It used to be easy to pick stocks before the Internet. Just look for a company with a good balance sheet, good management and a good product made in the US. Now there are thousands of choices and many of them are outside of the US. With online trading you can literally check the stock market in almost any country and purchase stocks with a keystroke or two.
Different categories of stocks have different safety tests. With mining stocks there are many aspects of a company to look at. With the recent changes in laws, taxes, and royalties in some South American and other countries, one of the first things to look at should be where is the mine. Argentina, Bolivia, Peru, Australia, and Venezuela are countries that have recently created an adverse environment for mining and oil companies. In some instances outright nationalizing some assets. Some mining companies like Hecla saw the future and sold their assets in Venezuela saving them from the horrors the oil companies are going through there.
Some of our favorite mining stocks now have some question marks on them. SLW, AUY, and PAAS have large holdings in some of these countries. SLW is a perennial favorite of ours and probably will continue to be, but one must look at the country the mine is in and assess for yourself your level of comfort before buying that stock. With all the information available to you on the Internet it is a relatively easy, but time consuming job. One only has to look at Yahoo finance, or most any other financial website. You can see recent articles on that stock, the officers, location, profitability, experts analysis, profile, earnings, trading volume, research, shares traded, dividends, P/E, balance sheets and charts. Do yourself a favor and check before buying!
Thursday, January 19, 2012
Options 1-19-2012
Just bought back the 10 Jan 21 53 strike price GDX calls @.10 for a 90% gain in 2 days.
Sunday, January 15, 2012
Golden Year! 1-15-2012
Gold has had almost a twenty per cent correction. We expect it to start moving up again in the New Year. Another metal to keep your eye on is copper. If copper starts to move it usually means the economy is picking up and the commodities will follow. There are many reasons for gold to move higher, inflation, economy picking up, stimulus packages, defaults, uncertainty, unemployment and wars. The Bureau of Labor Statistics publishes an alternative measure of unemployment called the U6. It counts those who have looked for work in the past 12 months and those who work part time but would like full time employment. The rate moved from 8.8% in December 07 to 15.6% last November. That is 7% higher than the official unemployment rate the government touts. 5.7 million Americans, 43% of all unemployed have been out of work for more than 27 weeks.
Pimco co CIO Bill Gross told CNBC the fact that central banks are printing money like gangbusters could reignite inflation. By adding hundreds of billions of currency into circulation, central banks can produce reflation, that is why we are seeing the pop in oil, gold and other commodities.
However, there is also the potential for deflation if the private credit markets can not produce some sort of confidence and solvency going forward, says Gross. So we are at great risk here, not only in the U.S. but on a global basis.
New York University economist Nouriel Roubini says the eurozone crisis is not going to be a sudden wreck. It is going to be a slow motion train wreck where initial economic difficulties, financials, fiscal then restructuring and eventually exit might occur. Separate countries will have difficulties at different points in time, Greece, Ireland, Portugal, Italy and Spain. Some experts have warned that unless the European Central Bank eases up in its reluctance to buy government debt from banks issued by troubled countries, the currency group could collapse.
Goldman Sachs Group Inc. is staying overweight on commodities, and gold specifically, because they believe more demand revives speculation of shortages. They believe in the next 12 months gold could hit $1940 per ounce, with interest rates and inflation remaining low.
Laura D'Andrea Tyson, former chairwoman of the Council of Economic Advisers under President Bill Clinton says, the danger in 2012 is not too much fiscal stimulus, but too much fiscal austerity. The same danger is stalking Europe and could lead to a sovereign default by a euro zone country and the breakup of the euro. Such an event, considered unthinkable just a few months ago but viewed as a real risk now, would plunge Europe and the United States into recession, with negative reverberations throughout the global economy says Laura.
More and more Federal Reserve officials believe the economy could use a third round of quantitative easing, loose monetary stimulus programs designed to pump up the economy when normal tools like interest rate cuts are not enough. The Federal Reserve Open Market Committee will meet on Jan. 24 and 25. Past comments indicate that there is more stimulus in our future since they feel the economy is not on solid footing.
