Quote of the Month - “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” Ludwig von Mises
With both Gold and Silver falling throughout the month, January 2010 proved to be a time that was much needed in the metals industry, a month for dealers to catch up with a market that has been raging almost uncontrollably for nearly a decade now. We needed the rest!
Now that January is past us, and precious metals like Gold and Silver seem poised for another run, it is important to take some time before the run up, not after, to see what your investment plan is going to be for 2010 and which portion you plan on allocating to your Gold and Silver purchases.
Buy the Dips!
It’s amazing to us here in the industry how swayed investors are by the daily and/or weekly changes in Gold and Silver. It seems as if that when Gold and Silver are trailblazing to higher levels we hardly have time to answer call ins, but when Gold and Silver fall, it gets really quite, really quickly. In reality, it should be exactly the opposite.
In January Gold corrected about 7% and Silver corrected more than 10%. Its times like these when you should be buying and taking advantage of an asset that is clearly a bargain at current levels. Don’t follow the herd and wait for prices to go back up before you buy, break away from that mentality, and your percentage gained will prove to be much better.
The Evidence is Clear
Below you will find the articles of the month for the month of January 2010. In them you will find that the SEC recently ruled that your legal right to redeem your money market funds can be denied – make sure to read that again – your legal right to redeem your money market funds can be denied!
You will also see that in December of 2009 the United States was within three days of defaulting on its foreign debt and that if Congress had not called a special session to raise the debt limit, it would have been highly likely that the United States credit rating could have been downgraded producing disastrous results. December was round one, many are expecting that Congress will again have to raise the debt limits, possibly as soon as March. We also included two powerful commentaries on Silver that is a must read for anyone who either doesn’t have any Silver, or for someone who wishes to add more.
The collage of articles below also includes what I feel as the most important that I have ever sent out in the ‘Best of the Austin Report’. The article is entitled – A Global Fiasco is brewing in Japan. The article illustrates the ever growing deficits of Japan and the United States, and how, if left unchecked, they could lead to hyperinflation, spelling disaster for the world economy that is already on the brink. The author refers to a historical model called “Monetary Regimes and Inflation” aka “The Bernholz Range” and in it he describes how there have only been 5 times in history that budget deficits compared to government expenditures have reached the levels recently seen in the United States and Japan, and each of the 5 instances that this happened in history – a savings wrecking hyperinflationary period followed. So, to be clear, historically speaking, countries that ran budget deficits comparable to those currently seen in the United States and Japan, 100% of the time, without exception, saw their currencies, livelihoods and savings utterly destroyed through hyperinflation. Why would we be so intellectually lazy to think that this time it’s going to be any different? Grab a cup of coffee, have a seat, and make sure that you read “A Global Fiasco is Brewing in Japan.”
Alarmists or Realists? You be the Judge.
In closing, I want to make one point clear – we at the Austin Report are in the business of selling Gold, so one could almost expect that we would want to harp on issues like inflation and the like. However, the truth is exactly the opposite. I for one do not enjoy talking or writing about hyperinflation. Why? Because it makes us sound like alarmists. In fact, had it not been mentioned in the press by so many prominent economists we probably would have never mentioned the term hyperinflation at all, but I want to leave you with this one thought:
We have a client who is a hedge fund owner and successful billionaire, a client of such importance that he was testifying on Capitol Hill recently in a banking committee hearing. At the first of the year, his Gold Specialist, who happens to be our Chief Operating Officer, sent him an email asking him what his outlook was for 2010. His response was short and to the point – HYPERINFLATION 12-18 MONTHS!
Contrary to the conventional wisdom in Washington, we cannot spend ourselves to prosperity. Do yourselves a favor and prepare for what is and what could be to come – it might be worse than any of us ever imagined. Make sure to call your representatives so that he/she can review your holdings and make a recommendation that fits into your game plan.
And don’t forget the wise words from Ludwig Von Mises - “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
Thanks as always for your business, I look forward to your calls and emails.
Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. This sites content shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author.
