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| ON THE OTHER HAND |
| The Muddled East
By Antonio C. Abaya Written Nov. 26, 2006 For the Standard Today, November 28 issue Why would US Vice-President Dick Cheney fly six hours from Washington DC to Riyadh, Saudi Arabia, there to meet with the rulers of that medieval kingdom for eight hours, then fly another six hours back to Washington DC? This is what he did today, Nov. 26, and those who keep track of events in The Muddled East must wonder what that was all about. Cheney, after all, is not your ordinary American politician trying to earn brownie points by having photo ops with world leaders, as a stepping stone towards a run for the presidency in 2008. He is not interested in becoming US president. And he knows he would not win even if he were.. Cheney is the highest ranking neo-conservative or neo con, one of those who � with Donald Rumsfeld, Paul Wolfowitz, Richard Perle - planned the invasion of Iraq months before 9/11 gave them, or they think it gave them, the moral justification for it. About 18 months ago, when Iran became obstreperous about its nuclear program, Cheney painted a possible scenario for dealing with the problem. He said it was possible that Israel would launch a first-strike against Iran �s nuclear facilities � as it did in 1981 against Saddam Hussein�s nuclear reactor at Osirak � and the US would shield Israel against the expected Iranian counter-strike. After the debacle in Iraq , American public opinion will not support another ground war, this time against Iran . But a bombing campaign, with minimal US casualties and maximal destruction of Iranian nuclear infrastructure, to secure the safety of Israel , would conceivably enjoy bi-partisan US support, given the influence of the Jewish Lobby and the belief of Evangelical Christians � Bush�s core support base - that the state of Israel is a creation of God. The selling point of such a campaign would be the expectation that the Iranian middle class, who are considered pro-Western, would rise up and overthrow the ayatollahs and effect a regime change in Tehran . Whether that hope is as misplaced as the expectation, before March 2003, that Iraqis would line the streets of Baghdad and welcome the Americans with flowers, as liberators, remains to be seen. But it is in this context that Cheney�s surprise visit to Riyadh may have to be seen. Israel is in mortal danger of being wiped off the face of the map, as Iranian President Mahmoud Ahmadinejad has several times threatened. If the Israelis are going to launch a pre-emptive first-strike, it has to be done within the next 18 months, before the Iranians develop a nuclear capability to strike back. Dick Cheney may have gone to Riyadh to secure Saudi approval for Israeli planes to fly through Saudi air space on their way to Iran , as well as for US anti-missile missiles to be deployed on Saudi territory to intercept Iranian missiles launched against Israel . The Saudis and some neighboring Arab nations may agree to that as they also feel threatened by Iran . The Iranians are not Arabs; they are Persians. They speak Farsi, not Arabic, even if they use the Arabic alphabet. During the heyday of the Persian Empire 2,500 years ago, the ancestors of today�s Arabs were colonial subjects of the Persians and some of them welcomed Alexander the Great and his Macedonians as their liberators from the Persian yoke. Perhaps the American neo-cons are trying to cultivate this pre-Islamic historical animosity, in the face of a deteriorating situation.. The Iranians� proxies in Lebanon , the Shia Hezbollah, seem to be preparing to overthrow the pro-Western government of Prime Minister Fouad Siniora, a Sunni Muslim, and assume total control of that country. Three weeks ago, five Shia and one Maronite Christian members of the Siniora government, all friendly to Hezbollah, resigned from the Cabinet. Last week, another Maronite Christian Cabinet member, Pierre Gemayel, was assassinated in Beirut . While most fingers are being pointed at the Syrian regime as the mastermind of the murder � because the Siniora government has arranged for a UN tribunal to investigate the assassination of former prime minister Rafik Hariri in February 2005, also blamed on Syria - the role and motivation of the Hezbollah cannot be overlooked. According to the Lebanese Constitution, if a government loses one third of its ministers, it has to resign, and general elections have to be called. The resignation of six ministers and the assassination of a seventh (out of 24 ministers) means only one more minister has to be eliminated, by fair means or foul, for those general elections to be called. There is no doubt that the Hezbollah, immensely popular because of its successful defiance of Israel last summer, will win those general elections and thus assume total control of Lebanon . A hostile Lebanon , alongside a hostile Syria , does not bode well for Israel . As if the situation in Lebanon were not discouraging enough., the conditions in Iraq are deteriorating even faster. The sectarian violence between Sunnis and Shia, and between factions within each community, has long reached the level of anarchy. Only Bush and the neo-cons refuse to admit that they are in the middle of a many-sided civil war. Even the most pro-Western leader in the Muddled East, King Abdullah of Jordan, who speaks English with an American accent, warns that there may soon be three civil wars raging in the region: Sunni vs Shia in Iraq; the Shia Hezbollah against the Sunnis and the Maronite Christians in Lebanon; the Hamas against the Fatah among the Palestinians in Gaza as they at the same time wage guerilla war on Israel. King Abdullah is hosting a summit in Amman next week between President Bush and the Iraqi Prime Minister Nouri al-Maliki. to discuss the diminishing options left to them. Even that is not a sure thing as al-Maliki�s main supporter, the anti-American Shia cleric, Moqtada al-Sadr, has threatened to withdraw his support from al-Maliki if al-Maliki meets with Bush, in which case the government in Baghdad will likely collapse. Into this boiling cauldron Pope Benedict XVI will dip his Prada shoes this week, despite demonstrations by thousands of Turks that he is not welcome in their country, after he made remarks last September deemed offensive to Islam. The last thing the world needs now is for the Pope to be assassinated, as some Turkish hotheads have threatened to. ***** Reactions to [email protected]. Other articles since 2001 in www.tapatt.org OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO |
| Reactions to �The Muddled East�
If the Pope will be assassinated, Christian Europe will be dragged into war, then we have World War III. Muslim nations will not win obviously since the West has the technology and financial advantage, but the price of gasoline will be at a premium. Well, I've got to prep up my bicycle now, considering that it's beneficial to my cholesterol and glucose chart. I foresee expensive commodities and merchandise, even those at Walmart when the hypothetical event occurs. Nonoy Ramos, [email protected], Pennsylvania , Nov. 30, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww GOOD ANALYSIS, DEPTH OF PERCEPTION, DEPTH OF DATA AND YOUR COMMAND OF THE ENGLISH LANGUAGE. YOUR WRITINGS ARE GOOD AND WILL BE MOST USEFUL IF YOU DO NOT LOSE SIGHT TO FOCUS TOWARDS THE IMPROVEMENT OF OUR COUNTRY, THE PHILIPPINES THAT NEEDS REBIRTH, AND TO THE UNDERSTANDING OF THE PEOPLE IN THE WORLD YOU REACH OF THE DYNAMICS OF WORLD EVENTS, CULTURALLY, ECONOMICALLY, POLITICALLY, AND MILITARILY, AND HOW THESE ALL RELATE ULTIMATELY TO THE WELFARE OF HUMANITY, LIVING: AS ONE UNRULY BROKEN FAMILY OF MANY DIVERGENT ETHNIC VALUES, IN THEIR MANY DIVERGENT LEVELS OF CULTURES, WITHIN THE ONE GREAT ECOSYSTEM OF OUR PLANET. [email protected], Nov. 30, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww Aside from being muddled, we are probably watching an accelerating deconstruction of the current superpower. It is more or less self-evident that American financial and economic power had been in long-term decline from its peak during the 70s and 80s. Japan and Germany started the encroachment, followed by the Asian tigers, and now by China . Similarly, US political power had undergone the same decline. Since the invasion of Iraq , American military power has also been losing its bite. If I were the leader of Iran , I would make a deal with Putin that Russia warns the US that any use of nuclear weapons in the Middle East would expose US bases and naval fleets in the region to a similar attack. That should stop those US nukes. Iran would only have to concentrate on conventional war. An interesting question now is: "Has the US now lost a great deal of the initiative in the region?" There are good reasons to believe so: 1) The Israeli adventure into Lebanon revealed the reality that vital Israeli targets could be hit more accurately from Lebanon by weaponry that is more advanced and discriminating than Katyushas. 