Investing in Gold

Jeff Clark of Big Gold: “the downfall of every fiat currency are the two D’s. Debts and Deficits"

Wednesday, February 22, 2012 by Eric Harding

Now that we added another percent over the 100% of debt-to-GDP ratio in just 21 days (can anyone say exponential debt accumulation? Sure you can!), it is time to give kudos to Chuck Butler of Everbank for catching a good find today in his Daily Pfennig. Here’s Chuck:

“I read a great piece on Gold yesterday, by Jeff Clark of Big Gold who writes for Casey Research. Jeff did a great job in the article, and so I stole a snippet of it… Here, Jeff talks about “the downfall of every fiat currency (the dollar) are the two D’s. Debts and Deficits… So with that in mind, consider the following:

• Morgan Stanley reported that there is "no historical precedent" for an economy that exceeds a 250% debt-to-GDP ratio without experiencing some sort of financial crisis or high inflation. US total debt currently exceeds GDP by roughly 400%.

• Detailed studies of government debt levels over the past 100 years show that debts have never been repaid (in original currency units) when they exceed 80% of GDP. US government debt will exceed 100% of GDP this year.

• Investment legend Marc Faber reports that once a country's payments on debt exceed 30% of tax revenue, the currency is "done for." By some estimates, the US will hit that ratio this year.

• Peter Bernholz, a leading expert on hyperinflation, states unequivocally that "hyperinflation is caused by government budget deficits." Next year's US budget deficit is projected to be $1.3 trillion.

Chuck again… yes, debts and deficits… I’ve ranted over these for years, and people (non Pfennig readers!) are finally beginning to realize that deficits really do matter! And as long as we, as a country continue to go down this road of debts and deficits, I would look for Gold to remain the anti-dollar…"

Folks, you can almost feel the tears welling up, as THIS will end in tears. Debt accumulation at this pace destroys currencies. I agree with Jeff Clark. I agree with Chuck Butler! Want real gold, real physical gold that stands the test of time? Given what appears to be on the horizon, it is time to accumulate some gold coins. Time to call Lear Capital!

When the World’s Wealthiest Man Says a Really Silly Thing

Monday, February 13, 2012 by Eric Harding

There is nothing like throwing over 6,000 years of history out the window with one statement. I call that silly. It’s even sillier when a man with the wealth of Warren Buffett says it, as he recently called physical gold a “valueless asset”. The UK Telegraph picked up the comment in reporting that Fortune Magazine had interviewed Mr. Buffett on this subject. Also from the UK Telegraph article, their writer Emma Wall wrote the following last Friday:

“Buffett's attack comes as private bank Coutts predicts that the gold price will hit "new highs" by the end of 2012. In a report from the bank, that counts the Queen among its clients, gold is confirmed as a "key asset in investment portfolios".

Hmmm….. I think it is fair to say that the Queen of England knows her history. Also, one of the wealthiest men the world has ever known Mayer Amschel Rothschild, who was named by Forbes magazine as “the founding father of international finance” said “Wealthy men have always collected rare coins”. He probably knew his history too. Rothschild said that back when coins had value and were primarily physical gold or silver. Guess what modern founders of finance, like Richard Fisher, the President of the Dallas branch of the Federal Reserve are doing with their own money – investing in gold! Fisher’s disclosure of investment was recently released by the Federal Reserve as well as the holdings of the other Fed branch presidents. Another hmmm….. If the Fed presidents have so much faith in paper money, then why does Fisher own more than $1 million in gold and another $50,000 in platinum?

Back to Warren Buffett. If he thinks that gold is a “valueless asset”, then why did he say this on 8/19/09: “Unchecked greenback emissions will certainly cause the purchasing power of currency to melt.”? Combine that with his firm Berkshire Hathaway’s investments in silver a decade ago (did he think that the other monetary metal was also a “valueless asset”?) and an investor would have to conclude that Warren likes to speak out of both sides of his mouth. Sorry Warren, I appreciate your head-fake, but I’m going to continue to measure my stack of gold coins. I don’t know what your agenda was with your comment from last week, but I know that history is on my side. I’m buying more physical gold from Lear Capital!

Lear Capital: Facebook or Gold - Which Do You Prefer?

Thursday, February 2, 2012 by David Engstrom

At a time when our economy is fighting for its life, it seems almost surreal that an IPO is about to turn a handful of people into multi-billionaires. Facebook has definitely turned into an Internet phenomenon with some 850 million users worldwide. Now it begs the question - will an investment of $50 billion $80 billion and perhaps as high as $100 billion, produce a return on investment for those willing to bet another Google-Like phenom is being born.

These billions of dollars are about to be invested against a backdrop of a failing stock market and fresh warnings from the most powerful banker in the world. Looking back to just days prior to the Lehman launch of the 2008 credit crisis, we see stocks have done nothing. Even the great Google has fought just to recover to 2008 pre-crisis levels.

Now as if to say, "don't blame me when it hits the fan", Ben Bernanke, today, issued a warning, "Rising federal budget deficits are posing a significant threat to the U.S. economy and are likely to cause a crisis if not brought under control." This is especially alarming in the wake of having just raised the debt ceiling by $1.2 trillion dollars. Does that sound like control to you? Does this sound like an environment conducive to rising stocks is being created?

This warning is spoken like a true believer in printing money to escape economic disaster. As though debasement of our currency is preferred over creating debt that is increasingly more difficult, if not already impossible, to repay. This comment by the Fed Chairman suggests the Fed believes we have created too much debt and not enough printed money. That's my take. Either way, debt is not under control and may never be. The economy is not recovered and is still in peril. So what will be next. More debt or more printed money?

In the last 3 years or so, we have gotten a combination of both printed money and rising debt. More than $8 trillion worth. So in my humble opinion, whichever we are about to get more of puts gold in a win-win situation. Numbers don't lie. Stocks have gone nowhere and the gold price has more than doubled. Against that backdrop which investment makes more sense to you today. Facebook or Gold? I mean...I'm just sayin'. The choice is always yours.

Lear Capital Calls For Gold up 30% in 2012

Thursday, January 19, 2012 by David Engstrom

Is the Gold Rally over? Or, has it just begun?

September 15, 2008 - The U.S. credit crisis erupted with the failure of Lehman Brothers. Overnight, $600 billion vanished in the largest bankruptcy in American History. Panic set in to the already beleaguered markets. In just 3 weeks the Dow lost 2,937 points, the S&P lost 356 and the NASDAQ 624. It is said, we were just minutes away from economic Armageddon.

