Robert Perrego

The End of Gold, Part Three

In bad economic times and deflation people (individuals) are buying gold and stuffing it in safety deposit boxes worldwide. In inflationary times it is the best hedge.

In 'let's print $3 trillion worth of green paper' times it gets even more valuable.

Gold - $1200 by May, $1500 by end of year and $2000 in 2010.

Check out my call in October - article posted here. I picked the bottom clean and am riding the up gold wave fully loaded right now.

Stay on the sidelines and miss the opportunity or buy in and push my holdings higher.

I have been listening to the anti-gold crowd for three years now and all the while making money long the yellow. Wake up.

The End of Gold, Part Three

Gold is going to $2000 plus - you can make all the arguments against it but you cannot argue with this - supply has been dropping for years and there is a lot more paper out there now than there was last year - about $3 trillion more easily and probably $5 trillion (Fed's off balance sheet items they wont comment on).

$1300 by April, $1500 by end of 2009 and $2000 in 2010. GLD is up from $70 to $93 in 4 months and most gold miners are up 100% in the same time period. Sit on the sidelines and do nothing. Your loss.

Peter Schiff: Outlook for the Gold Market

You are dead wrong on number 5. Commodities may be in less demand per person but China and India have created over 200 million new middle class members to the world economy. The worlds population is growing and the economic revolutions in China, India, Russia and Brazil - even if slowed a bit here - will still grow and continually inject more people with spending means into the world demand picture. This increase in demand will not only staunch the price drops in commodities but will cause a fast V bottom and significant rally. I believe this will occur within the next 6 to 9 months. Markets anticipate the economy by 6 months or so. The commodity bubble popping is just about over and the one commodity that has held up the best is gold. Anyone with any trading experience knows that when a market reverses you buy the relative strength performers for the bounce as they will outperform and this is exactly what gold is positioned to do.

You can talk about deflation until you are blue in the face but the facts that during the Depression and the asinine Jimmy Carter regime - liquidity was not injected into the system to reverse deflation. That is being done now my multiple governments around the world right now. The deflationary forces will be fought off and the ensuing inflationary forces are going to be massive. Gold will explode.

On Dec 23 04:42 AM Commodity bubble proponent wrote:

> Anyone who buys Schiff's arguments is a moron for a couple of reasons:
>
>
> 1. The deflationary forces from the current de-leveraging are far
> larger than the quantative easing that the Fed can do. In the last
> year, we've lost nearly 20 trillion in global equity valuations,
> not counting the several trillion in global real estate assets, corporate
> bonds, municipal bonds, etc etc etc. The fed even on its best days
> may be able to only inject 2-3 trillion/yr into the system. what
> they are doing is basically trying to fill a bathtub with a squirt
> gun.
>
> 2. Gold investing has been a leveraged activity over the past 18-24
> months. Look at all of the Gold ETFs. They basically allow investors
> who never buy a single ounce of gold to partake in the price action.
> ETFs are now the fourth largest holder of gold supplies. If there
> is any serious hiccup in these entities, forced liquidations could
> cause the ETFs to flood the market with gold.
>
> 3. There is no replacement currency for the dollar. The ECB has proven
> that they are ass backwards in their thinking, the Japanese are still
> having problems with deflation, the Chinese are corrupt as hell and
> their banks are burdened with trillions of dollars of non-performing
> loans from the communist days, and we've all seen what's happened
> to Russia lately.
>
> 4. The Chinese consumer is not powerful enough to rescue the world
> economy. The average Chinese person earns roughly $2,100/yr and the
> average American earns $50,000. This means that the Chinese guy must
> increase his marginal income nearly 24x to hit the same level that
> the American guy is at. In order to get there, either that guy needs
> to earn 24x as much or the dollar needs to depreciate 97-99%. None
> of those things are likely to happen.
>
> 5. COMMODITIES were all a bubble and are not likely to reflate anytime
> soon. I'd expect this to happen only when all of the commodity bulls
> give up and go play somewhere else (which given the current CNBC
> offerings of advice will be a while).

Gold/Dollar Ratio Goes Parabolic

For the last $300 up in Gold all I have heard ablut is how this is going to collapse, how its going to back off, etc...

I guess if you write one of the articles, such as the one above every $100 up in gold, you are bound to be right sooner or later.

I have been buying the pullbacks for months now and am sitting on a massive winner - which will get bigger.

S&P estimated today we are half way through the write offs. Even if we are 3/4 of the way through the feds rate cuts we have over a point of more cuts coming. And do not forget the banks are all still writing off - maybe more moves at the window, policy changes, etc...

This move is in response to a little inflation and ANTICIPATED inflation. The paper money fiat market is getting soooooo inflated, just wait till it works its way through to the CPI and PPI. Thats when gold really goes parabolic. Dont forget that China just posted well over 8% inflation, Russia is printing roubles like puppet presidents. The world is awash in paper.

Nice chart buddy. Now take some time to figure out how to interpret it properly.