Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Google Alphabet (GOOG) AI Deep Mind Stock Trend Analysis - 17th Apr 21
Stocks and Bonds Inflationary Slingshot - 17th Apr 21
Best Smartphone Selfie Stick Tripod Review by ATUMTEK Works with Samsung Galaxy and Iphone - 17th Apr 21
How to Give Budgie's First Bath | Easy Budgie Bathing and Water Training with Lettuce - 17th Apr 21
Record-breaking Decrease in New Passenger Vehicle Sale in Europe - 17th Apr 21
US Stocks Climb A “Wall Of Worry” To New Highs - 16th Apr 21
Gold’s Singular Role - 16th Apr 21
See what Anatomy of a Bursting Market Bubble looks like - 16th Apr 21
Many Stock Market Sectors Are Primed For Another Breakout Rally – Are You? - 16th Apr 21
What Skyrocketing US Home Prices Say About Inflation - 16th Apr 21
Still a Bullish Fever in Stocks? - 16th Apr 21
Trying to Buy Coinbase Stock on IPO Day - Institutional Investors Freeze out Retail Investors - 15th Apr 21
Stocks or Gold – Which Is in the Catbird Seat? - 15th Apr 21
Time For A Stock Market Melt-Up - 15th Apr 21
Stocks Bull Market Progression Now Shows Base Metal Strength - 15th Apr 21
AI Tech Stocks Buy Ratings, Levels and Valuations - 14th Apr 21
Easy 10% to 15% Overclock for 5600x, 5900x, 5950x Using AMD Ryzen Master Precision Boost Overdrive - 14th Apr 21
The Current Cannabis Sector Rally Is Pointing To Another Breakout - 14th Apr 21
U.S. Dollar Junk Bond Market The Easiest Money in History - 14th Apr 21
The SPY Is Nearing Resistance @ $410… What Is Next? - 14th Apr 21
The Curious Stock Market Staircase Rally - 14th Apr 21
Stocks are Heating Up - 14th Apr 21
Two Methods in Calculating For R&D Tax Credits - 14th Apr 21
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Greg Weldon: Gold Price Still Has Significant Upside

Commodities / Gold and Silver 2010 Dec 08, 2010 - 01:32 AM GMT

By: Submissions

Commodities

Best Financial Markets Analysis ArticleMichael Campbell: What are the implications of solving a huge debt problem by taking on more debt?

Greg Weldon: Its more than Ireland or Greece when you think that 25 out of 27 EU nations are in violation of rules on either debts or deficit relative to their GDP. We’ve been saying for a long time that for Europe to to bail out Europe is ridiculous. To think that the US is going to commit a trillion dollars to any foreign bail outs is even more ludicrous. Really the spark in the stock markets around the world was that comment from an unnamed US official that the United States promised to buoy up the International Monetary Fund, with another trillion dollars.


The European Central Bank has been in a program to buy debt, but they sterilized that money they put in the system by withdrawing it at the back end. So they are not even really playing ball to begin with to the degree that the Fed has in the US. Having said that, the European Central Bank is expanding their balance sheet again. The Bank of Japan balance sheet just hit a new interim high. The US bought a lot of bonds and unfortunately they’ve had mortgage roll ups so they haven’t yet in net expanded their balance sheet to new heights, but they’re in the process of doing it. So when you have the three major central banks in the world expanding their balance sheets, that does provide some underpinning in terms of liquidity. To think that that’s a solution to these long term problems is absolutely ludicrous.

Michael: In your view then Greg, it’s not a matter of if we have a day of reckoning, it’s just when?

Greg: There is no way out. This is the cycle that you’re caught in and you can never underestimate the ability of monetary officials around the world to get creative. This is a bubble that goes back to the US removing the dollar from the gold standard. What we’ve entered into is an absolute the day of reckoning. But it’s not here yet because we’re going to keep going through these vacillations where they pump it up and dump until they can’t do it anymore. The second you pull the rag out from under the market in terms of support either fiscally or monetarily, it’s a nightmare waiting to happen.

So they have boxed themselves into a corner where pump it up is the only way out, yet inevitably it is doomed to fail. Timing that failure is what is just so difficult and it becomes increasingly difficult as these vacillations become more and more extreme. You might liken it to an EKG where you have a nice little pattern of up and down, up and down, up and down then in the ’97, ’98 crisis that pattern became a little more wild, in 2000, 2001 more wild, and 2007, we were into the heart attack stage.

Michael: In the Gold Trading Boot Camp you wrote in 2006 you chronicled the kind of situation financially that we’re finding ourselves in right now. You wrote about taking advantage of gold as a protection against these kind of events. Where do you think gold is right now?

Greg: Gold still has significant upside. We actually became a little bit more cautious on precious metals about six weeks ago, when it looked like global interest rates had started to rise. But as we mentioned before the Bank of Japan’s balance sheet is expanding again, the ECB expanding its balance sheet and the Fed doing the same. As soon as these mortgage roll offs get out of the way the feds balance sheet should explode. So this certainly is positive for Gold.

More importantly in the bigger picture, when you take a look at gold prices in every currency in the world, it’s not a dollar move. Gold is gaining against every single currency in the world. The flip side of that is that every currency in the world depreciating relative to gold because central banks are debasing money everywhere. That’s the bottom line when talking about gold. That’s what people tend to miss, tend to overlook, is what is really at the core of this. It’s kind of veiled, it’s kind of hidden, and no matter which way it goes, whether it is a successful hyper-reflation or whether it is a downturn to debt deflation, either scenario incorporates a lower standard of living. For example if you bought a million dollars of treasury bonds five years ago, versus buying gold at $450. While you got your money back because the bond was ‘safe’ guaranteed investment, the million dollars you got back it buys one third the amount of gold it could have bought 5 years ago. That in a nutshell is the debasement of the currency at work. It is the lower standard of living at work. We’ve lived on this credit bubble for so long that he downturn is going to be very difficult to fight because we’ve become reliant on expanding credit.It’s not the right thing to do, it’s just because we’ve become so reliant on it now.

Gold is so attractive in the long term because this is a trend that is intensifying. It’s a trend that’s broadening, and the tentacles are reaching throughout the world in places that it has not reached before. You’re not protected in currencies, so for me on the longer term picture gold still looks attractive even at these prices.

Michael: Is silver outperforming gold?

Greg: Silver is absolutely outperforming gold. It has been a big performer and an upside leader for quite some time in the near term. I have a love for Silver as when I first started the business it was in the Silver pit in New York Cities World Trade Centerback in the hey day of $50 Silver.Talking about the bigger picture, Silver has a great appeal in that it’s a lower denomination metal, you can hold smaller quantities, exchange it for less value in terms of what you mightexchange Gold in potentially a real worst case scenario down the road. From that perspective I still like Silver. It does continue to outperform gold and I expect that to be sustained.

Michael: Always fascinating Greg, Greg does all the work that other analysts and institutions want to have a look at. He gets behind the numbers and obviously has a terrific understanding of what’s going on. You can subscribe to Greg Weldon’s Newsletter at www.weldononline.com.

Robert Zurrer for Money Talks

zurrermoneytalks@shaw.ca
(604)-512-3134

© 2010 Copyright  Greg Weldon - 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