By October 3, with seemingly no choice, the Troubled Asset Relief Program (TARP) was signed into law. It provided $700 billion be used to purchase toxic assets from banks deemed too big to fail. However, that alone wasn't enough to halt a market freefall. Not until late November, when the Fed announced its infamous $600 billion round of Quantitative Easing (QE1), did market stability return.

By March 2, 2009, as the last of the $600 billion was spent, it became apparent QE1 wasn't enough as the markets teetered on the brink of total meltdown. The DOW had fallen from record highs above 14,000 to just 6,626, the S&P 500 fell from a record high above 1,500 to 683 - the NASDAQ fell from 2,810 to 1,293.

Then, in the markets' darkest hour, the Fed once again came to the rescue with an extension of QE1. On March 18, 2009, it announced another trillion dollars would be committed to easing. Immediately, markets reacted positively and proceeded to rebound.

The rebound was strong seeing a steady rise over the next 12 months. Then, in anticipation of March 31, 2010 (the end of QE1), the markets began to crash. The four months to follow saw the S&P fall 16% creating fear of another wholesale collapse back to March 2009 lows.

By August 23, 2010, yielding to market pressures, the Fed, during Jackson Hole, hinted at another round of easing. The markets immediately sent a signal of approval and edged higher. On November 3, 2010 the Fed confirmed another $600 - $900 billion for the purchase of treasuries. QE2 would now run to June 30, 2011.

In the time between Jackson Hole and the expiration of QE2, markets soared. The S&P climbed 28%. Then QE2 ended and the markets threatened another crash. Printed money had become to the markets what a drug is to an addict. Take away the drug and a crash is inevitable. Again the Fed was cornered.

In response, the Fed made an August 9, 2011 announcement of plans to hold interest rates at already historic lows. Shortly after, on September 21, it announced the Twist - a fancy term for "refi". The quick successive moves were intended to produce similar rescuing effects on the markets as quantitative easing without having to print more money. Instead, confidence failed to be restored as today's markets flounder in volatility. Hence, rumors of QE3 have surfaced.

It's clear, past stimulus efforts have had only a temporary effect. Numbers don't lie. Since Lehman, the markets have produced Zero Gains. This is especially troubling when you consider an additional $5.2 trillion of national debt incurred for government's own stimulus and bailout programs. That's $8 trillion dollars or more spent with zero results.

One investment, however, has been a consistent winner. GOLD!

Since Lehman, gold prices have doubled as rising demand suggests that, with or without stimulus Gold is in a win-win situation. Without stimulus it's believed markets will crash leaving gold as the safe haven investment that's never been worth zero. And, with stimulus and higher deficits, paper currencies lose value, inflation sets in and gold prices rise as the purchasing power of paper money falls.

Will QE3 become a reality? Will deficits continue to climb? According to a special report released by Lear Capital that deals with the question, Is Gold still the answer for investors?, "The Fed may have no choice but to print more money." And, when we asked Kevin DeMeritt, President of Lear Capital what that would mean for the gold price, DeMeritt responded, "More stimulus would set the stage for gold to repeat its performance of the last 3 years. That would mean another 30% rise in 2012."

He quickly added however, "But more stimulus and rising debt are just 2 of the 7 reasons we've identified that could send gold prices 30% higher this year. If a combination of 3 or more play out at the same time, gold could go much higher than that."

Lear Capital is not alone in its call for higher gold prices ahead. In December, Citi Bank released its report The 12 Charts of Christmas wherein Citi projects gold at $2400 an ounce in 2012 and $3400 in 2013. That's a 50% rise in 2012 and more than 100% by 2013. Morgan Stanley joins the chorus with a $2200 projection and a 35% rise this year. Merrill Lynch and Goldman Sachs, while less aggressive, are also bullish on gold projecting 33% and 23% gains respectively.

As revealed in Lear's report, many factors are driving these bullish outlooks on gold. The report delves deeply into the global debt crisis and its effect on gold prices, geopolitical tensions surrounding Iran and the now insatiable demand for gold by the Central Banks of the world. Last year, for the first time in 20 years, Central Banks turned from being net sellers of gold to net buyers. As Lear points out, it is especially intriguing when those who have the power to print more paper money are demanding gold.

Perhaps it's time for a little self-examination. How many 30% winners are in your portfolio right now? No one has a crystal ball, but the case for rising gold is making a lot of people wonder if the gold rally is over or just beginning.

Lear Capital: Last Chance to Buy Gold Cheap?

Thursday, January 5, 2012 by David Engstrom

Just when you think gold was down for the count, as so many news reports would influence you to believe, the gold atmosphere changed and has people now leaning again toward more gold in their portfolio.

The pummeling gold took in 4Q 2011 was like a tornado hitting a tent. As clearly, one of the top performing investments going into 4Q, the gold price was beaten down by profit-taking, multiple increases in contract margin requirements and repeated claims that gold was another bursting bubble. Had anyone known what gold was headed for prior to its 4Q beating, $1000 gold predictions would have appeared certain.

Instead, gold hung in there like Ali vs. Foreman and now appears to want to move back toward record highs. With all the negativity for gold potentially behind it, we now look forward and see that a global debt bomb could go off any minute, world currencies are getting weaker by the second and central banks are buying gold like it's the last chance investment before Financial Armageddon.

Now the question, if all the negative forces in play last quarter only resulted in what could be called a normal bull market pullback, what will the positive forces now in favor of gold do to the gold price? To answer that, I refer you to a recent Citi report that projects the gold price to reach $2400 an ounce in 2012 and $3400 by 2013. The report even hints of the potential for gold at $6000 an ounce, a price you expect to hear uttered only by the most fervent of gold bugs.

If these predictions are true, this could be the last chance for investors to own gold CHEAP! But then again, what's cheap? The real question of how high can the gold price go is really a question of how far can currency values fall. The more you print the less they are worth.

And print they will, at least according to a report today from Morgan Stanley, who says the economy will slow dramatically in early 2012 thus prompting the Fed to engage in more easing. More easing means more printing and less dollar value.

Game on!

Lear Capital article review: Backdoor Quantitative Easing

Monday, December 26, 2011 by Eric Harding

Blog Photo Eric Fry of The Daily Reckoning calls it on the carpet. Slight of hand, funny money, helicopter money. In yesterday’s issue he called it by the above title. He surmised and brought in a fellow colleague to give us his thoughts: “No matter how you slice it,” observes our friend Dan Denning, editor of the Australian Daily Reckoning, “many of the world’s governments need money. If the private markets don’t give it to them, their central banks will have to do the job. This will lead inevitably to money printing and currency devaluation. The amount of money these governments require is staggering.”

