Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Roubini Says Gold $2,000 is Utter Nonsense

Commodities / Gold & Silver 2009 Nov 18, 2009 - 11:28 AM GMT

By: Q1_Publishing

Commodities

Best Financial Markets Analysis Article“Maybe [gold] will reach $1,100 or so but $1,500 or $2,000 is nonsense.” That’s what Nouriel Roubini said a few days ago at the Inside Commodities Conference in New York.

The comments from the economist credited with foreseeing the banking crisis were aimed squarely at investing legend Jim Rogers.


According to reports, Roubini specifically referred to Rogers’ call for $2000 gold as “utter nonsense.”

Since then, gold has continued to set new highs and is attracting a lot more attention from some of the best investors in the world.

The Day Gold’s Fate was Sealed

Back in March, when the S&P was sliding back to 1997 levels and wiping away years of gains every couple of weeks, the prospects for gold became more attractive than ever.

In March the Fed officially announced it would be monetizing government debt. In an official announcement the Fed announced it would “purchase up to $300 billion of longer-term Treasury securities over the next six months.” This was in addition to its purchases of more $1 trillion worth of agency debt and mortgage-backed securities.

On top of all that, Chairman Bernanke forthrightly declared in a 60 Minutes interview the Fed was “printing money.”

There’s no turning back from this point. The U.S. government continues to set record deficits. Even the rosiest projections – those from the Whitehouse – have the annual deficit remaining at $700 billion a decade away. The U.S. dollar is in a big hole and there are no responsible (i.e. non-inflationary) ways out of it. And gold is becoming an increasingly attractive save haven.

When our free gold report was released last March (click here to claim you’re copy), the central bank’s open admission of money printing was an essential condition as sealing gold’s fate as an increasingly dear asset. In the report we noted, “Every few decades, the right conditions come along to make an absolute fortune in gold and gold stocks. Right now the conditions are right.”

Regardless of the fundamentals, some - like Roubini - see the gold run coming to an end sooner than later. Others, including some of the most successful investors in the world, see a much different story playing out.

Not Just for Gold Bugs Anymore

Since the official announcement earlier this year, it’s no coincidence a number of the world’s best investors have jumped on the gold bandwagon and have earned exceptional results, and they’re just getting started.

Leading the way has been hedge fund manager John Paulson. The man who “made too much” by betting against subprime mortgages has been buying gold and gold stocks since “the day gold’s fate was sealed.” Since Paulson’s firm’s disclosure in May, gold prices have risen 23% and gold stocks have more than doubled that.

But here’s the thing about Paulson – he’s not a “hot money” hedge fund manager looking for a quick score. He’s always after the truly big opportunities.

As we noted back in May in the Prosperity Dispatch:

Paulson began betting against subprime mortgages in 2005. That was well before the housing market peaked and nearly two years before subprime markets started to falter in 2007.

He was right, but he was early. He stuck to his bet even though the housing market continued to do well. Eventually, it paid off.

Paulson may be getting most of the headlines for gold, but a slew of other great investors have been moving into gold.

For instance, Steven Leuthold has been on a roll lately. His Grizzly Short Fund returned 73% in 2008. Granted, it was tough not to make money being short in 2008, but 73% far outpaced the overall market’s decline.

Leuthold also called a major market bottom on March 5, stating comparisons made between the credit crunch and the Great Depression were “out of touch with reality.”

Leuthold explained in his firm’s quarterly update for shareholders of his Core Investment Fund:

As mentioned in our last quarterly letter, the Core Fund established a small position in Physical Metals (now about 2% in Gold and a little less than 1% in Silver).We plan to add more when (if) prices come down from current lofty levels. We continue to be concerned about the long term prospects of currency debasement inflation (a run on the dollar). Essentially, this holding is viewed as an insurance policy, and will likely be increased in coming months.

The line-up of newly minted gold bugs doesn’t stop there. One of the greatest traders in the world, Paul Tudor Jones, has recently declared his interest in gold.

Jones, who built Tudor Investments into an asset management powerhouse with $11 billion under management, recently told his fund investors:

I have never been a gold bug. It is just an asset that, like everything else in life, has its time and place. And now is that time.

As one would expect, rising inflation suggests higher gold prices, especially when the Fed is perceived to be behind the curve. Gold appears to be cheap. In our view, gold’s value should increase as its scarcity relative to printed currencies increases.

Now, it’s only a matter of time until the herd piles in. Big institutions still have very little exposure to gold and most retail investors still haven’t even considered it yet. But there’s still time left to get in.

Two-Step Strategy to Making a Fortune in Gold

Everything is in place for gold. And as gold makes incrementally new highs and rebounds from the eventual and unexpected corrections, there will be more opportunity.

But at this stage in gold’s run, there’s a simple two step strategy to make a fortune in gold in the next few years.

Step 1) Make a plan to buy gold and gold stocks over the next three to five years

Step 2) Stick to the plan

That’s the beauty of getting in something relatively early. Gold has made a good run over the last eight years, but the biggest money will likely be made in the next eight years as a lot more money piles into the “utter nonsense” that is gold.

Good investing,

Andrew Mickey
Chief Investment Strategist, Q1 Publishing

Disclosure: Author currently holds a long position in Silvercorp Metals (SVM), physical silver, and no position in any of the other companies mentioned.

Q1 Publishing is committed to providing investors with well-researched, level-headed, no-nonsense, analysis and investment advice that will allow you to secure enduring wealth and independence.

© 2009 Copyright Q1 Publishing - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules