im calling a bottom, page-24

http://www.forbes.com/markets/feeds/options/2008/11/09/options20413.html

Why It's Time To Be A Gold Bug Now?
11.09.08, 11:43 AM ET



Chart 1

As we approach the end of the year, a few things are ringing clear in investors' heads. We now know who our President of the United States will be. We also know who his chief of staff will be as well. One thing is for sure: there will definitely be change in Washington, which could spell major change on Wall Street. It has been several months since I looked at Gold as a viable investment option, but it's looking good for several reasons right now. They are:

Drop in the Dollar - As the US continues to drop interest rates, it makes commodities like Gold more valuable. Yes, Oil could be included as well, but Oil has been closely tied to the stock market in terms of production, while Gold is not. As our Dollar diminishes in value, it will likely prop up Gold prices. Right now, the price of Gold in US dollar terms after inflation is around $2000 an ounce.

Recession or Depression - Right now the total debt on the US economy is in the trillions and keeps climbing. As long as this continues, and there's almost certainty that it will, this will likely push Gold higher, as it did back in the 1930s. That's the last time we had huge debts on our country.

Supply and Demand - according to many Gold producers, the amount of Gold that is mined from the ground has actually fallen by 5-10% this decade. If this trend continues, Gold should rise on its own despite the problems outlined above. As far as demand is concerned, India and China are the world's largest consumers of Gold. Unlike oil, which is used for production, Gold is seen by these countries as a form of savings, in both good times and bad.

Correlation to the Stock Market - Gold in the long term is a great hedge against paper assets. Look at the last few decades, as the 1970s were great for gold. The 1980s were great for stocks. Now we see the trend for stocks as down as the trend for Gold up again.

.....cont'd