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INVEST
IN RESOURCE STOCKS NOW - WHY? Watching gold’s present volatility just confirms that this year should be a very interesting year for gold. Volatility always confirms the presence of powerful market forces attempting to move a price in one direction or another. But we always come back to a simple principal. You cannot hold a spring down forever. It eventually moves forward and higher. Same with gold. Gold is heading well higher this year and it is not just me making this prediction. Top experts in this field are also predicting gold will reach new highs this year. Are you worried about gold’s volatility? Look below at the gold chart for this past Monday. As you can see the momentum is higher still…hence the principal of the spring.
Gold will do quite well this year for 2007 thank you. You wouldn’t believe the depressed emails I am getting now just because of a job report just released for December payrolls. Of course there were more jobs created in December. It’s the busiest month of the year for everyone as folks spend money they don’t have for another Christmas. I ask myself over and over why people can get so concerned over watching superficial news events from Brian Williams yet they miss the more important news driving our entire market. “The dollar moved higher against the euro and British pound Friday after the Labor Department said the economy added 167,000 jobs in December, while the jobless rate remained at 4.5%.” click And the US dollar rallied over this little bit of pitiful news? Don’t you think those 167,000 jobs added in December probably had something to do with Christmas and the busy retail season? Give me a break people. Dave, “I am a computer programmer who spent 20 months hunting for a decent job (cleaning apartments and grading tests don’t count as decent jobs for a highly skilled professional)…” “Over a third of the highly trained programmers who I worked with in 2000 had the same problem.” “Outsourcing was all the buzz, and American programmers were being fired in huge numbers to make way for Indian programmers. It was at that time that I turned completely away from the American mainstream press. I have the personal opinion that aliens could come from Mars and swipe an entire American city. The press would never notice anything (unless one of the aliens had sex with a movie star- and then all they would report was the sex). The press is now hiding the true inflation rate from us. I see it with my eyes in the grocery store every time I visit. I can remember .99 cent bread- so why is bread now $1.50-$2.50? All meats seem to have doubled after Katrina- so has almost anything else that I buy in the grocery store. Electronics and clothes have not moved, but that is the China effect. The Chinese are not dumb. Eventually they will want to get paid for their labor. Right now they are more interested in using our stupidity and Criminal Capitalism to pull all our manufacturing out of the country. Once they have everything that cannot be nailed down, then they will move their currency again- and bam. That will be a bad day- maybe the press will notice then- or maybe not.” Thank You, Susan V. Well, you believe what you want to believe, right? Do you really feel more secure in your job today than you did 5 or 10 years go? Sure you do. You probably feel more secure in your job if you are a computer programmer living in India. But what do you see from your own observation and personal experience? No way Hosea. It just ain't happening. The only jobs that are truly increasing in the US are the lower income service type jobs as the United States continues to prep itself to be the service industry for the rest of the world. And that is reality. The future is getting dimmer in terms of opportunity and job growth. The middle class is disappearing. Sure, there will be a very wealthy upper class as the years progress, but there will not be the bulge that exists today in the form of a vast middle class. Again and again and again I say that the middle class is shrinking. We are entering into a world of the haves and have not’s. The middle class is being squeezed out. And the majority of those being squeezed are descending to lower middle class, but only a small select number are acquiring upper middle class financial status. We are becoming more and more a class conscious society consisting of only two real classes…the well off and the poor. That is why it is so important today to supplement your income from another source. Because you may just find your present job shipped over seas at any time. I don’t care if you are even making a $100,000 plus a year as you could probably lose that job at the drop of a hat and then where would you be? Today, as never before you need a second job and a second income. You need to be creating wealth and not just creating a higher income. Now that we are on the subject of income and wealth just what is the difference between the two? “…jobs are a system for income creation, not wealth creation.” “What is true wealth?” “…true wealth isn’t so much about buying more things as it is about having more time to do what YOU want to do.” Burke hedges, 1997, click So you still think there is security in an income of $150,000 per year? Consider the following below. “Time is our most precious commodity – far more precious than gold…” “Have you ever known any hard-working doctors or lawyers who make upwards of $150,000 per year – but they feel trapped? Are they creating true wealth? According to my definition of wealth, the answer is “no!” “In effect, they HAVE TO work to create income so they can maintain their lifestyles.” Burke hedges, 1997, click Only the stock market and in particular resource stocks can offer you the kinds of gains that can create true wealth that you can in turn continue to build on. Again I say that only investing and/or speculating will build real wealth that you can pass on to your children some day. “People who are locked into their jobs – no matter how much or how little they earn – are victims of income creation, not wealth creation.” “The only way to create true wealth is to leverage your time, money and efforts so that 10 hours of work equals 100 hours of pay…or even 1,000!” “You see, the rich get richer because they take advantage of leverage by investing their money over time.” “That’s the way the rich get rich and stay rich…by putting their money to work for them by investing it over time.” Burke hedges, 1997, click Let me say this right off the bat. You better