Gold Panic - time to buy or sell??

With the price of gold steadily dropping since its peak in September, we’re seeing pessimism and panic in the market. Try not to be swayed by short-term events and realise that in the long run the price of gold will rise. This is because money printing is the most likely solution the leaders will choose to solve the European banking crisis and there’s a good chance we’ll see QE3 in the US during 2012. The more money they print, the less valuable the currency becomes which is positive for gold.

You’ll find many examples in history where nations opted to solve similar problems we face today in the world using QE to create liquidity. During the great bull market of the 1970s, for example, gold went from $35 to over $850 per ounce. In that spectacular rise there were several 50% corrections in the gold price and I’ve been saying all along that the market will become more and more volatile, so I would be using these periods of pessimism and panic as a wonderful buying opportunity.

Gold will rise as investors realise that gold is a valuable asset to store and protect wealth during periods of inflation or recession. Whichever economic environment persists, the value of gold will be driven upwards by the efforts of central banks to create liquidity and debase fiat currencies.

To quote the legendary Jim Sinclair:
“Don’t allow your emotions to direct your decisions. Your emotions will always be your best contrary indicator you have. You have to examine the circumstances and ask whether or not the reasons why you’ve committed to something have changed. And if they haven’t changed, you simply need to buck up and go the course because you’re right.

People are beginning to literally crack, defined as shifting their total focus to their emotions and away from their intellect. I’ve seen emotionalism in areas where it doesn’t belong, where it’s never existed before. I’m in total shock.”
If you’re already freaked out by the movements in gold so far, you might want to sell up because I’m warning you that the ride is going to get much bumpier on the way to gold at $5000. In 2012, I anticipate that we will see gold going at least to $2500 an ounce.

Central banks remain buyers of gold. South Korea, for example, increased its gold reserves by 39% in November alone. The fundamentals for gold remain intact. No market ever moves in a straight line. The long-term picture for gold remains positive. So hang in there, it will be well worth the ride!

For those of you who have not yet invested in gold and silver, this is a wonderful opportunity to get in at a good price before everything skyrockets once again.

Gold Price Down - Great Buying Opportunity!

As I write, gold is at USD$1572 an ounce and silver is at $28.13 an ounce and many are getting very jittery and selling their precious metals. This is normal, especially for those who have bought recently at around $1800 – 1900 an ounce. However, remember I have said all along that we were going to see massive volatility. This is to be expected, but fundamentals haven’t changed. Our global economic system is based wholly on debt and the value of fiat currencies is gradually eroding as QE continues and while banks are “too big to fail.”

The fact that prices have dropped so significantly is one of the main reasons I always tell people NOT to borrow money in order to buy gold and silver. This is where you can come unstuck. It’s much too risky and it’s going to get riskier as time goes on. I wouldn’t be surprised if gold went as low as $1300 an ounce and the lower it falls the higher it’s likely to bounce back in the future.

No one can tell exactly where the bottom is for this current dip, but I can see on the charts that this looks like a wonderful time to buy. The sensible people are buying while the sheeple are selling.

If you have cash in the bank and no precious metals at all, you are fully invested in the fiat currency system and you have all your eggs in one basket. This is a huge risk as you could lose an enormous amount of money or you might lose it all. In Lithuania right now, there are huge runs on the banks with people scrambling to get their money out. In Greece and Italy, depositors are withdrawing their money in droves from the banks. I would suggest that you have AT LEAST 10% of your cash in gold and silver (mainly gold), and you will at least know that you have insurance in case there is economic collapse and that 10% will be your saviour.

To quote the legendary Jim Sinclair,
“The most important thing is volatility. One thing this shows you, and it increases continually, is this is the wildest chop we’ve ever been in, in the history of trading gold, in terms of ups and downs. It means to me that gold is going to rise to prices even higher than I expected....” and Jim has been saying that gold will go into the $2000s and possibly even up to $4500 or more…

So what are you waiting for? This is a wonderful buying opportunity folks! Don’t be scared off, act as a contrarian, buy when others are thinking of selling.

Is Gold Confiscation on the Cards??

