The presses are back on. Money’s cheap and there’s lots of it. You haven’t heard? The US Federal Reserve has taken on the role of the World’s banker as evidenced by the announcement last week of a coordinated action by World Central Banks to add liquidity to the system. Sure, the announcement said “World” central banks, but we all know that is code for the Fed, since the US is the biggest Central Bank in the world and owner of the world’s most circulated currency.
“Loophole” Lets you Tap Big Oil’s Cash Stash…
Big Oil made out like bandits when gas prices hit $4.
How about using this little-known “loophole” to get some of that cash back?
And not just a tiny stock dividend either — this can pay you up to three times the income most stocks or bonds pay. Even though this move has nothing to do with the stock market.
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The last time this type of liquidity measure was announced was in 2008…gold prices have doubled since that time. It’s a pretty simple equation, but one that many have not paid heed to. You print more paper with no assets to back it up, and that paper becomes worth less…right before it becomes worthless. It takes more and more of that worthless paper to buy things and that is why things go up in value and price. The thing that will do that the most will be gold.
It’s been a while since we recommended that you buy gold. In fact we said sell earlier this year when the metal neared its all time high. Good timing? Maybe. But, today there is an even more pressing reason to be buying bullion. By this time next year who knows how many more liquidity injections will be necessary to revive broken markets. Add to this the inevitability of more Euros being printed and the globe will be awash with printed paper.
In the past we have made money by buying gold stocks as they appeared and still appear extremely cheap in comparison to the price of the underlying metal. That’s a problem, frankly. They should be twice their current price, but they’re not. The implication is that they were overvalued in the past and are now fairly valued as the market is now using metrics like price/earnings ratio to value them. In the past there wasn’t much in the way of earnings so people bid up shares based on holdings in the ground and production. Strange how the market has decided to adopt a new valuation method. It may not matter much soon.
Gold prices are slated to take off on the latest move by Central Banks and the impending moves by the European Union. There really is not much choice unless by some miracle of finance these countries decided to pay back their debt by some other means that do not require printing money. Yep, not going to happen. This time however you may want to consider buying the gold or silver ETFs (GLD-NYSE) or (SLV-NYSE) instead of or in conjunction with gold and silver mining shares. If the past is any guide, the ETFs will outperform the stocks. If the old past comes back – you know, when gold stocks actually traded as if they had billions of dollars of assets in and above the ground, then gold stocks should soar in price as well. If you’re looking to the gold stock plays…the metal is kind of pricey…then your best bet is to look to the junior mining and explorers. Those companies have actually seen their values cut by 30% to 50% – again something’s don’t make much sense these days. Regardless of the direction or vehicle
that you choose…choose one!
The ‘Bug’ in Your Bank
If you could hack into your bank, how many zeros would you add to your balance?
There’s 9 ‘bugs’ in the big-banks’ super-computers and they’ve already made a few people on the inside rich…
Click here to continue reading this special bulletin and see how Kevin Raymond is giving his best advice to a small group of League of Power members.
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