So, more smoke and mirrors! Eric Fry finishes with this:

“Where is that money going to come from?

It’s hard to say where the money will come from, but it’s easy to say where it will not come from. It will not come from private citizens who are looking to park their cash in safe and secure investments. There aren’t enough folks with actual money to invest who are willing to lend that money to a bankrupt government. So in order to fill this $10 trillion funding gap, we should expect a few more quantitative easing programs and other forms of money-printing.

Meanwhile, we should also expect a lot more attempts by government powers to repel the forces of economic nature: More “coordinated central bank intervention,” more “emergency landing facilities,” and more ad-hoc, too-big-to-fail remedies.

So at least we’ve got that going for us — a lot more of the stuff that hasn’t worked… and never will.

Buy gold…some more.”

More good advice from Eric, especially after this pullback in the gold coin price. Today’s gold news is all about gold demand in light of the action of central bank decisions of propping the financial system up! Call us today at Lear Capital to get your gold coins!

Lear Capital: The Gold Rally is Over! Not!

Friday, December 16, 2011 by David Engstrom

Today, one faithful reader named Clay said it would be nice if he could get a comment from us on the recent wild price action in precious metals. It is crazy isn't it?

Let me first reiterate prior expressed beliefs, those being, nothing has changed. Since 2008 not one - I mean not one single issue related to the financial crisis that erupted has been resolved. In fact it's gotten worse.

Despite reports that unemployment has declined, the true data show that when you consider the discouraged worker, expired unemployment benefits, shorter work weeks, pay cuts and the conversion of full time jobs to part time, the employment situation in this country is worse than ever.

And, not to Grinch the Christmas spirit, but once the holidays are over, thousands of seasonal jobs will vanish and the jobs picture will change dramatically. Let me give you some examples. UPS reported hiring 55,000 additional workers for the holidays. Fed Ex - another 20,000. Retailers hired hundreds more thousands of seasonal workers as did certain manufacturers and distributors. Unfortunately for these workers, when the holidays end so do the paychecks.

Granted some of these jobs are held by students and full time workers taking on temporary part time work. But to think all this hiring had no short term effect on the jobs picture is just head-in-the-sand logic.

Then there's housing. In November a Bloomberg article called the Housing double dip one of the "scariest business stories of 2011." So, no improvement there either.

Then there's debt. Since 2008 our debt crisis has reached gargantuan levels. Even worse, it is planned to grow by trillions more over the next 10 years. All this Super-Committee talk is just that - Talk! They speak of $400 billion a year cuts in spending but only after they agreed to increase deficit spending each year by more than $1 trillion. So, in reality, the cuts they discuss are really cuts to exorbitant increases already penciled into the budget picture over the next decade.

They say the real crisis in 2008 was averted. That being a total collapse of the American financial system, one that could have driven us to third-world status in a matter of months, weeks or even days. Subsequent actions by the Fed and government to print money saved us. But, from what? Enter gold . . .

As the crisis unfolded, gold prices really began to soar, more than doubling. Governments started buying it, central banks turned from net sellers of gold to net buyers for the first time in 20 years and Gold ETFs sprung up to accommodate the paper gold investor. In other words, much of the world failed to buy into the "crisis averted" story.

To the extent gold prices have dipped now to levels below $1600 an ounce, they are still more than double where they were when stocks were at pre-crisis highs. So begins the cry that the gold bull market is finally over. Meanwhile, what have stocks done? The Dow is down 15% from its pre-crisis high, the S&P is down 19% and the NASDAQ fairing slightly better, is down just 5%. With a recovery like this, who needs a crash?

The markets have been crumbling right before our eyes but never did we hear from the TV geniuses that the stock rally is over and it's time to get out. What we have heard is the perpetual recovery in motion chant. The louder the chant the steeper the drop in stocks.   Almost as often as we have heard the recovery chant, we have heard the claim the gold rally is over. Yet, each time the gold price pulled back, during this undeniable gold bull Market, the pull backs proved to be nothing more than normal periods of consolidation and profit taking. Imagine that! The gold bull market has now spanned more than a decade and more than once someone was compelled to take a profit. The nerve!

Now look! As we exit our trance, it's clear we should have believed the opposite of what we heard. We shouldn't have bought more stocks and we shouldn't have sold our gold. Now the chants have reached a crescendo. Enter Europe . . .

Given our own debt crisis has only been a futile exercise in kicking the can down the road, the end of the road is getting closer and closer. What that means seems to remain a mystery to most, except those like central banks who are buying gold. It means, some day our debts will be so large that we simply cannot pay them. It means default or print more money. If we default, the dollar becomes worthless as do your dollar denominated investments. It would happen fast. (My opinion)

If we print more money to pay debts, as we have been doing, inflation begins to steal dollar value. While it may be a slower death, the end is inevitable and the same as default. Eventually, the dollar becomes worthless as do your dollar denominated assets.

If you remain in denial and believe debt is something we will forever be able to deal with tomorrow, then what I have to say about Europe won't matter. If you believe or perhaps are starting to believe the end of the debt road is approaching, the truth about the European debt crisis will scare you out of your mind. Caution you may be compelled to do as central banks are doing and buy more gold. Don't say I didn't warn you.

Here's some fun facts about the European Debt Crisis and your money.

1. U.S. exposure to bad European debt is as high as $4 trillion, more than 6 times what vanished in the Lehman Bankruptcy. A bankruptcy that almost crumbled the entire global financial system.

2.   A Greek default alone, could wipe out $1.6 trillion of U.S. wealth.

3.   Fitch Ratings, a premier credit ratings agency, reports that," About half of the assets in the 10 largest U.S. prime money-market funds are invested in European bank debt." That means the cash in your money market checking account could be at risk of vanishing in a European Debt Default.

4.   Certificates of Deposit and savings accounts are FDIC insured. Money Market Funds are not.

5.   If the Euro crashes, billions of dollars in U.S. pension funds could be wiped out. Does your pension Fund own European Debt.

6. Three of our largest U.S. banks have an estimated total of more than $60 billion of exposure to European debt. Citigroup, JP Morgan and Bank Of America.

This is all just the beginning of the story on the European Debt Crisis and your money.

Ironically, it could be the default of Europe that crashes our own dollar. I'm only speculating, but if Europe falls and takes the Euro with it, the Fed could be compelled to launch the mother of all QE programs. Maybe this is why one analyst predicts the end of the dollar by 2013.

