A wave of violent protests is rocking the heartland of China and being met with an iron-fist response. The government is busting heads, and keeping it as quiet as they can.
It's a proletariat uprising - a demand for better pay and better hours. It will have huge impacts - but none bigger than on gold prices.
See, it's not the workers buying gold. It's the nearly half million millionaires in China doing the buying. Their net worth now tops $1.7 trillion. They're scared to death of losing it to some worker uprising.
So they're buying things of value. Purchases of gold doubled in the first quarter of this year.
It's a proletariat uprising - a demand for better pay and better hours. It will have huge impacts - but none bigger than on gold prices.
See, it's not the workers buying gold. It's the nearly half million millionaires in China doing the buying. Their net worth now tops $1.7 trillion. They're scared to death of losing it to some worker uprising.
So they're buying things of value. Purchases of gold doubled in the first quarter of this year.
How to put one million ounces of pure gold "in your name"
Dear Reader,
I’m Peter Krauth and I’d like to tell you a story about a “private vault”…
A “vault” that contains nearly one million ounces of 99.9% pure gold bars ready for market, ready to sell for nearly $1.4 billion at today’s spot price.
This is also the story of men who are making the kind of money most only dream of.
Wouldn’t it be wonderful to partner with them? Well, you can, and in the next 72 hours.
You can buy in, in the same way a banker buys in, at a steep discount.
You can own the most valuable commodity in all the land, obtained at almost a steal.
I’m Peter Krauth and I’d like to tell you a story about a “private vault”…
A “vault” that contains nearly one million ounces of 99.9% pure gold bars ready for market, ready to sell for nearly $1.4 billion at today’s spot price.
This is also the story of men who are making the kind of money most only dream of.
Wouldn’t it be wonderful to partner with them? Well, you can, and in the next 72 hours.
You can buy in, in the same way a banker buys in, at a steep discount.
You can own the most valuable commodity in all the land, obtained at almost a steal.
How to discover profits in commodities without wading into the risky world of futures or crazy options schemes or dubious dead-end claims.
“First, take no risks,” I advise the well-heeled and soon-to-be. In fact, it’s this safety-first approach that led me to the “vault” uniquely filled with gold.
Let’s look into this vault and the caravan of armored trucks pulling up, unloading what will ultimately be one million ounces of pure gold.
And let’s talk about how you can “partner” to bring this gold to market and, yes, make the kind of money most only dream of.
This golden vault is out west in Vancouver. Not many know about it, or the “bank” that it sits in, secure, walled off from the public. That’s because it’s no ordinary vault, and no ordinary bank.
They don’t take deposits, or have ATM machines, or hand out mortgage loans, or play with dangerous derivatives or any of that Wall Street flimflam. They do just one very unique thing:
They buy a portion of a mine’s production in advance, and get gold in return.
And not just any gold – highly discounted gold. Obtained for as low as $444 an ounce, which is less than one-third of the current spot price.
Then they turn around and sell that gold at current spot.
So right out of the gates they book a 248% return on capital. I’d take that all day long, and I imagine you would too!
But these profits (as amazing, and amazingly reliable, as they are) are just the beginning of what this unique banking model is capable of…
Think about it. You know yourself that regular banks make huge profits thanks to leverage. They can get cash from the Fed for less than 1% and then buy government-guaranteed bonds for 4% and make a handy 3% without risk. But they're not making just 3% are they?
They get to leverage that money.
They lend out the same money 20 times. So they earn 60% – which is great for them but also the main reason the U.S. is in such dire financial straits.
Well, I'm not here to rail against bankers or politicians or the unholy alliance that feathers their nests. I'm here to say that Wall Street bankers can't touch the money-making ability of this Vancouver-based bank.
For starters, this “gold bank” doesn’t leverage the heck out of their money, leaving them and their investors exposed to a collapsing market or a run on the bank.