2) The US and UK placed 160,000 ground troops in a "pocket" where its logistics lifeline can be cut off anywhere from the Strait of Hormuz, the middle of the Gulf, the ports of Kuwait City and Basra, and along the highway to Baghdad and Al Anbar. The Iraq invasion and occupation is indeed a blunder. 3) Iran can cut off 16 million bbls a day of crude oil supply to the West, its allies and to the world. That could mean an oil price between $100 to $200/bbl. for quite some time. Japan , China , and the US dollar would get hit the hardest. So who has the initiative now? Russia and Iran or the US , UK , and little Australia . If I were Iran , there would be no need to engage in overt violence. Just wait for the US to deconstruct and keep feeding the Iraqi insurgency with money, weapons and manpower. Antonio Anciano, [email protected], Nov. 30, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww As for me, the U.S.was left with no choice but to do something after the 911attacks. It�s that simple, whether Saddam, Osama or kung sino pang mga sira ulo pa yan, Bush has to show that they will not only be at the receiving end of what was done to them. But I think they overdid everything. The country that really gives me the chills are not the Middle East countries and U.S. , but it�s the North Koreans that I am really afraid of. Among the nut cases of this world, Kim Jong-il is the strangest creature. Michael Delgado, [email protected], Dec. 01, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww While Muslims in the West and in our country make efforts to convert people to their faith, traditional Islamic countries have laws which prevent anyone trying to convert Muslims out of their faith. In Saudi Arabia and Malaysia , conversion of Muslims from their faith can lead to jail sentences. In Algeria on March 15, the parliament introduced a bill which prevents anyone from apostasising from Islam to another faith. The bill was passed into law, and allows imprisonment of from two to five years and a fine of from $6,000 to $12,000 ( US ) for anyone "urging or forcing or tempting, to convert a Muslim to another religion." Now I understand why some people predict that we will all be Muslims in the next 20 to 30 years. Ike Eslao, [email protected], Dec.03, 2006 wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww (The following article was emailed to us) The Falling Dollar � What to Do Thursday, November 30, 2006 Dear Subscriber, The U.S. dollar is standing on the edge of the abyss, with one foot on a banana peel. In just the last two months, it�s plunged nearly 4% against a basket of the world�s major currencies! Years from now, we�ll look back at this as a major turning point when the fires of world inflation and soaring interest rates were ignited, again. Already, the price of gold is foreshadowing this, skyrocketing from around $560 in early October to as high as $641 this week, with most of the gains occurring in just the last fourteen days. I�ve been warning you � in no uncertain terms � about a plunging dollar all along. But this is one time when I would have preferred to be wrong. That�s because the next phase of the dollar�s decline is going to send the U.S. economy into a frightening inflationary cycle that will catch almost everyone off guard. The good news: You can turn this sorry state of affairs to your advantage and make a pile of money. In a moment, I�ll go over five steps that you can take, including information on a mutual fund specifically designed to profit from the dollar�s demise. But first, because this is so extremely important for your financial health, I want to tell you why the dollar will keep falling and send interest rates and inflation soaring. I�m also going to give you four ways to monitor the coming crisis. Two Major Forces That Could Send the Dollar Lower The dollar had been sliding for two years. So when it bounced sharply earlier this year, the pundits started shouting �rally� almost immediately. But the greenback quickly lost its oomph. It huffed and puffed along with one more brief spurt of energy, and now it�s throwing in the towel. Anybody looking at the longer view can see that the dollar�s rally has been nothing more than routine market noise. The major trend since early 2002 has been relentlessly down. And there�s nothing on the economic horizon right now to change that direction. If anything, I see two big forces that could drive the dollar even lower � Force #1: The Huge Trade Deficit The gargantuan U.S. trade deficit will easily top $700 billion for 2006, the biggest shortfall ever. The