Now, all this said, do you believe for a second the gold rally is over? --------- I didn't think so. If you feel so compelled as to request more information on Gold and the global debt crisis, visit LearCapital.com today and request our latest special reports and world gold guide.

And if you have yet to receive your FREE End of the Dollar Video from Lear Capital, click here to get your free video today.

Lear Capital: Solving Debt Crisis By Printing More Money, Buying More Gold

Monday, November 28, 2011 by David Engstrom

Today, the markets are expressing exuberance as Europe speaks of printing more money in order to bail itself out of a debt crisis. Here we go again. As soon as it appears Europe is on the brink of collapse, some encouraging news makes its way through the airwaves and for a few days hence, all seems well in Mudville.

Really?

Let's be honest, whatever is known today by European officials, regarding the financial state of Europe, was known a month ago, a year ago and maybe even a decade ago. In my opinion the U.S. has knowingly been kicking the can down the road for over twenty years. Loose money policies have been in place since the advent of the Home Equity Loan (HEL) whereby consumers were duped into sacrificing home equity in favor of temporarily elevating their lifestyle. I will submit, without the "equity-for-debt-trade," the economy would have died a long time ago.

Here in the U.S. warning bells of a credit crisis have been sounding for decades. Trust me! Europe heard them too. Don't try to tell me policy makers, here in the U.S. did not see the dangers that came with the creation of liquidity out of thin air. And, whatever Europe's plan may be for digging the world out of this crisis now, that plan was made long ago.

I've always believed that the "fix" to the crisis, here or in Europe, will be to continue to find ways of creating more liquidity. Printing more money, if you will. In the old days it was accomplished through the seduction of the consumer. We traded our equity for debt and there was no need for government intervention, per se. Now trillions of our dollars in equity are gone. What we had, going into 2008, was wiped out overnight as some $7.7 trillion was lost to instantaneous deleveraging of derivative assets by major banks.

That leaves Central banks and governments as our only source for new liquidity/printed money. Can we expect it? If printed money, either by the consumer, central banks or governments, has been what's bailed us out for more than two decades now, what makes you think this practice will now cease?

The world is faced with two choices. Either print more money and continue to destroy the value of all paper currencies, or, default on debt. Since default would lead to flat out depression and a digression in standard of living back to depression-like standards, I suspect, the world will continue to print more money. Since the U.S. has already printed trillions, it is Europe's turn at bailing out the global markets.

And why not? If we take turns with Europe in printing more money, the vanishing purchasing power of our money will be masked by an equal drop in purchasing power of the Euro and the Pound Sterling. China may become the biggest victim of our printed money as the more we print the less profitable their massive exports become. That will force higher prices and now we begin to see how inflation takes seed and grows.

This also goes far to explain why central banks have become net buyers of gold. If printing money is going to destroy the value of currency, then a counter move to buy gold with some of the money printed, makes perfect sense. The more currency you print the less valuable it becomes. Conversely, the gold price moves higher as valued in currency thus preserving purchasing power. How much gold would you buy if you needed only to print the cash with which to pay for it? It's brilliant! Print more currency to buy more real money - GOLD!

And if Europe fails to print more money? According to Peter Mirici, in a recent New York Post article, "the Euro's death will send gold soaring." Essentially, the death of the Euro would destroy all faith in paper money and drive investors to gold.

So, you see, it appears gold is in a win win situation. If Europe prints more money, then inflation strikes hard and the migration of investor money to gold will continue for many years to come. If the Euro crashes the flight to gold will leave within the hour. Either way it is difficult to see why gold prices would collapse or why gold would all of a sudden become irrelevant as a safe haven investment.

How will you protect your hard-earned savings. To learn more watch this free video and see why gold prices could double even triple where they are today.

Lear Capital: Will Gold Bail Out Christmas?

Friday, November 25, 2011 by David Engstrom

As reports begin to stream in, it appears the Christmas retail season is off to a fast start. Some suggest this is a positive sign of things to come as, for many retailers, a strong holiday selling season could make the difference between earning a profit for the year or not.

However, caution is in order! A strong start to the season could also be a signal that the beleaguered consumer is going to buy at a bargain or not buy at all. One analyst suggested we could see a strong start, as consumers rush to take advantage of big discounts, followed by a long lull until just a few days before Christmas. That's when the credit cards come out in an effort to delay the pay date as long as possible.

With a real unemployment/underemployment number estimated to be closer to 16% than the reported 9%, one really has to question where the money could come from to bolster a strong retail season. More than one analyst has attributed recent gold sales to an effort to offset losses in other investments. We are near year-end, a time when many stock and investment transactions are tax motivated. I may suggest another reason for selling gold at this time of year.

The experts, in talking about gold, seem to forget that gold is up more than 21% on the year. What better motivation for a an average gold investor to sell off a piece of gold in order to ensure a gift-laden Holiday season for the family. According to a recent Gallup Poll, the average family plans to spend $712 this year on Christmas gifts. More specifically, per the poll, "about one-quarter of Americans plan to spend at least $1,000 on gifts, another quarter say they will spend between $500 and $999, and about one-third will spend between $100 and $499. Very few plan to spend less than $100 while 14% are unsure."

These numbers illustrate how far an ounce of gold could go toward covering an entire season of gift buying, especially considering an ounce, which currently sells for more than $1700, when sold would produce about $360 of investment return over the last 11 months. In this regard, gold may not only be bailing out losing portfolios, it could also be bailing out Christmas.

Considering these motivations for selling gold along with a general sentiment that gold prices have peaked, it's a wonder the gold price is holding up as strong as it is. It seems every ounce that comes on the market is being grabbed up quickly by those who do not trust the theory of our own recovery or Europe's ability to solve its debt crisis.

Lost in the Holiday commotion and forced selling of gold is the fact that central bank gold buying is skyrocketing. China alone seems willing to buy every ounce put on the market. Let's not forget that dollar strength and the resultant downward price pressure on gold, is like a giant Christmas gift to foreign buyers who hold dollars in their reserves. What better opportunity to off dollars than when the dollar is showing relative strength against just about every other major currency in the world. Even today as the gold price dipped on negative news from Europe, we were reminded that the gold price, in Euro terms, went up.

It's long been reported that China has begun to bail out of its dollar reserves. Estimated now, to be near $3 trillion, China couldn't ask for a better gold buying situation. It may be the irony of all ironies. We are selling gold for dollars to pay for our Christmas gifts while China thinks the real gift is the opportunity to get rid of more dollars to buy our gold.

Now that's what I call a bailout.

Lear Capital: Does the Gold Price Make Sense?

Monday, November 21, 2011 by David Engstrom

Central banks are buying more than ever and producers claim it is more costly than ever to get out of the ground, yet the gold price continues to slip lower.

According to World Gold Council Reports, "central-bank gold purchases in the third quarter more than doubled from the second quarter and were almost seven times higher than a year earlier as countries continued to diversify reserves." Last June, Standard Chartered released results of a survey of more than 300 producers, and determined that future supply of gold would fall well short of levels previously anticipated.

These facts alone should be enough to drive gold prices to even higher highs. Instead, it appears the gold price is headed toward lower levels of support. Some suggest a level around the 150 day moving average of $1605 an ounce, will be reached.

So, how do we explain the recent gold price action? First, realize gold prices, even at $1605 an ounce, would still represent a 20% gain on the year. Stocks, on the other hand, are negative for the year with the S&P leading the way down with more than a 6% loss at today's current trading level. Adding this to the equation may explain one reason gold is selling off. It's one of very few assets that can be sold for a profit.

Let me give you an uber simple example of what could be taking place. Let's use a $100,000 portfolio to make it easy to illustrate. Then, let's say I started the year with 80% of my portfolio in stocks and 20% diversified into gold. That's $80,000 and $20,000 respectively. If my stocks are down 5%, and I see a further decline ahead and sell, I have lost $4000 on the year. My gold, on the other hand, up at least 20%, would provide me with a $4,000 gain. This means I can sell my gold for perhaps zero tax consequence as gold gains offset my stock losses.

Yes, this is a very simple illustration with many variables. So simple it may seem inconsequential but when you multiply the amounts in play and consider trillions of dollar in invested money, you can see how important it could be for many investors to sell metals, essentially tax free now, to offset other losses.

This would be especially true if stock investors see even greater losses ahead. Why wait around when losses could mount to levels so high, a complete tax write-off may never take place.

Are greater market losses coming? In a November 17, article, Jim Cramer, warns us that Europe could be a total disaster, driving the Dow down to 8000. Now, I believe things get a little clearer. If everyone who owns stocks and gold is compelled to sell, first to avoid further market losses and secondly, to effectively take tax-free metals profits, that could explain a joint sell-off.

If this be the case, the next question is, how long can this go on. It is estimated that of the total of investable money out there, still only 1% of that amount is held in gold or precious metals. There just isn't enough precious metals in portfolios to facilitate a prolonged sell-off in stocks even if every ounce of gold had to be sold to cover stock losses.

I'm not suggesting this is the only reason people are selling off precious metals. I do think much of the selling, though, is profit motivated and voluntary. But, let's face it, others are being forced to sell. It could be to cover margin calls or simply because times are tough and money is needed. I don't think I need to remind you, but we are still in the midst of a recession and Christmas is coming.

Whatever reasons exist for selling, the reasons for owning should be equally as strong, perhaps more so. Central banks aren't buying tonnes of gold because they think the price is going down. It's a currency play. I mean how much can you love anyone's currency when all you have to do is print more when it runs out?

If you are one of the few that is fortunate enough to have money to invest, now may be the last best chance you have to add some gold to your savings and retirement accounts. Remember you can add gold or silver to an IRA. When it is held in an IRA it is treated, tax-wise, the same way as any other investment.

And if you want to track where the gold price is headed from here, get the blockbuster video, The End Of The Dollar to learn more. Does this all make sense now? I welcome your comments.

Lear Capital: Is it Gold to the Rescue?

Tuesday, November 1, 2011 by David Engstrom

In recent days, newsletter writer Dennis Gartman, reversed his call on gold saying, "The authorities have no choice but to inflate their way out of the morass that they’ve found themselves falling into and that shall mean the diminution of currencies generally and the advancement of gold as the only currency not diminished."

Not to be outdone, James Turk, renowned gold market analyst and fellow newsletter writer, recently joined the chorus making a case for gold at $11,000 an ounce. Turk is hardy alone in his lofty predictions as numerous well-known writers and analysts agree with the prospect of gold at $10,000 an ounce or higher.

Is this possible? Is this why you should own gold?

Let's put things into perspective. Since the credit crisis began, gold prices have more than doubled, up 125% even after today's pullback. Custom Chart Maker Meanwhile, the Dow is down 16%, the S&P is down 21% and the NASDAQ is down 6%. To arrive at these current standings, $11 trillion of printed money has been pumped into the economy. Oh, and by the way, that was 7 million jobs ago.

Basically, we're in worse shape now than we were pre-crisis which begs the question. Do we pull the plug on any further stimulus and risk depression or do we print more money. Either way gold is in a win win situation. We know what gold can do if we stimulate. What we can only imagine is how high gold will go if we don't. Stocks on the other hand appear to be in a lose lose position. We stimulate and they lose a little. We don't stimulate and they crash.

Do the math. A stock portfolio diversified with 20% gold at the outset of this crisis could have been rescued from negative returns. So while it may be exciting to speculate about $11,000 an ounce gold, the real reason to own gold is to be diversified into something that has potential to rescue your other investments if the worst comes to pass.

Lear Capital: Gold Makes Stealth Move Higher

Monday, October 31, 2011 by David Engstrom

FREE Video - Wake Up America!
Just about a month ago, the gold price tanked in after market trading, dropping all the way down to $1535 an ounce. This occurred right after the parade of experts past the TV screen, began to make the most wild predictions of much higher gold prices to come. Even the words $5,000 an ounce were uttered, some saying it could occur by the end of the year.

As gold prices pulled back, the enthusiasts jumped off the band wagon so fast you would think someone had thrown a bee hive, full of killer bees, into their midst. Few bothered to look at the charts and see what really happened. The bottom line is, in this bull market of more than 10 years now, this latest pull-back is normal. And, as markets open today, gold is up more than 29% on the year. If gold made no further move higher, it's performance for the year would be considered stellar.

But that's not what we hear. When gold came off its last record high, we heard - AGAIN - the rally is over! The portion of the story we did not hear was that, gold at its lowest point after this last pull-back, was still up 16% on the year. The S&P however, was down 9% but it was the tale of the golden disaster that was told.

Then, last week, to widespread cheers, the markets broke out of the red zone into the black - Barely! Yay! We're even! I think this is a clear sign we have arrived at a momentous point in the markets and the economy. Presently, the sentiment is so negative on gold, even mention of the word causes people to scoff, as though you're an idiot for even thinking about owning it. One gentleman commented to me personally, "See I told ya!" That was 30 days ago. Since then, gold is up 12% even after some morning profit-taking. And, even though gold is up 29% on the year, the story goes untold and the story line on gold remains, "The Gold Rally Is Over!"

