November 21, 2017 
 Tuesday 
 
 

Forum
Topic:
Gold Enters Major Bull Market

       

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 By martin newkom

07/19/2008  4:16PM

If Southwest airlines can re-
main viable by hedging fuel, ie
buying futures contracts, the 16-1 might want to look into
some sort of plan or scheme that enables the company to do like-wise.
 By Rick

07/18/2008  8:50PM

All the gold I own I found myself. It's not much, but it is certainly sitting over there in my box. The next best thing to finding gold myself is having confidence in entities I've selected to find it themselves and own stock in the potential.

This is why I know how what Bluejay suggests is the wise course of action.

And of course, concentrating potential. Our Sixteen to One Mine has the most potential and reward in the small cap investment potential.

As I get older I recognize that it becomes more and more difficult to find my own gold; it also isn't much of a hedge (since it's so little...yet the life-quality fun-factor is worth the endeavor), so I continue to have faith in OAu potential.

Bluejay's analysis can be condensed into this: buy gold; or buy interest in those who will actually find it. I'll add this...find some yourself if you can.
 By bluejay

07/18/2008  11:41AM

Here's a primer to the wise words of Howard Ruff and a case on why you must own gold.

The article was sent to me via Email without credit being given to its author.

FINANCIAL SURVIVAL 101

Most people are oblivious to what’s going on in America. They don’t"get it." You may not either. If so, I’m going to give it to youstraight. It’s time for a wake-up call. It’s time for you to "getit." If you don’t "get it", your financial
future is dim.Last week I was talking with my 72-year old corporate counsel, who is planningto retire. I told him he couldn’t afford to retire. "You only have amillion dollars," I said. "Subtract a $100,000 a year for inflation.In nine years you have the purchasing power of $100,000. You’ll be greetingpeople at Wal-Mart." I was only guessing about his net worth. Perhapshe’s got $2 million or more. I continued, "You’ve got guys managingyour money who don’t "get it.". You’ve got these establishmentguys with conventional investments in stocks and bonds, and they don’t seethe big pictures. They could wipe you out." "I suppose," hemumbled.My lawyer doesn’t "get it," doesn’t want to "get it." Iunderstand that because almost nobody "gets it." It’s over for theAmerica we’ve known. We’re on the down escalator. The assets we’ve reliedon to keep us secure are now
riskier than ever.In the fall of 1999 I wrote a newsletter that warned about a pending crash inthe stock market. The NASDAQ collapsed a month later. Subsequently, I wrote anewsletter about a coming crash in residential real estate. In 1999 I wrote anovel about gold rising to $1,000, people losing their homes, high inflationand a bad economy. It was right on the money. I’m not bragging, I’m makinga point. How did I write such accurate forecasts? I learned the economics ofsound money and free markets. There are incontrovertible truths in economicsand when they are violated, the outcome is easy to predict. It’s noparticular brilliance on my part, only common sense conclusions that anyunbiased reader would arrive at.Eighty years ago, in 1928, Babe Ruth, the greatest baseball player of all time,made $50,000 a year. Alex Rodriguez, a Yankee star of today, makes $28 million.The Babe made
1/5 of 1% of Rodriguez’s salary. That’s .002. In a way, youcould say the money of 1928 has become virtually worthless.Let’s go back 40 years – half way to 1928. In 1968 Willie Mays was votedthe most valuable player in the All-Star game. He made $120,000 that year. Doyou "get it"? $50,000 - $120,000 - $28,000,000. The rate ofdepreciation of the dollar is increasing exponentially (the bigger it gets, thefaster it grows). Somewhere in America today (or in South America), a two yearold kid tosses around a rubber ball. In less than 30 years he will earnone-billion dollars a year to play baseball.In 1934 the politicians gained control of the money. The free market haddetermined that gold and silver were money. (Remember, the free market is theclearinghouse for the buying choices of the citizens. In the free market theconsumer is king, not the government. The consumers decide who succeeds
and whofails through their buying choices. The free market is the essential componentof liberty.) I’m not stumping for a return to the gold standard. Thereisn’t enough silver available to be money on Wake Island and gold would haveto be $40,000 to $50,000 an ounce. However, the one thing to remember about thegold standard is that politicians couldn’t create it out of thin air. That’swhy it was good, and that’s why they got rid of it.When government gained the monopoly on money, abolished the gold standard andallowed politicians to gain control over spending and money creation, the diewas cast. It opened the door to ever-expanding social programs, wars anddeficits. Before long, money and credit creation were used to stimulate theeconomy. Artificially low interest rates (not free market rates) spawned boomsthat invariably turned into recessions when the money growth slowed or
