On the Verge of a Gold Stock Explosion

By: Jeff_Berwick

It's probably the #1 question on gold stock investors' minds. Are we on the verge of a repeat of the 2008 wipe-out.

Just by the very fact that we have had so many subscribers ask us this question, we can almost on this evidence alone say no. Massive crashes never happen when everyone is looking for them and afraid of it.

However, there is much more evidence than this.

The most important is the money supply. True Money Supply (TMS), the Austrian economics method for calculating the money supply, is in a much different position than it was in 2008 pre-crash.

In 2008 it had been close to 0% growth for two years. Now? In the last three years it has been between 8-18% annual growth and looks to be spiking higher again in recent months.

Fact: You don't have serious market crashes - not in nominal terms - when the money supply is increasing at a rapid rate.... like it is now.

For further evidence, let's take a look at the HUI Gold Bug Index (a basket of major gold stocks) versus the Dow Jones Industrial Average (INDU) in 2008 versus now.

Notice in 2008 how the gold stocks actually led the INDU to the downside, in a big way.

Now, let's look at this last year... which includes the most recent market correction.

Gold stocks have been outperforming the INDU throughout the year as well as into the last few weeks. This is a very large difference from 2008.

If gold stocks were to start to plunge from here (20%+) then we'd have to re-assess. But this is looking quite unlikely with the current market action.

In fact, Ed Bugos, TDV Senior Analyst, is expecting a VERY profitable fall and winter for gold stock investors based on all his indicators.

With gold nearing $2,000/oz, it is really only a matter of time.

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The Dollar Vigilante is a free-market financial newsletter focused on covering all aspects of the ongoing financial collapse. The newsletter has news, information and analysis on investments for safety and for profit during the collapse including investments in gold, silver, energy and agriculture commodities and publicly traded stocks. As well, the newsletter covers other aspects including expatriation, both financially and physically and news and info on health, safety and other ways to survive the coming collapse of the US Dollar safely and comfortably. The Dollar Vigilante offers a free newsletter at DollarVigilante.com.

© 2011 Copyright Jeff Berwick - 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.

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