Showing posts with label Goldvestor Reports. Show all posts
Showing posts with label Goldvestor Reports. Show all posts
Wednesday, February 3, 2010
Sunday, January 3, 2010
GoldVestor Report - January 2010
Hello to all! We hope you had an excellent holiday season! Now that 2009 is behind us with a new decade ahead, it becomes important to reflect on where we have been, where we are, and where we are headed. Over the last decade, Gold and Silver have proven to be the best asset class to own, bar none. Since the year 2000 Gold and Silver have outperformed stocks, bonds, money markets, T-Bills, and most any other asset class on the face of the planet – we have reason to believe that this trend will not only continue, but that it will get stronger.
On Monday, January 3rd 2000, Gold closed at $288/oz. Silver closed at $5.30/oz. on the same day. Fast forward to the year 2010 and you will see that Gold closed at $1118.70 while Silver closed at $17.50. Had you invested $100,000 in Gold on January 3rd, 2000, today its value would be $387,946. Had you done the same with Silver, today’s value of your 100K original investment would be worth $330,188.
As we all know, hindsight is 20/20, but based on our research and others, the amazing gains seen in the precious metals markets during the NEXT decade, could make the 300% gains during the last decade seem negligible at best.
Predictions, Predictions, Predictions
Where do these bold projections come from? Well, where do we begin? Let’s start with Goldman Sachs, Barrick Gold, Morgan Stanley, Business Insiders, Henry Paulson, Central Bankers, Respected Statisticians, and others. Many others.
As reported on the George Washington Blog:
Goldman Sachs is predicting that gold will shoot past $1,400/ounce by 2011
The world's biggest gold producer - Barrick - says that the relatively easy-to-reach gold supplies are gone, and so supplies are getting more and more expensive to locate and extract:
Aaron Regent, president of the Canadian gold giant [Barrick], said that global output has been falling by roughly 1m ounces a year since the start of the decade. Total mine supply has dropped by 10pc as ore quality erodes, implying that the roaring bull market of the last eight years may have further to run.
"There is a strong case to be made that we are already at 'peak gold'," he told The Daily Telegraph at the RBC's annual gold conference in London.
"Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore," he said.
The Perfect Storm
We started stressing that the supply and demand fundamentals for Gold were stronger than ever in June of 2009. By January 2010 it was announced that for the first time in 20 years that Central Bankers will become net BUYERS of Gold not net sellers. Remember, the two main sources of Gold supply in the world are Gold mines, and Central Banks. Global mining output has fallen by 1 Million ounces per year over the last 10 years, leading many to proclaim that Gold production has peaked and that the mining industry will never return to the levels of productions witnessed in previous years.
On top of this, the financial carnage that we have experienced and have yet to experience, should continue to increase demand far into the next decade, supporting even higher prices for years to come. Remember, less than 1% of the world’s population even owns a single ounce of Gold for investment purposes. Should 1% of the world’s financial assets decide to reallocate their holdings into Gold, it would consume the entire worlds mining production for 75 years! Are you starting to get the picture? Can you see the perfect storm?
Consider the article below: “Central Banks In Rising Nations Bulk Up On Gold, Fueling Prices”
If You Own Stocks – Consider Selling Them ASAP!
Morgan Stanley is reporting that 2010 will be brutal for stocks, pointing out that tight monetary policies and other cycles that bode ill for stocks are right around the corner. Morgan Stanley isn’t alone in this assumption as recent insider seller to buyer ratio spiked to 82:1, meaning that for every 82 shares of stock sold by insiders, there was only 1 buyer. In dollar terms, insiders sold over $950 MILLION worth of stocks, while only buying 11.6 million dollars worth. Does Morgan Stanley and other insiders know something that you don’t? Now is the time to prepare for the inevitable, if 2010 is going to be disastrous for stocks, odds are, it will be fantastic for Precious Metals.
Morgan Stanley and Business Insiders aren’t the only ones warning you. John Williams, a respected statistician who runs the popular website shadowstats.com, portrays an even bleaker picture for 2010 and beyond:
“The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression. Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment. The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar. The results of those efforts are being seen in tentative selling pressures against the U.S. currency and in the rallying price of gold.”
