Gold is definitely on a roll.

“THE PRICE OF AN OUNCE OF GOLD ROSE $5.90 TO $402.70, THE HIGHEST SINCE FEBRUARY 1996.” Barbara Hagenbaugh & Matt Krantz, USA Today, 12-2-2003

Can gold continue to go higher?

If we turn to look at the pro gold folks we witness the likes of Jim Sinclair enthusiastically predicting even HIGHER gold prices. And let’s be realistic here. The last time gold reached a significant peak was in 1996 when gold climbed to around 416 an ounce & it never went any higher but proceeded after this top to start its merry descent all the way down to around 253 an ounce. Why should it be any different now?

Is this a peak for gold or can the price really continue substantially higher?

Let me state for the record here that I am not a gold bug. I am a history buff & I love to attempt to discern trends. But isn’t that what we are all presently attempting to do? To discern a trend & hopefully, to profit from that trend?

Any of you out there like to read Tom Clancy?

I love Tom Clancy’s work & I think he is a great writer. His writing holds you at the edge of your seat. Mr. Clancy deserves every dollar he has earned because his writing is superb & gripping & so very real. But I have to share a secret here. I no longer read Tom Clancy novels. Indeed, his last book that I read I did not finish but stopped at the last 50 pages.

There is one element to Tom Clancy’s writing style that I can no longer stomach.

Every novel that Tom writes has a fairy tale style ending. No matter how many American lives have been lost, no matter how many acres of real estate have been blown up, no matter how severe an economic crises may have been everything always reverts back to a picture post card perfect ending at the close of the novel.

But let me state here that I am not condemning Tom for writing in this style.

Indeed, this is what folks in this country like to read & I am sure he discovered a long time ago what types of stories sell the most number of books. In every book the other nations are always portrayed as the losers & the US comes out as the good guys who always seem destined to come out as the superior role model for the rest of the world to emulate.

But as I have said so many times my downfall is my appreciation for history.

And if we read our history lessons unfortunately real life does not always end in a beautiful fairy tale. But when I pick up a history book to study past great & invincible civilizations none of them ever remained neither great nor invincible for ever.

I always find it ironic that Constantinople, the last vestige of the great & ancient Roman Empire, fell as a city the year after Christopher Columbus discovered the New World. One old mighty age was dying & giving way to a new empire. And of course that new empire was & is North America respectively.

“…the fall of Constantinople…the last vestige of the ancient state of Rome.”

“With so many enemies ringing it, the Empire managed to cling to life by playing rival groups off on each other. They raised foreign policy to an artform, & developed a finely-tuned form of statecraft which was quite ingenious. …”
http:/pages.sthome.net/djhalnon/1453.html

Hey, that last part about “They raised foreign policy to an artform…” sounds a lot like the present day US of A! Editor

“…most believed the city itself could not fall. … Constantinople’s fall was lamented far & wide; many reacted with shock & even disbelief.”

“…and it is not easy to compute the multitude of citizens who, from an honorable station & a prosperous fortune, were suddenly reduced to the condition of captives & exiles.” Volume I, Outline of Great Books

Even today all the central banks of the world are hurriedly purchasing up as many US dollars as they can to try & stabilize the US but unfortunately the much larger & more important private sector is busily & hurriedly DUMPING US bonds & dollars.

Our generation has grown up expecting always a larger house eventually to move into. Our generation expects always to be able to drive the latest model cars. We expect a good paying job some day for our sons & daughters.

But as I discern events today I have to ask if our standard of living really is rising & if our county’s prestige & financial system is really growing in the eyes of the rest of the world.

But our original discussion was about the direction of the price of gold right? AND WHERE IS THE GOLD PRICE HEADED NOW? Let’s try to analyze the REAL trend of today & examine what events are truly shaping our world today.

And what major events are presently shaping our financial futures?

Euro Tramples Dollar, Hits New High Friday November 28, 2:37 PM EST , By John Parry, NEW YORK (Reuters) -
“The euro barged to a record high above $1.20 in thin trade on Friday, as investors sold the dollar, which failed to rally on strong U.S. economic data earlier this week.”
"Rightly or wrongly, $1.20 is a psychological barrier and a big number. WE HAVE NEVER BEEN THERE BEFORE AND WE ARE DEFINITELY CHARTING NEW GROUND," said Marcel Kasumovich, head of G10 foreign exchange strategy with Merrill Lynch in New York.”
"THE UNITED STATES NEEDS CAPITAL INFLOWS. We know that in the second half of December there is precious little capital flow" and that will disadvantage the dollar, said Robert Sinche, global head of currency research with Citibank in New York.”
I know & you know that all of us are tiring of hearing about a sinking dollar. I suppose the same could be said about hearing repeatedly about a huge forest fire that was heading in our direction. The message gets old but it is one we still need to hear over & over & over again.

