Nov 15, 2012

A Word To The Wise: Prepare

Common Sense Commentary: "Go to the ant, thou sluggard; consider her ways, and be wise." Prov.6:6 
"The ants are a people not strong, yet they prepare their meat in the summer."
Prov.30:25.   

"Boast not thyself of to morrow; for thou knowest not what a day may bring forth." Prov.27:1 

17 reasons to own gold and silver now....

According to Mark Leibovit, leading expert, of Leibovit VR Gold Newsletter.

    • The gold market has entered a once-in-a-lifetime period of opportunity. Gold, which surged over $800 in 1980 and then tanked to the depths of $280 in 1999, is now embarking on what may be a 20-year advance which will likely carry it to as-yet-unforeseen levels – possibly as high as $11,000 an ounce and silver to $700 an ounce.

    • Proportionally, the silver market price can be dramatically influenced. Any look into the history of silver prices shows that the metal can escalate quickly, often 10-20 percent in a period of just a few weeks. Since mid-August, silver prices are already up 32 percent.

    • Since October 2001, silver has increased in price from approximately $4 to a recent high of $49 which is an approximate 1125 percent gain. Once we clear $49, the sky is the limit! It’s the poor man’s gold! Mark Leibovit predicts Americans will be standing on street corners to buy silver (and gold) before the ultimate top comes!/li>

    • Silver has both intrinsic and industrial value. From film emulsions, to antibacterial products to circuitry, silver has literally thousands of industrial applications that help to limit the amount of physical silver in circulation. We are already holders of silver in our TV, computer and electronic equipment, batteries and car bearings. Silver is utilized in medical technology, solar energy and water purification. As technology advances, so do applications for silver.

    • Gold demand has continued its rapid acceleration. According to the World Gold Council, demand in 2010-11 reached a 10-year high of 3,810 metric tons, a 10 percent increase over the previous year. The U.S. Geological Survey reports that total global gold production has been falling steadily over the past decade to just 2,350 metric tons in 2011. We question whether sovereign nations have been accurately reporting.

    • Gold is still underpriced relative to inflation. Inflation-adjusted prices for gold range from $2,382 to $10,226, so at $1,922 an ounce (the Sept. 6, 2011 high), gold is not even close to reaching prior price levels.

    • Gold bears have been consistently wrong. Mainstream financial media predictions of a gold bubble have not come to pass. One influential analyst at Kitco predicted gold would end 2011 at $800 an ounce … yet it ended the year at $1,405 despite an anticipated correction.

    • We are drowning in debt. Government debt is skyrocketing. The national debt is now $16 trillion, more than $50,000 for every American man, woman and child. Bernanke, Obama and Draghi (European Central Bank president) are promoting dangerous policies that create only an illusion that the economy is stable. Any hope that the runaway spending of the Obama administration and other governments was a temporary "emergency," a reaction to the 2008 credit wipeout, has been derailed. The federal budget deficit went from $160 billion in 2007, before Obama’s election, to $1.4 trillion in 2009, $1.56 trillion in 2010, and was projected to hit $1.65 trillion in 2011. The 2011 budget has the biggest one-year debt jump in history, or nearly $2 trillion, reaching $15.476 trillion – the first time since World War II that U.S. deficits hit over 100 percent of GDP.

    • Do you think that is scary? That is nothing. According to data presented at the U.S. Debt Clock, U.S total debt is $55 trillion and total U.S. unfunded liabilities are $116 trillion.

    • The federal government is in a mayhem printing spree, with the M2 money supply increasing 21.1 percent from June to September 2011. As the dollar devalues, investors are scrambling to buy hard assets. It took a lawsuit by Bloomberg to uncover the Fed's "Secret Liquidity." The Federal Reserve mounted an unprecedented campaign, secretly providing as much as $1.2 trillion to banks and private companies without any congressional or public approval.

    • Large-scale gold buying is just beginning to make its way into mainstream "retail" financial institutions and pension programs. Five years ago, only gold "fanatics" and other "extremists" were buying gold. Today, central banks are buying again. Famed hedge-fund managers George Soros, John Paulson, Paul Tudor Jones and David Einhorn have piled into gold, gold exchange-traded funds and mining stocks.

    • Gold is in the process of reemerging as an international reserve currency. As central banks around the world have engaged in massive money creation, smart money will allocate a greater percentage to gold as a "store of value."

    • Gold bullion holdings amongst the world's central banks have risen to a 6-year high, according to data compiled by the International Monetary Fund. Emerging and developing nations have swollen their gold reserves 25 percent by weight since 2008. The debt-heavy West is a net seller.

    • Investment overtook jewelry as the largest source of demand for the first time in three decades in 2009, according to GFMS Ltd., a London-based research company. Investor demand will climb 9.9 percent to 1,597 tons this year and another 11 percent in 2012, Morgan Stanley estimates.

    • The U.S. Mint sold 85,000 ounces of American Eagle coins since May 1 as the Standard & Poor's GSCI Index of 24 raw materials fell 9.9 percent. The last time sales reached that level, bullion rose 21 percent in the next year. Gold will keep gaining in 2012, a Bloomberg survey of 31 analysts, traders and investors reports.

    • Supplies of physical precious metals (especially silver) are diminishing. The time is not far off when obtaining physical delivery of the metal will be very difficult if not impossible.

    • We are nowhere near a market peak. The signs you see on street corners offering to buy gold represent smart commercial buyers – not a sign of a market peak. When you later see long lines of retail buyers (some waiting overnight), then a top may be near.

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