Reasons Gold Stocks Will Fly
posted on
Sep 19, 2008 12:23PM
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Reasons why Gold stocks will fly:
One, commodities were selling off because of worries that the world was heading for recession. This should stem those worries.
Secondly, they've chosen to inflate their way out of this. Inflation won't hit right away but will continue to rise for the next 2 to 5 years. Inflation is good for gold.
Thirdly, more money printing will eventually drive down the USD. There will be inflation but no way to fight it with rate hikes for 5 months or more as they can't raise rates until after the election and probably wouldn't do it until the next president is in place and has his economic team in place. After that, the new president will be leary of screwing with any recovery. Rates will hold. Paulson should be gone. I wouldn't doubt that Ben will be gone as well if the Dems take over.
Four, it means money will start to flow again and juniors will have access to funds.
Five, hedge funds will have to look at other ways to make money, rather than shorting financials and praying on downtimes. Now we could see a true bubble. In fact, I think this has the making of a few bubbles. One in commodities. Another in tech. Perhaps another in biotech.
Six: The crisis has not gone away. It's only in remission. There will always be jitters and gold has proven itself to be a better bet than most of the other so called safe havens.
Seven: If the world economies do get back in gear, then we're back to rising oil consumption in emerging markets.
Eight: John Nadler is an idiot and all the world knows it. I suggest that everyone here write to Kitco suggesting he shook you out of your gold positions with his dire warnings of an imminent drop in gold. Hitler must be smiling today :)