San Francisco Fed President John Williams has said unemployment rates will stay high, which does make an argument that we should have more stimulus, according to CNBC. Meanwhile, Cleveland Fed President Sandra Pianalto has said in a recent speech that economic models indicate the Fed should be even more accommodative than it is today. New York Fed President Bill Dudley has also said fresh easing may be needed, and three inflation hawks who would normally oppose easing, Richard Fisher of Dallas, Narayana Kocherlakota of Minneapolis and Charles Plosser of Philadelphia, are rotating off the committee that sets such policies.
Silver is a more attractive investment than gold, the latter of which is showing signs of bubbling, says John Licata, CEO and chief commodity strategist at Blue Phoenix Inc., a commodities and metals research company. While gold may post more gains in 2012, other metals are showing signs of more lasting upswings, such as vanadium or lithium, Licata said in an exclusive Newsmax.TV video interview.
Rare earth elements are needed for products like mobile phones and TVs. New technologies are creating demand and mining is not keeping up with demand. In fact China produces most of these metals and they have cut back on exports recently. EconIntersect will be watching these as well as oil and oil associated industries. We believe oil could be a major mover in the New Year because of all the problems with Iran, more and more countries using more of their own oil leaving less for export, and the fact that there is not enough new finds to replace depleted oil fields.
One other item of importance, The New York Times reports Standard & Poor's research shows dividends may break records in 2012, suggesting that the U.S. recovery is picking up at a faster pace. Dividends are on track to set a record of more than $252 billion in 2012. This is based on current dividend rates of 394 companies, up from $240.6 billion in 2011 and $205 billion in 2010.
Dividends have been rising strongly, says Binky Chadha, the chief strategist at Deutsche Bank, according to The New York Times. And the rise that we have seen has plenty of upside.
Pimco co CIO Bill Gross told CNBC the fact that central banks are printing money like gangbusters could reignite inflation. By adding hundreds of billions of currency into circulation, central banks can produce reflation, that is why we are seeing the pop in oil, gold and other commodities.
However, there is also the potential for deflation if the private credit markets can not produce some sort of confidence and solvency going forward, says Gross. So we are at great risk here, not only in the U.S. but on a global basis.
New York University economist Nouriel Roubini says the eurozone crisis is not going to be a sudden wreck. It is going to be a slow motion train wreck where initial economic difficulties, financials, fiscal then restructuring and eventually exit might occur. Separate countries will have difficulties at different points in time, Greece, Ireland, Portugal, Italy and Spain. Some experts have warned that unless the European Central Bank eases up in its reluctance to buy government debt from banks issued by troubled countries, the currency group could collapse.
Laura D'Andrea Tyson, former chairwoman of the Council of Economic Advisers under President Bill Clinton says, the danger in 2012 is not too much fiscal stimulus, but too much fiscal austerity. The same danger is stalking Europe and could lead to a sovereign default by a euro zone country and the breakup of the euro. Such an event, considered unthinkable just a few months ago but viewed as a real risk now, would plunge Europe and the United States into recession, with negative reverberations throughout the global economy says Laura.
More and more Federal Reserve officials believe the economy could use a third round of quantitative easing, loose monetary stimulus programs designed to pump up the economy when normal tools like interest rate cuts are not enough. The Federal Reserve Open Market Committee will meet on Jan. 24 and 25. Past comments indicate that there is more stimulus in our future since they feel the economy is not on solid footing.
San Francisco Fed President John Williams has said unemployment rates will stay high, which does make an argument that we should have more stimulus, according to CNBC. Meanwhile, Cleveland Fed President Sandra Pianalto has said in a recent speech that economic models indicate the Fed should be even more accommodative than it is today. New York Fed President Bill Dudley has also said fresh easing may be needed, and three inflation hawks who would normally oppose easing, Richard Fisher of Dallas, Narayana Kocherlakota of Minneapolis and Charles Plosser of Philadelphia, are rotating off the committee that sets such policies.
Silver is a more attractive investment than gold, the latter of which is showing signs of bubbling, says John Licata, CEO and chief commodity strategist at Blue Phoenix Inc., a commodities and metals research company. While gold may post more gains in 2012, other metals are showing signs of more lasting upswings, such as vanadium or lithium, Licata said in an exclusive Newsmax.TV video interview.
Rare earth elements are needed for products like mobile phones and TVs. New technologies are creating demand and mining is not keeping up with demand. In fact China produces most of these metals and they have cut back on exports recently. EconIntersect will be watching these as well as oil and oil associated industries. We believe oil could be a major mover in the New Year because of all the problems with Iran, more and more countries using more of their own oil leaving less for export, and the fact that there is not enough new finds to replace depleted oil fields.
