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Monday, October 11, 2010

[T.S.R:15941] Gold-The Only Sustainable, Desirable Bubble


There are three bubbles building up right now – the Australian housing bubble, the US bond market bubble, and the gold bubble.

Only one of those is sustainable, and as an investor, only one of them is desirable. That's the gold bubble.

The fact is, when either one of the Australian housing bubble or the US bond market bubble bursts, the knock-on effect will likely see the price of gold soar even further than you've seen so far.

If you're like George Soros and you think the gold price is high, just wait: in Aussie dollar terms you could see the price of gold hit $2,000 or $3,000 or even higher.

And it could happen before the end of next year.

But heck, what do I know?
 
You would have read about gold many times in recent years. We make no secret of the fact that we're bullish on gold and that the shiny metal should be a part of any serious investor's portfolio.

And I don't mean a tiny 1% or 2% of your portfolio either. I'm talking about 10%, 20% or more.

But here's the thing. I don't always look at physical gold investing as the means to get rich. No, I look at it in the same way as I look at an insurance policy.

I buy and hold gold because of what central bankers are doing to the value of money. The fact is, the creation of money from thin air has a devastating impact on your wealth. It's devastating because for the most part you don't realise it's happening.

The gradual increase in money created by central bankers means that the money in your pocket and in your bank account is worth less today than it was yesterday. And less this year than it was last year.

That's why you need to have an exposure to gold. Not just because you want to profit from it - more on that in a moment, but because it can protect your other investments when the current financial system as we know it collapses.

But that's just my view on the value of gold. And maybe you don't agree with me.

However, one thing's for sure, if you haven't seriously considered about investing in gold, or if you currently hold the stuff but don't know what's going to happen to the gold price next, then you need to do something about it.

That's why I'd like to tell you about The 2010 Gold Symposium being held at the Amora Jamison Hotel in Sydney on Monday 8th to Wednesday 10th November.

Let me fill you in on who and what you can expect to hear at this three day event:
  • Dan Denning, has been writing on gold and commodity markets for fifteen years. In 2005 when gold was trading for under $600 per ounce Dan wrote: "Now gold has crossed the Rhine...beginning its inevitable conquest of paper currencies and its inexorable advance toward monetary hegemony. Look for bigger and stronger gains ahead..."

  • My old pal Steve Keen will also be there. He's the author of Debunking Economics and creator of the highly effective "Financial Instability Hypothesis". He's known as one of a tiny few Aussie economists who cogently warned of the current crisis. You'll want to hear his big picture for 2011.
 
Plus, you'll hear from a bunch of other gold experts. Experts who eat and breathe the stuff:
  • Jim Dines is one of the most famous gold bugs on the planet. Moneyline called Mr. Dines, "one of the most extraordinary men in America today; a man with a long and glorious reputation in being one of the first people to call the real turns in the strategic moves that happened in our marketplaces over the years."

  • Richard Karn writes the superb Emerging Trends Report out of Alaska. He's 7 months into a 2-year circumnavigation of Australia investigating precious and specialty metal projects. He'll be sharing some recommendations in Sydney.

  • Dr David Evans, founder of GoldNerds, applies his Stanford PhD in statistics to analysing gold stocks. David is a good friend, a long-time reader of the Daily Reckoning, and an excellent analyst of the Australian gold scene.

  • Brett Le Brocque of Australian Bullion Company will give you the historical background currency vs money (there is a difference) and what the means in the current gold cycle.
 
If that isn't enough to get you hooked then all I can say is that you're a pretty tough customer.

I mean, gold has done pretty well as an investment since 2005. You'd have more than doubled your money – in Australian dollar terms – if you'd bought gold then and held it until today:


 
5 Year Gold Price

 
That's pretty good. Especially compared to the barely breakeven return you would have got from the stock market:
 


 
Stock Market
Source: CMC Markets Stockbroking

But if you're more interested in taking a punt on the gold market rather than being in it for economic reasons, then you'll have the chance to listen to Barry Dawes – no relation to our Slipstream Trader Murray – Managing Director of Martin Place Securities.
 

 
Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
 
Nothing in this article is, or should be construed as, investment advice.
 
 
 

 
 


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