France Bans Cash Sales of Gold/Silver over €450 / USD$600
A couple of weeks ago some Austrian banks began to restrict the sale of gold and silver to €15,000 (USD$20,000 USD) reportedly because of money laundering issues. Governments are starting to make it more difficult for individuals to buy gold anonymously.

Based on the French government’s official website, as of September 1, 2011, anyone attempting to buy or sell ferrous or non-ferrous metals, which includes gold and silver, will be required to pay for their purchase via a credit card or bank wire transfer if it exceeds €450 (USD$600).
According to independent reports the law was passed to stop the illegal sale of stolen metals like copper, steel, etc. The fact that gold and silver were included in this cannot be ignored. This new law makes it illegal to buy even one ounce of gold or around 18 ounces of silver in cash.
It makes you wonder when other countries will use a similar excuse of the rise in the theft of metals to introduce similar draconian laws?
Central banks are presumably so concerned that more people are getting out of fiat currencies and are trying to preserve their wealth through gold and silver that governments are cracking down on the anonymous purchase of gold and silver.
Be aware that USD$600 isn’t even enough to purchase a half ounce of gold at today’s prices. This guarantees that people who transfer their savings over to precious metals will be known to the authorities, leaving them vulnerable to government confiscation of their gold and silver later on down the line. Let’s not forget that the US government confiscated gold in 1933 and this could so easily happen again.
What can you do proactively right now:
• Buy precious metals anonymously with cash while you still can
• Store some of your precious metals outside the country in which you live
• Be aware of small changes in laws around the world that may give you clues as to what do with your assets in advance
• Consider buying gold and silver now while the price has fallen
• Watch out for the “man in the street” buying gold and silver. That’s the point you should probably sell.

Gold Going Higher and Higher

As fears mount that global markets are no longer safe, investors are turning to gold as insurance in case the economy collapses, and as an investment. Stock markets are extremely volatile as we’ve seen over the past few weeks, unemployment is rising, prices of food and essentials are going up, and gold is the one safe haven in the midst of all this turmoil. This week, the price of gold went as high as $1881 per ounce which marks a 7% increase in this week alone and a 25% increase since July of this year.

Since my last article and video on August 7th, gold was at $1666 an ounce and closed this week at $1851, an increase of nearly $200 in just under two weeks. I have been encouraging my clients to buy gold and silver now, even at these prices because it looks inevitable that the price of bullion is going to go considerably higher. The clients who asked me when gold was at $1200 “is it too high to buy now?” are now very thankful that they went in at that price. The same can be said today. It’s not too late to buy now. Central banks are buying more gold than ever. According to the World Gold Council, they purchased more than four times the amount this quarter compared to a year ago. That should be telling you something. They don’t invest in anything that they don’t think is going to increase in price.

The US economy is headed into an even deeper recession as companies like Bank of America, Sears and UPS continue to announce layoffs. In Europe, the ongoing debt crisis is pushing the markets into a downward spiral.

Morgan Stanley along with other analysts expressed their concern that the US and the 17 countries in the Euro were hovering close to a recession. In my view, they are already in recession and heading dangerously toward a world depression. Because of these concerns, gold will continue rising in price for the foreseeable future.

As I have been predicting, $2000 an ounce for gold is just around the corner. At some point, when there is real panic in the markets, the gold price could go parabolic and reach $5000 and more per ounce.

Silver broke through the $40 mark and saw an increase of 8.5% this week alone. And for silver, $50 is very close, with $100 being a very conservative estimate of the price it will reach in the not too distant future.

Many people ask me how they can invest in gold. If you live in a big city, check out your local bullion dealer. They buy and sell gold and silver coins. Go along and see how much they are charging above the spot price for gold. Depending where you live, you can expect to pay a premium of 3-7% above spot for your gold, and a little more than that for silver.

If you don’t find a local bullion dealer you feel comfortable with, or if you live in a small place, then check out various dealers online.

I am often asked about storage places such as GoldMoney and Bullion Vault. On the plus side, they are excellent for the liquidity they provide and you are able to trade 24/7 and have easy access to your funds should you require them. On the minus side, they can only continue to trade if the internet stays alive, and if we don’t have any nuclear disasters, and if the technology survives any major earth changes. Keep in mind that whenever you have anyone else store your gold, in the event of an emergency, you may not be able to reach them to sell your gold or to have them send it to you. There is always that risk when someone else stores your gold. However, these companies do have a place and as long as you are aware of the risks, then that might be an option for you.