John Williams may sound like an alarmist, but he speaks from experience. John has been tracking the manipulation of Government Data and reports dealing with Unemployment Figures, Inflation Figures, GDP, and other falsified data released by the Government since the 1970’s. You see, John Williams believes in the inevitable, that the U.S. will eventually face a currency crisis rivaling that of Zimbabwe and the Weimar Republic. The key to this story though, is that his prognosis has changed. He originally forecasted that the coming currency collapse would happen by 2018, his revised outlook though, says that we are headed for Hyperinflation as soon as next year. He goes on to warn:
“The intensifying economic and solvency crises, and the responses to both by the U.S. government and the Federal Reserve in the last two years, have exacerbated the government's solvency issues and moved forward my timing estimation for the hyperinflation to the next five years, from the 2010 to 2018 timing range estimated in the prior report. The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency. Accordingly, risks are particularly high of the hyperinflation crisis breaking within the next year.” Adding that – “The U.S. has no way of avoiding a financial Armageddon.”
Whether or not “financial Armageddon” comes this year, next year, or in 10 years, this eventuality seems to be a certainty. Why? Because not a single fiat currency, which describes a currency backed by absolutely nothing except the faith of a Government to pay it back (think U.S. Dollar), has ever survived for more than 50 years. The United States went totally fiat in 1971 under President Nixon, and since then the value of the dollar has precipitously fallen. Consider Gold and Silver as your protection against a devaluing dollar. To steal a quote from James Grant who runs the website interest rate observer - "Gold is a speculation. But it is a speculation on a certainty: the debasement of the currency."
Now is the time to protect yourself from these eventualities. We would urge you to reconsider your holdings and consider selling stocks, bonds and other assets so that you can convert it into Gold and/or Silver. Heed the warnings from John Williams, Morgan Stanley, Barrick Gold and Billionaire Hank Paulson, and take the necessary steps to prepare yourself for what is to come.
What is your investment game plan for 2010 and beyond? We would like to know. Take some time out of your busy schedules to review your investment portfolios and give us a call. You will be glad that you did. I have included a great way to get your investment plans for 2010 started. Attached to this email is the promotional flyer for one of the hottest products for 2009 - European Gold Coins. In fact, I think it is safe to say that we sold more Euro Gold in 2009 than we did in the 5 years from 2000-2005. Review the attached offer and let me know where you fit in. Don’t see anything you like? Give us a call to discuss your situation and together we can come up with a game plan that works best for you. Also, don’t forget Silver. Silver outperformed Gold in 2009, we believe it can do so in 2010 as well.
Thanks as always for your business. I look forward to all of your calls and emails!
Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. This sites content shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author.
On Monday, January 3rd 2000, Gold closed at $288/oz. Silver closed at $5.30/oz. on the same day. Fast forward to the year 2010 and you will see that Gold closed at $1118.70 while Silver closed at $17.50. Had you invested $100,000 in Gold on January 3rd, 2000, today its value would be $387,946. Had you done the same with Silver, today’s value of your 100K original investment would be worth $330,188.
As we all know, hindsight is 20/20, but based on our research and others, the amazing gains seen in the precious metals markets during the NEXT decade, could make the 300% gains during the last decade seem negligible at best.
Predictions, Predictions, Predictions
Where do these bold projections come from? Well, where do we begin? Let’s start with Goldman Sachs, Barrick Gold, Morgan Stanley, Business Insiders, Henry Paulson, Central Bankers, Respected Statisticians, and others. Many others.
As reported on the George Washington Blog:
Goldman Sachs is predicting that gold will shoot past $1,400/ounce by 2011
The world's biggest gold producer - Barrick - says that the relatively easy-to-reach gold supplies are gone, and so supplies are getting more and more expensive to locate and extract:
Aaron Regent, president of the Canadian gold giant [Barrick], said that global output has been falling by roughly 1m ounces a year since the start of the decade. Total mine supply has dropped by 10pc as ore quality erodes, implying that the roaring bull market of the last eight years may have further to run.
"There is a strong case to be made that we are already at 'peak gold'," he told The Daily Telegraph at the RBC's annual gold conference in London.
"Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore," he said.
The Perfect Storm
We started stressing that the supply and demand fundamentals for Gold were stronger than ever in June of 2009. By January 2010 it was announced that for the first time in 20 years that Central Bankers will become net BUYERS of Gold not net sellers. Remember, the two main sources of Gold supply in the world are Gold mines, and Central Banks. Global mining output has fallen by 1 Million ounces per year over the last 10 years, leading many to proclaim that Gold production has peaked and that the mining industry will never return to the levels of productions witnessed in previous years.