One other item of importance, The New York Times reports Standard & Poor's research shows dividends may break records in 2012, suggesting that the U.S. recovery is picking up at a faster pace. Dividends are on track to set a record of more than $252 billion in 2012. This is based on current dividend rates of 394 companies, up from $240.6 billion in 2011 and $205 billion in 2010.
Dividends have been rising strongly, says Binky Chadha, the chief strategist at Deutsche Bank, according to The New York Times. And the rise that we have seen has plenty of upside.
Doug Casey of the Casey Report says to rig for stormy weather, buy gold, build cash, diversify internationally, and look for opportunity in crisis. We totally agree. Keep your eye on EconIntersect as we expect to be making some trades very soon.
Sunday, January 8, 2012
Gold Outlook For 2012 1-8-2012
Gold has gone up ten years in a row. These are year end prices.
2000 $273.60
2001 $279.00
2002 $348.20
2003 $416.10
2004 $438.40
2005 $518.90
2006 $638.00
2007 $838.00
2008 $889.00
2009 $1096.50
2010 $1421.40
2011 $1566.80
Not a bad run! We think there is still lots of tailwind to this record.
In contrast Bloomberg says stocks lost 12% worldwide last year while bonds went up 6%. The dollar has had a nice run of late too. The bigger the problem, the more investors seek the safety of US Treasury. It is still perceived as the best safe haven, even better than gold at the moment. You would think that gold would go up every time there is a crisis, but just the opposite has happened recently. The dollar has risen and gold has fallen with the stock market. The European crisis has certainly boosted the status of the dollar once again. Will it last? Who knows for how long, but gold has stood the test of time for centuries. We doubt it will change.
To paraphrase a Bloomberg article:
Leading world governments have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs. Led by Japan, $3 trillion, and the US $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year. Investors may demand higher compensation to lend to countries that struggle to finance increasing debt burdens as the global economy slows, surveys show.
The amount needing to be refinanced rises to more than $8 trillion when interest payments are included. The competition to find buyers is heating up. Borrowing costs for G 7 nations will rise as much as 39 percent from 2011, based on forecasts of 10 year government bond yields by economists and strategists surveyed by Bloomberg in separate surveys.
When bond buyers dry up most likely The Fed will print again. If this happens gold may be the only safe place to be.
Jeff Clark, editor of the S&A Short Report, sees the best opportunity to trade gold stocks of the past three years, the S&A Digest reports. After the end-of-the-year rout in the sector, one of his favorite indicators dropped to its lowest level since October 2008, one of the most pessimistic times in history for gold stocks. But after the indicator flashed BUY, as it is doing today, the average gold stock doubled over the next 10 weeks.
Take a look at this chart of the gold sector bullish percent index, which shows the past two times his indicator flashed buy, in June and October of last year,... Gold stocks rallied 20% over the following month in both instances.
We think gold stocks will have a great year in 2012. GDXJ is the junior miners ETF fund and it fell 38% last year while gold was up. We feel there is a lot of catching up to do with these stocks and they may be one of the best investments of 2012.
The Daily Reckoning and Casey Research has this to say:
Let us put the recent price action into perspective. Gold peaked on September 5 at $1,895, London PM Fix, and has thus been in decline for about three months. Yet look at the bull market for the biggest three month correction in relationship to the ultimate trend.
Gold fell 20% from August 1 to October 31, 2008, the biggest rolling three-month decline in our current bull market. And yet, it eventually powered much higher, in spite of many investors and industry experts thinking it had peaked at the time. The final quarter of 2011 ended down 5.5% over the previous quarter. The point? Do not confuse short-term volatility with long-term forces. The investor who looks only at the headlines is prone to making ill timed decisions.
Obviously at EconIntersect, we think gold will shine again and gold and silver stocks should excel, but we should be careful to check out the stocks we invest in. Some of our favorite stocks might not be as attractive this year. Argentina has tightened foreign currency controls. President Cristina Kirchner is trying to stem the drain on their international reserves. New laws require authorization before buying foreign currencies. There are also negative political developments in Peru and Bolivia regarding tax and royalty issues. Some of the stocks that could be affected are PAAS, SLW, and AUY which all have mines in these countries.