No, this “gold bank” acts more like a VC, a venture capitalist. They put up a few million bucks… and get a few hundred million back in gold.
This is the old “supplying shovels to miners” play – which makes good sense, right?
Well, it makes even better sense here because the bank is not stepping in early while the miner is still wandering the backcountry with a 3-legged mule and an empty canteen. They wait until the miner’s laughter comes ringing down through the canyon because that vein runs deep…
This is so much safer and smarter than risky leverage.
This is using “seed capital” with seeds that are golden and capital that is carefully deployed.
So carefully that up to 639% returns will be generated over the contract period.
Yes, these gold bankers and their partners practically lock-in 248% ROI and then ratchet it as high as 639% because of the events we know are coming…
We’ll look at all of this much closer, and I’ll show you how you can participate in this unique investor partnership. But you’ll want to know something first:
They've done this before.
They did it at Silver Wheaton (NYSE:SLW) just recently and their “partners” walked away with gains as high as 1,214%.
Here’s the stock chart:Folks who put in $10,000 now have $121,400 in account, having taken less risk than with most stocks. That’s how “partners” should treat each other, eh?
If you got in on the Silver Wheaton joyride, congratulations!
If not, you wouldn’t want to miss out again. And the geniuses behind Silver Wheaton are doing it again.
We’re getting a second bite at this golden apple, and you can bet the taste of this victory will linger for years to come…
If you know the Silver Wheaton story and the 12x returns they produced, you’re familiar with the wonder boy behind it all.
Silver Wheaton’s CFO was the youngest CFO of any New York Stock Exchange company… ever.
And now he’s CEO… and still only 32… and if you talk to any mining insider in Vancouver, they’ll tell you “he has a keen eye for the value of dirt.”
And he’s tireless in pursuit of the perfect plot of dirt.
In his first year at this new gold banking company, he looked at nearly 400 mining operations. He got requests to do business from miners all over the world.
He’s only financed six projects so far.
Being good at “gold banking” takes two skills that don’t usually go together – knowing mining, and knowing finance. If you’re good at both, you know there’s only a handful of projects that are the right size… with the right setup… at the right stage… with the right risk profile….
It’s kind of like panning for gold. You’ve got to swirl a lot of sand to get one good nugget. But you’ve also got to have a sixth sense about the lay of the land.
And this wonder boy banker has got it. I’m looking at his company’s financials right now, and I can see that they’re on track to tally up a minimum of $1.4 billion in gold sales and probably much, much more…
And they’re doing all this with only 10 employees and a puny little $1.5 million operating budget!
I’ve never heard of such a small operation making so bloody much! All the more reason to become a partner with this lean and mean operation and enjoy all the advantages coming…I call this bank a “Gold Streaming Bank” technically because they invest cash and get a steady stream of gold deliveries in return…
When they locate a miner with the right stuff and a need for money, they invest…
In return, the miners hand over to the banker an agreed-upon quantity of gold at a discounted price. And the bank then sells this gold on the open market.
So paying ahead for gold at huge discounts… and then selling in a steadily rising market… locks-in big steadily rising returns.
As a partner with these bankers, you share in the profits. This may well be the most lucrative way to make money ever invented.
So let’s look at the company’s actual profit outlook – based on the gold prices we see coming.