When we find ourselves cheering break even and jeering 29% gains, I believe that is a dangerous sign. Yesterday, a friend cited some statistics he read about the economy. He informed me that total GDP is higher today than it was pre-crisis. He added that we have reached this level with 7 million fewer workers in the workforce. The comment was followed by the question, "do you think this indicates some kind of recovery?" I then reminded him that, between government bailouts and Fed stimulus, there has been some $11 trillion spent and invested to avoid economic collapse and bring about recovery. See Bailout Tracker here. So I ask, "if $11 trillion of stimulus could not save 7 million jobs, how many more trillions of stimulus will it take to bring them back and start growing the economy?"

Of course the GDP has grown but not without an equal but opposite reaction. More Debt! Here's the staggering reality. For every job lost since the crisis began, we spent a staggering $1.57 million. Put another way, we spent $37,000 per man woman and child in this country on recovery. We printed money, we borrowed money and we're spending our savings to get nowhere. Our savings and retirement accounts are being gutted right before our eyes yet we continue to be force fed the recovery story.

Will you survive further recovery efforts? Wake up America. Get this FREE Wake Up America Video and get the facts about recovery and take steps now to protect what's left of your savings and retirement.

Lear Capital: The Gold Rally is Over - You Can all Go Home Now!

Thursday, October 6, 2011 by David Engstrom

Do you believe that for a second? Do you think I do? Absolutely not. But, what if it was? What would that mean? It's often suggested that I am just the eternal optimist when it comes to gold - a true gold bug, if you will. However, as I have said on a number of occasions, I long for the days prior to the 2008 credit crisis. Yes, those were the days. Credit was cheap, real estate offered many opportunities to buy, build, sell, rent . . . you name it. And stocks! A monkey with a dart board could pick 'em. Even gold was on the move as those wary of inflating bubbles were not totally buying into the Shangri la theory that most investors embraced. It was hard to be in the wrong business.

Then BAM! Seemingly, overnight, home values were cut in half. Commercial and residential construction sites were abandoned leaving half-done jobs standing as though aliens abducted all the workers. Perhaps worst hit were stocks as we watched them fall from all-time highs. Investors realized, much of their wealth was borrowed and the time had come to cover margin calls. Sell sell sell was the cry! Then the crying.

And what about gold? Even gold got hammered. Right in the middle of a bull market that saw gold prices rise above $1000 for the first time ever, gold prices dropped more than 20%. If only the Mayans could have left October of 2008 off the calendar, maybe the devastation could have been avoided.

Then, to the rescue came the Fed and government with printed money to fuel a rebound. This was a crucial time for all of us as we scrambled to find an investment we could rely on to take us the rest of the way to retirement. Some went back into stocks and stocks moved higher. Others stuck with gold and were vastly rewarded as the gold price, since that major pull-back, has doubled, far outperforming any rebound in stocks.

Now, as the economy and the markets come down off their printed money high, Gold and precious metals prices have once again pulled back. This would be the fourth major pullback since the bull market started in 2002. A bull market in gold that has seen prices, even at today's levels, rise more than six-fold in less than 10 years. So Really! Is the Gold rally over? Or may this be the opportunity of a lifetime to take advantage of what may well be just another routine pull back in metals prices?

Fast forward! What do you see? Do you see $15 trillion of debt vanishing overnight? Do you see job growth, a housing rebound and economic recovery without more printed money being injected into every arm of our economy? Or, do you see the birth of inflation, perhaps hyperinflation, brought on by massive printing of world currencies and especially the dollar?

It does not take an economic genius to recognize the death of the dollar, as chronicled in a new video at EndOfTheDollar.com, is occurring right before our eyes. Do yourself a favor and take a close look at how monetary policies have affected the markets, the dollar and gold over the last 10 years, then decide where to place your bets to protect the future purchasing power of your savings and retirement accounts.

Bye Bye Stocks - Bye Bye Gold - or - Buy Buy Precious Metals?

Monday, September 26, 2011 by David Engstrom

As America wakes, my phone, my email and my texts all started buzzing, ringing and dinging. It was like standing in the middle of a casino. Why? It's simple! Everyone wants to know what's going on with the markets and specifically, precious metals. One reader commented on my last article, Is Gold Rally Losing Steam or Building Pressure? and asked, "what do you say now?"

Let me first say, enjoy the panic. More on that in a bit but before I explain, let's revisit the gold chart as it appeared less than 3 months ago.

I would bet many are surprised to learn, gold this morning, remains up nearly 7% in the last 85 days. That still translates to a 28% plus annualized return. By contrast, the S&P is down 17%., since July 1, and down 10% on the year. Note in the gold chart, the trading gaps created by exuberant gold buying in early August. Technicians will tell you these gaps need to be revisited and filled before the bull trend can continue. To this, I think we can attribute some of the sell-off, especially for those fund managers starving for profit in their portfolios.

The last time we saw a decline in gold prices of this magnitude was during the period between May 11, 2006 and June 14, 2006. See the chart

Here, we witnessed a 23% decline in the gold price from $720 an ounce down to $555. I remember clearly the comments. "The gold rally is over." Even at today's levels, the gold price is nearly 3 times that. I did not believe the gold rally was ending then and I don't believe it is ending now. I just don't see a widespread change in the world financial landscape to suggest any crisis is over.

Also contributing to this sell-off is another round of hikes to margin requirements on gold contracts. Such moves in the past have been shown to have a temporary effect, not really deterring investors from investing. As I commented in a prior article, I doubt central banks are concerned about margin requirements on gold contracts when physical gold is what they are buying.

Of late, central bank gold buying has been considered a major factor in the rise of gold prices, so, naturally, one would wonder if central bank selling is now causing prices to dip. According to a recent zerohedge.com article, there is no evidence of central bank selling. That said, it would not be surprising to see this recent price action spark another round of buying. I don't think central bank policies shift into reverse in a matter of a few days. If central banks have become net buyers of gold, and they have, it is because of their long-term outlook for the global economy. The world is not crashing one day and soaring the next. Do you really think central banks, who printed money to buy gold are going to turn around and buy back printed money with gold? I mean, I'm just thinkin' out loud here.

