Sandy

October 30, 2012

Here are some stark images from the destruction in New York. Our thoughts and prayers are with the victims.

To help the victims, you can donate to the American Red Cross Disaster Relief Fund:

http://www.redcross.org/charitable-donations

 

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Hurricane Sandy Intermission Review

October 29, 2012

The markets closed early today due to Hurricane Sandy and trading in gold was subdued due to so many New York traders and investment houses hunkering down for the storm.

So, rather than review today’s inconsequential market results, we decided to look in our archives for articles that we might have overlooked that are particularly relevant to hard asset investors.

We think we found two from just under two weeks ago that everyone should stop and take a closer look at.

First, recently, Pimco, the parent company of the largest bond fund in the world, warned that a further downgrade of America‘s sovereign credit rating is in the cards. They think it’s inevitable and will probably happen just after the first of the year…

http://www.bloomberg.com/news/2012-10-17/u-s-to-get-downgraded-amid-fiscal-theater-pimco-says.html

Second, Mark Hulbert, esteemed editor of the Hulbert Financial Digest, one of the oldest and most respected investment newsletters out there, has pointed out that extensive academic research indicates that a 1987-like stock market crash is “inevitable.”

http://www.marketwatch.com/story/another-stock-crash-like-1987s-is-inevitable-2012-10-17?dist=afterbell

Both of these articles are relevant for investors because they should both serve as warnings that paper assets that might seem secure today, may not actually be so secure tomorrow. If US Treasuries are no longer rock solid and the stock market crashes, gold investments will likely be the most secure assets that an investor can own.

 


Gold at $5,000?

October 29, 2012

One of Wall Street’s true all-stars, who correctly forecast the subprime mortgage debacle back in 2007-2008 is now forecasting sharply higher gold prices over the next two years.

Peter Schiff, head of Euro Pacific Capital, thinks that the combination of runaway government spending and loose monetary policies will cause the price of an ounce of gold to climb to $5,000 per ounce over the next two years.

Note that Schiff sees this eventuality regardless of who wins the presidential election next week…

http://www.cnbc.com/id/49550053

Here is a video of Schiff’s statement on CNBCTV last week:

http://video.cnbc.com/gallery/?video=3000125017


Europe gets closer to the brink

October 26, 2012

While all of the attention seems focused on the USA due to our presidential election, the world economy may be what matters most–and nothing that the next president of the United States can do will necessarily save the entire world from itself.

Take Europe as an example. Europe has been careening toward crisis for two years now. The European Union has repeatedly applied band aids in attempts to correct the underlying problems, but those band aids have never been enough.

Now we are in a situation where two of Europe’s problem nations, Spain and Greece, both have unemployment at over 25%. These are simply depression levels. And even supposedly, relatively healthy Britain now has unemployment at record levels.

In today’s interconnected, globalized economic and financial system, there is simply no way that the acute problems in Europe can be limited to Europe. Make no mistake, their presence will be felt here in the US, in our financial markets. Many US companies are dependent on overseas markets for sales of their goods and services. Others are dependent on overseas markets for equity ownership stakes.

The continuing European crisis is one which investors cannot ignore. They must diversify into assets that have historically performed well when other assets suffer. Gold investments are ideal for that purpose.

Spain Joblessness Reaches 25%

http://www.bloomberg.com/news/2012-10-26/spain-joblessness-breaches-25-adding-to-rescue-pressure.html

Greek Unemployment Rises Above 25%

http://www.fool.com/investing/general/2012/10/11/greek-unemployment-rises-above.aspx

UK Unemployment Hits All-Time High

http://www.telegraph.co.uk/finance/jobs/9614120/UK-employment-hits-all-time-high.html


Reuters: Higher Inflation on the Way for Americans in 2013

October 25, 2012

For quite some time, we’ve been warning that America‘s fiscal and monetary policies would eventually result in higher inflation.

Now the mainstream media has finally caught on. Reuters is warning of tough times for Americans in 2013 due to higher prices for many items. In other words, higher inflation is on its way:

Consumers will have to dig deeper into their pockets next year to pay for costlier healthcare, more expensive grocery bills and higher taxes, an extra drag on the country’s already slow-moving economy.

Rises in the prices of corn and soybeans and other field crops as a result of drought this year in the U.S. Midwest are expected to feed through into food prices late this year and in early 2013.

U.S. soybean prices jumped 40 percent over the summer, while wheat shot up about 50 percent. Prices have eased a bit since then, but the increases are expected to filter down to consumers.

http://www.reuters.com/article/2012/10/25/us-usa-economy-consumer-idUSBRE89O0LH20121025

The arrival of higher inflation also has serious implications for investors. Historically, periods of high inflation have been unfriendly for the stock and bond markets. On the other hand, gold investments tend to lead the way during periods of high inflation. This is true of a broad array of gold investments, not just gold bullion.

For example, rare gold coins tend to outperform gold bullion due to their added scarcity. They also offer security and privacy advantages over other forms of gold investment.


The Great Inflation Cover-Up

October 22, 2012

The general consensus for quite some time in the US has been that inflation has not been a factor in the US economy.

But there is a substantial amount of evidence to indicate that inflation DOES exist in the US economy and has existed for some time. However, government agencies and big Wall Street insiders find inflation to be an inconvenient fact–so they cover it up.

The federal government manipulates and fudges the inflation measures to underreport inflation and Wall Street then parrots the government statistics to their own purpose. You see, historically, high inflation has been decidedly unfriendly for the stock market, so Wall Street has a vested interest in low inflation. High inflation is, of course, very positive for gold investments.

What’s the federal government’s angle? There are several. First of all, high inflation doesn’t help incumbents get re-elected. Second of all, high inflation gets in the way of the Federal Reserve‘s scheming…

There is a great deal of evidence that inflation DOES exist and has existed over the past decade. The report linked below provides evidence of rising price levels, despite the government statistics to the contrary…

http://www.theblaze.com/stories/not-just-gas-check-out-the-drastic-price-increases-on-these-21-everyday-items/


Europe–Again

October 11, 2012

Just when many investors assumed that they could forget about Europe, news from across the Atlantic has cropped up again–and that news is not good.

The European Union has supposedly taken action to “solve” the fiscal, monetary and economic crises plaguing Spain and Greece, but the fact is, both countries are still in dire financial straits.

The unemployment report from Greece came in and fully 25% of Greece’s workforce is unemployed. There is only one word that can describe that sorry situation: DEPRESSION.

Meanwhile, in Spain, the news was no better.

Standard & Poor’s downgraded Spain’s credit rating two notches (again) to just one level above junk status. This will raise the cost of borrowing for Spain and is a reflection that past band aids put on by the European Union have not solved that nation’s problems.

What all this means to investors is that, though the financial world is oblivious now, it won’t be able to remain oblivious forever. And though right now investors are not seeking the safe haven of gold due to the European crisis, we can be sure that eventually they will.

It is best to accumulate safe havens BEFORE everyone else does!