GOLD ECONOMY

MY OPINION ON GOLD by Leonard Rivero

 

    Did you ever hear of Integrated BioPharma Inc.(INB:AMEX)?  Probably not but it went from 7 cents to $9.60.  The Wall Street insiders grabbed it all before the public knew it existed.  Unless you are an insider, it’s best to stay away from stocks and bonds as they are designed to suck the money out of the investors for the benefit of the BIG BOYS.  Every broker that entices their investors to earn commissions has a conflict of interest.  And a few of their wealthier players may gain some occasional advantage, their chances are about as good as gambling at a Casino when the market turns down.

However, if you want to hedge your bet because you have surplus cash and need to invest it securely, consider this strategy:  Buy gold coins or bullion.  Lodge it at your bank as collateral for a loan for say 80% of its value at the lowest interest rate for its secured collateral.  Then use that money to buy more gold or to speculate on the stock market.  If the US dollar devalues, your gold maintains its world market value and you can pay off your load with cheaper dollars at any time or simply wait until the US dollar crashes and becomes worthless.

Since the time that the US government discontinued using gold to determine worth of its paper money it took $35 to buy one ounce of gold.  Since printing excessive paper money, it now takes over $25,000 to cover each ounce of gold in its Federal Reserve.  So, what will happen when the government prints another $700 billion for the Wall Street bailout?  The world market for gold at this time is around $900 per ounce and I predict that it will increase to $1200 by the end of the year.

Playing the stock market at this time in history is a big gamble.  And if you want to gamble, try changing your mindset by gambling on the fact that the US dollar has depreciated because of bad government management and the excessive printing of paper money.  And as the dollar devalues, it will take more dollars to buy gold because of increasing demand for this colored metal.

And if you do decide to buy stock, its best to buy the 2% of the best potential penny stocks because if they do take off, the margin would be substantial.  There is no advantage in buying high priced oil stocks because the company is making excessive profits and do not want or need to pay its true dividends to their shareholders so they pay excessive salaries and bonuses to their executives and hide much of their surplus profits in so-calls exploration expenses when they already have huge oil reserves that have been capped for many years since they could buy foreign oil cheaper than pumping their own oil.

Leonard Rivero.  email: lenrivero@msn.com