interestrates rose. Today’s bubbles are created by excessive money and credit. Wecurrently have bubbles in farmland, commercial real estate, art, antiques andcollectors items. It’s the consequence of inflationary money and credit. In1928, the national debt was $17 billion, in 1968 $347 billion, in 2008 $9trillion. You see it’s running away.Wall Street doesn’t "get it," the public doesn’t "getit," the politicians and bureaucrats most certainly don’t "getit" and, it seems that even the Federal Reserve doesn’t "getit." They just keep spending, borrowing and printing more money.Government liabilities may now exceed $60 trillion and the astronomicalexpenses from government social programs are going ballistic. Furthermore, thecurrent crisis is calling for billions to finance bailouts and otherguarantees. There’s no possibility of paying for all this without debasingthe currency.
Washington claims the inflation rate is under 4% and Wall Street,Main Street and the media buy it hook, line and sinker. Truly they don’t"get it."The high inflation of today ruins the plans of retirees and throws many of theminto poverty. Our inflation rate of 15% (my estimate) also acts as a hidden tax.It impacts the poor, low income workers and those on fixed incomes at exactlythe same rate as the rich who can better afford it. This cruel tax, brought tous exclusively by the government, makes poorer those who can least afford it.No person, rich or poor, escapes this terrible depreciation of their money andthe subtraction of their purchasing power.That’s not all. Historically, inflation stokes hatred towards businesspersons and free enterprise. It elevates left-wing demagogues who promiseredistribution. It encourages a bigger nanny state, more lobbying, politicalcorruption and loud
demonstrations by subsidized activist group. Ultimately,runaway inflation leads to enormous social unrest, civil disobedience, riots,strikes, radical politics and other destabilizing upheavals.In the history of severe inflations (including the Weimar Republic and two fiatmoney episodes in 18th century France) only a few nimble investors andspeculators survived and prospered. The vast majority of people lost theirshirt. Most of them didn’t know or understand what was happening. Theydidn’t "get it." There was much speculation gambling, debt andleverage, but in the end, all was lost.Figure it out for yourself. Stocks are down 20% and inflation is 15%(Shadowstats.com says inflation is 12%). That means many investors are out 1/3,and if inflation stays at this level, in twelve months they will be down 50%.Virtually everyone will argue with this viewpoint. That’s because theydon’t "get
it." Eventually they face ruin.Savers and bondholders are also taking a shellacking. Back in 1980 there was anelderly currency analyst by the name of Franz Pick who spoke at monetaryconferences. He was fond of saying, "Bonds are certificates of guaranteedconfiscation." He may have been premature in 1980, but no longer. In 2000I bought an old Superman comic book. This high-grade 1941 copy has more thandoubled. So far in this century comic books have been better than governmentbonds.The secret to financial survival now and in your retirement is to own tangibleassets that will appreciate at a level that exceeds the rate of inflation.Convert depreciating paper assets into tangible assets. Make sure they are notin a bubble, and still promise appreciation. Don’t use leverage. Never try tomake a killing. Be patient. Do not wind up on the financial scrap heap with thevast army of
inflation-ravaged investors who didn’t "get it." Mostinvestors are going to get killed. Be one of the select few who "getsit." Remember that in every big inflation those who listened to governmentspokesmen were ruined.I don’t want to terrify you, but there is one more thing I see happening. Itcould happen soon or it could be a long way off. Pray it’s the latter.Foreigners who hold trillions of U.S. dollars are losing billions as the dollarsinks. The Asians could have losses approaching $2 trillion. Chinese exports tothe U.S. amounted to only 2.1% of their rapidly growing economy last year. Theworld doesn’t need our business as they once did. The stronger the worldeconomy outside of the U.S., the less they’re going to be willing to holddepreciating dollars. Plus, many countries would like to stick it to us.If too many countries abandon the dollar as the world’s reserve currency,
andif a few large Asian countries are unwilling to buy our bonds, our governmentwould soon be insolvent. The dollar would be next to worthless and a paralyzinghyperinflationary depression would lay the U.S. low. Don’t think it’simpossible. We can’t live beyond our means for decades, bury ourselves indebt, and consume more than we produce without a day of reckoning. That sad dayis coming, I promise you.
 By bluejay