If you are unable to store your metals yourself, have a trusted family member or friends store them for you, or consider storing them with a depository in the country in which you live and also somewhere outside of where you live. That way, you haven’t got all your eggs in one basket.

As I have being saying for the last five years, the price of gold and silver will go up considerably, and I feel strongly that this is still the case right now. Don’t miss out on this opportunity to be able to protect yourself. If you don’t have any precious metals, then do your research and get some. If you already have some, buy more.

Another Global Economic Crisis - Gold Going Parabolic

Three momentous events occurred this week that deeply affect the global economy:

The United States has lost its sterling credit rating of AAA for the first time since it was granted in 1917. And there is even a chance of a further downgrade within the next six months to two years.

The Dow Jones industrial average fell 699 points this week, the biggest weekly point drop since October 2008.

Gold soared to a new high of $1666 per ounce.

This downgrade will likely drag the world into a depression. Borrowing costs for countries, banks, you name it, are likely rise everywhere. These costs will ultimately be passed on to you, the consumer, with the prices of mortgages, loans and credit cards going up.
The crisis is set to deepen. In Europe, the sovereign debt crisis has escaped from the peripheries and spread to Italy and Spain while parts of the European banking system have frozen up.
There have been warnings that we may be in for a repeat of the crisis of 2008. However, this time it’s going to be much, much worse. Back then, policy makers had at their disposal a whole range of powerful tools to remedy the situation which are simply not available today.
In 2008, interest rates were comparatively high, both in Europe and the United States. This meant that central banks were in a position to avert disaster by cutting the cost of borrowing. Today, rates are still at rock bottom, so that option is no longer available.
Second, the global situation was far stronger three years ago. One reason why Western economies appeared to recover was because China responded with a substantial economic boost. Today, China is plagued by high inflation and is not in a position to help.
Finally, in 2008, national balance sheets were in reasonable shape. In Britain, for example, state debt, according to the official figures, stood at around 40 per cent of GDP. This meant that the UK had the balance sheet strength to step into the markets and bail out failed banks. The national debt has now surged past the 60 per cent mark, meaning that it is impossible for the British government to perform the same rescue operation without risking bankruptcy. Many other Western countries face the same dilemma.
The consequences are dire. Policy-makers have run out of tools to change the situation and the Western leaders are obviously out of their depth.
The Euro is very close to collapse. It will come as no surprise if some Italian and Spanish banks are forced to close their doors in the course of the next few weeks. If you are travelling in Europe, hold only the minimum of the local currency, and treat with especial suspicion Euro notes coded Y, S and M (signifying they were printed in Greece, Italy and Portugal respectively). Take plenty of dollars with you, which shopkeepers will certainly accept if there is a run on the banks, or if Euros suddenly cease to be legal currency. It’s best to be prepared just in case.
This is a wake up call. What can you do? You can prepare. Just as we try to prepare for earthquakes, tornadoes or hurricanes, you should also prepare for a huge economic downturn. If you don’t own any gold, you should buy some. The price as I am writing is fast approaching $1700 an ounce…and it may soon be too late as there is a strong possibility that as confidence dips worldwide, the price of gold could go exponential. i.e. $2000 an ounce and more. If you cannot afford to buy gold, silver is a great alternative, currently priced at just under $40 an ounce and it provides all the same protections as gold.
The other major thing you can do is educate yourself. If you don’t know what is going on and why, you need to find out. If there is one thing that can help allay your fears it is information. Download my free ebook: Getting Rich While The World Falls Apart: http://www.financemoneybusiness.com/ or my Handbook For Surviving The Global Financial Crisis ($4.99 for download).

Things could unravel very quickly from here and remember it’s better to be a year early than a day late.

World Predictions 2011-2012

On December 31st 2008, when gold was trading at USD$850.00 I predicted it would go to over USD$1400.00. At the end of 2010, gold is now trading at USD$1420.00.

