December 10, 2012

The approaching fiscal cliff and the probability of higher taxes could prompt an end of year sell-off in the stock market. Investors should prepare by diversifying into assets which are not positively correlated with stocks. Gold investments in particular are well-suited for this purpose…

Wall St Week Ahead: “Cliff” worries may drive tax selling

Investors typically sell stocks to cut their losses at year end. But worries about the “fiscal cliff” – and the possibility of higher taxes in 2013 – may act as the greatest incentive to sell both winners and losers by December 31.

The $600 billion of automatic tax increases and spending cuts scheduled for the beginning of next year includes higher rates for capital gains, making tax-related selling even more appealing than usual.–sector.html




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…

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

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…

Gold Opens 4th Quarter By Hitting 7-Month High

October 1, 2012

The bulls once again ruled the gold market on the first day of the 4th quarter of 2012. This positive 4th quarter trading day comes on the heels of an excellent 3rd quarter for the yellow metal. The price of gold increased by 10.6% during the 3rd quarter, its strongest quarterly showing since the 2nd quarter of 2010.

The spot price of gold rallied $8.70 per ounce to finish above $1,780 per ounce.

Gold was buoyed by a positive manufacturing report, continuing weakness in the US dollar, thanks to the Fed’s QE3 monetary policy, and by the fact that Fed Chairman Ben Bernanke gave a speech in Indiana at mid-day. Though the speech contained nothing surprising for gold investors, as often happens in Bernanke’s case, the Fed chairman managed to spook the financial markets, derailing what was a much stronger rally on Wall Street.

Meanwhile, Barclay’s bank, one of the United Kingdom’s biggest banks, turned bullish on gold with the following market comment:

“With the dollar weakening and debates over inflation and fiat currency debasement now likely to move back to center stage, QE3 is likely to support the recent pickup in physical and futures market buying, which should help to bring to an end gold’s position as one of the weakest commodity markets in 2012.”


Bank of America/Merrill Lynch: Gold headed to $2400/oz

September 18, 2012

When Wall Street starts admitting that gold is headed higher, it’s time to start doubling up on your gold investments.

Today Bank of America/Merrill Lynch weighed in on Fed monetary policy by proclaiming that it will send gold to $2,400 an ounce from its present price of around $1,770.

That’s a 36% increase. Not only that, the firm is calling for higher gold prices through the end of 2014…

In one of the most bullish gold calls since the Federal Reserve announced a new round of easing last week, one strategist sees a 36 percent jump in the metal’s price to $2,400 an ounce, by the end of 2014.

“The new target reflects our view that the Fed will maintain mortgage purchases until the end of 2014 and will move to buy Treasuries following the end of Operation Twist this coming December,” wrote Francisco Blanch, a global investment strategist with Bank of America Merrill Lynch, in a note to clients Tuesday.

“Given the new open-ended nature of QE3, the upward pressure on gold prices should continue until employment is strong enough to require a change in policy,” Blanch added. “In our view, this is unlikely to happen until the end of 2014.”

Gold is up two percent since the Fed’s statement as others besides Bank of America pile into the metal on fear these actions may spark inflation and leave the metal as the only store of value in a world of paper currencies.

Investors should keep in mind that there is a broad array of alternatives when it comes to gold investing. Just as diversification of your overall investment portfolio is important, diversification of your gold holdings is just as important. Investors should not assume that just buying gold bullion is the best way to take advantage of rising gold prices. On the contrary, rare gold coins provide added profit potential compared to bullion due to their added scarcity. Moreover, rare gold coins have security and privacy advantages.

Coin Trader can provide you with complete details.

Investment rating firm Egan-Jones cuts US credit rating due to QE3

September 17, 2012

Wall Street may be euphoric over the Fed‘s new QE3 scheme, but they’re only looking at the short term bump that the stock market is getting.

The true adults in the financial world are very much concerned. The rating firm Egan-Jones went against the conventional wisdom last week and downgraded the US credit rating specifically because of QE3. This story was not widely reported because much of the world’s attention was focused on a Middle East in flames due to protests at US embassies across the Islamic world.

The rating agency on Friday downgraded its credit rating for the U.S. to AA- from AA, citing the Fed’s latest round of stimulus. From Egan-Jones:

[T]he FED’s QE3 will stoke the stock market and commodity prices, but in our opinion will hurt the US economy and, by extension, credit quality. Issuing additional currency and depressing interest rates via the purchasing of MBS does little to raise the real GDP of the US, but does reduce the value of the dollar (because of the increase in money supply), and in turn increase the cost of commodities (see the recent rise in the prices of energy, gold, and other commodities). The increased cost of commodities will pressure profitability of businesses, and increase the costs of consumers thereby reducing consumer purchasing power. Hence, in our opinion QE3 will be detrimental to credit quality for the US…. From 2006 to present, the US’s debt to GDP rose from 66% to 104% and will probably rise to 110% a year from today under current circumstances; the annual budget deficit is 8%. In comparison, Spain has a debt to GDP of 68.5% and an annual budget deficit of 8.5%. 

While Egan-Jones is not as widely known as S&P or Moody’s, there are those on Wall Street who say they have the best track record in recent years of all the ratings agencies.

Note that undermining the value of the dollar, which is what Egan-Jones says QE3 will do, is very positive for gold investments for two reasons:

1. Gold is priced in dollars, so a decline in the value of the dollar tends to push the price of gold higher.

2. Because the dollar is currently considered the world’s reserve currency of choice, gold is a natural rival to the dollar. When the dollar weakens, investors naturally gravitate to gold investments.

Who Can You Trust?

August 16, 2012

One of the most frustrating and worrisome aspects of investing is the fact that, on occasion, investors are victimized and lose their money to crooks and swindlers.

And those crooks and swindlers are not always small-time operations.

Take MF Global for example. MF Global was one of the fastest rising trading firms in the financial world, headed by the former governor of New Jersey, Jon Corzine.

Thousands of clients lost billions of dollars when MF Global used their money in unauthorized transactions that subsequently went bad. In most circles, that’s called “stealing.” When someone gets caught stealing, they are supposed to go to jail.

But that’s not going to happen in the case of MF Global. The firm stole from its clients then collapsed and now no longer exists. The ace investigators at the US government have just concluded their work and lo and behold, NO ONE will be charged with a crime in this disgraceful affair.

This is what is known as adding insult to injury.

Investors need to be careful about putting to much trust in Wall Street. And they need to be careful about putting too much faith in government regulators to protect their hard-earned wealth.

All too often, promises from Wall Street and Washington are hollow.

Investors need to put their faith in an asset that is not dependent upon anyone’s promises: GOLD. Gold isn’t anyone’s liability and it doesn’t depend on anyone’s backing or guarantees. That’s why it should form the financial shield for the properly diversified investment portfolio.–finance.html?_esi=1