To set the stage, the gold bank is currently financing six gold mines in four countries and is bringing on at least four more in the coming years…
| Project #1 Profit Scenarios | |||
| Contract: Est 240,000 ounces at $489 | |||
| At spot of | $1,550 | $2,500 | $4,000 |
| Cash generated | $310,000,000 | $500,000,000 | $800,000,000 |
| Return on capital | 317% | 511% | 818% |
| Project #2 Profit Scenarios | |||
| Contract: Est 54,000 ounces at $617 | |||
| At spot of | $1,550 | $2,500 | $4,000 |
| Cash generated | $69,750,000 | $112,500,000 | $180,000,000 |
| Return on capital | 251% | 405% | 648% |
| Project #3 Profit Scenarios | |||
| Contract: Est 24,000 ounces at $600 | |||
| At spot of | $1,550 | $2,500 | $4,000 |
| Cash generated | $31,000,000 | $50,000,000 | $80,000,000 |
| Return on capital | 258% | 417% | 667% |
| Project #4 Profit Scenarios | |||
| Contract: Est 54,000 ounces at $444 | |||
| At spot of | $1,550 | $2,500 | $4,000 |
| Cash generated | $69,750,000 | $112,500,000 | $180,000,000 |
| Return on capital | 349% | 563% | 901% |
| Project #5 Profit Scenarios | |||
| Contract: Est 72,000 ounces at $888 | |||
| At spot of | $1,550 | $2,500 | $4,000 |
| Cash generated | $93,000,000 | $150,000,000 | $240,000,000 |
| Return on capital | 175% | 282% | 450% |
| Project #6 Profit Scenarios | |||
| Contract: Est 132,000 ounces at $1,009 | |||
| At spot of | $1,550 | $2,500 | $4,000 |
| Cash generated | $170,500,000 | $275,000,000 | $440,000,000 |
| Return on capital | 154% | 248% | 396% |
| Projects #7 - 10 Profit Scenarios | |||
| Contract: Est. 400,000 ounces at $674 | |||
| At spot of | $1,550 | $2,500 | $4,000 |
| Cash generated | $620,000,000 | $1,000,000,000 | $1,600,000,000 |
| Return on capital | 230% | 371% | 593% |
This has to be the sweetest profit picture I’ve ever seen. The six mines now under contract are already guaranteeing a profit for the bank. The four that will come on in the next year or two will just keep those profits roaring ahead. It all adds up to one impressive bottom line:
| Profit Summary for Gold Streaming Bank | ||
| At $1,550 gold | $1,364,000,000 | 248% |
| At $2,500 gold | $2,200,000,000 | 399% |
| At $4,000 gold | $3,520,000,000 | 639% |
Every time gold goes up, this bank makes a bigger spread… so more profit for investors.
And what if gold shoots past $4,000 an ounce to $5,000 like a lot of very sober analysts are projecting?
In this case, their expenses stay the same but their profit increases – it’s a killer formula!
And these are just the numbers for the hard assets of the company, the book value if you will.
We haven’t even talked about how high the company’s stock price could climb as more and more investors figure out the beauty of this banking model.
And one more thing to sweeten the entire proposition…
The one million ounces of gold we’ve been talking about? That’s the amount of gold already under contract.
But it can run higher. Much higher, in fact.
You see, not even the sharpest geologist with the fanciest equipment knows how big a mine is going to be until they dig deep and begin running down all the veins.
Sometimes there’s less than hoped for. But since we’re gold bankers, that doesn’t hurt us – we still get our contract’s worth at the same discounted price.
Sometimes there’s more than estimated. Quite a few miners have been met with pleasant surprises recently, just like we could be…
| Gold in Ground: Projected v. Actual | ||||
| Name | Year | Projected | Actual | Increase |
| Kinross Gold’s Tasiast | 2007 | 1.0 mm | 7.6 mm | 660% more |
| Semafo Inc. Mana | 2008 | 2.4 mm | 5.9 mm | 146% more |
| Eldorado Gold | 2010 | 1.8 mm | 5.2 mm | 290% more |
As you can see, a Kinross mine had six times the gold they’d projected. A Semafo mine had one and a half times as much. El Dorado was greeted with nearly three times as much.
If history is any guide, our “gold bankers” could be banking $21.12 billion, and sharing that with partners. And if that happens, well, you can bet my readers will be renting a big old boat and taking a victory lap around the world together!
Until then, keep in mind, this is all about maximum profit AND minimum risk.
