Blinded By Expectations


Blinded by hopeful expectations!

It is speculated that the Federal Reserve will maintain the pace of monetary stimulus to boost the economy. This means that money will remain cheap while driving the inflationary pressures of money expansion. This change of course has caused many people to realize again, that gold and metals are a good place for a store of value.
For many of you, I am sure your wondering why the economy is behaving the way it is. Your probably speculating why gold went down while the U.S. government was shutdown? There are no clear answers to all these questions. We know that that there are forces that cause the economy and the perception of the economy to react. In the past year, money has moved towards equities as a place of investment while not fearing inflationary pressures through fed policies.
For years, people have feared inflation and even anticipated it. However, this story has gotten old and people doubt its reality. People are wanting “NORMAL” back. People truly want to believe in retirement security. People want to believe in Social Security. People want to believe that taking a mortgage is safe again, because surely tomorrow will resemble today. There is elasticity towards the norm that creates a reality resembling the “normal” simply because of mass expectations. The only time this doesn’t work is when there is also a real and believable reality to cause panic.
The result is that as long as economic patterns can remain stable, the norm will be the reality. If the worst case becomes inevitable, then the swing towards security will become fast and decisive. This is what we see when people run towards gold and then turn away. The price goes up and goes down…There is no general trend.
My recommendation is that metals are ultimately an insurance. You can invest in Gold insurance through stocks, physical metals, private mining companies, and a few other opportunities. These investments need to be seen as insurance policies and remain faithful to understand that someday you will be glad you have already made this allocation. However, if you do not make this allocation or divest your position, you might find yourselves being too late. If world economic crisis and inflation does happen, then the time to invest would be yesterday, not tomorrow.
Gold has dropped 19% this year, heading for the first annual decline since 2000. Some investors lost faith in the metal amid a rally in U.S. equities and low inflation. I recommend holding a reasonable position always. You only worry about storms when there is no shelter to protect from disaster. Take this worry off your table. Don’t be blind! Be wise!

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OUR FUTURE IN HISTORY

“The budget should be balanced, the treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.” — Cicero , 55 B.C

In order for us to speculate on the future, we must become a student of history.   We must research history to get a glimpse at human nature as it interacts and intersects through cultures.  In the quote by Cicero, it sounds like Rome was experiencing some alarmingly similar struggles before its historical fall.   Will the cycle of history repeat itself?   Would we be naive to believe we are “too big and powerful to fall?  Even amongst the technology, knowledge, and mechanization of today, civilizations have been lead and occupied with people with very similar desires, reactions, and fears.

In the generations that have passed, gold and silver have had their place as a store of value.  We have recently failed to heed the economic history of fiat currency and currently find our economies suffering as a result. There is a revival of concern happening now that is forcing us out of this fiat slumber and perhaps it will set the course back to standards in which we have value.

Today, bullion still embodies real wealth and real money.  Due to its rarity, it will remain a possession that is prized by civilizations to come.  Precious metals will hold value for these reasons:  Beauty, Indestructibility, Malleability, and Rarity.

Gold and silver are the only globally recognized currencies that cannot be created out of thin air, which makes both great stores of value. Unlike fiat currencies that can easily be debased, gold and silver remain the ultimate forms of money and will stand the test of time.

RECOMMENDATION:

Have your position in precious metals.  I recommend having 5-20% of your wealth in metals.  In my opinion, you should have physical to meet the demands of an extreme emergency.   In addition to physical gold, I would recommend looking in the mining sector equities for a value opportunity in a mining operation(s) that are in production.

This mining sector is where most of my efforts are currently.  I believe there could be an upside to the price of metals, but I KNOW there can be an upside to mining investment in the correct companies. Please see Featured Investments for more information.

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Debt—Inflation’s Mistress!

The debt of the U.S. is now measured in numbers once only familiar to astronomy!  In a matter of years we have gone from Billion Dollar debt positions to Trillion.   How many of us truly know what a Trillion dollars is?  One trillion dollars equals one million x one million!

Here is an idea of how much money we are talking about:

  • A stack of $1,000 bills eight inches high would equal $1 million.
  • One billion dollars equals 1,000 x $1 million. $1 billion would require a stack of $1,000 bills 8,000 inches high (that is, 667 feet.) For comparison, the Empire State Building is 1,250 feet tall, so $2 billion dollars stacked in $1,000 dollar bills would be about the same height.
  • One TRILLION dollars equals 1,000 x $1 billion. This means a stack of $1,000 bills that totaled $1 trillion would be 666,667 feet high – which is just over 126 MILES!

You must understand some economics and debt to truly understand what might be next.  You should make some crucial decisions based on this information.  If you do nothing, then your value you have stored, earned, and pursue will dwindle.   If you do nothing, you risk loosing your purchasing power and we have all experienced this in the cost of living recently.   We Americans are isolated from most currency awareness.  If you live on the borders or have experience traveling across borders, you realize that our monies are not equal and they shift higher or lower in terms of buying power respectively.