As the gold price fluctuates, so does silver. While silver possesses infinitely more industrial uses than gold, its price is still affected by the direction in which gold prices move. Early this morning silver traded at $26 an ounce until domestic markets awakened and slammed the brakes on this downward slide. Funny how the best buying opportunities seem to come under cover of darkness when the average investor cannot take advantage.

Adding further to the confusion, stocks are up today. The Dow is up 150 points right now but still cannot break above the 11,000 mark. All the data still points to a possible double dip in the recession, hence, the scarcely repeated comment by Federal Reserve Governor Sarah Bloom Raskin, that additional Fed easing may be warranted.

This to me is a clear sign that "nothing has changed." The economy still wallows near the brink of double-dip. The housing market may be getting worse as foreclosures loom larger than ever. And, as Treasury Secretary Geithner warns all of Europe, "the threat of cascading default, bank runs and catastrophic risk must be taken off the table." Does this sound like reason for the markets to surge while precious metals sell off?

The next few days may be the most interesting days ever in the markets - both stocks and precious metals. Is today's rise in stocks a temporary reprieve from total collapse and the dollar? Can we kiss the gold rally goodbye or is it time to back up the truck and load up on both gold and silver as central banks have been doing for the last several months? I suggest a visit to this new "End of The Dollar" video may shed some light on the path down which we are headed. By all means, stay aware, stay informed! Watch this new video now! Your financial life may depend on it.

A stock-pickers advice on gold - Jim Cramer of CNBC on video

Monday, September 19, 2011 by Eric Harding

Blog photo I’ve heard former CNBC anchor Erin Burnette accuse Jim Cramer of attending the “church of what is working now” in investments. That is why Jim Cramer recently AGAIN sang the praises of owning physical gold in your portfolio. Why, you may ask? In a nutshell, it’s all supply and demand. Gold supply and demand is what it is all about!

Here’s what Cramer said:

“Gold is another fantastic, long term theme that you will be able to fall back on for years to come. I’m telling you that no portfolio is complete without gold in it.”

Watch it, ponder it and call us at Lear Capital to get yours!

Bill Bonner asks Doug Casey – is gold still a buy? (It’s a Yes!!)

Wednesday, September 14, 2011 by Eric Harding

Blog photo As I have stated many times before, I like listening to older, wiser folks. There is nothing that compares with experience! They also tend to remember history – certainly a plus when it comes to physical gold investments!

Here’s a portion of their exchange, as Bill Bonner asks if the gold price is heading higher:

“But it’s plain as day that gold is going to go higher. There’s simply no other place for people to try to safeguard their wealth as the dollar, euro, and other currencies plummet toward their intrinsic values. What else could people buy as they get more and more afraid of paper currencies losing acceptance? What are corporations going to do with the billions of dollars in their treasuries when their management gets frightened? Where else can they go when they need to get rid of dollars, euro, yen, and yuan? Central banks, too – what will they do when they need to dump dollars in favor of something that will hold value?

This is why I see a bubble in gold still ahead. It has nothing to do with the supply and demand for gold in the jewelry trade, or whatever – it’s going to be a result of there being no viable alternatives when the paper-money con game is over. Gold is the ultimate cash, and that’s where people will go when there’s a global, total, panic to cash.”

Bonner finishes the article in his own words:

“Gold is fundamentally a bet that the financial authorities are losers...that the world’s paper-based monetary system is headed for destruction, and they can’t stop it. It is a good bet.”

My take on it? Yes, I agree that physical gold is still a very, very good bet! Call us today at Lear Capital to learn more!

Lear Capital: Is Ben Bernanke Gold's Best Friend?

Tuesday, September 13, 2011 by David Engstrom

As the time for two days - not just one - of Fed meetings draws closer, rumors have begun to circulate about what big news the Fed will deliver. It's all but a foregone conclusion that Bernanke and company will take steps to create liquidity in some last ditch attempt to bolster the economy.

Bernanke has already assured America that interest rates will remain low through 2013. That is to say the fed funds rate and the fed discount rate will remain status quo. These rates are currently, 0 - .25% and .75% respectively. The prime rate, influenced by both the fed funds rate and discount rate is 3.25%.

While these rates are at historical lows, it is believed by many experts the Fed can and will do more. For example, mortgages and other real estate loans are not only influenced by rates set by the Fed but are highly influenced by treasury yields. Currently, the 10-year yield is 1.99%. The 30 year is 3.30%. If the Fed could force these rates even lower, this could cause investors to turn away from bonds as an investment in search of higher returns.

At the same time, as these rates fall, this helps to drive down loans on everything from cars to homes to credit card balances. Throw in a promise to have Fannie and Freddie buy up as many loans as can be written, and you have the formula for potentially very low and new mortgage rates.

Why all the interest rate gymnastics? To spur consumer spending again and to effectively encourage the consumer to take on more debt. They won't even have to call it QE3. In fact, they could announce there will be no more quantitative easing in an effort to stave of political pressure against incurring more debt.

But, make no mistake, whatever wig you put on the mannequin, it's still a dummy and it's still printing money. Will it work? If mortgage rates were 2% on a 30-year fixed rate mortgage would you refinance your house and maybe take a little equity out for good measure? Would that renter be coaxed into buying again instead of renting? Don't you think real estate prices would actually bump a little higher as a $100,000 mortgage just got $200 a month cheaper. Cripes! You can lease a little gas-saving Chevy with the money you save on even a small mortgage.

As always, should this come to pass, there will be winners and losers. Will it create enough money to finally jump start a failing economy? Will that create more jobs? Or, will it just be another temporary reprieve? I think those who win will be those who use the extra liquidity to reduce debt at a faster rate. Yes, some will invest successfully and turn 2 or 3 percent money into 6 or 7 percent money. Heck, some people may even buy gold and other commodities in search of those higher returns.

Look what the last 3 years of printing-money policies have already done to the gold price. Gold has doubled, far outperforming stocks or real estate. Now there's a great idea. Borrow money to buy gold. In fact, it could be like having your own printing press for money. Do like the central banks are doing. They print money to pay debt, stimulate the economy and BUY GOLD!

That said, gold prices could be on the verge of a mini explosion as a result of a fed move that could keep the gold market booming for years to come. Don't wait. At least learn more and watch the signs, visit LearCapital.com for breaking news you can use to take advantage every way you can.

Lear Capital: UBS Totally Blows The Call On Gold

Thursday, September 8, 2011 by David Engstrom

Today the story hit, Swiss Investment Bank, UBS, has raised its gold forecast for 2012 to $2075 an ounce. This represents a 50% increase over its prior prediction of $1380. Wow! They really went out on a limb on that one. Given the Gold price passed the $1380 mark about 9 months ago and has since topped $1923 an ounce.