Here is something to think about. A person needs to make around $34,000 per year to be among the wealthiest 1% in the world. World Bank economist Branko Milanovic says in his book, The Haves and the Have-Nots, that half of those one percenters live in the US. The perspective of much of the world is that we are rich beyond their wildest dreams. Maybe we are!
2000 $273.60
2001 $279.00
2002 $348.20
2003 $416.10
2004 $438.40
2005 $518.90
2006 $638.00
2007 $838.00
2008 $889.00
2009 $1096.50
2010 $1421.40
2011 $1566.80
Not a bad run! We think there is still lots of tailwind to this record.
In contrast Bloomberg says stocks lost 12% worldwide last year while bonds went up 6%. The dollar has had a nice run of late too. The bigger the problem, the more investors seek the safety of US Treasury. It is still perceived as the best safe haven, even better than gold at the moment. You would think that gold would go up every time there is a crisis, but just the opposite has happened recently. The dollar has risen and gold has fallen with the stock market. The European crisis has certainly boosted the status of the dollar once again. Will it last? Who knows for how long, but gold has stood the test of time for centuries. We doubt it will change.
To paraphrase a Bloomberg article:
Leading world governments have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs. Led by Japan, $3 trillion, and the US $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year. Investors may demand higher compensation to lend to countries that struggle to finance increasing debt burdens as the global economy slows, surveys show.
The amount needing to be refinanced rises to more than $8 trillion when interest payments are included. The competition to find buyers is heating up. Borrowing costs for G 7 nations will rise as much as 39 percent from 2011, based on forecasts of 10 year government bond yields by economists and strategists surveyed by Bloomberg in separate surveys.
When bond buyers dry up most likely The Fed will print again. If this happens gold may be the only safe place to be.
Jeff Clark, editor of the S&A Short Report, sees the best opportunity to trade gold stocks of the past three years, the S&A Digest reports. After the end-of-the-year rout in the sector, one of his favorite indicators dropped to its lowest level since October 2008, one of the most pessimistic times in history for gold stocks. But after the indicator flashed BUY, as it is doing today, the average gold stock doubled over the next 10 weeks.
Take a look at this chart of the gold sector bullish percent index, which shows the past two times his indicator flashed buy, in June and October of last year,... Gold stocks rallied 20% over the following month in both instances.
 |
The Daily Reckoning and Casey Research has this to say:
Let us put the recent price action into perspective. Gold peaked on September 5 at $1,895, London PM Fix, and has thus been in decline for about three months. Yet look at the bull market for the biggest three month correction in relationship to the ultimate trend.
 |
Gold fell 20% from August 1 to October 31, 2008, the biggest rolling three-month decline in our current bull market. And yet, it eventually powered much higher, in spite of many investors and industry experts thinking it had peaked at the time. The final quarter of 2011 ended down 5.5% over the previous quarter. The point? Do not confuse short-term volatility with long-term forces. The investor who looks only at the headlines is prone to making ill timed decisions.
Obviously at EconIntersect, we think gold will shine again and gold and silver stocks should excel, but we should be careful to check out the stocks we invest in. Some of our favorite stocks might not be as attractive this year. Argentina has tightened foreign currency controls. President Cristina Kirchner is trying to stem the drain on their international reserves. New laws require authorization before buying foreign currencies. There are also negative political developments in Peru and Bolivia regarding tax and royalty issues. Some of the stocks that could be affected are PAAS, SLW, and AUY which all have mines in these countries.
Here is something to think about. A person needs to make around $34,000 per year to be among the wealthiest 1% in the world. World Bank economist Branko Milanovic says in his book, The Haves and the Have-Nots, that half of those one percenters live in the US. The perspective of much of the world is that we are rich beyond their wildest dreams. Maybe we are!
Sunday, January 1, 2012
New Year 1/1/12
We can close the door on 2011. It was a roller coaster ride that ended almost where it started. Navigating the ups and downs was a difficult task. Nothing much was resolved to make 2012 any different. Most of the problems of 2011 are still waiting to be corrected. Although Europe was the focal point, much of the world slowed down and is feeling the pain. Even the BRIC nations show slower growth although still much above the US.
Gold and silver ended the year on a big slide down. Gold down around 20% and silver close to 40% from their highs.