07/18/2008  9:53AM

Dick

Thanks for the perspective concerning some financial writers at johntreed.com/bestseller.html.
 By Dick Davis

07/15/2008  10:47PM

Looks like Howard isn’t writing a new book but recycling the old.

I can recall when Howard jumped out of gold on the way up. (I'm an old guy too.) So I Googled. The original 1980’s version, How to Prosper During the Coming Bad Years, is available used on abebooks.com, goes for $1.

28 years…. My friend Dr. Everett tells me, “Even a blind squirrel occasionally finds a nut.”

Google also turned up:

John T. Reed’s web site mentions the author of How to Prosper During the Coming Bad Years, Howard Ruff, declared bankruptcy.

See: http://www.johntreed.com/bestseller.html
 By bluejay

07/15/2008  7:38PM

Our financial system appears to be melting down. What can you do to protect yourself? The following article may be of some help, especially with inflation heating up.




Jul 15 2008 11:56AM

Can Anything Stop It?

For weeks, I’ve been doing talk-radio interviews to help me sell my book, How to Prosper During the Coming Bad Years in the 21st Century. It’s déjà vu all over again, and I’m enjoying success.

But often I’ve been asked: “What advice would you give to the presidential candidates to head off the coming hyperinflationary depression?”

My answer is two-fold:

“I would tell them to stop lying to us. They are all making promises no president can keep. Our president is not an emperor or an absolute ruler; many promises being made can only be kept by Congress. No president can keep all those promises, and in many cases, even he if could, he shouldn’t.”


“I’m not in the business of curing national problems; I’m not smart enough to do that. I’m trying to help middle-class Americans who aren’t economists and are less concerned with solving the national problems than protecting themselves. My role is to help them know what to do with the money they have. Many of them have never “invested” before, and certainly not on Wall Street. But the average American is making investment decisions whether he knows it or not.”
We all have earned a certain amount of money by performing our jobs. We have to decide what to do with that money, so my advice is two-fold:

It is defensive. The real problem is not a depression like the 30s coming back. That’s not likely. That depression was deflationary in nature. 25 percent of the people were out of work and had no income, but you could buy a loaf of bread for a nickel. In the inflation we face, the cost of a loaf of bread will be measured in dollars, perhaps many of them. It’s a different problem entirely. We face runaway inflation, which has already started. My job is to teach you how to cope with the fact that during hyperinflation, commerce becomes undependable. Every store depends on trucks which roll up to their back doors every day and restock the shelves which were attacked by buyers the day before.

In an inflationary environment, the cost of fuel soars. Independent truckers, especially, cannot afford to drive their trucks because of the cost of fuel. Strikes become endemic. Although there will always be some commerce, it will not be as dependable as you would like. You may not be able to buy what you want when you want it, at a price you can afford.

My defensive advice is really simple; when you buy anything, don’t just buy one. Buy five or six for storage. You will pay today’s prices and consume them at tomorrow’s higher prices. That’s a fine investment.

The storage program is described in detail in my new book (you can buy it on my website www.rufftimes.com or at www.amazon.com). It doesn’t require some kind of national calamity to make sense, but we will have a national calamity – hyperinflation.

When you have cash to invest, don’t invest in anything denominated in dollars because dollars will become worth less and less (including most stocks, bonds and cash).
The dollar is supposed to be a means of exchange and a store of value. It is still a means of exchange and will continue to be for some time, but it has long ago ceased to be a store of value.

One common question from the radio hosts has been “what proof do you have that you are right about a runaway inflation?”