hope this resource bull market still has legs because you need to supplement your income today now as never before. You will not get rich from selling your house so write off that idea. Your employer is probably not going to be giving you a large 5 or 6 figure bonus this year. So what other means exists where by you can make a lot of money via leverage? Only investing/speculating in gold, resource, uranium and mining stocks in general can offer these kinds of very significant gains. And yes, there are risks. But isn’t the greater risk just sitting back and doing nothing, but attempting to depend on your humble 401 K to provide for you when you retire? “That’s the big difference between income creation and wealth creation. Income creation is temporary – you have to do the work or you don’t get the income. Wealth creation is permanent – you escape the time – for – money trap by putting your money and your time to work for you.” “It’s about investing your time to create wealth because time equals money when you invest it properly!” Burke Hedges, 1997, click Let’s repeat part of what we just read because this is very important to digest if you truly wish to succeed and to get ahead financially. “It’s about investing your time to create wealth because time equals money when you invest it properly!” From the bottom of my heart I can honestly say that the vast majority of those reading this will die broke leaving no more than a pittance to their children via a poor performing 401 K plan. But there will be a few who acquired significant wealth from investing in gold, silver and resource stocks. The following email below comes from a reader in India with an interesting observation. Dear David, “I agree with your trends and would like to make a couple of observations.” “…I feel it my duty to point out to people such as you who wouldn’t have direct experience in this matter that India is not to be compared to China. The fact that the western press constantly hurls them at the readership as a couple, suggests to me a willful attempt at denial. It is an attempt at allowing themselves to believe that China 'like India' is a cheap labor growth story. But in fact the difference is that whereas India IS a labor story and would be non-competitive if wages rise enough, CHINA is nothing short of the power that is going to replace the West over the next couple of decades.” Viraj Shah Let’s hear from Bill Buckler from down in Australia. Bill is probably the most unrecognized master analyst in the markets today. He keeps a low profile “down under” and shuns publicity so folks don’t hear his name as often as they should. But this fellow is good. Let’s hear what he is predicting for 2007. Bill Buckler - “There are precious few $US denominated "assets" which would have compensated foreigners or even Americans for the dive in the purchasing power of the US Dollar over the past five years. Only the holding REAL economic goods (such as commodities and metals) and precious metals have done that. And herein lies the key to understanding the past five years, and the year to come as we wait on the doorstep of 2007. Here is an item which encapsulates the decline of the global financial system underpinned by the US Dollar as nothing else could. It has recently been reported that worldwide, the amount of CASH Euros in circulation now exceeds the amount of CASH US Dollars in circulation. This is quite astounding.” “If you could not already clearly see the mountain of evidence building up showing the accelerating decline of the US Dollar, this little snippet of information can leave no further doubt. The foundation of the global financial system, the US Dollar is visibly crumbling.” “The US economy has hit the wall, unable to sustain the drain of the political establishment's empire. It is an age-old situation in history, and it is happening NOW to the United States of America.” “Given the financial situation in the US and the utter helplessness of both the US political establishment and the Bush Administration to address it, the pressure on the rest of the world to find a "substitute" for the US Dollar will steadily grow in 2007.” “This is the situation, and more and more people, including people in "high" places, are realizing it. Gold remains what it has always been, the ultimate form of financial insurance for those who want to protect themselves. This function becomes critical when those who are the manipulators of the monetary system are clearly losing control of the situation.” click And don’t forget about humble uranium which will blow the socks of off everything in 2007. Uranium is in demand and the supply to meet this demand is just not there. “Uranium’s Supply/Demand Squeeze Keeps Getting Tighter” “…there are 28 reactors under construction around the world and another 62 being planned…” “There are 29 pending license requests for the construction of new nuclear power plants in the U.S.” “So if you think uranium prices have been on a tear so far, just wait. By 2008, we could see an all-out feeding frenzy. And anticipating that crunch, prices should move well in advance.” “The Second Wave of Uranium’s Bull Market Is About to Begin!” “I think we’re looking at $100-a-pound uranium by the end of this year — a 39% move from recent levels. And even at that point, uranium will still have plenty of room to run!” click Gold Letter emails reviews of undervalued gold, silver, uranium and other resource stocks that are under valued. Order it online today. Also, if you are interested in reading an interesting and short survival story about my dad and his dad order his book, Prisoners of the River Araguaia. This is a true Indiana Jones type story. No way am I doing what they did though. Too dangerous for my blood. ©
2007 David N. Vaughn CONTACT
INFORMATION The publisher and its affiliates, officers, directors and owner may actively trade in investments discussed in this newsletter. They may have positions in the securities recommended and may increase or decrease such positions without notice. The publisher is not a registered investment advisor. Subscribers should not view this publication as offering personalized legal, tax, accounting or investment-related advice. The news and editorial viewpoints, and other information on the investments discussed herein are obtained from sources deemed reliable, but their accuracy is not guaranteed. Authors of articles or special reports are sometimes compensated for their services. The opinions of FSU contributors do not necessarily reflect those of Financial Sense. |