The gold silver ratio is at 56 which means it takes 56 ounces of silver to buy one ounce of gold. This is high although it has been much higher. In September 2008 it was at 84 and the 10 year low was in April 2011 at 31. Silver is much more volatile than gold because some believe it is more manipulated and because it is a smaller market. Some traders play this market because they believe the ratio should be smaller meaning silver should go up in price to close the ratio. We believe that both gold and silver will go up in 2012 and that silver could go up much faster like we saw late in 2011
"The gold price is primarily supported by investment demand. Investors look to gold as a safe haven and the limited supply of the metal could push prices to very high levels in 2012, potentially exceeding $2,000 in the next six months," says Angelos Damaskos, the chief executive of Sector Investment Managers and an adviser to the Junior Gold Fund.
We agree, however there still could be some down side before we see the big jump.
Gold and silver ended the year on a big slide down. Gold down around 20% and silver close to 40% from their highs.
The gold silver ratio is at 56 which means it takes 56 ounces of silver to buy one ounce of gold. This is high although it has been much higher. In September 2008 it was at 84 and the 10 year low was in April 2011 at 31. Silver is much more volatile than gold because some believe it is more manipulated and because it is a smaller market. Some traders play this market because they believe the ratio should be smaller meaning silver should go up in price to close the ratio. We believe that both gold and silver will go up in 2012 and that silver could go up much faster like we saw late in 2011
"The gold price is primarily supported by investment demand. Investors look to gold as a safe haven and the limited supply of the metal could push prices to very high levels in 2012, potentially exceeding $2,000 in the next six months," says Angelos Damaskos, the chief executive of Sector Investment Managers and an adviser to the Junior Gold Fund.
We agree, however there still could be some down side before we see the big jump.
Monday, December 26, 2011
End Of Year 12-26-2011
Gold is down around 15% since August. The Wall Street Journal attributes it to the slowdown in India's economy. It grew 6.9% last quarter. In 2010 India was the biggest buyer of gold jewelry, but it dropped off significantly this year due to a weakening of the rupee.
Another reason for gold's decline is the strength of the dollar. As the Euro falls the dollar becomes the safe haven. There are many potential problems in the world now that could affect gold. The banking system is stressed and there are rumors of major banks in trouble. Stocks of Bank Of America have fallen to around $5 a share. It is thought that they were bailed out last summer and that they are being helped again now. Of course the Feds will not comment. On Friday Bloomberg News released data on the Fed emergency lending of 50,000 transactions made through seven different financial mechanisms. These programs represented 1.2 trillion dollars in loans to banks and financial institutions.
IMF Chief Christine Lagarde said "Currently the world economy stands at a very dangerous juncture." She called it a crisis of slow growth and high unemployment. Europe, the US, and the BRIC nations are all experiencing down turns. The world economy is so intertwined that most countries are feeling the pain. For us here in the US we have the added problem of gridlock in our government. Our government can not manage their checkbook. Our national debt amounts to around $136,000 per household and is climbing at the alarming rate of almost $1000 per household per month. It seems that this insane spending will eventually crash the system and the only thing the Fed can do is print!
Gold should shine in this environment. We may not be there yet, but it is a good bet it will happen. Many economists feel the QE3 is just around the corner, possibly starting in January. Right now gold is $300 an ounce cheaper than it was in August. Silver is down almost 40% from the high. Have your cash ready!
Another reason for gold's decline is the strength of the dollar. As the Euro falls the dollar becomes the safe haven. There are many potential problems in the world now that could affect gold. The banking system is stressed and there are rumors of major banks in trouble. Stocks of Bank Of America have fallen to around $5 a share. It is thought that they were bailed out last summer and that they are being helped again now. Of course the Feds will not comment. On Friday Bloomberg News released data on the Fed emergency lending of 50,000 transactions made through seven different financial mechanisms. These programs represented 1.2 trillion dollars in loans to banks and financial institutions.
IMF Chief Christine Lagarde said "Currently the world economy stands at a very dangerous juncture." She called it a crisis of slow growth and high unemployment. Europe, the US, and the BRIC nations are all experiencing down turns. The world economy is so intertwined that most countries are feeling the pain. For us here in the US we have the added problem of gridlock in our government. Our government can not manage their checkbook. Our national debt amounts to around $136,000 per household and is climbing at the alarming rate of almost $1000 per household per month. It seems that this insane spending will eventually crash the system and the only thing the Fed can do is print!
