer be held at bay.

Free market forces will win; governments, banksters, and their power structures will come tumbling down just as we have been seeing elsewhere around the world these past six months.

The spoils will go to those who were prepared and understood the debacle years before it hit.

The precious metals and the junior mining shares will reward those who understood, and punish those who didn’t.

Yes, the precious metals market will be extremely volatile in both directions at times, but buy the dips as gold and silver will keep heading to higher and higher ground.

As long as the Fed and U.S. government follow the course of “Quantitative Easing” or anything like it, you can rest assured that gold and silver prices will soar!

If you leave your money in U.S. banks in dollars, you will lose most of the purchasing power of your money.

Use the downside volatility to buy any dips you see in the metals. Whether you bought gold at $600, $1,000, or $1,500 an ounce, it really won’t matter much when gold is trading at $6,500 an ounce or more.

The same thing can be said for silver. Don’t worry so much whether you bought at $25 or $50; silver will be priced in the hundreds of dollars an ounce, possibly $600 or more as the silver to gold ratio descends to 15 to 1, and possibly even 10 to 1.

In fact I believe silver stocks will actually be one of the biggest winners over the next 24 months.

Time is of the essence.

The lies of the Fed and the U.S. gov't are becoming bigger and more complex, their noses growing longer and longer as the fiat currency-economic-insanity comes to a head.

source:http://www.wealthdaily.com/articles/gold-aimed-at-6500oz-silver-600oz/3085

Can investing in commodities insure your money during financial crisis?

LONDON (Commodity Online): Can investing in commodities insure your money during financial crisis? The recent plunge in several commodities led by gold, silver and crude oil have turned the futures trading market volatile across the globe. And people are beginning to doubt if commodities are the best bet to insulate their investment.

In the last few years, investors have parked funds in commodities as a safe diversification strategy. Experts say while commodities still continue to give good returns to investors, the unnatural surge in the prices of certain commodities should be always seen with caution and care.

Gold, silver and crude oil prices have been surging to record levels in the last two months. But last week, gold fell by 5%, silver plunged by 30% and crude oil dipped by more than 10%, turning the whole commodities market volatile and making billions of investments into heavy losses.

What led gold, silver and crude oil prices to tank? Here is what some renowned experts have to say on the volatile commodities market:

Ace commodities investor and analyst Jim Rogers: "A series of technical events led to the collapse of silver prices. Once that elephant gets out of the room, it takes everything else out with it. Whenever you see a big run-up in prices, you're going to have a sharp cut-back. It's nothing more significant than that."

Rogers says: “5% correction in gold is meaningless. These things correct 10-15-20-30% every year. Nothing unusual about that. That is the way the markets work. I do not see anything unusual. I expect there would be more correction during the course of the bull market. I hope that the bull market goes up, consolidates, goes up, consolidates, goes up and consolidates for years to come. That is my expectation for all commodities.”

Mark Luschini, chief investment strategist at Janney Montgomery Scott: “We had some soft economic data that had been accumulating over the past couple days, which kind of spooked the commodities market.”

“While you may see some temporary relief at the gas pump, oil prices won't see a sustained drop. At the end of the day, the driver for oil prices is demand. As long as we see global growth and China continues to expand, that combination is going to pull on demand for oil,” he says.

John Cadigan, a strategist on the $400 million Rydex Long/Short Commodities Strategy Fund: "When you get dramatic contagion, you see the correlation of commodities spike through the roof. Commodities certainly failed to insulate investors during the financial crisis. The stock market fell 48% from July 2008 to February 2009, while the Goldman Sachs Commodity Index, a domi nant commodities benchmark, fell 71%.”

source:http://www.commodityonline.com/news/Jim-Rogers-on-why-gold-and-silver-prices-crashed-39083-3-1.html