This gold bank only holds mines that are producing, or about to. There’s very little risk of a mine going bust, or getting red-tagged by regulators. And if one does run into trouble, the bank is the Senior Secured Creditor and first in line for the gold.
And, the mines are located in safe places…
There’s no risk of some crackpot dictator trying to nationalize them. You saw the map – these projects are in Canada, Mexico, Brazil, the U.S. – as safe as it gets.
So this is one sound investment model, and gold market analysts have taken note. Analysts such as the respected John Doody of Columbia University put the fair market value of a gold streaming bank at 20 times earnings. So let’s do the math…
Let’s say the “bank” sells all the gold they’re scheduled to receive in just the next 12 months at $1,550 an ounce. That’ll bring in $60 million in cash earnings. So we multiply those earnings by 20 and we get a $1.2 billion valuation for the company.
Okay, now the “bank” is trading at a value of $300 million. Again doing the math… a $300 million company… worth $1.2 billion based on sales… that’s four times its current value.
On that basis, the stock should rise from $1 a share to $4 in just the coming year alone.
I can’t find anything to dislike about this company and these numbers we’re seeing!
And these numbers stretch to the horizon. Armored trucks will keep pulling up to the vault and unloading a steady stream of gold for the next 8 to 11 years – that’s locked into the contract.
And gold is likely to keep rising – up, up, up, down, up, up, down, but long-term up because of the hard realities of the world today…
We know the demand from just China is a powerful driver – their purchases of gold doubled again in the first quarter of 2011. The numbers of Chinese becoming middle class is exploding, and they want gold!
And, it’s not just China. The world’s richest and most powerful investors are still buying gold, and buying it in quantity, despite its record price.
Citibank’s precious metals analysts John Hill and Graham Wark said recently, "Frankly, we're surprised that gold is not already at $2,000 an ounce.”
Britain’s stodgiest old-line bank, Standard Chartered, sees “gold prices rallying up to $4,869” this decade.
And London’s Schroder Group, no slouch with $277 billion in investor money on the line, recently told a Hong Kong audience that gold could reach $5,000 an ounce.
These are not gold bugs or dealers looking to cash in on a craze.
These are people who only get rich when their clients get rich.
They’ve crunched the numbers. As a May 2010 New York Times analysis concluded: “Based on economic expansion as well as price inflation… the gold price could top out at around $5,300.”
So with forecasts like these, this Gold Streaming Bank could rise in 2013 to $6.50 a share and in 2014 to $7.80 a share.
This stock is at $1 now and in three years could hit $7.80 – that math works!
If there’s a smarter, safer way to ride to riches on the gold boom, I don’t know it.
Now, I do know a lot of investors are still holding onto those old beliefs that the fastest trail up the mountain of gold profits is through the junior mining forest…
And I understand. I’ve made people trainloads of money on junior mining stocks, as you’ll see shortly. But…
And this is a huge "but”…
Picking the right mining stock at just the right time is really tough – even for pros.
If you can pigeonhole an honest miner like I do regularly, they’ll admit that there’s a lot of snakes in the game of mining. There are sudden deaths and backward free-falls and very few drill holes ever strike the good stuff.
Do you know the odds of success? Well, think of it this way:
- If you go to Vegas and play craps, your odds of winning are a little under 1 in 2
- If you bet the ponies, the odds that a $2 wager will pay out are
3 to 2
- But if you invest in a junior gold mine, your odds fall to one in 1,000… because that’s how often the miners I’ve studied actually hit pay dirt.
Better to play the ponies, eh?
Even better to take a low-risk path up to the projected 639% gains these gold-banking wizards are capable of over the long term. They know what they’re doing…
And competence is hugely important – because it’s really expensive to mine gold these days.
Any idea how much it costs to get a gold mine up and running?
Even better to take a low-risk path up to the projected 639% gains these gold-banking wizards are capable of over the long term. They know what they’re doing…
And competence is hugely important – because it’s really expensive to mine gold these days.