real problem with the deficit is not that we�re buying more than we�re selling. It�s that we have no control over what happens to the U.S. dollars that go overseas for payment of the goods. The recipients of those dollars are free to do whatever they want with them. If they reinvest them back in the U.S., there�s virtually no problem because the dollars just come back to us. Unfortunately, when overseas investors look at the U.S. today, they see the biggest IOUs in the history of industrialized society. And in my opinion, they are soon going to start diversifying into other assets and currencies. In this scenario, the dollars get sold off, draining the U.S. economy of much needed liquidity and increasing the chance of a recession. Plus, private investors are not the only ones who will turn away from the dollar this time. Despite Wall Street�s rhetoric that overseas central banks would never dump the dollar wholesale, it appears that�s exactly what�s starting to happen ... Force #2: Central Banks Will Also Dump Dollars So far, most analysts in the U.S. say foreign central banks are merely talking about dumping the U.S. dollar, that they�d never actually do so. That�s hogwash! In my opinion, central banks are already dumping dollars. Now, there�s no way to get statistical evidence until after the fact, when it�s too late. Reason: Central bankers are not going to come right out and say they�re selling dollars. But they will give hints. Witness the recent statements below and you�ll see the increasing pressure on the dollar ... � October 18: Australia�s Treasury Secretary, Peter Costello, calls on East Asia�s central bankers to �telegraph� their intentions to diversify out of American investments and ensure an orderly adjustment. Costello said �the strategy had changed� and that Chinese central bankers were now looking for alternative investments. � October 30: Sultan bin Nasser al-Suwaidi, the governor of the central bank of the United Arab Emirates, told a meeting of central bankers from Gulf States that the bank eventually wanted to lower its reserves in dollars by anywhere from 8 to 50 percentage points! � October 31: Japanese life insurers, who manage the equivalent of $1.6 trillion in assets, say they may cut holdings of U.S. Treasuries. � November 8: At a Frankfurt conference, The People�s Bank of China Governor Zhou Xiaochuan states that China has very clear plans to diversify its currency reserves, which now stand at more than $1 trillion. A wide range of instruments are under consideration, he says, including gold and oil. Can you blame any of these countries? After all, they�ve watched the value of the U.S. dollar plunge nearly 32% in the past five years. Now, it�s starting to plunge again. And they�re not the only ones who should be worried! Internal Sponsorship The New Natural Resource WARS Fierce battles over oil about to drive its price to $100 and beyond. Intense competition for uranium, copper, steel and gold as China and India face off. How to convert this explosive situation into gains that could make the last wave of the natural resource bull market look small by comparison. How the Plunging Dollar Will Affect You ... The very first direct consequence of a falling dollar: Rising interest rates. This isn�t happening yet because too many people are expecting the U.S. housing market slowdown to send interest rates lower. My warning: Don�t let anyone tell you interest rates are headed lower. There�s just too much debt in this country and not enough in savings to avoid a bond market disaster. Indeed, according to technical signals and my analysis of the bond market � there is fully 14 more points of downside in bonds, meaning interest rates could jump as high as 8% or 9% in the months ahead. Another direct consequence of the falling dollar: Soaring inflation. You can�t have the dollar plunge like it is now without setting off a wave of inflation. The only way to avoid it would be backing the dollar with gold, which is just not going to happen. Plus, surging demand for natural resources will only add to the inflationary pressure. Earlier this year, the Commodity Research Bureau�s index of 17 commodity prices hit a twenty-five-year high, and it�s very close to breaking that record right now. It�s absolutely critical that you watch inflation closely. So, here are � Four Signals to Help You Monitor The Coming Wave of Inflation To hear the government tell it, inflation is tame. They base this on their Consumer Price Index (CPI), the most commonly-quoted measure of