Five Reasons Gold Is Set to Soar Higher

Gold Reason No. 1: Don’t Ignore Inflation: The stock market panic of 2008 sent commodity and equity prices, which includes the price of oil, falling sharply. That opened up a great debate about whether deflation or inflation would be the end result. Remember, since 2001, under an estimated price inflation of 2.5%, gold managed to go up 400%. The Federal Reserve is expected to keep short-term rates close to zero through 2013 and 2014, leaving the door ajar for more inflation.

To shorten the recession, quantitative easing (massive printing of dollars) blew up the monetary base. Beginning in October 2008, in just four months, the central bank doubled the US money supply, far more than has been done in the nation’s history.

Around the world, central banks have printed an incredible $12 trillion worth of stimulus money, which is robbing us citizens by greatly diminishing the purchasing power of the dollars that already exist, the dollars in our checks. payment and bank accounts.

Most economists agree that [inflation] it will eventually beat deflation.

Gold Reason No. 2: Demand is exploding: The biggest investors (pension funds and hedge funds) are making bigger investments in gold. Your highly paid investment advisors must be telling you [inside Info] the rest of us are not listening?

The popularity and success of exchange-traded funds (ETFs) that invest in and hold gold demonstrates this ‘mainstream trend’. The world’s largest ETF holding 1,100 tonnes of the gold metal, SPDR Gold Trust (NYSE: GLD), is the sixth largest holding account for gold bullion. Investors have never had an easier or faster way to own gold. (via the Internet, on your laptop)

This is not just an American phenomenon. According to the World Gold Council, the global demand for gold increased by 15% from the second quarter to the third quarter last year (2012).

China and India = Growing demand!

With a population of more than 2.5 billion citizens and a deep cultural affection for gold, Asian countries are driving greater global demand in a big way. China encourages its citizens to buy more silver and gold and goes a step further by providing gold-linked checking accounts. Currently, China is neck and neck with India as the world’s largest consumer of gold. A growing middle class whose members are experiencing rapid increases in disposable income is a major factor that is bullish on further raising the price of gold. (continued ‘population expansion’ ensures more gold buyers)

Gold Reason No. 3: Central Banks Are (New) Net Buyers: India’s recent purchase of 200 tonnes of gold from the International Monetary Fund (IMF) was the likely reason for gold to rise above the $1200 level in December 2012. Even more Most important is the big shift that has seen the world’s central banks go from being net sellers to becoming net buyers of gold. It will be the first time in 20 years that banks have become “gold buyers”, as central banks have been net sellers of gold since 1988. More “buyers” equals MORE DEMAND for gold.

Gold Reason No. 4: The Pending Currency Crisis: Portugal, Italy, Greece and Spain -The “PIGS”- are in very bad fiscal shape. They are not the only ones. Iceland is considered near bankrupt. The UK, US and other economies are struggling, barely able to grow their GDP. That grim reality ignited a “crisis of mistrust” regarding fiat currencies in the minds of most citizens and investors.

“Paper money is nothing more than paper and ink, backed by the faith and credit of the issuer.” When investors discover that their faith in the issuer is greatly weakened, the value of the coin falls lower. Another potential trigger to unleash a currency crisis is further downgrades of sovereign debt by rating agencies. Under those conditions, the last store of value, gold, which is the world’s oldest form of money, will soar higher, as both citizens and investors take steps to protect its dwindling purchasing power.

Reason for gold #5: Don’t wait for the mania stage: The gradually building gold bubble driving gold prices to all-time record levels will eventually inflate in three distinct stages. In Stage One, the process begins with currency devaluations that will be driven by growing investment demand. (China and India and their citizens buy up to 100 tons a year!) In Stage Two, gold prices will experience a stratospheric rise repeating the late 1970s over and over again. In stage three, it will be the mania phase, when everyone and their grandmother jump because they see gold running uphill with price escalations. Truly, those investors who got in early (gold around $1,000 an ounce) could make fortunes as the price of gold soars to $5,000 an ounce and higher.

Many economists predict that the $5,000 price will be reached in the third and final phase, if not before. When the price of gold enters the manic phase, as it did in 1977-79, it will act as if it had a jet pack strapped to its back. Today’s market price ($1,200 an ounce) will be dwarfed by the high levels that gold prices will eventually rise to. [below] Remember, the entire world gold industry only has total market value (capitalization)

the total value of Walmart Stores Inc. (NYSE: WMT) (about $200 billion). So when the crowd jumps in (mania phase), most of the “big money” to be made quickly will be from investments in “gold explorer and producer” stocks, where returns of 1,000% could be common, calculated starting at today’s prices ($1,200 for Gold; $20 for Silver).

These demand reasons explain why gold prices are about to go higher from here.

And while I predict that gold will eventually reach the $5,000 range, that leaves plenty of room for investors to profit by entering at current (Dec 2013) levels.

Is it time to make your move?

Everyone should have some gold in their portfolio, regardless of risk tolerance or age. Owning a few physical coins or bars makes economic sense, but it’s a bit tricky to implement within most retirement accounts.

That’s why the ‘explorers and producers’ in the gold sector promise the biggest profits. Production costs generally rise as gold prices rise, while profit margins are expected to expand even faster. Once your friend’s talks go gold, for any of the reasons I described above, gold stocks will erupt and then hit all-time highs, just as they did in 1977-79. [today] When is this likely to happen? In a few years most likely. No one knows for sure with speculative frenzies or bubbles.

When this happens, gold will likely create a new generation of millionaires, possibly some new billionaires. Although the mania stage is several years away, the savvy investor will recognize the importance and potential of investing in gold or silver.

while the prices are lower.

There is little doubt that the current gold price of $1,200 will finally look like an outrageous bargain. [take physical delivery] Our advice is: if you own gold, gold shares, silver or silver shares, hold onto them and buy even more on price dips. In years to come, he will be seen as a hero to his family for his acumen for forward-thinking investing, and he will have a great legacy to leave them. [having it in your own personal possession]

We recommend you

of your gold or silver. That way, you’re guaranteed to “see” it, “keep” it, or show it off to your family members. Owning shares of an ETF that (supposedly) has some gold for you in New York or Switzerland is much less reliable. , as some reports claim, may NOT have as much gold as they claim, which is NOT the same as . Have it shipped directly to your home address or PO Box for your ‘personal’ possession. Right now, at the end of December 2013, gold and silver prices are the lowest in 5 years. This is a fantastic time to buy gold at around $1,200 an ounce and silver at $19.60 an ounce. I just bought a few more of both for my family stash.