Russell Upsomgrubb

Silver Prices Are About to Fall

Warren Buffett is perhaps the most successful investor of all time and just bough Burlington Northern, making a huge bet going forward on the growth of the American economy over the next 5-10 years. If he is correct, I see the dollar strengthening over time. The consensus on Wall Street is so often wrong and the vast majority of traders are short the dollar. Buffett is an investor, not a trader. He believes in the long term creation of wealth, not trying to get rich overnight. Mark Faber, a doomsayer, claims the value of the dollar will eventually fall to zero. Gee, I'll bet he owns a lot of gold.

Inflation Expectations and the Price of Gold

In Jim Rogers' recent Bloomberg interview, he said he preferred silver to gold because the IMF was desperately trying to sell its gold. Not according to the IMF website:

www.imf.org/External/N...

World Gold Council Throws Water on COMEX Rumors

Cramer changes positions on stocks so often it's like he's performing a financial version of the Kama Sutra.

How the Gold Game Could End

Every central bank around the world is printing paper currency to deal with the bad debt in the form of sub-prime mortgage backed securities that was exported by Wall Street globally, after getting Fitch, Moody's and S & P to stamp this dreck AAA. Either the economy recovers and foments hyperinflation or we slip further into a morass of residential and commercial foreclosures. Gold wins in both scenarios, as the paper money devalues or in being seen as a safe haven. First come the foreclosures of homes, the biggest asset, then the auto loan defaults, and finally the unsecured credit card debt. The latter two have not shown up on banks balance sheets as yet. Not to mention the billions of dollars of short-term commercial paper that comes due over the next three years with little chance of it being refinanced as more retailers go bankrupt in an economy that is 2/3 driven by consumption. General Growth Properties, one of the biggest mall owners in the country, just declared bankruptcy. While there are televised ads for the purchase of gold coins , they seem to be outnumbered at least two to one by commercials offering to buy your gold jewelry. That type of anecdotal evidence leads me to believe gold has more upside. I guess we'll see what happens when home sales are reported this week.

Resurgent Dollar Leaves Gold in the Dust

All the central banks in the world have been on a currency printng spree- as one writer put it the dollar has been like the winner of a beauty contest in a leper colony. The US banks spread those fake AAA CDOs around the world, the 70 billion the government is putting into the housing market will do little to counter the trillions in real estate value that has been destroyed, and why should other countries continue to pile into T-bills with the 10 year paying under 3% after we just got done running this sub-prime mortgage backed securities Ponzi scheme on them?

Gold: The Only Remaining Bubble?

The chart sure looks like the parabolic one of oil at its high.

Merrill Lynch Kisses Up to Gold, Predicts It Will Hit $1,500

Demand for gold jewelry has little to do with the demand for gold as a hedge against a falling dollar. Jewelry is marked up 3-4 hundred percent compared to its actual value. Trillions of dollars will be required to bail out insolvent banks and the government doesn't have any so they will just print it. Billions of dollars in short term commercial paper come due this year with little chance of it being refinanced. Central banks around the world are printing currency that is backed by nothing but faith. I've never owned gold before but this time it's different. When the price of gold has risen above the S & P index in the past it has peaked from 2 to 4 times the index. There are a ton of call options on gold that expire the third week of February. There will be a number of trading opportunities, but longer term the flood of paper will bring inflation.