At the end of 2008, when silver was trading at just USD$11.00, I predicted it would go over USD$30.00. At the end of 2010, silver is now trading at USD$30.89.

Had you invested in gold you would have made a profit of 65% and with silver you would have made a profit of 153%.

Let me give you my predictions for gold and silver for 2011:

Gold will go to $1800 and above and silver will go to at least $45.00. If you have not yet invested in gold and silver, it is still not too late. Precious metals are yet to become mainstream and therefore have a long way to go. We are at the beginning of a long-term bull market and there could be shortages of the physical metals in the future.

I predicted that real estate would fall dramatically in the US and it is continuing to fall. I predict that over the next two years, property prices will drop overall another 20% the US and that the Chinese and Australian property bubbles will burst. There will be small pockets of land and real estate that will hold their value even during the economic crisis that still lies ahead, but they are few and far between. In the main, if you are thinking of buying property, think again. You may want to rent for a while to keep your options open. Don’t get into something that looks like a “real bargain” only to find six months later that its price has dropped by another 20%.

Stock markets will be more volatile than ever. Between now and 2014, the Dow Jones could still fall to 90% off its all time high. If you are thinking of trading on the markets during 2011, make sure can afford to lose the money you are investing as there will be wild fluctuations in prices and people will become even more speculative than before and bubbles will form and burst in the twinkling of an eye.

The US dollar will continue to fall and we will see the start of currency wars, trade wars and cyber wars.

Unemployment in the US is at a 26 year high and unemployment among the young is at over 50% in Spain and Italy. This sets the scene for greater unrest and revolts against authorities and governments to come.

During 2011 we will see the schism between the haves and have nots widen with more austerity measures piled onto average person. We’ve already had civil unrest in Greece, Ireland and the latest in the UK with the students’ revolts and an open attack on Prince Charles and Camilla.

We will see more bailouts this coming year, governments taking on even more debt and more printing of colossal sums of money. We’ve already had QE 2 and I am fully expecting to see QE3 some time in the summer to fall of 2011. The same holds true for Europe where the situation is also worsening.

Governments worldwide will be imposing more and more taxes. Sales taxes, property taxes, income taxes etc., cash strapped states, councils and governments will be looking for ways to squeeze cash out of the everyday person. Make sure you keep your accounts and business dealings in order as I am seeing Inland Revenue departments chasing even small sums of money such as $50 or $100.

There will be more groups who want to expose corruption in governments, banks and big business. It has started with Wikileaks and OpenLeaks, but the power of hackers around the world remains unknown and they may be able to bring down the likes of Paypal, Visa, Mastercard and Amazon. Take your privacy seriously and do whatever you can to put in place protections for your online security and financial security.

We will see more government leaders voted in and out of office quickly, just as we saw in 2010 with Kevin Rudd voted out by his own party within a year of taking office. And in the US the November mid-term elections where there was a sweeping change in the balance of power.

There will be more natural disasters in places we least expect them. In 2010, Christchurch experienced a 7.3 earthquake and seismologists were not aware of a fault line in that area of New Zealand. There continue to be severe aftershocks that are still affecting the people and the buildings. Changing weather patterns will bring about freak weather conditions. In Australia there is severe flooding in areas that have had droughts for the last ten years.

I predict that we will see flooding so excessive in some places where small towns or even whole cities will go underwater. A proliferation of water borne diseases could ensue.

The majority will stick it out in the cities and towns and they will face civil unrest, uprisings, austerity measures and restrictions on their personal freedom. Others will withdraw, retreat to nature or live communally with others of like mind. They will be concerned with survival issues and will live independently and self-sufficiently, growing their own food and generating their own power. If you are unable to escape from where you are living, but feel vulnerable to the changes ahead, at least stock up with some basic food and water supplies, a first aid kit, torches and make copies of all your important documents. Think of it as taking out insurance – be prepared for the worst and hope for the best.

For more information download Goldsmith’s FREE Ebook:
Getting Rich While The Rest Of The World Falls Apart
Or buy Handbook For Surviving The Global Financial Crisis which is available on Amazon, Lulu and www.financemoneybusiness.com