Gold should shine in this environment. We may not be there yet, but it is a good bet it will happen. Many economists feel the QE3 is just around the corner, possibly starting in January. Right now gold is $300 an ounce cheaper than it was in August. Silver is down almost 40% from the high. Have your cash ready!
Sunday, December 18, 2011
Gold's time is coming! 12-18-2011
One wonders if those responsible for our current predicament will ever pay for it. On December 16th the SEC filed civil suits on 6 former Freddie and Fanny executives. Of course Barney Frank wasn't included even though it was his job to oversee them. It will be interesting to see if anyone goes to jail.
Four co-authors on a website of the Federal Reserve Bank of New York presented some findings from a recent study. According to the study, more than a third of the homes purchased in 2006 at the peak of the housing boom, were by people who already owned a home. In some of the biggest bubble states like California, Nevada, Florida and Arizona it was almost half. Almost 20% owned more than two. Many of these people simply walked away from the properties when they saw no more appreciation in the future. More unintended consequences from government policies.
What about Europe? Senator Bob Corker, a Republican from Tennessee, said Bernanke made it very clear that no additional aid will be given to the region's sovereign debt crisis in a meeting with law makers. Lindsey Graham, a South Carolina Republican said Bernanke told lawmakers the he doesn't have the intention or authority to bail out countries or banks.
Question: A Greek, and Italian and a Spaniard walk into a bar. who picks up the tab?
Answer: The Americans!
Reuters reported that Fitch Ratings, the third biggest credit rating agency, downgraded Goldman Sachs, Deutsche Bank, Barclays Pic, Credit Suisse AG, B of A,BNP Paribas, and Citigroup. This is the result of economic developments and regulatory changes they said. They also cited a policy momentum against using tax payer money to support banks.
French President Sarkozy said the legal basis for a new accord on debt and deficit rules in the 17 nation euro area will be put together by Christmas and hopes to have a treaty by March. Sarkozy also said, "you have to understand this is the birth of a different Europe. The Europe of the euro zone in which the watchwords will be the convergence of economies, budget rules and fiscal policy.
Four co-authors on a website of the Federal Reserve Bank of New York presented some findings from a recent study. According to the study, more than a third of the homes purchased in 2006 at the peak of the housing boom, were by people who already owned a home. In some of the biggest bubble states like California, Nevada, Florida and Arizona it was almost half. Almost 20% owned more than two. Many of these people simply walked away from the properties when they saw no more appreciation in the future. More unintended consequences from government policies.
What about Europe? Senator Bob Corker, a Republican from Tennessee, said Bernanke made it very clear that no additional aid will be given to the region's sovereign debt crisis in a meeting with law makers. Lindsey Graham, a South Carolina Republican said Bernanke told lawmakers the he doesn't have the intention or authority to bail out countries or banks.
Question: A Greek, and Italian and a Spaniard walk into a bar. who picks up the tab?
Answer: The Americans!
Reuters reported that Fitch Ratings, the third biggest credit rating agency, downgraded Goldman Sachs, Deutsche Bank, Barclays Pic, Credit Suisse AG, B of A,BNP Paribas, and Citigroup. This is the result of economic developments and regulatory changes they said. They also cited a policy momentum against using tax payer money to support banks.
French President Sarkozy said the legal basis for a new accord on debt and deficit rules in the 17 nation euro area will be put together by Christmas and hopes to have a treaty by March. Sarkozy also said, "you have to understand this is the birth of a different Europe. The Europe of the euro zone in which the watchwords will be the convergence of economies, budget rules and fiscal policy.
What is hard to get your head around is that we are in worse shape and we are trying to tell the rest of the world how to respond to this crisis. We have to borrow 40 cents on every dollar the government spends. Not a shining example! In fact we fully expect the printing presses to be unleashed in the new year and the European Central Bank will most likely buy more bonds to keep interest rates low.
This brings us to our point of this article. Gold and silver. When the Fed and the ECB start "easing", gold and silver will shine again. They have shined since the start of the financial crisis and there is no reason to believe that will change. This latest downturn has created a potentially great buying opportunity. Many pundits are predicting gold at well over $2000 in 2012. In addition the gold and silver stocks have been hammered and are oversold giving extra leverage to any uptrend in the metals. Below is the spot gold chart.
Here is the chart for the gold stocks.
Both may have some downside to go but we are getting close to a place where we should be accumulating.
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