Any idea how much it costs to get a gold mine up and running?
- $50 million to punch thousands of exploratory drill holes…
- $15 million to buy up nearby land to make sure all the gold stays in your hands…
- $20 million for a feasibility study…
- $300 million to build roads, mineshafts, a smelter, warehousing, assay labs, electricity, water hookups, offices…
You could be $400 million in the hole before an ounce of gold is ever delivered.
So you can see why so few exploration projects actually become producing mines... and how the bankroller plays a critical role.
A role so critical and lucrative... that I am urging readers of my Global Resource Alert to enter into this “partnership” for up to 639% return on investment.
These unbelievable returns are being made, straight up, with none of the risk that comes with gold mining.
If you’re ready to become an investing partner, a simple call to your broker will get you in.
I’ll lay out the buying details in a special Global Resource Alert.
With this intel in hand, you’ll be off and running. Within 72 hours, if you wish. But before you decide, I’d like to share a little more of my investing philosophy with you.
Because it matters.
Call me Canadian if you wish, but the way I see it, there’s only one reason to upgrade to a premium advisory like Global Resource Alert.
That reason?
Exclusivity, plain and simple. Some of the best opportunities in natural resources can only be shared in a valuable way with a limited few.
I can only open up these recommendations on an exclusive basis.
And I am opening that door to you now… so you can decide for yourself if this kind of exclusivity is for you. Let me tell you more about how I work, to help you decide…
If there’s one key to my success, it’s a full wastebasket. Because of my position in the natural resources sector, I get a lot of polished presentations from corporate flaks.
I toss them all.
And instead I lace up my boots and trudge into the field to dig into the claims, before even considering the stock. If this means trekking to 18,000 feet in the Andes with an oxygen tank, so be it…
I learned years ago that most of the PR pitches are nothing but desperate pleas from wannabes or artful deceptions from never-gonna-bes.
I learned that slipping unnoticed into the bar at the Gold Rush Inn up in Whitehorse Yukon… or into La Bodega on Howe Street in Vancouver... yields more nuggets of truth than any office meeting with designer water bottles set perfectly around the table.
Whenever I scout out great intel, I go sleuthing, running down leads, showing up unannounced at corporate offices to ask the no-BS questions that cut to the quick and puncture the hype.
Then I meet with my team of commodities insiders – these are seasoned pros who haven’t got an emotional bone in their bodies, frankly.
They’ve all seen their share of mining outfits that are stuck in an eternal cycle of raising money and drilling holes on a long-shot property. They’ve learned to take a "don't trust, verify" approach that’s cold and cynical, but that’s investing.
This approach has paid out handsomely for us for two decades now. Take Romarco Minerals, for example…
Romarco is a small mining outfit in the heart of the Carolina gold rush. In late 2009 they were halfway through an 85,000-meter drilling campaign, and they were hitting gold in all directions. I knew that they would soon be reporting that fact, and then the stock price would skyrocket.
So I told readers in an Oct. 23, 2009 Alert that, “I expect we could see 40% gains in the next six months, and maybe a double within the next year.”
And how did it go?
Six months later on March 2 the stock was up 64% and I advised selling a third of the shares and taking profits…
By Sep. 21 the stock was up 100% and I advised selling half of the remaining shares and taking even bigger profits.
So you can see why so few exploration projects actually become producing mines... and how the bankroller plays a critical role.
A role so critical and lucrative... that I am urging readers of my Global Resource Alert to enter into this “partnership” for up to 639% return on investment.
These unbelievable returns are being made, straight up, with none of the risk that comes with gold mining.
If you’re ready to become an investing partner, a simple call to your broker will get you in.
I’ll lay out the buying details in a special Global Resource Alert.
With this intel in hand, you’ll be off and running. Within 72 hours, if you wish. But before you decide, I’d like to share a little more of my investing philosophy with you.
Because it matters.
