Well it has been an interesting year for sure for GOLD, Junior GOLD Explorers, and for the West African GOLDies, (etc). Whats the New Year hold???
Very hard to imagine, if there is a free and unfettered market for gold, that gold will not solidly appreciate in the forseeable future, and a conservative pick would be $2000 per ounce within 12 months. The deflation in value of the IOU's or fiat currency has few options for the Central Bankers, and try as they will to mask what the effects of their maneuvers are or will be, through a forever compliant popular media, the trend is solidly down for IOUs, and up for the things that the Bankers and Politicians cannot print/create ad nauseum...gold plus other physicals.
Quoting JP Morgan, who knew a little about how finance works...“Gold is money. Everything else is credit”...pure and simple.....(JP Morgan, testifying before Congress, 1912), nothing has changed except that now there is a hell of a lot of credit out there, increasing every day, and trust in its value is diminishing fast (every day)...and the amount of BS in the financial press beggars belief. Fiscal cliffs, Quantitative Easing X, where are the gold old words like productivity...
Buying gold through GOLD, physicals (WA Mint) or some other ETFs are ways (so if you buy now you might pay $1700 per ounce, and so if gold goes to $2000 per ounce, you make 15%, which will be better than you will make in the banks). But there is another way coming up, which is what some class of investor (long term thinkers, Chinese?) seems to be considering, as I have been told.
The more highly leveraged way, bearing in mind the times we live in, maybe to buy it in the ground. Especially if you only pay $50-100 per ounce or 5-10% down so to speak. You do not have to rip it out of the ground right now, as the ground is a kind of bank. The better bank (ground holding) is one which holds a lot of gold (more the better generally, and the higher grade the better etc..), until the time is right to take the gold out. The best bank is the one which can attract/discover a lot of interest payments (read "ground bank in which you can make more discoveries cheaply")
So the Chinese seem to be displaying a very particular interest in gold (plus other physical assets). China is the world biggest gold producer, but they sell no gold into the world market??? They tend to take a "long view" on matters.
China is now going about setting up the Pan Asian Gold Exchange (see http://www.forbes.com/sites/robertlenzner/2011/09/27/the-chinese-mean-to-control-the-global-gold-market/ for example, but do your own research and watch this page). Lets assume they do not do this to fill in time. What does this do? What are their intentions? You would able to buy spot gold or futures contracts in China. It also means that the Chinese currency- not US dollars– will for the first time become the ruling currency used in one of the major "speculative (I would contend that the fiat currencies or credit paper is the more speculative) commodities of our age. And there will be a lot more to come for sure. The US did not like this for sure, nor did Europe. Fight as they will, my money is on the Chinese.
Have a look at the pitiful and pathetic squabbles in the USA Politics about the Fiscal Cliff or slope. Really, these guys are going to get organized and continue to be a world force? They can't even agree on the definition of inflation. Is there a light in Europe. Nope. More squabbling. The new French Tax on the rich is ruled unconstitutional (it was purely illogical before) and the French are still checking out what Entrepreneurial means (undoubtedly they will ring the US Fed). Italians. Spanish....I worked in Portugal last year, and the most remarkable thing was that there was an almost complete disinterest in doing a hard days work. You had to start at 8.30am, have time off for coffee several periods in a day, then an extended lunch, plus a few smokes, jokes..productivity was down to be polite.. But the politicians are even more lost than in the USA...
Good old democracy at work...
As an aside, an interesting read for those interested in the above, is "A Free Nation Deep in Debt, the financial roots of democracy" by James Macdonald, a former Investment Banker. An interesting look ta the last 2,000 years...One small statement worth having a look at is " For the greater part of recorded history the most successful and powerful states were autocracies"....hmmmm...one wonders what could be around the corner...
So all of the above (which is a condensed version for sure) leads me to think Gold is a good thing to invest in this year, and for the forseeable years.
Gold in the ground bank, is another "asset class" being held by some companies, that a certain group of long term investors (not necessarily the major companies, but rather the Chinese) may take a great deal of interest in. The more gold in the ground bank, and the greater probability of discovering more gold in the bank is the place to be for me in 2013.
Happy and Lucky investing and good luck to us all (and the US $, and the Euro and indeed the A$)! My monies in gold (sorry for the play on words), and I like the ground banks...better leverage.