You might ask how can this be?  We are not currently on the Gold Standard! Our dollars are not exchangeable for rare and precious metals with intrinsic value as they once were. There have been many times that currencies were created without scarcity and were backed only by the governments that created the money.  This is the current system the world now uses.  Economists call this system the “fiat” system.  A brief lesson in history will show that all fiat systems have failed in its economic evolution due to inflationary problems associated with having a non-intrinsically valued form of currency. Will our system fail?  Has it failed?   It brings me no pride or value to blame anyone or panic everyone for the economic chaos that globally plagues our world.  However, as is the purpose of this report, we can be prepared and live our lives prepared to the best of our abilities.

Problems with paper currencies exist because they are man-made and have no scarcity.  Precious metals, on the other hand, are rare and recognized without a need for a currency exchange system. You can find and extract or mine precious metals, but you cannot create or manufacture them.  There is risk incurred by creating a lot of paper or non-precious coin money: if you create too much of it, it can slowly become less valuable, which is known as inflation.

The affects of inflating currency are obvious today.   Twenty dollars in the 1920’s bought a fine man’s suit.  Since then, dollars have been added to the economy with no bearing on value erosion.  This is why a $20.00 dollar gold coin will buy a fine tailored suit to this day, but a $20 dollar bill will not even buy a tie in today’s inflated currency.

Inflation always follows debt in a fiat system of business.  Otherwise bankruptcy would be the case for an unhealthy budget!  Why would a government opt for bankruptcy if could print itself out of the debt problem?   There within lies the need and the problem with the Federal Reserve and our world wide economic system.

RECOMMENDATION:

Have your position in precious metals.  I recommend having 5-20% of your wealth in metals.  In my opinion, you should have physical to meet the demands of an extreme emergency.   In addition to physical gold, I would recommend looking in the mining sector equities for a value opportunity in a mining operation(s) that are in production.

This mining sector is where most of my efforts are currently.  I believe there could be an upside to the price of metals, but I KNOW there can be an upside to mining investment in the correct companies. Please see Featured Investments for more information.

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RED and BLUE

WE ARE NOW A NATION DIVIDED!

Many of you were in awe these weeks past as the election process unfolded.  There are some that feel the election was rigged or other claims to a conspiracy of sorts.  All these things are possible I suppose.  The one certain fact is that we are a nation divided ideologically to the core.  I have never seen such a chasm of beliefs and vision.  I speculate this must have been the temperament of the population prior to the Civil War.   We are now entering into a climate where half (population) of the country does not feel represented in beliefs about where to nation is going.  This half is now wondering what is next?  What event or chain of events will heal this divided UNION?  In this climate, we are compelled to look towards financial safety with what you have worked hard to save.  In this market Precious metals are a must if you want to have some stability in buying power and hedge against inflation.

Today, gold continues to hold its value and even soar with inflation.  In times of uncertainty and geopolitical unrest, investors gravitate towards gold and other precious metals known as bullion.  Physical gold, unlike stocks, ETF’s, and other paper wealth, cannot go to zero.  Many professional advisers are finally advising that a properly diversified portfolio should contain 5-20% Bullion to preserve and increase one’s wealth.

GOLD IS SAFE:

Despite the political results, precious metals didn’t rally as many suspected they would.  Why is this?  Recently, there has been appreciation of the US Dollar against leading risk related currencies such as the Euro and Canadian dollar.   During the past couple of months the Euro/USD declined by 1.2%. In addition, there were some positive reports regarding the progress of the U.S economy, the November non-farm payroll report was higher than anticipated, the manufacturing PMI continues to expand at a faster pace, and U.S GDP growth remains stable at 2% as of the third quarter of 2012.

Although the current news isn’t driving the metal through the roof, I recommend that you stay the course on your position and remain exposed to metals.  The world economic climate has not changed and things will likely get worse.

  • The mean average expectation of 16 analysts is that gold will close the year at $1,900 an ounce, or 9 percent more than now.
  • Paulson & Co. has a $3.62 billion bet through the SPDR Gold Trust (GLD), the biggest gold-backed exchange- traded product,
  • Soros Fund Management LLC increased its holdings by 49 percent in the third quarter, U.S. Securities and Exchange Commission filings show.
  • 1980 record of $850 equal to $2,398 today
  • Gold’s 12-year rally, the longest in at least nine decades, is poised to continue in 2013 as central banks from Europe to China are pledging more steps to boost growth, raising concern about inflation and currency devaluation.

We can probably expect gold to continue its climb in 2013-14 unless real and significant progress is made in the world’s economic situation. With current debt levels and continued failure to solve the financial debacle, a change of course is highly unlikely.  The world financial authorities are simply trying their best to weather the storm.

RECOMMENDATION:

Have your position in precious metals.  I recommend having 5-20% of your wealth in metals.  In my opinion, you should have physical to meet the demands of an extreme emergency.   In addition to physical gold, I would recommend looking in the mining sector equities for a value opportunity in a mining operation(s) that are in production.

This mining sector is where most of my efforts are currently.  I believe there could be an upside to the price of metals, but I KNOW there can be an upside to mining investment in the correct companies.  Please see Featured Investments for more information.

