Tuesday, July 1, 2008

Gold getting ready for another big move

Jim Sinclair became fabulously wealthy when he called the great gold bull in the late 1970's, selling out at the top. He's the dean of the gold bugs, and gives his advice away for FREE at his web site. He posted a bulletin today where he thinks the gold is getting ready for its assault on $1600. His previous prediction for that level was by 2011, so he thinks things are speeding up.

Gold is traditionally slow moving in the summer, but that may change. If you're going to buy gold, do it soon. It is not going much lower, if at all. It is definitely going higher, because the dollar is going lower. It is really that simple.

I suggest US Gold Eagles of various denominations. Silver Eagles are also a great investment. I've had very good prices and service in the past from
Franklin Sanders as well as GoldMasters. If you live outside of Oklahoma (to avoid sales tax), you can try American Precious Metals Exchange in Edmond, OK.

Investment guru Jim Rogers, who correctly called for $100 a barrel oil and $1,000 gold in 2006, urged investors in a recent speech to "avoid the dollar at all costs." "The best investments in 2008 are commodities and natural resources. Agricultural prices have much higher to go over the next decade. We have a shortage of everything, including seeds.''

Any money you leave in US stocks (except selected precious metals and commodities), bonds, and money markets will become worth less and less as inflation eats away at their value. Be safe, not sorry. As Gary North is famous for saying: "Procrastination kills."

My good friend Michael Pink updated my store closing list in today's earlier post with news that Starbucks will be closing 600 underperforming stores in the US. I didn't need that last bit of lingering optimism anyway!


Anonymous said...

Porter, what are your thoughts on the possibility that the Federal Reserve will increase rates in an attempt to slow inflation making the dollar look more attractive?
Take care, Bob...
Bob Donohoo

Porter Davis said...

The Fed is between the proverbial rock and a hard place, on the horns of a dilemma, if you prefer. If they raise rates to strengthen the dollar and dampen inflation, and they stifle economic activity even more. That's not very popular in an election year. The effect of inflationary money creation on an economy is like that of meth for a speed freak. They don't like the withdrawal pains, while it takes more just to keep going. Too much, and they die exhausted anyway. Alan Greenspan's chickens are coming home to roost. Hyperinflation, anyone? (Our predicament lends itself to many figures of speech!)

ksdrover said...

I do not understand how people think that gold going so high is a good thing. The devaluation of the dollar through the expansion and contraction of the money supply was one of the most explicit warnings our founding fathers gave us.

To think these events are mere happenstance is to submit to a naivete that is beyond comprehesion.

The ONLY way to avoid what looms beyond the horizon would be to adopt a barter system which precluded taxation by the source of our economic woes.(Which will never again happen.) By adopting such a system people would have to re-educate themselves to providing labor relative to necessity, again won't happen.

This may seem somewhat dialectic but I do not doubt that the price of gold in comparison to the dollar will rise.

My query is: At what point will people stop accepting the dollar as an exchange medium?

ksdrover said...


Porter Davis said...

It is not a "good" thing that gold is going up, any more than it is "good" that a thermometer shows one's temperature is rising. A rising gold price is a measure of the debasement of the currency.

What is "good" about gold and silver are that they have intrinsic value, and are not anyone else's debt. History has shown that they are proven stores of value. As such, they give people a chance to protect their liquid weath from erosion by inflation.

ksdrover said...

I understand what you're saying Porter, I also possess gold and silver for the same reason.

What I am saying is that we can't eat gold. Gold does not provide the security and 'education' necessary to endure the coming collapse. Gold won't fill our bellies or our childrens bellies when the food stuffs don't exist to begin with.

Here is a story running in my local paper:
On the surface it would seem like a wonderful 'blessing' to recieve $10 million dollars to expand a college, but let's look at it from a different perspective.
That same $10 million dollars would go a long way to 'educating' people that their reliance on this governmental system has led them to poverty.
You could take that same $10 million dollars and distribute $1,000 to 10,000 needy families that are discovering that the poverty they lived in is nothing compared to the poverty that in store for them.
Yet we believe ourselves to be people of distinction because we 'see the wisdom' of putting such an abundance of funds to such a worthwhile cause.
That my friend is NOT wisdom but an 'education' of futile ignorance.

When the work we do no longer puts food on the table for us and our families what good is any 'education'?