Buy Gold And SILVER Coins On Pullbacks!

It is time to buy gold and silver coins and stocks on pullbacks in price.  Yes, I am adding the “S” word to the list.  As we get closer to a major currency collapse buying gold and silver coins and stocks will be the smartest move that you ever made.

Words mean things unless you are speaking from inside the bubble of the the world of politics. Alan Greenspan has been accused of creating the housing bubble among other things.  I guess when you spew words everyday in an effort to cover your tracks, you will occasionally put some in a random order that actually make sense and have meaning.  I am sure that Mr. Greenspan would never have wanted the following words to see the light of day!

Alan Greenspan in a 1967 speech

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.  This is the shabby secret of the welfare statist’s tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statist’s antagonism toward the gold standard.”

These words explain what we have been witnessing in the last few days in the gold market.  We are witnessing yet another attempt at holding gold down with the express purpose of driving investors out of a solid,  sustainable investment, i.e. gold.  This is a blatant attempt to send them scurrying into the U.S. Dollar as a safe haven, which it most certainly is not!  This too shall pass and when it does there will be little of the dollar left to hold onto!

On the other side of the world, Timothy Geithner was schilling for the dollar and it was not well received.

Geithner gets laughed at by Chinese students when saying $ assets are safe

June 1, 2009
Tom Bawden

Geithner tells China its dollar assets are safe

Mr Geithner, in China on his first visit as US Treasury Secretary, reiterated that US would cut its huge fiscal deficits

Timothy Geithner moved today to reassure the Chinese Government that its huge holdings of dollar assets were safe as he reaffirmed his faith in a strong US currency.

Mr Geithner, in China on his first visit as US Treasury Secretary, sought to allay concerns that Washington’s growing budget deficit would fan inflation which, in turn, would undermine the dollar and US bonds.

Chinese assets are very safe, Mr Geithner said, answering a question after his opening address at Peking University this morning.

His answer was greeted with laughter by the students, who question the wisdom of China spending huge amounts of money on US bonds instead of improving domestic living standards.

China is the biggest foreign owner of US Treasury bonds, holding $768 billion (£468 billion) at the end of March.

Next up, let’s take a look at what the Peterson Institute for International Economics has to say about the value of gold when compared to the U. S. Dollar.  This may not portend a dollar collapse, but it certainly pointing to a realignment.

U.S. dollar seriously overvalued: study

Wed Jun 3, 2009 8:07pm EDT

WASHINGTON (Reuters) – The U.S. dollar is “seriously overvalued,” mostly against the Chinese renminbi and some other Asian currencies, according to a new study published on Wednesday.

The Peterson Institute for International Economics, a Washington-based think tank, said the majority of the 29 currencies it studied need to appreciate against the dollar, with a large rise especially needed by the Chinese currency.

“The principal counterpart to the overvalued dollar is the undervaluation of the Chinese renminbi, which would have needed to appreciate about 21 percent on a weighted average basis and about 40 percent against the dollar to achieve equilibrium,” said the study by economists William Cline and John Williamson.

Investor flight to the dollar safe haven since last year has pushed the U.S. currency up by about 10 percent, which on top of an estimated overvaluation of about 7 percent a year ago made for an overvaluation of about 17 percent by March this year, the study said.

Now, admittedly, these are three unconnected sets of words that all point in the same direction.  At some point we have to stop and say that “all that smoke must be coming from a fire”.  The current administration has not created one new job outside of Washington and yet it has mortgaged the next generations future.  Gold will rise as the reality of what is being done to this country becomes common knowledge.  These deficits and the spending that increases them are not sustainable and gold will reflect this shortly.  This latest pullback in the price per ounce of gold and the price of gold stocks should be seen as another acquisition opportunity.  I hope everyone took advantage of last weeks run up in the gold stocks to take some profit off the table.  As we get further into this pull back in the gold stocks we will have ample time to increase our holdings at lower prices.

I am still interested in both NewGold (NGD) and Novagold (NG) and it is looking like their price is coming into a much more reasonable range.

Both of these stocks have great potential once the price of gold bottoms in this round.  Just waiting three or four days from the end of last week has made a marked improvement for an entrance point.  I cannot pretend that I can pick the bottom for these two, but I sure like them more here than I did last Thursday.  If the dollar continues to rally, these babies will drop even more , so I will go out on a limb and say that I will be looking to see the action tomorrow and start picking some up if the sentiment is pro dollar and anti gold.  Newgold is off .13 (4.65%) at $2.66 and NovaGold is off .36 (7.21%) at $4.63.

Sometimes it amazes me how little we know, or to put it more correctly, how little knowledge we take advantage of when we are making investments.  Jim Rodgers can be found on any given  day on youtube and yet this piece where he talks about the coming currency crisis and the value of commodities has had only around 5,500 hits.  His words and positions have far more wisdom than the Community Organizer in Chief and all of his minions!

I think it is important to note that Mr. Rodgers is saying that the next currency collapse will be of the major currency variety and that it will be wide spread.  Can You say U.S. Dollar?  I know that I can and I am taking steps now that will protect me from this event when it occurs.  You should be doing the same.  You should be buying gold coins on any pull backs in the price per ounce of gold.  I know that gold is still pretty pricey at these levels, but it is nothing compared to where it will be in the future.  I concur with Jim Rodgers that buying silver is also a good protection for what is coming.  Buying both gold and silver coins and bullion is the right way to go now.

Buy both gold and silver stocks on any downturns.  Silver offers the opportunity to get into both silver coins and silver stocks at much lower levels than you can with gold coins and gold stocks.  With that in mind I would like to introduce a silver stock for you to consider as this pull back in stocks continues.  Silver Wheaton Corp (SLW) was down .11 (1.07%) at $10.18 and definetly deserves your consideration in the near future.

As is always the case, don’t buy anything on my recommendation alone.  I am just telling you what I like and what I am looking at.  I am not a professional trader, and I have been known to totally miss the boat on occasion.  Suffice it to say, I try not to do that too often, but what the heck, it does happen!  Do Your own due diligence  and you will be fine.

One last snippet before I take my leave.  This Northwestern Mutual announcement,  as reported by Bloomberg, is another random piece that points to where we are headed.

Northwestern Mutual Makes First Gold Buy in 152 Years

By Andrew Frye

June 1 (Bloomberg)  Northwestern Mutual Life Insurance Co., the third-largest U.S. life insurer by 2008 sales, has bought gold for the first time in 152 years to hedge against further asset declines.

Gold just seems to make sense; it’s a store of value, Chief Executive Officer Edward Zore said in an interview following his comments at a conference hosted by Standard & Poor’s in Brooklyn. In the Depression, gold did very, very well.

Northwestern Mutual has accumulated about $400 million in gold, and Zore said the price could double or even rise fivefold if the economy continues to weaken. Gold gained 10 percent last month, the most since November. The commodity has more than tripled since 2000, rising for eight straight years. Gold futures for August delivery slipped 30 cents to $980 at 11:47 a.m. in New York.

The downside risk is limited, but the upside is large, Zore said. We have stocks in our portfolio that lost 95 percent. Gold is not going down to $90.

Till next time, good luck and good trading!

More Gold Market Analysis:

• Buy Gold Coins and Bullion Now!
• Buy Gold Coins, Bullion to Hedge Dollar Drop
• Buy Gold Coins And Bullion on Dips Under $900!
• Gold And Silver Are The Answer!
• The Silver Christmas Present

Incoming inquiries for this information:

• 10 day chart
• Northwestern mutual dollar collapse