I argued the bull case for gold in my posts over the past few months (see “Gold bullion - regaining its shine?“, “Gold bullion glitters bright” and “Gold bullion - challenging $1,000“. With the gold price scaling fresh peaks and closing in on $1,100, it would certainly seem as if renewed interest in the yellow metal is being stirred up, especially subsequent to the purchase by India’s central bank of 200 metric tons of gold from the International Monetary Fund.

As printing presses are running at full speed to produce ever-increasing quantities of fiat money as governments engineer the greatest asset price reflation in human history - and the US greenback is heading South - the longer-term fundamental case for the yellow metal is arguably positive.

“The gold bug has caught several big hedge fund managers this year including John Paulson of Paulson & Company, Kyle

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This analysis from Dr. Marc Faber is adapted from our exclusive webcast Global Investing Outlook, which originally aired in early September. Dr. Faber, based in Hong Kong, is a prominent international investor and a member of the influential Barronrsquo;s Roundtable. I would argue that the weaker the economy is, the more fiscal stimulus will be applied and the more money printing will take place under Fed Chairman Mr. Bernanke, who is historyrsquo;s greatest money printer. As a government, you can print money, increase your debt and put everything on the governmentrsquo;s balance sheet, but it is unlikely to help the typical household in the United States. It may help Wall Street and it may help some asset markets, but not the American standard of living. If money printing would make countries rich, Zimbabwe would be the richest country in the world. If you pursue a monetary policy aimed at driving down and keeping interest ...

This analysis from Dr. Marc Faber is adapted from our exclusive webcast Global Investing Outlook, which originally aired in early September. Dr. Faber, based in Hong Kong, is a prominent international investor and a member of the influential Barronrsquo;s Roundtable. I would argue that the weaker the economy is, the more fiscal stimulus will be applied and the more money printing will take place under Fed Chairman Mr. Bernanke, who is historyrsquo;s greatest money printer. As a government, you can print money, increase your debt and put everything on the governmentrsquo;s balance sheet, but it is unlikely to help the typical household in the United States. It may help Wall Street and it may help some asset markets, but not the American standard of living. If money printing would make countries rich, Zimbabwe would be the richest country in the world. If you pursue a monetary policy aimed at driving down and keeping interest ...

If we’re right about where the price of gold is headed, the general public will someday clamor to buy all things gold. While gold stocks will be where the real leverage is, the rush will start with gold itself. As a gold editor, I have a very natural question: is there enough to go around?

According to the U.S. Census Bureau, there are 6.783 billion earthlings. Meanwhile, CPM Group, a highly respected industry organization, estimates there are 4.8 billion ounces of above-ground gold in the world. And this includes jewelry, electronics, and dental. So, even if everyone around the world volunteered to have their chain, cross, or tooth melted into a coin, we’re already short. Those towards the end of the line are out of luck.

However, it’s worse than that. Of all the physical metal ever mined…

2.1 billion ounces, or 43%, is found in jewelry, decorative, and religious items. Private stock – ...

“I’m Brazilian. I have gold. And I’ve just arrived from Rio richer than anyone…” Thus sang one of the characters in an operetta by Jacques Offenbach. But that was in the mid-19 th century. But hey… what goes around…

Guess what happened last year? According to a study from Boston Consulting Group, the only area of the world that got richer last year was Latin America… led by Brazil!

The rest of the world got poorer. By 11%, according to BCG. Down in the rum and sun zone, on the other hand, they got 3% richer.

So maybe our investments in South and Central America will turn out all right after all.

Meanwhile, back in the developed world… what’s going on? There are two main schools of thought. Ours. And theirs.

Who’s right? You decide.

They say – the crisis is over. We can thank our lucky stars – and the feds.

Now, we’re getting back

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This short update comes to you from Cape Town airport where I am awaiting my flight to Johannesburg, and then to Frankfurt and finally Ljubljana (capital of Slovenia) where I will be spending the next few days with a group of South African business people.

I often argued the bull case for gold over the past few months. With gold having surged by $40 an ounce (+4.1%) to $994 this week, it would certainly seem as if renewed interest in the yellow metal is being stirred up.

As printing presses are running at full speed to produce ever-increasing quantities of fiat money as governments engineer the greatest asset price reflation in human history - and the US greenback is heading South - the longer-term fundamental case for the yellow metal is arguably positive.

The shorter-term technical picture is also starting to look interesting. This is explained by Adam Hewison

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A special report by Comstock Partners, the highly regarded investment manager run by Charles Minter, argues that US economic growth may be just as lethargic over the next 20 years as that of Japan during the last 20.

The first paragraphs are given below.

“We are in the process of deleveraging the most leveraged economy in history. Many investors look at this deleveraging as a positive for the United States. We, on the other hand, look at this deleveraging as a major negative that will weigh on the economy for years to come and we could wind up with a lost couple of decades just as Japan experienced over the past 20 years. It is true that Japan didn’t act as quickly as we did but our debt ratio presently is much worse than Japan’s debt ratios throughout its deleveraging process.

“Presently, the stock market is exploding to the

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Is gold bullion coming back to life? Should one read anything into the rise of 6.2% (+$56) since the yellow metal’s low of early July?

When it comes to gold bullion and gold stocks, I need to confess I started my investment career in 1984 as none other than a mining analyst. Ever since those days of calculating net present values on my trusted HP 12C I have been intrigued by the shenanigans of the yellow metal and related stocks. And I have also learnt over the years that one should never underestimate the ability of the gold price to surprise when least expected.

Admittedly, part of the improvement in the gold price can be ascribed to the fading US greenback, which declined by 3.9% over the same period. I always have more faith in gold’s rallies when they are not only a reflection of US dollar weakness, but

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Gold added about five bucks to its price from the time that trading began in the Far East Thursday…and the London a.m. gold fix. Then from there, it gave back seven dollars going into the p.m. gold fix…and after that, it gained over eight dollars until half past lunchtime in New York. Then a really serious seller showed up taking nine bucks off the price between then and the close of electronic trading in New York. It was pretty choppy trading all around…and it was obvious that every rally ran into serious resistance. The same could be said for silver. But according to the usual New York gold commentator [who is not Dennis Gartman, by the way], volume in gold was heavy…estimated at 140,658 contracts…”which involved a 21.6% surge in the last half-hour. The presence of such determined buyers and sellers during the floor session is unusual.”

Wednesday’s open interest in

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“Words from the Wise” this week comes to you in a shortened format as I do not have access to my normal research resources while on the road in Europe (also see my post “Gone A.W.O.L. - to Slovenia and Switzerland“). Although very little commentary is provided, a full dose of excerpts from interesting news items and quotes from market commentators is included.

While investors’ hopes of an economic recovery might have got ahead of reality, the cartoonists continually reminded us of worrisome issues …

Source: Signe Wilkinson, Washington Post,  June 18, 2009.

The past week’s performance of the major asset classes is summarized by the chart below - a mixed bag so to speak.

Source: StockCharts.com

A summary of

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