Call me Canadian if you wish, but the way I see it, there’s only one reason to upgrade to a premium advisory like Global Resource Alert.
That reason?
Exclusivity, plain and simple. Some of the best opportunities in natural resources can only be shared in a valuable way with a limited few.
I can only open up these recommendations on an exclusive basis.
And I am opening that door to you now… so you can decide for yourself if this kind of exclusivity is for you. Let me tell you more about how I work, to help you decide…
If there’s one key to my success, it’s a full wastebasket. Because of my position in the natural resources sector, I get a lot of polished presentations from corporate flaks.
I toss them all.
And instead I lace up my boots and trudge into the field to dig into the claims, before even considering the stock. If this means trekking to 18,000 feet in the Andes with an oxygen tank, so be it…
I learned years ago that most of the PR pitches are nothing but desperate pleas from wannabes or artful deceptions from never-gonna-bes.
I learned that slipping unnoticed into the bar at the Gold Rush Inn up in Whitehorse Yukon… or into La Bodega on Howe Street in Vancouver... yields more nuggets of truth than any office meeting with designer water bottles set perfectly around the table.
Whenever I scout out great intel, I go sleuthing, running down leads, showing up unannounced at corporate offices to ask the no-BS questions that cut to the quick and puncture the hype.
Then I meet with my team of commodities insiders – these are seasoned pros who haven’t got an emotional bone in their bodies, frankly.
They’ve all seen their share of mining outfits that are stuck in an eternal cycle of raising money and drilling holes on a long-shot property. They’ve learned to take a "don't trust, verify" approach that’s cold and cynical, but that’s investing.
This approach has paid out handsomely for us for two decades now. Take Romarco Minerals, for example…
Romarco is a small mining outfit in the heart of the Carolina gold rush. In late 2009 they were halfway through an 85,000-meter drilling campaign, and they were hitting gold in all directions. I knew that they would soon be reporting that fact, and then the stock price would skyrocket.
So I told readers in an Oct. 23, 2009 Alert that, “I expect we could see 40% gains in the next six months, and maybe a double within the next year.”
And how did it go?
Six months later on March 2 the stock was up 64% and I advised selling a third of the shares and taking profits…
By Sep. 21 the stock was up 100% and I advised selling half of the remaining shares and taking even bigger profits.
By digging deep into the investment story well before the armchair analysts and know-it-alls got involved, we pulled out the safest run of profits.
Fortuna Silver Mines has been another big winner for us…
I had gotten word that their San Jose mine was just days away from a positive pre-feasibility study – opening up nearly 40 million ounces of silver. So on April 27, 2010, I advised buying at $2.23 to ride the coming bonanza, and what a bonanza it was!
We took profits of 51% in October and 126% the following March.
This is the right way to invest in commodities, in my view. Taking smart actions based on insider guidance leads to solid 50% gainers and 100% gainers with controlled risks…
- Mag Silver gave us 129% gains
- Romarco Minerals gave us 100% gains
- Energold Drilling gave us 103% gains
And every once in a while, these solid success stories morph into something even more fantastic – a 5x or even 10x or greater story that I’m sure you’ll be telling the grandchildren about until they can’t stand it anymore.
And that’s precisely what we have before us right now – this “Gold Streaming Bank” has all the proof elements lined up favorably…
And that’s precisely what we have before us right now – this “Gold Streaming Bank” has all the proof elements lined up favorably…
In a very short time from now, you could be in the biggest profit game of our time.
It’s a game that’s as sure to go into extra innings as Washington is sure to keep spending America to the breaking point.
We know the deal in Washington. We know the politicians are looking to monetize the debt, inflate away their problems, and kick the responsibility can further down the road.
We don’t know how it ends, but we know it ends badly.
Which is why every nation in the world is officially quitting the dollar.
China and the Arab states are creating their own reserve currencies.
Billionaire investor Jim Rogers reminded us in a Bloomberg interview recently that when the British sterling lost its status as the world’s reserve currency, it lost 80% of its value.
