Is The Gold Market A Bubble?
February 7, 2011 by Bob Livingston
People who hate the discipline of gold are creative in their attacks to discredit honest money.
They say gold is in a bubble. But it is paper money that is in a bubble and the world is in the blow-off stage. In fact, every passing hour there is created tens of millions of dollars in phantom money. This requires more and more gold to rebalance the escalating deficit of substantive money.
Gold is not in a bubble. The world’s governments and people need more and more gold versus paper money.
Confidence in government “money” is collapsing. People all over the world are suddenly learning that governments steal from their citizens by inflating their currencies.
My advice to you is that if you wish to return to the good old days when you could buy a loaf of bread for a dime, then you must have some silver dimes. The baker will understand the value of a silver dime when the time comes.
Also, you should get money out of the United States into the Swiss franc and investigate Swiss annuities. There is a $50,000 minimum now. For information call toll-free 1-800-331-0996, leave your name, address, and phone number for information. Please speak clearly.
Another offshore wealth protection strategy is offshore life insurance. You can obtain our free research manual, The Offshore Life Insurance Advantage, written by top attorney J. Richard Duke, to learn more about them. I outlined some of the advantages of offshore insurance in my recent column, Consider Offshore Life Insurance For Asset Protection.
The greatest problem the American people have is currency depreciation by the government. The government produces nothing. Government can only depreciate the value of the currency to pretend to pay debts and stabilize the economy.
Once again, gold is not in a bubble. It’s paper money that is in a bubble. Gold has been rising in paper money terms for 10 years because wealth holders around the world are increasingly seeing it as a more stable currency than their local currencies.
Gold is a more stable currency than paper money because of its scarcity; annual demand for gold exceeds its production. Annual demand for paper money does not. The truly damning phrase should not be gold-bug, but paper-bug. Many investors and media commentators resolutely refuse to understand gold as real money.
No, it is not too late to buy gold and silver coins. In fact, the recent correction makes now the right time. You must keep them in your personal possession, not in a bank safe deposit box.
Gold and silver stocks have broken out to the upside again. They still have a lot to gain in my opinion. I use Charles Schwab for a discount broker.
The following are gold, silver and energy stocks that I own. I’ve made tremendous gains with them and they still have a long way to go: BHP Billiton (I recommend this stock to everyone), Royal Gold; Kinross; Iamgold; El Dorado; Agnico-Eagle; Silver Standard; Pan American; CONSOL Energy; ASA Limited; Marathon Oil; Talisman Energy; Endeavour Mining; Industrias Penoles; Couer d’Alene Mines; Compania De Minas Buenaventura SA; Baidu Inc. (this is the Chinese Google, a high flyer and has a long way to go, in my opinion).
We are not selling yet: Newfield Exploration.
Some good funds: India Fund; Morgan Stanley Indian Fund; Vanguard Energy Fund; Fidelity Select Gold Fund; GAMCO Gold Fund; Tocqueville Funds; US Global Investors Precious Minerals Fund; US Global Gold and Precious Minerals Fund.