James Turk: Gold headed to $8,000?

At a wonderful barbeque this past weekend a close (and very successful) friend of mine expressed his puzzlement at investors' fascination with gold recently.  As he pointed out, it has very little intrinsic value.  Well, maybe.

The thing is, as I tried to point out, is that it is very hard to watch your dollars drop in  value for a decade with no end to government spending in sight.  On top of that, we can never know when the Chinese will pull the plug on their treasury holdings, when the euro will implode overnight, or even what events like these would mean for the dollar.

In the words of James Turk at the 2010 World Mining Investment Conference:

". . . but even as the prediction may seem extreme, to some, the sting in the tail is that he does not see these levels in the gold price, or Dow, as suggesting real increases in wealth. Rather, such an increase would serve only as wealth preservation as the purchasing power of most currencies is devalued in a hyper-inflationary environment due to the huge volumes of fiat money being pumped into the market by governments in an attempt to stave off global recession."

And I guess that's really where I'm coming from now.  I don't expect gold or silver to make me rich, but I'd like to preserve some of what I've worked so long and hard to accumulate.


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Dollar destruction on the horizon?

This video from the NIA is long, but also compelling.  Highlights for me were the illustrations of just how bad off we are in terms of national income and expenses and our incredibly excessive military commitments around the globe.



Suddenly I'm not worried about paying $1,200 for gold or $18 for silver.

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Shadowstats John Williams--Buy Gold

If you've never visited Shadowstats.com, don't wait another minute.  John Williams does a great job of showing us "what's behind the curtain."  For just a taste of his thinking, though, check out the following.  In the first paragraph he makes it crystal clear that inflation is the only way out for our government.

"Now to put that into perspective, if the government wanted to balance its deficit on a GAAP basis for a year, and it seized all personal income and corporate profits, taxing everything 100%, it would still be in deficit. It can't raise taxes enough to contain this. On the other side, if it cut all government spending except for Social Security and Medicare, it still would be in deficit. With no political will to contain the spending, eventually the government meets its obligations by revving up the currency printing press."

If that paragraph doesn't make you a little queasy, please read it again.  Of course he did leave out the option of default, but which will Washington prefer, an outright admission of failure, or a thinly veiled swindle?  Later in the article he points out how tranparent and politically inspired are everything we hear out of D.C.  Remember when we had to have the bailout or unemployment could top 8%?  Now that we sprung for that, all we hear is nonsense along the lines of "green shoots."

"You are getting happy news from governments, central banks, financial markets, Wall Street analysts and the popular media, which does tend to cater to Wall Street."

Finally, he gives his thoughts on wealth preservation (that's preservation, not getting rich!)

"In terms of preserving the purchasing power of your assets, the best thing I can think of is physical gold."

Please check out the entire article on Mineweb.com if you have time, and again, be sure to check out Shadowstats.com.


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Peter Schiff predicts gold will surge

In March of 2009 Peter Schiff predicts gold will surge as the dollar tanks.  Granted, this video is a bit dated now.  Still though, do you see any of the factors hurting the dollar changing any time soon?




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China cuts holdings of U.S. Treasuries

This headline says it all for me.  Still, I did enjoy the following: 

WASHINGTON - The government said Tuesday that foreign demand for U.S. Treasury securities fell by the largest amount on record in December with China reducing its holdings by $34.2 billion.

The reductions in holdings, if they continue, could force the government to make higher interest payments at a time that it is running record federal deficits.

 ". . .could force the government to make higher interest payments at a time that it is running record federal deficits."

Really?  Do you think so?  And hey, what will the Chinese be doing with their money now?  I don't see the Euro is offering much appeal.  Other than gold, where do you put big money now?



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