Will the dollar lose 80% more of its value?
That’s not too likely, in my view, if only because it has already lost so much. But if it even approaches such a disastrous drop, we can expect revolution in the streets – mass panics, huge price increases, sudden shortages, misery enough for all.
And when that day comes, a gold price of $1,550 will suddenly feel like one of those 1950s black and white newsreels – something from the long lost past.
So the real question here is, how high can we reasonably expect gold to go?
I think there’s no better answer than this chart of gold and the dollar over time:
The green line is the “purchasing power” of the dollar going back to 1792. For nearly two centuries the dollar tracked fairly closely with gold. But after Nixon delinked it from gold in 1971 it plunged and is only worth about a nickel of its former value…
The orange line is the “purchasing power” of gold. It’s been running away from the dollar in the direction of value. And despite taking a few breathers, it hasn’t slowed down.
Facts like these are stubborn things. And the fact is, we’re in the middle of the biggest government trashing of the dollar in American history.
This trashing has gotten so bad, the government couldn’t turn it around now even if it wanted to. It’s like inviting cancer into the body – once it’s there, it’s chemo or death. That’s the future for the U.S. economy.
We’re already seeing the cancer take hold. The things we need to survive – the everyday commodities – are skyrocketing in price. That can’t be turned around.
And that’s only half the picture.
We also know that hundreds of millions of people around the globe are itching for a shot at their own middle-class lifestyle. They want stuff, lots of it. And they have money that’s appreciating in value.
So you can take the demand for basic commodities, and stick a steroid needle in it.
This is one of those V8 moments – like, Wow, I could have made a fortune… simply by being in the commodities game.
It’s a game that’s as sure to go into extra innings as Washington is sure to keep spending America to the breaking point.
We know the deal in Washington. We know the politicians are looking to monetize the debt, inflate away their problems, and kick the responsibility can further down the road.
We don’t know how it ends, but we know it ends badly.
Which is why every nation in the world is officially quitting the dollar.
China and the Arab states are creating their own reserve currencies.
Billionaire investor Jim Rogers reminded us in a Bloomberg interview recently that when the British sterling lost its status as the world’s reserve currency, it lost 80% of its value.
Will the dollar lose 80% more of its value?
That’s not too likely, in my view, if only because it has already lost so much. But if it even approaches such a disastrous drop, we can expect revolution in the streets – mass panics, huge price increases, sudden shortages, misery enough for all.
And when that day comes, a gold price of $1,550 will suddenly feel like one of those 1950s black and white newsreels – something from the long lost past.
So the real question here is, how high can we reasonably expect gold to go?
I think there’s no better answer than this chart of gold and the dollar over time:
The green line is the “purchasing power” of the dollar going back to 1792. For nearly two centuries the dollar tracked fairly closely with gold. But after Nixon delinked it from gold in 1971 it plunged and is only worth about a nickel of its former value…The orange line is the “purchasing power” of gold. It’s been running away from the dollar in the direction of value. And despite taking a few breathers, it hasn’t slowed down.
Facts like these are stubborn things. And the fact is, we’re in the middle of the biggest government trashing of the dollar in American history.
This trashing has gotten so bad, the government couldn’t turn it around now even if it wanted to. It’s like inviting cancer into the body – once it’s there, it’s chemo or death. That’s the future for the U.S. economy.
We’re already seeing the cancer take hold. The things we need to survive – the everyday commodities – are skyrocketing in price. That can’t be turned around.
And that’s only half the picture.
We also know that hundreds of millions of people around the globe are itching for a shot at their own middle-class lifestyle. They want stuff, lots of it. And they have money that’s appreciating in value.
So you can take the demand for basic commodities, and stick a steroid needle in it.
This is one of those V8 moments – like, Wow, I could have made a fortune… simply by being in the commodities game.
Peter Krauth
June 2011
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