But let me repeat part of the above statement again.

“WE HAVE NEVER BEEN THERE BEFORE AND WE ARE DEFINITELY CHARTING NEW GROUND…”

When we read an article like the one above & witness our currency descending in value does it really look like we are in the midst of an improving economy? Actually, the only thing we can know for certain is that it is election time again & we can only expect the present administration to make every effort to see government calculated figures about the economy looking good.

And if there is one thing we have learned well as a result of Wall Street financial accounting scandals is that books can be altered to reflect any thing you want them to say.

But let’s ask ourselves: “How are the financial gurus themselves perceiving our present economic pseudo miracle & what are these financial pros doing with THEIR personal money?

SOROS 'SPECULATING AGAINST DOLLAR'
Pound surges to five-year high against US currency. Buffett also said to be betting against greenback
By Philip Thornton and Michael Jivkov, 11-28-2003
“…The pound surged against the dollar yesterday amid speculation that Warren Buffett and George Soros, the world's most famous speculators, are betting the US currency will plummet.”
“…CONCERNS OVER THE US CURRENT ACCOUNT DEFICIT CONTINUED TO OUTWEIGH EVIDENCE OF A REBOUNDING ECONOMY.” …
“One hedge fund manager, who asked not to be named, said: "I have heard that both Soros and Buffett are shorting the dollar. There's a growing belief on Wall Street that the dollar is looking like a one-way bet downwards."
“Demand for the dollar has waned on concern the country will not attract enough capital to fund its record current account deficit, which is expected to break through 5 per cent of GDP this year.”

I am not the smartest individual on the street but I was not born yesterday & can tell when trouble is brewing on the horizon. And everything that I read tells me that this gold bull is not just a short term temporary phenomenon that is soon to expire.

My personal opinion & estimation is that we have not even begun to see a really appreciable move in gold yet.

Let’s read part of that last statement above again.

“DEMAND FOR THE DOLLAR HAS WANED ON CONCERN THE COUNTRY WILL NOT ATTRACT ENOUGH CAPITAL TO FUND ITS RECORD CURRENT ACCOUNT DEFICIT, WHICH IS EXPECTED TO BREAK THROUGH 5 PER CENT OF GDP THIS YEAR.”

And if you still are not comprehending the message let me try & put it in simple words.

The US owes a LOT of money & relies on the rest of the world to finance this tremendous & ever GROWING debt. Well, the sources for this massive debt payment are drying up. And as less money is available to pay this massive US debt there will be tremendous repercussions that will eventually come home to roost.

And how damaging will be these coming repercussions?

We will just have to wait & see. But in the mean time we can be preparing ourselves by getting out of debt & investing in the only asset that will see its purchasing power grow:

GOLD!!!

It just may be that we do not have a fairy tale style ending where everyone lives happily ever after when these events gather steam & come crashing down on us. And what will it cost you to pay down your debt & invest in gold?

Cheap insurance really.

If you are interested in gold & silver stocks subscribe to an Internet based site that reviews & recommends new & different & promising gold & silver mining companies.

AS DOLLAR TARNISHES, GOLD GLITTERS, RISING ABOVE $400 AN OUNCE, BARBARA HAGENBAUGH & MATT KRANTZ, USA TODAY, 12-2-2003

“It is becoming an attractive alternative,” says Amaury Conti, trader at U.S. Global Investors in San Antonio. He says funds & individual investors with little or no experience in gold are taking the often-ignored investment tool SERIOUSLY.”

I guess my question to you is, “Are YOU taking gold seriously as an investment?

Gold Letter makes it easy for you by offering you a life time subscription offer for an email alert service that covers gold & silver stocks. It takes money to make money & knowledge is the definite key to greater financial rewards.

Your subscription is for LIFE!!!

David N. Vaughn
Gold Letter, Inc.

149$ Lifetime Membership               (limited time offer)                      You receive access to the site and recent reviews immediately upon completion of your order!

top

Author/publisher does NOT trade stock of the company being followed for 30 days BEFORE & 30 days AFTER an article is published. It is the author/publisher’s goal of this letter that the reader may have his or her interest piqued in such a manner that will compel the individual to do their own further diligent research on the topic, issue or company discussed herein. All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The author/publisher of this publication has taken every precaution to provide the most accurate information possible. The information & data were obtained from sources believed to be reliable, but because the information & data source are beyond the author’s control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Because of the ever-changing nature of information & statistics the author/publisher strongly encourages the reader to communicate directly with the company and/or with their personal investment advisor to obtain up to date information. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise. Authors of articles or special reports may be compensated for their services. Neither the information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. The author/publisher of this letter is not a qualified financial advisor & is not acting as such in this publication. Gold Letter, Inc. is not a registered financial advisory. Investors are advised to obtain the advice of a qualified financial & investment advisor before entering any financial transaction.