Talk about doing a 180. It was just this last July when managing director Peter Hickson, at least according to China Business News, said gold had peaked and was set to plunge to $1000 an ounce. My question is, what happened in the last 2 months to so drastically revise these claims?

If I were to speculate, which is all I can do since my crystal ball cracked, I would say, either UBS had an awakening and actually sees the price headed much higher. Or, that the earlier comments were some kind of effort to suppress the gold price and create a buying opportunity. Why create a buying opportunity?

Just two days ago the Swiss National Bank announced it intends to make moves to devalue the Swiss Franc. I think I get it. It's more expensive to buy gold after you devalue your currency than before. That's what happens here when we print more money - gold goes up in dollar terms.

This recent Swiss move adds more evidence to the theory that there is an international race to debase in order to inflate away debt. A strong currency hinders exports and the ability to repay debts, public or private. I think we all look forward to being able to repay today's debt with tomorrow's cheaper dollar.

Once you come to the realization that a weak currency is preferable to everyone, it's easy to see how and why gold could keep rising well beyond this recent UBS prediction.

The Swiss are very shrewd business people and I can't help but think there exists an ulterior motive to such a ridiculous about face. In September '02, the SNB announced plans to sell 283 tonnes of gold by September '03 as part of a plan to rid itself of 1,300 tonnes of "unneeded reserves" by 2005. Wonder what they think about that move today? And, why make the announcement ahead of time when you know such news could inhibit a trend of rising gold prices?

Today, the World Gold Council reports that indeed Switzerland has reduced its physical gold holdings from 2590 tonnes in 1999 to 1040 tonnes by August 2011. However, I came across a curious report that indicates the SNB, may have, once the planned sale of physical gold was complete, embarked on a plan to acquire paper gold.

Check out this report on SNB reserves. The entry found at "Gold (including gold deposits and if appropriate, gold swaps) and you see that purchases of gold via vehicles that carry maturity dates, has skyrocketed since 2005. At the same time, the entry shown as "Gold (including gold deposits and if appropriate, gold swaps): Weight in thousand fine ounces" appears reflective of the SNBs 60% reduction of physical gold holdings since 1999.

Keep in mind, paper gold could be shares of an ETF that holds physical gold. Has the SNB cleverly disguised its accumulation of gold? If this is true, another UBS Gold Price Prediction could fall well short of its recent public announcement. Stay tuned here and if you don't yet own gold you getter get some before the Swiss corner the market.

Wisdom: “….tell the surface conditions of the ocean just by looking at the sky.”, Porter Stansberry

Wednesday, August 31, 2011 by Eric Harding

Blog Photo Long time investment guru Porter Stansberry waxes eloquently on the subject of physical gold investment as he wrote last Thursday. It was picked-up by the good folks at Agora Financial and their 5 Minute Forecast staff:

"I enjoy offshore fishing," our friend Porter Stansberry wrote yesterday, drawing a useful Friday afternoon analogy... if, in fact, you're trying to decide if gold is in a bubble or not.

"I have a relatively modest center console fishing boat," Mr. Stansberry goes on. "I like it because it's really fast and I can get across to the Bahamas quickly, which is my favorite place to fish. But to get there in a reasonable amount of time, I need calm water.

"My wife is always surprised that I can tell the surface conditions of the ocean just by looking at the sky. I know because the ocean is the mirror of the sky. While you might not be able to ‘see' the waves in the sky, waves are caused by wind. You just can't see the wind.

"The same thing is true about the price of gold and the stability of fiat currencies. Gold is the mirror of the world's paper currency system. The price of gold doesn't reflect the intrinsic value of the metal -- which is almost unchanging over time. It reflects the relative value and volatility of paper currencies.

"The people who are arguing that gold is overvalued are not looking at the right numbers. They ought to be looking at Europe's banks. They ought to be looking at the amount of short-term obligations that are sitting on the U.S. Treasury's books.
"The price of gold is reflecting the likelihood that the world's sovereign nations decide to bail out Europe's banks and paper over the U.S. Treasury debt."

My thoughts exactly. How much are those bailouts or “papering over” worth in the price of physical gold, in 1.0 oz gold coins? A lot more, in my opinion. Call us today at Lear Capital to discuss this further!

Lear Capital: Stocks Soar, Precious Metals Collapse - Is Gold Still a Win-Win

Tuesday, August 23, 2011 by David Engstrom

Yup! We can all pack up and go home now. The markets are recovered and there is no need to rely on gold and silver anymore to protect our assets.

Stocks are up and the mood in the financial world can be described as exuberant. I mean, what's not to be excited about? The S&P right now has almost climbed back up to being down just 14% in the last 7 weeks. Meanwhile, gold and silver are off 2% from yesterday's highs (record high for gold) and the sky is falling.

This morning it has been suggested that rising stocks are due to an anticipated announcement by Ben Bernanke that some form of QE3 is on its way. In a recent article, I provided charts showing how much the markets love printed money. I also showed how much precious metals love printed money. So, why are stocks up today while gold and silver are down.

It's a matter of perception. Stocks are up from a 12-month low and gold is down from an all-time high. The S&P, for example, is still down 200 points over the last 7 weeks. Gold at $1835 right now, is still up 22% over the last 7 weeks, despite its recent pullback. Gold and silver should be off yesterday's highs. Despite the outlook for gold and silver down the road, there are always those who want and need to take profit. Especially after the markets spanked everybody so hard the last few weeks.

The question now is, where too for both? If there is some other form of QE3 coming, it would be in pattern for stocks to rally around the promise -- with one proviso!! The can has only been kicked down the road Again! We're still driving the car off the end of a cliff, only now we're moving toward it at a slightly lower speed.

Gold and silver also appreciate printed money, as every time the printing press fires up, the new money injected into the system devalues, or, destroys the purchasing power of the money already in existence. Hence, higher gold prices as investors turn to gold to hedge against weaker currencies.

If you are wondering which is the better investment, remember I have no crystal ball. I only write about my opinions based on what I observe every day. With respect to stocks, I observed that when the supply of printed money is threatened, the markets dip. Gold and silver on the other hand continue to rise as both become a safe-haven play against financial Armageddon.

That's why I think gold and silver are in a win win situation right now. It's a debt trap and only gold and silver have shown the potential to spring you from its grip. For up to the minute reports on Gold visit LearCapital.com for a variety of free services and breaking gold news.