Haven’t you been looking? It’s all around you! It’s already started. Look at the price of gasoline, wheat and corn. Eggs are up 30 percent. The major factor in the increase of a barrel of oil is not that oil is becoming scarce or more valuable. There is enough oil in the United States to meet demands for the next 60 years. There is more oil in the shale in Utah and Colorado than there is in Saudi Arabia. There is no real actual shortage, although it is a function of price and politics.

As oil becomes more expensive, it becomes more useful to consider the oil shale in the Rockies. It is approaching a price where exploiting oil shale is profitable. We know the oil is there.

What causes the increase in the oil price? Inflation, pure and simple. Oil is denominated in dollars, and the value of a dollar is shrinking, so producers want more dollars for a barrel of oil. The oil price simply reflects of the decreasing value of the dollar.

Oil is not the only sensitive indicator of the value of the dollar. The dollar is now in its twilight years; it is rapidly diminishing in value. You once could buy the best suit of clothes in town with two pairs of pants from the best tailor around, for one American gold piece. You can still buy the best suit of clothes with two pairs of pants from the best tailor in town with the value of one American gold piece. The price of gold also reflects the loss of value in the dollar.

There are really two things to watch, the price of oil and the prices of gold and silver.

Will Rogers once said, “Invest in inflation; it’s the only thing that’s going up.” That’s pretty funny, but it is also a profound truth. There are ways to invest in inflation. Stop buying most investments which are denominated in dollars. The stock market is denominated in dollars, although certain stocks are the same as investing in inflation.

I like uranium stocks because we will be building many nuclear plants, and there is only half enough uranium above ground to fuel them, so Uranium Mining Stocks will do very well over the years.

I like Oil Service Stocks – companies that build and service oil rigs.

I like Mining Stocks, not just for gold and silver, but for basic metals like copper because of the soaring demands of an exploding population in China and India which will lead to more and more construction. They will need raw materials. So we are now in an age of basic raw materials, and we must look beyond America to see what’s happening in the rest of the world.

Doing these interviews has caused me to think far more broadly about the roots of the problems we face, especially if it is denominated in shrinking dollars.

It’s very simple. You should get rid of your dollars by investing in inflation. What is the alternative? Not foreign currencies, which is what Wall Street would like you to do, because inflation is contagious and will affect every currency in the world. You must base your future portfolio in gold and silver and their derivatives because the world is changing; the lead article in this newsletter explains how you have to make occasional market changes in how you approach these metals.

The fundamentals are changing, and your outlook must change also. Hidden behind these problems is a glowing opportunity. Perhaps once in a lifetime we face a change as fundamental as this, allowing us to invest early in the game and turn small amounts of paper dollars into genuine wealth. That is what The Ruff Times is devoted to.

The Collapse of the Dollar?

I’ve received several emails and letters from subscribers asking “what will happen to gold and silver denominated in dollars if there is a collapse of the dollar and it becomes worthless.”

The term worthless is a combination of two words – “worth” and “less.” I’m of the opinion that the dollar will not become worthless, it will just become worth less. If we have runaway inflation, the dollar still exists and has some value, it just won’t have as much value as it has now, and it will take more dollars to buy stuff.

Currency is supposed to be a means of exchange and a store of value. The dollar today is a means of exchange and will continue to be a means of exchange as long as it is in existence. But it has ceased to be a store of value. Consequently, this argues that one of the worst long-term holdings is cash in the bank. It sounds prudent to have a lot of cash, but that assumes that the dollar is stable and continues to maintain its value. That is not the case now and will be the case less and less as years go on.

So gold and silver will retain their value. Denominated in dollars the nominal value will multiply many times over.

A similar question is, “what will happen to gold and silver if the stock market collapses.”

The price of gold and silver has nothing to do with the stock market. It is an international phenomenon. If the dollar becomes useless as an everyday currency, you can bet that gold and silver will become valuable as currency. It has happened several times throughout history, ever since the invention of the printing press. When a currency becomes less valuable, gold and silver becomes more valuable.

I remember during the metals’ bull market of the 1970s when we were worried about gas rising to $1.50 a gallon, some enterprising gas stations put up signs selling gas for a dime a gallon. Of course, they wanted pre-1964, 90-percent silver dimes which had value in excess of a gallon of gas. If you were smart, you didn’t fall for it. You were better off keeping the coins to yourself.

