Investing in Gold, Silver and Technology Stocks, Today’s Trades

I thiny you are correct in your gold and silver stock plays and recent timing decisions. You may enjoy two other blogs that focus on gold and silver stocks.

http://earnosestocks.blogspot.com/

http://goldstockprophet.blogspot.com/

Best Regards,

Paul Wills, M.D.,F.A.C.S.

Hi Andy,

I have really enjoyed your posts on Seeking Alpha. I think the Royalty models of RGLD and TRE will really come into focus over the next month or so, as traders begin to drill down to individual stocks & stories after the initial dust of this massive breakout in gold and silver settles down.

Costs are rising (NEM is a great example) and production is flat for many of the large producers and I think the royalty plays will very soon have their day in the sun.

Sinclair has recently returned from China. I’m curious as to what TRE has unfolding come 2008. This will be an interesting year for TRE and Sinclair – as much of what he’s been predicting for the last few years is now unfolding in the U.S. Dollar and with Bernanke and inflation.

If you are interested in my 2 cents on Bernanke, Gold and inflation; I penned a post along with some charts that speak volumes about how the market felt about what I call:

“Bernanke’s Blink”

http://goldsilverstockcharts.wordpress.com/2007/09/30/ben-bernanke-blinks-and-the-market-calls/

Silver is lagging the move in gold a bit, so I’ve actually been adding more silver stocks than gold of late.

SLW, SIL, PAAS, HL and the silver ETF “SLV.”

I think 2008 is going to be the year Gold and Silver dominate the headlines.

All the best,

Michael Cerulean

Monetary Reflation Today, Price Inflation Tomorrow

(Excerpted from speech to China Gold Summit, December 4, 2008, Shanghai — by Jeffrey Nichols, managing director of American Precious Metals Advisors and NicholsOnGold.com)

I remain bullish on gold because — even as the global economic recession deepens — governments will find the only way out of this mess is to print more money. In other words, to inflate.

The United States Treasury and the Federal Reserve have already thrown a few trillion dollars, more or less, into the banking system and are now also lending directly to businesses and households. And, there’s surely much more to come when the next Administration moves into Washington.

It’s not only the U.S. monetary authorities pumping up the money supply. Their counterparts in every major economy – including the United Kingdom and the Euro zone, China, Russia, Japan and on and on – are doing likewise.

We have never in the history of money seen such an expansion in its supply without, after a period of time, a rapid deterioration in its value – in other words, without a rapid increase in the overall price level. More than any other factor influencing the gold market, it is the inevitable devaluation of money and the corresponding rise in price inflation that will propel gold skyward in the next few years.

As sure as day follows night, reflationary monetary policies — however necessary — have long-term implications for global inflation. Typically, monetary creation affects price inflation with a lag of six months to a couple of years – and in the current environment, the lag could be still longer . . . so it may be some time before inflation is recognized as a serious problem. But gold prices have shorter lags and could begin moving up before rising inflation becomes apparent or worrisome.

Longer term, gold-price prospects remain as bright as ever — and I firmly believe we will see record high prices in the next few years with gold back over $1000 an ounce in the coming year.

With the right confluence of economic and geopolitical developments we should see gold break through $1500, then $2000, and possibly still higher round numbers in the next few years – particularly if we get the type of buying frenzy or mania that often occurs late in the price cycles of financial and commodity markets.

This is hardly an audacious forecast when looked at relative to the upward march in consumer prices over the past 28 years. After all, the previous high of $875 an ounce in January 1980, when adjusted for inflation since then, is today equivalent to more than $2200.

Let me end with a warning about the days and weeks ahead. In the short term, gold remains volatile and vulnerable, if only because market psychology is nervous, anxious, and fearful. In this environment, we could still get a quick sell-off that would bring us back to the recent lows. But, day by day, I think that becomes less likely and, day by day, I think the base is building for a lasting longer-term recovery.