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The Union Divided

The markets have cast their vote this week to the election. Gold and silver have made expected gains as many fear an Obama economy to propel gold to new highs because of an inflated dollar.

The nearest fear is the upcoming “fiscal cliff!”   The Congressional Budget Office has gone so far as to predict that, should the U.S. go over the edge, the economy could see a drop in GDP of .5% and unemployment over 9% by the end of next year.   This along with Bush tax breaks will likely drive the investment community to look towards shelter as the year ends.

Where to place our investments?   I think the answer is precious metals.   I think the safest place to be is away from the dollar until more stability returns, if it returns.  I cannot say how high it will go, but I will project that it will not crash as long as worldwide economic fundamentals remain the same.

I believe the highest gains in the next years will come from a select number of mining companies.   The miner stocks have lagged and many have awoken to this reality to shift the companies towards directions their investors are wanting to go.  This direction is to yield and production.  Long gone are the days of raising money, spending money, drilling, reserving, and the cycle starts again.  The new investment world wants production and will demand it!

Many of you were in awe this week as the election process unfolded.  There are some that feel the election was rigged or other claims to a conspiracy of sorts.  All these things are possible I suppose.  The one certain fact is that we are a nation divided ideologically to the core.  I have never seen such a chasm of beliefs and vision.  I speculate this must of been the temperament of the population prior to the Civil War.   We are now entering into a climate where half (population) of the country does not feel represented in beliefs about where to nation is going.  This half is now wondering what is next?  What event or chain of events will heal this divided UNION?  I pray that you all have a good weekend and know that God is always in control!

I will be traveling this week looking at several mining projects.  My next report will come from Washington state.

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Election —-What will the market do?

Gold rose for a second day on Tuesday, largely tracking equities, as the market watched the U.S. presidential election in which a win for President Barack Obama could boost bullion by raising expectations for Federal Reserve stimulus.

This race is a coin toss.  We will likely not see the results until late this evening.   People are asking if Gold or Silver are a good investment if Romney wins.   The answer, is that Romney and Ryan cannot fix inflationary pressures immediately.  However, they can help with HOPE!   With a Romney victory, many capitalists will be encouraged to continue to invest and build America.  With a Obama win, you might see a rise in metals prices as people run towards more security.

Regardless of the election, gold and silver are strong long positions as the world economies unwind inflated positions in currency.

The world is waiting for this election.  The investment value of metals should not change since the world financials will not change this evening.   I suspect you will see a decline in metals if we have a Romney win.  However, I think the prices will return to bull levels soon after.  This may be a very good buying opportunity.

Our future and country are in God’s hands as we patiently await the results.  Use knowledge to make wise choices and don’t let FEAR rule your world.

God Bless,

Jason

 

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GOLD RUSH TONIGHT

I just returned from a mining/ Investor conference in New Orleans.  There were 100+ companies presenting and displaying the opportunities around the world.  The attendance at this show was half of the previous year.  I wonder why there is less interest in the current year about investing in mining stocks?  Could be a number of factors:

  • Everyone is waiting for the elections to pan out?
  • The mining industry is too confusing and big for most investors to get comfortable?
  • Or people do not believe mining is a worthwhile endeavor for their capital any longer?

I tend to believe that the junior miner market is too uncomfortable for most.  Most of the companies sound the same, and pitch the same opportunity with the crazy stock cycles.  How does a mining company stand out from the rest?   I think the pure answer to this is production.  Find a company that is near production or near production and you will have a return.

The Gold Rush team is launching the premiere tonight on the Discovery Channel!  I have had such a good time with these guys this past year.  I wish them well!   My showing should be on air tonight on the offeseason segment.  The show starts at 7:00 PM central time.  I will keep everyone posted as the season progresses.   I can only talk about things that have happened on air.  Since the mining season is over—-I cannot talk about most of it until seen.  I do encourage you to watch.  I think it will be very entertaining.

God Bless,

Jason

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Free Gold And Silver for Gold Rush Launch

This Friday—The Gold Rush Season Launch—, we will raffle the gold and silver from the the last season.  Perhaps you can be the lucky winner.   All members of the newsletter and Facebook have a chance to win!  Tell all your friends and family that by signing up, they can still enter to win by Friday the 26th of October, 2012.

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October 27th Update

Gold 1731.20

Silver 34.36

With no clear resolution in sight for the European economic crisis, precious metals remain the safe haven.  Many believe more money will enter the system for easing since that has been the only strategy deployed as of late.  With this news Gold has benefited.  Home Sales and US Durable Goods orders this morning came out much better than expected and the US Dollar is trading higher against the Index at the moment. Markets are looking to Brussels for direction and posture.

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October 26th Update

Gold 1723.50

Silver 33.42

It is obvious, that the European debt crisis has no solution.  The Greek debt is set to default.  The precious metals have suddenly awakened again.  We are likely going to see a bull rush due to inflationary pressure. Investors will rush back in, paying higher prices than where they unwisely sold. Many investors will rush in, seeing banks and government bonds as ugly options.

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