inflation. Don�t be fooled: The CPI is a fairy tale number manipulated by the government. In fact, it�s so flawed in its mathematical construction that it�s practically meaningless. If you want to know the real truth about what�s happening with inflation, pay attention to real signals that give a far more accurate picture of inflation. Four of them � 1. The value of the dollar: As the dollar weakens further, foreign goods cost you more. Period. Specifically, watch the U.S. Dollar Index (DXY), which compares the dollar to a basket of major currencies. The indicator broke its uptrend line the day after Thanksgiving, and now, as you see on the chart, it�s crashing. You can monitor the dollar index here. It�s also in the �Money & Investing� section of The Wall Street Journal. 2. Treasury bond prices: Keep your eyes on bonds because they are extremely sensitive to inflation. According to my indicators, when the 30-year Treasury falls below the 110 price level, all heck will break loose as investors start to run for their lives from inflation. This will also signal that the dollar crisis is in full-blown mode. To monitor the price of U.S. Treasury bonds, again, check The Wall Street Journal�s �Money & Investing� section (pages one and two). 3. The Commodity Research Bureau index: When somebody tries to tell you there�s no inflation, ask why the CRB index has gained almost 16% in barely two months! Keep an eye on this index. It will take breathers from time to time, but as long as it remains above the 529 level, inflation is building momentum. You can monitor the CRB index in the �Money & Investing� section of The Wall Street Journal. 4. None other than gold itself! Historically, gold has been an extraordinarily accurate leading indicator of inflation because, for centuries, it�s maintained a basically stable value in terms of purchasing power. I don�t know if gold will blast off to new highs today, tomorrow, or next month. But I can tell you that the yellow metal is in a long-term bull market and headed much higher. My view: Once gold closes above the $660 level, record new highs will be right around the corner. Five Steps You Can Take to Prepare Your Portfolio I wish I could say December is going to be a nice, quiet month ... that you�ll be able to relax and get ready for the holidays. But I think we�re on the doorstep of the financial crisis I�ve been warning you about. So it�s absolutely critical that you consider taking these steps to prepare: Step #1. If you�re still in long-term government and corporate bonds, consider getting out immediately! As I said earlier, I think they�re headed into crash mode and interest rates are about to skyrocket. Step #2. Make sure you have your core gold holdings in order. I suggest 5% in gold bullion, with another 15% in the very best gold shares and funds. Two gold funds I like are DWS Gold and Precious Metal (SCGDX) and Tocqueville Gold (TGLDX). Step #3. Don�t ignore other key natural resources like oil. There are plenty of great stocks and funds to select from. For specific investment recommendations, look in the �Natural Resources Riches� and �Real Income� sections of my Real Wealth Report. Step #4: To directly profit from a falling U.S. dollar, you can buy the Falling U.S. Dollar Profunds (FDPIX) mutual fund. When the dollar is sinking, this fund rises in value. It�s available through most brokerage firms or through ProFunds directly (www.profunds.com; phone: 888-776-5717). The minimum investment is $15,000. Step #5. If you�ve got some money set aside for more aggressive investments, be very choosy. Some of my favorites can be found in the �Resource Speculator� section of Real Wealth Report. Best wishes, Larry P.S. If you�re not already a Real Wealth subscriber, why not join? I think it�ll be the best $99 you�ve ever spent. wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww (The following article was emailed to us.) China Will Corner the Gold Market Thursday, November 16, 2006 Dear Subscriber, If China were to lay its $1 trillion in reserves end-to-end using dollar bills, the trail of paper would stretch for 96,906,565 miles. That�s enough to wrap around the widest part of the earth 3,876 times! Clearly, Beijing�s coffers are overflowing. In fact, China has the largest foreign reserves of any country in the history of the planet. Compare that to Washington, which owes nearly $9 trillion, not counting contingent liabilities. Whose paper currency do you think should have more purchasing power? Naturally, the yuan. Yet that�s not the case � the