Let’s make sure we don’t throw words around carelessly, like “worthless.” I am not suggesting the dollar will become “worthless;” it will become worth less in terms of its utility in buying every-day commodities.

The value of the dollar is measured in two ways:

its value relative to foreign currencies like, for example, it will cost you considerably more to go to Europe because the Euro has increased in value relative to the dollar, and everything will be more expensive;
and
It is also a measure of what the dollar will buy in America, which is an entirely different matter. In either case, gold and silver are historically the best answers.
By Howard Ruff
The Ruff Times
 By bluejay

07/11/2008  11:20AM

Gold $960.90 +$14.50
Silver $18.74 +$.45
Gold/Silver Ratio 51.13
Gold/XAU Ratio 4.93

Rick

I went down the driveway this morning to retrieve our morning paper(The Press Democrat out of Santa Rosa, California) and read on the front page, "It's A Bear Market Out There" superimposed on a chart showing a drop-off.

The fact of the matter is the paper, owned by the New York Times, is using a misnomer for an event that has not happened.

The Dow Jones Averages(DOW have been in a bull market since 1983 and that has not changed, at least not yet. I find that newspapers and TV commentators do an inferior job of reporting the facts as they relate to markets on a consistent basis.

How many times have I mentioned here that papers around the country have been telling their readers that gold was a bad investment over the years? Sure, the papers are influenced by our keepers but we have to know better what the markets are saying.

The DOW is off today over 200 points at just above 11,000. I would suspect that the "Plunge Protection Team" will try and steady things at or around the 11,000 level.

In 2002 the bull market almost ended but it righted itself around 7,000 and continued moving higher.

Personally, I am letting fundamentals weight 50% with my thinking in relation to a bear market analysis of the current DOW with all the debt problems and the failing contra-sides of the OTC derivatives. Basically, to my mind, we are already in a bear market without technical proof being presented just because of all the financial problems that currently exist. If you want to fail, just keep piling on the debt.

If the DOW goes below 10,700 and stays below that level for a period of weeks, then we are officially in a bear market and IF the 10,000 area fails later, WATCH OUT!

I do not own one share of anything outside of my precious metals and precious metal related companies and I sleep well at night.
 By bluejay

07/10/2008  1:46PM

Rick

The big picture of the primary bull trend in any market gives you the confidence to buy into, sometimes, severe sell-offs.

The reverse of this is to sell into rallies in a bear market. The Dow Jones Averages(DOW) are currently in an intermediate bear market. I think I mentioned the entry to this event in my observations somewhere page on these pages.

Whether the DOW enters a primary bear market which it may or may not, remains to be seen. Within stock groups in the general market some financials are in a primary bear market and are absolutely getting pounded.This is what people need to be on the watch for to avoid the destruction of their wealth.

Just pull up some on them at bigcharts.com and see the historical decimation. A few are MER, BAC and FNM along with others.

Never be afraid to buy a sell-off in a primary bull market. Learn to control your fear emotion.
 By Rick

07/07/2008  7:38PM

One more thing....when we read about gold being lower at $914+/oz it is time to remember the big bigger picture, eh?
 By Rick

07/07/2008  7:10PM

Blue-jay, thanks. Perhaps I'll become 1/3 of a winner if I only jump 1/3 of the way from securities into gold...later to find out how I should have perhaps been 4/3 in gold or not.

Long ago I took your advice for accessing kitco.com and it is my very first go-to page. Everyone reading this should do the same.

I'll take your recent advice and inform myself further with your direction.

Thanks, Bluejay
 By bluejay

07/07/2008  8:58AM

Rick

I have been thinking about your question this morning.

Jim Sinclair once said that if anything happened to him he would recommend his children turn over their funds to Monty Guild to watch for them at Guild Investments in West Los Angeles. Monty lives in Malibu so he gets a good amount of fresh salt air which is, in my opinion, quite conducive to reasonable thinking.

If you want to go it alone on your decision making concerning gold I would strongly suggest following Alf Field's analysis of the trading cycles of gold.

