The Coming Gold Rush….

  • U.S. deficits can only be solved as they always have been: reflation and debasing the dollar.
  • World demand for good and services is escalating, and will only continue to escalate in the coming months and years.
  • Vehicles for participation in gold’s coming rise.
  • Positive technical behavior of GLD and gold in the past: $3,000 gold = 295-300 GLD.

In definition, gold is:

  • A combination of a reflection and hedge against U.S. and world inflation.
  • A form of money or currency, accepted worldwide.
  • A store of value.
  • A protection and hiding place against economic and political world problems and uncertainties.
  • A contra investment against an overbought stock market, especially in a low-interest-rate environment. The market has been overbought to these levels only three times in history: 1929, 2000, and 2007. (Nobel prize winner Robert Schiller).

The deficits caused by governments’ excessive and wasteful spending, including those caused by wars since and including WWII, have always created screaming commentary similar to what we read today:

Just how is Washington and the nation going to cure the enormous deficits we have created? They are a serious percentage of our GNP and foreign governments are effectively in potential control of our country by way of their large investments made in our government bonds.

Our history shows we have solved this problem not by shrinking these deficits in actuality, but by reducing their percentage of our GDP and debasing our dollar in so doing. This has been done by reflating (see former prices): $0.17 per gallon of gas, $2.00 for a carton of cigarettes, $850 for a Chevrolet deluxe, and $15,000 for a 2,000-square-foot suburban home are just a few examples. Wages and income have kept pace with price inflation nearly on par.

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