Editor’s Note: Byron is
back with his take on the market situation. To him, there’s only one
safe way to go…buy gold. Enjoy…
|
The Only Safe Investment in the Market |
By Byron King
September 24, 2008
Why are precious metals moving upwards? After all, the market smashed
them down all summer as the dollar strengthened. The short answer is
that right now gold and silver are the only decent game in town.
Yes, there are a few other asset and income
plays as well in the market. After all, there’s still an economy to
run out there. There are 303 million Americans, and 6.2 billion other
people in this world, who want to eat every day. But much of the stock
market is a crapshoot. If you love pain, then the broad stock market
is the place for you. While gold and silver represent the flight to
safety and quality.
The U.K. Telegraph put it nicely:
“As investors scrambled to make sense of last week’s events, already
one conclusion was all but irrefutable — the U.S. dollar will have to
take another major fall. The dollar rally that began in July and
pushed the pound’s value against the greenback significantly lower has
come to an abrupt end as markets face up to the fact that the currency
will have to absorb the effects of a sudden shocking increase in
America’s budget deficit.”
So we see lots of bad news for the dollar.
But when you own gold, it’s your asset. With a specific gravity of
19.3, gold is dense, non-reactive and otherwise immutable. Gold is
nobody’s liability. As one of my old professors at Harvard used to
say, “That’s physics.”
**********************************
One of the Longest-Standing Options
Newsletters in the Country
This year marks Options Hotline’s
18th anniversary — making us one of the longest-standing options
newsletters in the country.
For the last 18 years, my father and I have
been proudly helping everyday folks like you make
175%...259%...277%...even 1011% by committing about three minutes of
their time each week.
When the service started, our goal was to
help busy readers consistently rack up the best gains in their trading
careers. Eighteen years later, I’m proud to say that we’re still
living up to that lofty goal.
Check it out here…
**********************************
Gloomy News from Wall
Street
Speaking of physics, I’ve looked east of the
sun and west of the moon. I can’t see much good news for the U.S.
dollar on any horizon. Really, what’s gloomier than the news from Wall
Street? The investment model of the modern era (borrow short, lend
long, pay big bonuses) is dying before our eyes. “And it’s about
time,” some might say. But it’s happening on our watch. So we had
better suit up in battle-rattle.
Wall Street’s losses are in the range of
hundreds of billions, maybe trillions. Which prompts me to inquire,
where are Bonnie and Clyde when you need them? At least the Barrow
couple knew who they were and what they did for a living. To their
credit, on their last foray the dynamic duet had the guts to shoot it
out with the cops and go out in tragic style.
But now the modern bank robbers are talking
about how they should get big bonuses for all the good work they put
in up until things blew up. Really, I’m serious. Lehman Brothers wants
to pay $2.5 billion in bonuses to 10,000 employees. That’s an average
of $250,000 per person. (Except I think the office runners and
secretaries will get less than $250K and a select few will rake in a
lot more.) What has anyone there done to deserve $250,000? Did I miss
the news about somebody at Lehman discovering a cure for cancer? It’s
all just so…Baby Boomer.
At the end of the day — and the clock is
ticking fast — it’s too bad that the wrong people are going to get
paid. And bonuses? Oh, if only I could be a bankruptcy judge for just
one hour.
**********************************
The Extra $90,203 You Could Have
Made Last Year
Let me ask you this...
What would you do with an extra $90,203?
If I’d had the chance to write to you about
the best options plays of the coming year, back at the end of 2006,
that might have been the exact question you’d be asking yourself right
now.
Now, you don’t have to ask about extra
money. You can make it.
Read on…
**********************************
The War on Risk
Do you recall the $700 billion of borrowed
money that the U.S. paid over the past seven years to fight the
so-called “War on Terror?” Well now, with the stroke of a pen the U.S.
taxpayers will pay another $700 billion (and probably more) for the
“War on Risk” in the next year or so.
War on risk? It seems that way to me. Let’s
back up. In the past few years — seven or so, coincidentally — a lot
of people gambled and lost. People bought houses they couldn’t afford.
Brokers arranged the loans. Bankers lent the money. Other bankers
bundled-up the mortgages and sold them as “asset-backed securities.”
Rating agencies sprinkled their holy water on the transaction.
Insurance companies insured everything against default and loss.
A lot of people were making a darn good
living for a while. But it was all a farce based on cheap credit and
an abiding faith in a “something-for-nothing” way of life. And it’s
too bad that a lot of people bought — as the saying goes — “as much
house as they could afford.” Except they couldn’t afford it.
So now the whole mess is falling apart. And
in true Baby Boomer fashion, the key perps on Wall Street want to
change the rules and stick the house with the bill. That is, the White
House and the House of Representatives, and your household as well.
The advertised number of $700 billion for
the Wall Street bailout is just the posted price — the “loss leader”
to get the American people into the store, so to speak. But get set
for a bad case of sticker shock as events unfold. A group of business
reporters at Bloomberg tallied up the raw numbers and came up
with their own number of $1.8 trillion.
$700 billion? $1.8 trillion? When the
numbers are that big, does it even matter? It’s the inflation-adjusted
equivalent of fighting World War II again. Except who is the enemy?
Whatever the final tally may be, it cannot
be good for the U.S. dollar. So buy gold and silver. If you can’t
acquire the metal in the form of coins or bars, then buy precious
metal stocks of companies with ore in the ground.
Until we meet again…
Byron W. King
P.S.: With gold, your
assets are safe. Your money should appreciate, and you can live
independent from all the market troubles of today. But if I told you
that you can do that without gold, and even make more money with just
as much security, would you be interested? I hope so, because today I
have something that’s better than gold.
Read on…
