Gold Stocks: Recent Gold Weakness and Dollar Strength May Be Played Out

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...It won't take much buying from just a few central banks to create a much higher gold price. Just like countries buying jets and bombs and guns to protect their borders, central bankers will buy gold to protect their financial system, since the paper money hoax on this planet is just about over...

Gold stocks have seen their lows. As all asset classes have been in a historic (time wise) liquidation, gold has actually held up better than most other asset classes. But the gold mining stocks have been beaten up badly for various reasons that are now basically played out. Concurrently, dollar strength has been based on two overriding circumstances and these are about finished as well. This means a very positive environment is about to affect the gold and silver mining stocks...

The U.S. Dilemma: Bullish for Gold

Two wars

An energy policy that is poorly conceived and unworkable

Huge and unprecedented budget deficits baked into the cake

A credit crisis for institutions...

A recession that will create more financial stress

A medical and retirement commitment that will be overwhelming

The answer to all of the above is printing more money. It is as simple as that. Taxes can be raised to 95% of income and it wouldn't make a dent in the above.

If you own gold and silver and legitimate gold and silver mining companies, the above means you are in the right sector. You do not have to make things anymore complicated than that as your investment thesis.

The current global "credit freeze" is because of mistrust by bankers of other banks solvency. If commercial bankers globally don't trust each others paper then central bankers are also not going to trust each others paper (currency and notes of the host government) either. Therefore, I believe some central banks will be buyers of gold because even with the dollar still believed to be better than their host currency, these bankers know the dollar is going to be debased dramatically in the future and gold cannot be debased.

With this mindset, some portion of the 200 or so central bankers in the world will most likely quietly (under the table) buy gold...It won't take much buying from just a few of these central banks to create a much higher gold price. Just like countries buying jets and bombs and guns to protect their borders, central bankers will buy gold to protect their financial system, since the paper money hoax on this planet is just about over...

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