A Unique Era
By Mary Anne & Pamela Aden
Date: June 18, 2007
The gold market has been under pressure lately and some investors are feeling a little nervous. But the major trend is clearly up. That being the case, let's stand back and look at the facts...
Gold has been rising for over six years and it's gained 158% since then. That works out to 26% per annum, which has consistently been better than most other markets... We continue to believe that gold will likely rise for years to come, eventually reaching at least $2,000 and it'll probably go even higher.
Why?...
Essentially, the perfect storm is gathering...
Number one on our list is the global boom and wealth shift...
China, for instance, has been buying up a large share of the world's steel, lead, tin, cement, aluminum and other raw materials to build its infrastructure. Commodity imports are soaring and China is the world's second largest oil importer.
All of this demand has been the key factor driving the commodity markets higher in recent years and there's no end in sight. This is also coinciding with the mega commodity cycle, which has been quite consistent for over 200 years...
This demand factor is very important, especially combined with the limited commodity supply...
Spending, money and inflation are the other three big factors we've often discussed and they are equally important. In fact, that's really what this long-term bull market in gold is all about and it's the essence of the perfect storm.
The U.S. is the world's largest debtor nation...
...the government simply creates money and it's been creating piles of money. Interest payments on the debt alone are about $200 billion annually...
Inflation is the direct result of excessive money creation...
This will also make the dollar worth less...
It's also important to understand what happened in the 1970s and why this will continue to affect you.
Briefly, from that point on and by presidential decree, the dollar was no longer backed by gold...
The dollar became a paper currency... Throughout history, no paper currency has ever survived...
Gold, on the other hand, has stood the test of time. It has a 5,000 year track record and it's valuable. It always has been, and it always will be.
Gold is real money and it has maintained its purchasing power over the centuries. And as the dollar continues to slide, and spending and money creation continue on their merry way, gold will be the ultimate beneficiary...
So bumps in the road shouldn't sway you. Gold is in a mega trend based on fundamental factors that are not going away any time soon. So again, stay invested and we feel strongly that you'll be glad you did.
The above information has been redacted from the article as it originally appeared on AdenForecast.com on June 18, 2007.
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