The Bull Market Reset
Source: Seeking Alpha, James West (10/14/08)
The stage has been set for $2,000 gold, and though many skeptics may marvel at the audaciousness of this sentiment still being echoed after all these years, it is now imminent and definite.
First of all, it's key to understand that the Federal Reserve Board of the United States is essentially fabricating money out of thin air to inject “liquidity” into the credit system...
However, in that this imaginary cash that is providing the liquidity has essentially the effect of further eroding U.S. dollar purchasing power, the opportunity here is the dollar-negative gold-positive influence of such moves.
Right now, the dollar is looking strong because of the massive repatriation of U.S. dollars now underway as a result of global U.S. denominated asset de-leveraging. So it looks like the dollar is strengthening. This is however a temporary illusion, and the fact is that this is a perfect opportunity to unload U.S. dollars and everything denominated in same. When the export of dollars to the U.S. eases, the greenback will plunge.
As all of the world’s currencies weaken in tandem with the U.S., since they are all tied to some degree to that ailing foreign reserve standard, gold will slowly at first, and then suddenly, surge into new record territory. These are the events that have irrevocably set the stage for $2,000 gold, and though many skeptics may marvel at the audaciousness of this sentiment still being echoed after all these years, it is now imminent and definite.
So the first great opportunity presented by this crisis, besides the last minute premium available for USD, is in physical gold. Not only is this the best strategy for capital preservation versus holding cash, it’s the next great opportunity to buy low and sell high.
There will be the usual resistance to swapping cash for gold on the part of mainstream investing America, and as usual, Americans will be the last to cotton on to the fact that all of the anti-gold messaging they’ve been spoon fed over the last decade is actually just an exit strategy for the cannibals of Wall Street...