dollar remains stronger. But not for long. Here�s why ... China Is Going to Corner The World�s Gold Market I warned of this nearly three years ago, but now the signs are even clearer: Over the next few years China is essentially going to corner the world�s gold market. In the process, the price of the precious yellow metal could soar to well over $1,000 per ounce, and eventually to more than $2,000 an ounce. ARE YOU ON TRACK FOR RETIREMENT? Here�s an innovative way to help you get there ... one you may not have thought of ... � 10 things every investor needs to know about dividend-paying stocks. � How to select the right stocks for safe, steady income. � What strategies best harness the incredible nest-egg-building power of dividends. � Three areas that hold hidden promise for yields, and 17 specific stocks to look at. � And more ... Mind you, this won�t be intentional on China�s part. Beijing will not set out to consciously �corner� the gold market. But, in effect, that will be the end result. Take it from me. I�ve met with central bankers, banking regulators, and gold traders in China. I know their views on the yuan and gold. I�ve been told that China will be buying up huge amounts of gold. You see, Beijing knows that the rest of the world perceives China�s economy as loaded down with hidden debts and plagued by corruption. So as China progresses toward superpower economic status, authorities in Beijing want the country�s currency to be a world-class, stable medium of exchange. They envision the yuan as a major international currency some day, with as much (or more) status than the U.S. dollar. That�s why they�re going to back the yuan with gold ... loads of it. Consider this: China has a mere 1.3% of its reserves in gold (600 tons). That�s the lowest of any industrialized economy! To put it into perspective ... � The U.S. has nearly 75% of its foreign reserves in gold. � The European Union has 26.5% of its reserves in gold. � Lithuania, Mozambique, and even tiny Nepal all have more of their reserves in gold than China. Tonnes % of Tonnes % of reserves reserves United States 8,133.5 74.5% Nigeria 21.4 1. 1% Germany 3,423.5 61.4% Ukraine 17.3 1.9% IMF 3,217.3 1) Belarus 16.5 24.6% France 2,768.0 62.9% Cyprus 14.5 5.9% Italy 2,451.8 66.1% Korea 14.3 0.1% Switzerland 1,290.1 42.1% Brazil 13.7 0.4% Japan 765.2 1.8% Czech Republic 13.5 0.9% ECB 662.9 25.8% Netherlands Antilles 13.1 34.9% Netherlands 654.9 57.3% Jordan 12.7 4.6% China 600.0 1.3% Cambodia 12.4 19.7% Spain 457.7 48.9% Mongolia 8.9 22.3% Taiwan 423.3 3.2% Ghana 8.7 8.9% Portugal 402.5 80.3% Latvia 7.7 4.4% Russia 385.5 3.0% El Salvador 7.3 6.3% India 357.7 4.4% Myanmar 7.2 13.8% Venezuela 357.1 23.3% CEMAC 7.1 2.1% United Kingdom 310.3 14.1% Colombia 6.9 1.0% Austria 290.8 43.3% Guatemala 6.9 3.5% Lebanon 286.8 31.0% Macedonia, FYR 6.8 8.1% Belgium 227.7 34.9% Tunisia 6.8 3.5% Algeria 173.6 4.9% Lithuania 5.8 2.7% BIS 165.8 1) Ireland 5.5 11.9% Sweden 161.8 12.1% Sri Lanka 5.2 3.6% Philippines 146.3 14.0% Slovenia 5.1 1.2% Libya 143.8 5.8% Bahrain 4.7 1) Saudi Arabia 143.0 11.3% Nepal 4.0 4.8% Singapore 127.4 2.0% Mexico 3.5 0.1% South Africa 124.1 10.5% Canada 3.4 0.2% Turkey 116.1 3.9% Aruba 3.1 18.1% Greece 108.1 76.2% Hungary 3.1 0.3% Romania 104.8 8.4% Kyrgyz Republic 2.6 7.7% Poland 102.9 4.3% Luxembourg 2.3 17.1% Indonesia 96.4 4.8% Albania 2.2 2.8% Thailand 84.0 2.9% Hong Kong 2.1 0.0% Australia 79.8 3.4% Iceland 2.0 4.0% Kuwait 79.0 14.5% Papua New Guinea 2.0 4.0% Egypt 75.6 6.7% Mauritius 1.9 2.8% Denmark 66.5 4.3% Trinidad and Tobago 1.9 0.7% Pakistan 65.3 10.3% Mozambique 1.7 2.9% Kazakhstan 59.8 8.8% Yemen 1.6 0.5% Argentina 54.7 4.2% Tajikistan 1.3 14.0% Finland 49.1 13.8% Suriname 1.1 9.9% Bulgaria 39.8 7.6% Cameroon 0.9 1.5% WAEMU 36.5 9.7% Honduras 0.7 0.5% Malaysia 36.4 0.9% Qatar 0.6 0.2% Slovak Republic 35.1 5.4% Dominican Republic 0.6 0.6% Peru 34.7 4.8% Gabon 0.4 0.8% Bolivia 28.3 21.5% Malawi 0.4 5.3% Ecuador 26.3 22.3% Central African Rep 0.3 4.7% Morocco 22.0 2.4% Chad 0.3 2.8% Just to up its reserves to 5% in gold, Beijing would have to purchase $50 billion worth. That could easily send the yellow metal skyrocketing to more than $1,000 an ounce. And if China were to match roughly half of the gold reserves held by the United States, it would have to buy another $300 billion worth. That kind of buying would send gold to more than $2,000 an ounce. We�re getting closer and closer to the day when this starts unfolding. Why? A few months ago, China announced that it will plow at least 2.5% of its trade