The future is collectables, gold and silver

I would like to share with you my views on gold. At the moment gold is trading at about US$1,050. It has always been a true measure of the real value of the US dollar based on financial security and value. Its recent rise reflects growing concern in the future of the US$. Despite gold's crucial role it is the most manipulated commodity on earth with prices being fixed at US$35 per ounce for many years. I wonder why and for whose benefit? Why did Australia, for example, sell half its gold holdings just a few years ago? And who bought them? Was it the big banks? What we do know is that the Australian tax payer WAS the BIG Loser! South Africa went down a similar path many years ago.

In the last few years under George Bush the financial collapse started and, as a result, the US government put up trillions of tax payer dollars (not just Zimbabwe does it) to support their ailing banking system from a complete implosion, and spent billions aiding major industries like the automotive industry from complete collapse. The little man at the end of the chain with his unmanageable mortgage became a casualty of the greed of well-heeled others. Property was like the tip of the "Pyramid scheme" that could only burst like the South Sea Bubble once did.

The irony is that under Bush the US had spent similar amounts fighting the war in Iraq in an increasingly futile attempt to keep the oil wells under US and US company control in a last ditch stand to prop up a failing dollar. Where were the weapons of mass destruction? Never did believe that story anyway.. ;-)

You now have the perfect currency storm coming with the oil trade now looking for gold or a basket of currencies away from the toppling US $. As a result, one of its fundamental instruments of value "West Texas Crude" in US$ is becoming irrelevant. What this means is that the value of the US$ will no longer be propped up by oil. This coupled with the enormous debt (largely loaned from an increasingly concerned Chinese government) has resulted in two tidal waves peaking together as China now look for another (more secure) way to invest its cash surpluses (also gold or a basket of currencies).

If the US$ was a ship it would be the Titanic already on its way going down to the bottom of a very deep sea. If it was a stack of cards the bottom cards would already have collapsed like the World Trade Centre just waiting for the imminent collapse of the rest. The irony is that it is thanks to the US$ and other currencies going off the gold standard (a greed based decision by bankers) that this iceberg has been created.

So while the US$ starts following the trail well trodden by the valueless Zimbabwean dollar the gold price is set to shine and raw gold (in coin or bullion) is set to become the most secure form of currency in these troubled times (forget about long term fixed deposits in the bank - ouch). Of course silver is another excellent safeguard and any numismatists holding large volumes of this precious commodity would be wise to hang on to even the smallest tickey in these uncertain times.

My prediction is that by year end gold will be approaching US$1500 per ounce and silver currently at nearly US18 per ounce rising to close to US$40. By then the US$ will have started to implode as oil finds another safe harbour and the burden of US debt and unwanted bonds makes the US housing crisis look like a tea party.

If this prediction in fact happens gold could be US$10,000 per ounce in six months as the world's biggest economy becomes subservient to the new financial powerhouse, China. The big surprise could be silver - in 1980 when gold hit US$800 as Bunker Hunt attempted to corner the silver market - silver hit US$50 per ounce.

I predict that silver could be selling at hundreds of dollars per ounce between a year to a few years. This depends on the weight behind the US$ collapse and a new form of financial measure (maybe through the Internet) which could become the international financial standard. The banks always wanted a single global currency didn't they?

One thing is without question rare collectibles will be the real winners in these growing times of trouble.

In closing, no currency will escape the implosion as gold becomes the safe water and currencies like the ZAR and even the recovering Au$ will crash in real terms against the oldest and most trusted measure of value - our precious commodities like gold and silver.

All Hail Globalisation, the new Colonial disaster of the 21st Century!

Even Fox News the "American Patriarch" recognise the dollar's imminent collapse, see video below.

Return to articles