The Only Investment Hitting a 28-year High
Thursday, September 20th, 2007
By Michael Lombardi, MBA for Profit Confidential
For five years, I have been preaching the merits of investing in quality gold producing stocks. My economic thoughts during the past half decade have been concentrated on the eventual effects of the expanding money supply, inflation, deflation, deficits, savings rates and the fact that countries no longer want strong currencies.
At one time, every country wanted a strong currency. Today, because of the “globalization” of world economies, countries want weak currencies in order to achieve their goal to be net exporters, not importers of goods. If countries want weak currencies, where are investors to find security for their money?
Over the past 10 to 15 years, most industrialized countries have sold their gold bullion holdings. Simply a stupid idea! Throughout history, in time, the actions of governments are often proved incorrect. And I believe the bulk sale of gold bullion by world governments will be a case in point.
The sale of gold bullion by world central banks will eventually come back to haunt those banks, as they may one day need to buy the back the gold they so cheaply sold. If the goal of most governments is a weaker currency, what currency will the oil producers accept for their oil? Gold may prove to be the only acceptable currency for oil.
>From a technical perspective, gold bullion prices are now on a runaway path above the trend line — an extremely bullish action in my view.
Gold bullion is now trading at about $730.00 U.S. per ounce. (I had predicted earlier this year that gold would surpass the magical $700.00 U.S. per ounce level.) At present, gold is at a 28-year high and closing in on its record high of $850.00 U.S. per ounce set in early 1980.
I believe the money supply in the U.S. will continue to expand at ridiculous levels. I also believe Bernanke has proven to be another Greenspan, ready to bring down interest rates to save the butts of investors and Wall Street.
The savings rate among Americans is quite pathetic. And with the U.S. dollar continuing on its downward path, I expect to see gold bullion prices continue to rise, taking the stock prices of quality gold producing stocks with them. The only investment hitting new record highs will continue to do so.
Next Post: Rate Cut Does Little to Allay Consumer FearsPrevious Post: Bernanke’s First Show After Taking Office
Tags: gold, gold bullion, gold producers, gold stocks, interest rates, U.S. dollar
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Michael bought his first stock when he was 17 years old. He quickly saw $2,000 of savings from summer jobs turn into $1,000. Determined not to lose money again on a stock, Michael started researching the market intensely, reading every book he could find on the topic and taking every course he could afford. It didn’t take long for Michael to start making money with stocks, and that led Michael to launch a newsletter on the stock market. Today, Michael only employs the top market analysts and editors. Some of our recommendations have posted gains in excess of 500%! Michael has authored and published over one thousand articles on investment and money management. Along the way to building Lombardi Publishing Corporation, now with over one million customers in 141 countries, Michael became an active investor in real estate, art, precious metals and various businesses. Readers of the daily Profit Confidential e-letter are offered the benefit of the expertise Michael has gained in these sectors. Michael believes in successful stock picking as an important wealth accumulation tool. Married with two children, Michael received his Chartered Financial Planner designation from the Financial Planners Standards Council of Canada and his MBA from the Graduate Business School, Heriot-Watt University, Edinburgh, Scotland.Follow Michael and the latest from Profit Confidential on Twitter