Alf knows his business and is almost, in my opinion in a league by himself, excluding Sinclair and a few others. You can access his free commentaries at kitco.com concerning how he does it in the commentaries section when they appear. If you check there now I believe there is current commentary available.

Gold is lower today at $916.30 and has made its intermediate bottom already at $845 or so and reamins in a major bull market. No better time to buy it than on sell-offs.

Hope this will be productive for you as Americans are in store for one hell of a shock with their money and wealth in the many months to follow.
 By bluejay

07/06/2008  8:50PM

Rick

Harry Schultz just sent out an alert warning people to be prepared for the coming international financial storm.

I believe he said, "Get out of U.S. dollars. Put 50% of your funds into governement bonds, not the U.S., but other big countries." I believe he said the Swiss Franc is the better choice.

"Put about 50% into various gold futures and the rest into good senior gold companies and the rest into oil and special situations."

I found it odd that he didn't mention gold coins. I guess the British government going into safety deposit boxes without the owners permission spooked him. What happens first over there usually finds it way over here.

I have lately been reading some business writers who are very concerned with the banks and the investment banks. Saying that we are approaching a time that not everyone will be bailed out.

Everything, excluding our home and some debt on it, that we own is heavily weighed to gold and silver and the related companies that are producing the metals or are looking for them.

Good luck my friend.
 By Rick

07/05/2008  8:17PM

BlueJay...I've been averaging into a down market with mutual funds. More shares in the broad spectrum while the value is lower; latent effect a better value if/when they do.

Now it's become an "if" instead of a "when."

I've toyed with the idea of selling low (not high) to instead buy gold. Or gold stocks; against all instinct since selling low is generally just plain dumb and results in losing money.

All sound rules point to holding an existing equity position (hold the nose) all the way through a downturn, since so far history shows how the long-term patient and wise holder of main stream securities ends up with a rebound, instead of a potential loss by bolting.

My gut says, "Hey gut? Buy gold."

My bank account, and portfolio says, "Woah, not here, we're going to withstand and with pride will rebound the temptation."

What, in your opinion, (and if Sinclair had a voice with your answer,) figuring the gold picture-to-immerge, would someone like me do?
 By bluejay

07/04/2008  5:35PM

The key to making money in stocks is not to get scared out of them. --Peter Lynch




Posted On: Friday, July 04, 2008, 7:25:00 PM EST

In The News Today

Author: Jim Sinclair










Dear Friends,

The problems out there are incalculable. Both the Fed and Treasury know this. That is why we got the show and tell the day before the ECB raised rates.

The damn OTC derivatives gang has killed us all to some degree. Oblivious to the obvious and driven by greed, those criminals are still writing OTC derivatives.

Hang on as the default derivative problem blows sky high when called on to perform.

Could GM be the match that lights the default derivatives fuse? The Financial Big Bang is just around the corner.

Are you prepared?

Regards,
Jim
 By bluejay

07/01/2008  9:40AM

Posted On: Tuesday, July 01, 2008, 11:43:00 AM EST

It Is Now!

Author: Jim Sinclair










Dear Friends,

There are two subjects of extreme importance today.

I sent you an email months ago saying, “This Is It.”

1. I am now telling you, “It Is Now.”

Gold is preparing for an assault not on $1000, but for a brief penetration of $1200.
Violent chopping will occur, then off it goes to $1650.

This violent chop we have been living in here and now will resolve itself very soon and the take will be seen by history as having occurred in this last formation HERE AND NOW.

2. Where your juniors are concerned please give equal attention to the fundamentals before you make any decision. When beaten down, as they have been, think about gold at $1200 and $1650 coming sooner than anyone expected.

Call the company and respectfully demand to speak to management, not an IR officer. If management is in the country but will not speak to you, put that in the debit column. Allow time for a call back as many other investor may be doing the same thing.

The questions are simple. Property, finances and costs are the subjects you approach.

As an example, a high cost mining company in Ghana just experienced an increased production cost per ounce of gold as a byproduct of increased electrical costs in the country. Before you push the panic button the question to the company is “What are your total costs per ounce, not cash cost?” Once you have that answer think about gold at $1650.

I will discuss the “why” of all this on www.JSMineset.com this evening.

