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Precious Metals’ Gleam Is Not Tarnished: When Will They Finally Bottom?

The question is, can gold's value per oz in US$ go up in a collapsing USA economy? The answer is yes. The same answer holds for silver and copper and all of the commodities.

Nancy P of Californie is the poster child of USA wealth destruction. She can impoverish the non government workers who create wealth while lavishing tax money at the feet of state workers who waste wealth and destroy the living standards standards of all but thereselves.

Gold is good in all countries while the US$ falls against other currencies.

Geopolitical Risk Is Positive for Gold

Remember the 1972 to 1980 years with Nixon and Carter and inflation and stagflation. The USA now has the rerun ot that old movie in the Bush and Obama years form 2000 to 2012 or 2016.

Reagan ended the Nixon-Carter inflation and US$ bond interest rate take off to 18% as Reagan began in office in 1980.

Now in 2009 US$ bond interest rates are soaring again and inflation in staples (food fuel and commodities) is too.. USA real estate prices in US$ falls as interest rates on US$ rise as the US$ falls against foreign currencies.

Yes, Reagan did it right with the help of Uncle Milton and Walter the giant at US Treasury..

The bomb is a short timer doing a lot of damage like Carter did.
Relax, the force is with you.

Good Luck.

Jeffrey Christian: Gold and Silver Could Spike

The world is awash in crude oil.

The current cartel of oil producers can not hold the price up without a Bush in the White House.

In the late 1960's oil sold for US$ 3.00 per barrel.

Oil consumption per unit output in the US and other economies is collapsing now and will keep on doing so as the 21st century continues. The anti energy freaks are very ignorant pitch persons.

Gold is the measure of the worth of a currency. The worth of the USA currency is high and going higher against many assets because massive number of US$ claims held as assets have lost the amount of the dollars they can claim.

Investors in non US$ momey assets are now loosing US dollars and selling non dollar assets to raise US$'s to meet their IOU's in that currency as they come due.

How long will this continue?

There are 4 counter trends.

1 let the creditor have the ass and walk away from the debt.
2 Burn the asset up and let the insurance company pay the creditor.
3 Get newly printed money from the US Government and pay off the creditor.
4 Reduce consumption and new asset purchases and pay your own debts off.

Nothing works quickly or well. As we learned in the 1930 to 1970 period in the USA. Yes, all those wars were just ways to burn up assets and have government debt replace inter private party debt.

Your should have seen this comming. Your should have cut your debt service costs. You should have sold your assets and paid off your debts. You should have studied history and educated yourself.

Good luck.

Blessed are the poor for they shall inherit the earth. Yes really.

Metals Manipulation - Or Simply Deleveraging?

One gets to feel like the guys in the WW !! front line fox holes trying to think of good things as the mind keeps going back to what the ultimate end will be.

We are comforted by the second chart in the above article which points out to business cycle believers that the gold price bottom is neigh as of October 2008.

Since the start of the 1900's, USA politicians and their agencies have always favored printing more fiat US $'s for any and all reasons.

My fox hole buddy is cheered up by the thought that, as happened in the summer of 2008, government agents will soon be by with packets of 1000 bills for each of us.

Of course, we are stuck out here without food or transport and can't get to a store to buy anything much less gold bars.

Good luck.

Bespoke's Commodity Snapshot (6/10/08)

Thanks for the charts. They are very useful in predicting mining company profits, all else being equal. The gold chart shows that that metal was being sold for $ 650 per oz. in the summer of 2007 and is now selling for $ 900 per oz. $ 250 per oz. more to the bottom line.

The Barrick president says the cost is $400 per oz. so profits should double in 2008 versus 2007. Perhaps, the stock value will double too.

See your investment adviser and always diversify your portfolio. This is not a recommendation to buy or sell any stock shares.

Critical Price Juncture For Silver

You can get longer period graphs by going to our site and clicking on commodities, and click on Moore and then click on currencies and or commodities to investigate then back to 1976. We also like to go back to the 1930's when talking about commodities. The high for copper in 1932 was 8 cents a pound and the low was 4 cents a pound.

Now copper brings about $3.50 per pound. It is up almost 100 times from $0.04 or 50 times from the 1932 high of $0.08. Check up current prices related to 1932 prices and they will be up 50 to 100 times. Try candy bars, tools, houses, cars, ears of corn, and etc. The point is that price increases of 50 to 100 times are normal from the 1930's to 2008.

Another interesting comparison is the 1984 to 2002 time period during which commodities prices were level for gold, silver, copper, and other commodities.

Then, all at once all commodities all took off and ran up in almost equal proportional increases. Now one has to explain the long level price period and the subsequent sudden and uniform price gain ratios. Note that foreign (to USA) currencies have also had big run ups in the 2001 to 2008 period.

What happened to cause the run ups in 2001 to 2008?

We believe the 20 years of no commodity price increases relative to US dollars were caused by the competition of vendors to get their hands on $US balances which were appreciating in the form of bond prices and stock prices as USA interest rates fell from 1980 to 2000. To see this take a look by clicking in interest rates and then 5 year bond rates on our site.

All being said, we see no problem to commodities up 50 times from 1932 since everything else is up that much.

Bullish on All Metals

Business cycle years in which USA dollar interest rates are falling have been supportive of gold price upswings as well as increases in gold mining stocks and also mutual funds such as the Fidelity Select Gold Funs which holds gold mining stocks. For example, in the 2001 through 2003 period, gold rose from $280.00 to $400.00 per ounce and in the same period the Fidelity Select Good Fund shares rose from $10.00 to $31.00 each by the end of 2003.

Who knows what will happen as the Fed cuts rates starting in late 2007. History could repeat.

To check this data, you can go to financialtrax.googlepa...
and click on Commodities and then click on the Moore site click and then look at short term interest rate history and then look at gold prices.

Gold mining stocks per cent change amplify the gold bullion because in the short their costs per unit of gold extracted stays constant while the whole increase in the revenue from the unit of gold sold passes through to profits.