On top of this, the financial carnage that we have experienced and have yet to experience, should continue to increase demand far into the next decade, supporting even higher prices for years to come. Remember, less than 1% of the world’s population even owns a single ounce of Gold for investment purposes. Should 1% of the world’s financial assets decide to reallocate their holdings into Gold, it would consume the entire worlds mining production for 75 years! Are you starting to get the picture? Can you see the perfect storm?
Consider the article below: “Central Banks In Rising Nations Bulk Up On Gold, Fueling Prices”
If You Own Stocks – Consider Selling Them ASAP!
Morgan Stanley is reporting that 2010 will be brutal for stocks, pointing out that tight monetary policies and other cycles that bode ill for stocks are right around the corner. Morgan Stanley isn’t alone in this assumption as recent insider seller to buyer ratio spiked to 82:1, meaning that for every 82 shares of stock sold by insiders, there was only 1 buyer. In dollar terms, insiders sold over $950 MILLION worth of stocks, while only buying 11.6 million dollars worth. Does Morgan Stanley and other insiders know something that you don’t? Now is the time to prepare for the inevitable, if 2010 is going to be disastrous for stocks, odds are, it will be fantastic for Precious Metals.
Morgan Stanley and Business Insiders aren’t the only ones warning you. John Williams, a respected statistician who runs the popular website shadowstats.com, portrays an even bleaker picture for 2010 and beyond:
“The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression. Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment. The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar. The results of those efforts are being seen in tentative selling pressures against the U.S. currency and in the rallying price of gold.”
John Williams may sound like an alarmist, but he speaks from experience. John has been tracking the manipulation of Government Data and reports dealing with Unemployment Figures, Inflation Figures, GDP, and other falsified data released by the Government since the 1970’s. You see, John Williams believes in the inevitable, that the U.S. will eventually face a currency crisis rivaling that of Zimbabwe and the Weimar Republic. The key to this story though, is that his prognosis has changed. He originally forecasted that the coming currency collapse would happen by 2018, his revised outlook though, says that we are headed for Hyperinflation as soon as next year. He goes on to warn:
“The intensifying economic and solvency crises, and the responses to both by the U.S. government and the Federal Reserve in the last two years, have exacerbated the government's solvency issues and moved forward my timing estimation for the hyperinflation to the next five years, from the 2010 to 2018 timing range estimated in the prior report. The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency. Accordingly, risks are particularly high of the hyperinflation crisis breaking within the next year.” Adding that – “The U.S. has no way of avoiding a financial Armageddon.”
Whether or not “financial Armageddon” comes this year, next year, or in 10 years, this eventuality seems to be a certainty. Why? Because not a single fiat currency, which describes a currency backed by absolutely nothing except the faith of a Government to pay it back (think U.S. Dollar), has ever survived for more than 50 years. The United States went totally fiat in 1971 under President Nixon, and since then the value of the dollar has precipitously fallen. Consider Gold and Silver as your protection against a devaluing dollar. To steal a quote from James Grant who runs the website interest rate observer - "Gold is a speculation. But it is a speculation on a certainty: the debasement of the currency."
Now is the time to protect yourself from these eventualities. We would urge you to reconsider your holdings and consider selling stocks, bonds and other assets so that you can convert it into Gold and/or Silver. Heed the warnings from John Williams, Morgan Stanley, Barrick Gold and Billionaire Hank Paulson, and take the necessary steps to prepare yourself for what is to come.
What is your investment game plan for 2010 and beyond? We would like to know. Take some time out of your busy schedules to review your investment portfolios and give us a call. You will be glad that you did. I have included a great way to get your investment plans for 2010 started. Attached to this email is the promotional flyer for one of the hottest products for 2009 - European Gold Coins. In fact, I think it is safe to say that we sold more Euro Gold in 2009 than we did in the 5 years from 2000-2005. Review the attached offer and let me know where you fit in. Don’t see anything you like? Give us a call to discuss your situation and together we can come up with a game plan that works best for you. Also, don’t forget Silver. Silver outperformed Gold in 2009, we believe it can do so in 2010 as well.
Thanks as always for your business. I look forward to all of your calls and emails!
Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. This sites content shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author.