Respectfully yours,
Jim
 By bluejay

06/15/2008  10:44PM

Jun 3 2008 10:22AM

Gold

What is the biggest mistake you can make with your money in 2008? Ignoring gold, silver and their related inflation hedges can lose you more money than all the other mistakes you can make put together, except for playing the roulette table in Vegas.

Once in a lifetime, there comes a chance to turn a relatively small amount of money into a fortune, and this is one of them. We are in the early stages of a massive multi-year bull market in the metals. The supply-demand situation beggars belief. This is as close to riskless as anything I have ever recommended in 31 years of publishing The Ruff Times. You can put a list of mining stocks on the wall, throw a dart at them, invest in the holes and make a lot of money, in effect creating your personal mutual fund. When the wind blows, even the turkeys fly. Of course you can make lot more money picking the sheep from the goats, and that is what the Ruff Times is for, separating the biggest winners from the holes in the ground surrounded by liars.

A word of caution: all my words of advice are for the long term only. In the short term, gold and silver can do anything, go anywhere. In the last bull market of the ‘70s-‘80s gold went from $120 to $850, but there were discouraging retreats of as much as 30% several times along the way. It was attacked by speculators, central banks, and even Uncle Sam through Jimmy Carter. But gold and silver prevailed, even though chickens bailed out from time to time. I was new to the advice business back then, and even I got scared out once for a little while.

Actually, this is “déjà vu all over again,” as said the master of malapropism, Yogi Berra. It’s an eerie repeat of the 1970s, only more so. All the same factors that drove that historic 1970s bull market are back, only a lot more so; an explosion of money creation by the Federal Reserve that is so great they have even stopped publishing a monthly report on M-3, the most trustworthy measure of changes in the money supply. I guess they no longer know, or don’t want you to know, the embarrassing numbers.

Actually, it’s worse than that. Did you know that the phrase “printing press” no longer means much when it comes to money? Actually, less than five percent of the money is actually minted, printed or coined! The rest of it is in cyberspace, created at the Federal Reserve, or by commercial banks. The amount is beyond comprehension. This process is called “monetary inflation,” and that is what ultimately drives price inflation and drives gold and silver. The more money is created, the higher go the precious metals.

Also, they react to the prospect of war, or actual war itself, and America has never been more threatened by war that will affect us at home than we are now, by terrorism and nuclear proliferation by rogue nations.

History tells us that ever since the invention of Guttenberg’s movable type press, and the subsequent development of paper currency. The average time each currency lasts is 50 to 75 years before the world is littered in dead paper currencies, and until we invent a new one, gold and silver coins reign supreme, but not before they soar to the moon in value. There is not a time in human history when gold and silver have not been considered real wealth and instinctively turned to when paper decorated with ink has become so much confetti.

How long will it take us, and are we near the brink? No one knows. We have become immensely sophisticated at postponing the inevitable. It might be five years, ten years, or twenty-five or fifty years before the inevitable drama plays out. But play out it will.

In the meantime, we will make a bundle in the metals and their derivatives. In fact, they will be a new way for the middle class to in effect print money, and in dollar terms, the metals are going to the moon. $2500 gold or $125 silver anyone? And what about 500% to 2000% profits in the next few years. That is written in cement over the next few years – or in gold or silver.

By Howard Ruff
The Ruff Times
 By bluejay

04/22/2008  9:25AM

Rick

The dollar is 71.25 this morning. It is making a five week low and in position to continue lower in the days ahead.

Your question concerning its correction appears directed at its upward correction. My opinion of its recent strength is feible at best.

Remember, according to James Sinclair, the dollar will hit 52 in the months ahead which will support a gold price of, at least, $1,650. Today's gold price is $923.50.
 By Rick

04/18/2008  7:09AM

Hey Bluejay, what do you make of the "correction" in the dollar?
 By bluejay

04/10/2008  10:39PM

John Maynard Keyens, in his 1924 tome entitled "Monetary Reform" said,

The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
 By martin newkom

04/09/2008  12:29PM

The only viable form of an
investment that resembles a
derivative in my book is a
Bankers Acceptance which is
listed in the "Money Rates"
section of the WSJ. Nowdays
only the biggest and "best"
bank customers can get them.
b

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