Gold Flush!

Hey There Income Hunters,

Gold has gotten flushed out this week as interest rates increased and provided an alternative for investors

But, much like my high school romances, it ain’t gonna last.

This, friends, is the opportunity I have been waiting for … because I think this will be the last downturn for gold before starting a MASSIVE leg up.

And when we get pullbacks like we’ve seen recently with gold, you MUST take advantage of them — if you’re really serious about generating income, that is …

Why I’m SO Confident in Gold
Treasury Inflation-Protected Securities (TIPS) trade at a price that reflects the US 10-year real rate of interest…

When TIPS go down, it is very bad for the economy because they represent the interest cost on debt.

Cost of debt goes up … companies with a lot of debt go down.

As in: default.

So, right now gold is correcting but it won’t stray too far away from TIPS. The Fed can not afford to let real rates go too far or they risk defaults in debt …

When inflation picks up in the months ahead thanks to massive stimulus spending, TIPs will resume their rally … and so will gold.

Also, in the chart below, check out how gold kicked TIPS butt in 2009 when the Fed started quantitative easing (QE) and markets priced in an inflation spike …

Gold never looked back and that rally WILL happen later in the year.

Where to Strike Gold
The SPDR Gold Trust ETF (Ticker: GLD) is heading right into a key area between 160 and 162 on the charts (see below). 

Historically gold is sold when lower inflation numbers arise in recession …

However, the Fed is stimulating as this occurs, so inflation rises substantially as that stimulus is circulated through markets.

And we are seeing signs of that now through very strong retail sales figures released on Wednesday — up 6%.

Bring It Home
This is a critical point to understand about gold and silver… they are real money — and no other commodity fits that definition (as stated in our constitution!) …

Precious metals explode in monetary crisis situations — and as I have been saying for months, we are in transition to a new monetary system. Most currencies around the world are being devalued to create inflation and address debt reduction needs …

There is also a chance one or more central banks will fortify their currency with gold and silver. This is done to improve confidence in the currency.

Don’t lose sight of that because the probability is high and the risk is low.

Live and Trade With Passion My Friends,

Griff

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