This article will assist
its readers in capitalising on one of the big investment
opportunities of this decade, namely the emerging great bull
markets in gold and silver. These bull markets are expected to
unfold over a five to seven year time frame and take gold
eventually to much higher levels, and silver should put in an
greater performance, in percentage terms.
Since the greatest
opportunities will be presented by the gold and silver mining
stocks, which are highly geared to the price of the metals, this
site will focus principally on the mining stocks. However, as
the chief determinants of the price of mining stocks as a class
are the prices of the underlying metals, gold and silver will
themselves be subjected to detailed analysis.
Gold's entry into a long
term bull market, after a gruelling twenty year bear market, was
confirmed by last December's breakout. The bull market is
expected to proceed rather hesitantly at first, with significant
advances followed by sizeable reactions, such as we have
recently seen, as it embarks on a parabolic trajectory that will
become ever more steep, until eventually, several years hence,
it will culminate in a vertical meltup and very high prices,
with the public clamouring for metals stocks.
Silver, meanwhile, is yet
to commence its bull market, it is currently trading at
rock-bottom prices as it forms a base area, with accumulation in
silver stocks indicating that the great silver bull market
should get underway before too much longer. So the great bull
market in gold is still in its early stages and in silver it
hasn’t even begun. The out-of-control credit and money supply
expansion in the US, which has been worsening for years and is
now approaching the terminal phase, is brewing a crisis of huge
proportions. The dollar is likely to plunge, foreign investors,
who have already taken a beating, will hit the exits, inflation
will rise sharply as the cost of imports rises, interest rates
will have to rise and the bond and stock markets will cave in.
Real estate, which is one of the only things keeping the economy
limping along, will go into severe decline. Millions of
homeowners in the US will face a negative equity situation.
After a period of inflation, rapidly declining demand will
result in a deflationary spiral. In fact, we are now in a
situation where inflationary and deflationary forces are at work
at the same time; longer term, the deflationary forces should
prevail.
Vast amounts of capital
will be on the move, scurrying for safety, and there will be
very few places of refuge. It doesn’t take a great effort of the
imagination to envisage what will happen to the price of real
money – gold, and silver, in this situation. With bank vaults
plundered, steady Chinese, Asian and Middle Eastern buying, and
gold companies covering their hedge positions, a tightening
supply situation will become suddenly become an acute shortage.
Ditto silver where inventories have been wiped out. The cabal or
cartel, if it exists, will simply be swept aside, and shorts
annihilated. Gold and silver will rocket. The total
capitalisation of all the gold stocks in the world does not
equal that of the Microsoft Corporation. Clearly, if only a tiny
percentage of the vast amount of capital running for cover
attempts to get into gold and silver stocks, the buying pressure
will be enormous and the performance of these stocks will be
spectacular.
I am pleased to be able to
say that gold stocks, especially quality exploration stocks,
are, generally speaking, very cheap relative to their prospects
over the next several years. These stocks will, I believe,
provide handsome returns to those who are savvy enough to buy
them at these bargain prices. So far in this bull market there
are only two minority groups invested in gold and silver stocks.
One is the super smart money, which piled in, especially into
the larger stocks, causing high volume advances in the early
stages. The other group are the goldbugs, partly because they
are always there. The big brokerage houses, by and large, are
not in, and nor are investment and pension funds and the retail
investor certainly isn’t. In other words this sector hasn’t been
discovered yet, but when it is the gains will be stellar,
because of the acute supply shortage.
There are countless gold
and silver stocks with firm chart patterns and very good
fundamentals, which are selling at good prices and just waiting
to be snapped up. As the mainstream financial crisis
intensifies, and gold and silver take off, the fundamentals and
charts of these stocks are going to look a whole lot better
still. There is, I believe, not a great deal of time left to
accumulate these stocks.
I have started this
website in order to assist readers in selecting the best gold
and silver stocks, not merely to protect capital, although this
is clearly vitally important, but also to position themselves
for what will be one of the great opportunities of this decade.
A cordial welcome is
extended to any Chinese readers. June is a landmark month for
Chinese investors, who from this month are permitted to invest
in gold, either by buying ingots or by opening gold accounts at
their banks. China is a country of 1.4 billion people and has
one of the highest savings rates in the world, so the entry of
Chinese investors into the gold scene can be expected to have a
significant impact.
As oer original article on
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