surplus into gold. That�s a staggering $2.5 billion of brand new demand for gold every year. Then, last week, People�s Bank of China governor Zhou Xiaochuan said China�s government is seeking alternative investments to risky U.S. dollars. My view: China has probably already started purchasing gold. That�s one of the reasons gold is now trading in the $625 range, well above important support levels on the charts between $590 and $600 an ounce. This is why I suggest getting more aggressive in gold right now. By the time Beijing officially declares that it�s buying gold, it will be too late. Another Reason Why Gold Can Triple, and Four Ways to Profit In terms of the purchasing power of today�s dollars, gold reached $2,176 in 1980. But right now, it�s trading near $625 an ounce, less than one-third of its inflation-adjusted high. This alone suggests that gold has much more upside. Even if gold got halfway to its inflation-adjusted price, it would zoom to more than $1,000 an ounce, more than a 50% gain from current levels. So is gold undervalued? You bet it is! Just to catch up with inflation, it should soar above $2,000 an ounce. China�s buying would just be the icing on the cake. Live Like a Millionaire without the Price Tag ... Stop paying crazy high prices and stop settling for puny profits, poor service and second-rate health care! In this �must read� report, discover the three shocking secrets that entitle you to: 1. Triple your nest egg in just 11 months with complete safety. 2. Block cancer and heart attacks for your whole life � at a cost of 15 cents. 3. Laugh at high gas prices as you get $12 cash back every time you fill up your car. . I believe gold is still one of the best bets out there, loaded with huge profit opportunities. No matter what aspect of the market I examine, I see much, much higher prices. So, without further delay, here are four ways to get a stake in gold ... First, you can buy bullion. For small amounts, a convenient vehicle is 1- and 10-ounce gold ingots. It might be a good idea to own some physical gold this way, but don�t go overboard. It�s too much of a pain in the butt to transport and store it. Second, I think the streetTRACKS Gold Shares (GLD) exchange-traded fund is a �must-own� investment. Each share represents 1/10 of an ounce of pure gold. And the metal is stored for you! This is the single best way I know of to own physical gold. Third, consider gold mutual funds like DWS Gold and Precious Metal (SCGDX) and Tocqueville Gold (TGLDX). You can pack them away, with a view toward holding them for at least a couple years. In my view, these funds could double, triple, even quadruple, over that timeframe. Fourth, you can invest in individual gold stocks. But be careful here. The irony of today�s bull market in gold is that some gold mining companies may actually go out of business as the price of gold soars. Reason: They still hedge too much of their gold production and/or reserves. As I always remind my Real Wealth Report subscribers, you need to be selective. Best wishes, Larry For more information and archived issues, visit http://www.moneyandmarkets.com About MONEY AND MARKETS MONEY AND MARKETS (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Sean Brodrick, Larry Edelson, Michael Larson, Nilus Mattive, and Tony Sagami. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM. Nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical inasmuch as we do not track the actual prices investors pay or receive. Regular contributors and staff include John Burke, Amber Dakar, Monica Lewman-Garcia, Wendy Montes de Oca, Kristen Adams, Jennifer Moran, Red Morgan, and Julie Trudeau. Attention editors and publishers! Money and Markets issues can be republished. Republished issues MUST include attribution of the author(s) and the following short blurb: This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.MoneyandMarkets.com From time to time, Money and Markets may have information from select third-party advertisers known as "external sponsorships." We cannot guarantee the accuracy of these ads. In addition, these ads do not necessarily express the viewpoints of Money and Markets or its editors. For more information, see our terms and conditions. If you have a friend, co-worker or family member who you feel could benefit from Money & Markets, please forward this issue to a friend. View our Privacy Policy. Would you like to edit your email notification preferences or unsubscribe from our mailing list? � 2006 by Weiss Research, Inc. All rights reserved |