Great Basin Gold Ltd. (fka GBGLF)

[OriginalFred]

GBN = Right place + Right time

"My analysis of the currency and metals markets points to an eventual dollar crisis and metals prices at all-time highs. I have no idea how long it will take but I believe that it will happen within the next 24 months."

Hollister should be just going into production by then. Perfect timing?

http://www.resourceinvestor.com/pebble.asp?relid=11873

Dale Doelling Says "If You Aren’t Long Gold Now Then You Should Be"

By Jon Nones
08 Aug 2005 at 05:40 PM EDT

St. LOUIS (ResourceInvestor.com) -- Dale Doelling, Chief Market Technician of Trends In Commodities, offers insight into the China equation by examining the country’s economic boom and the short- and long-term ramifications it will have on the U.S. dollar and the price of gold. Mr. Doelling is a 20+ year veteran trader of the financial markets, father of the commodity advisory service Trends In Commodities and recent founder of LTD Investment Corporation.

JON NONES: After China revaluated its currency and delinked it from the U.S. dollar, we watched the price of gold surge. Is this just the beginning?

DALE DOELLING: The United States economy and our standard of living have been artificially elevated by foreign countries that have continued to buy our government debt. This has allowed us to continue to live way beyond our means. Five years from now we’ll probably look back at this event (China’s decision to peg its currency to a basket of currencies instead of solely to the U.S. dollar) as the beginning of the end for the U.S. economy and the beginning of the end for our current standard of living. We are about to enter an economic environment that few, if any, are prepared for and the end result will probably make the long-term deflation that Japan has experienced look like a walk in the park.

JON NONES: How will the revaluation affect gold in the short term?

DALE DOELLING: China new foreign exchange policy is going to become the starting point for the greatest advance in the price of gold and silver in history. I have been advocating LONG positions in gold and silver since the December gold contract was trading near the recent lows around $424-428. My analysis of the currency and metals markets points to an eventual dollar crisis and metals prices at all-time highs. I have no idea how long it will take but I believe that it will happen within the next 24 months.

JON NONES: What about the long-term effects?

DALE DOELLING: I try not to dwell on the long-term effect that this scenario will have on our economy, but I believe that the eventual fallout will resemble the personal and economic strife that we experienced in the Great Depression. The combined forces from the crash in the dollar, the debt, both public and private, that we’ll eventually have to deal with, and the resulting crash in real estate and equity prices will push us into a prolonged deflationary cycle and it will probably take a decade for us to recover from this economic catastrophe.

JON NONES: What will happen if China continues to revalue its currency?

DALE DOELLING: I believe that, like the bombing of Pearl Harbor changed the United States’ position on WWII, China’s change in policy regarding their currency is the event that will change the U.S. economy and our relationship with China forever.

JON NONES: How soon do you think the next revaluation will be?

DALE DOELLING: It doesn’t really matter because the psychological damage, which will take some time to actually become evident, has been done. This first step is what is going to change the tone of the currency markets in general and has already had a negative affect on the U.S. dollar.

JON NONES: Are there other aspects of China’s market affecting the gold price?

DALE DOELLING: The Chinese are just beginning to get their first taste of capitalism, and they will eventually become addicted to it. Look at the IPO of Baidu this past week. That should certainly tell us something.

JON NONES: What will China’s surging economy do to gold in the long run?

DALE DOELLING: I have never professed to be an economist but I do believe that China is going to become, if it isn’t already, a major economic force to be reckoned with. When the U.S. economy begins to spiral downward, China will become “the straw that stirs the drink.” My recommendation is that we all start learning Mandarin now.

JON NONES: What effect will China’s insatiable demand for oil and other commodities have?

DALE DOELLING: There’s no doubt that the escalation in China’s economy is going to continue to support commodity prices in general and I remain bullish on commodities across the board for the long term.

JON NONES: What will higher oil prices to gold?

DALE DOELLING: As a trend follower, the last thing a trader should do is try to pick a top in a market. I’ll be the first to admit that I have been very surprised at the resilience in energy prices over the last year. Like copper and gold, the energy complex remains entrenched in a strong uptrend and there’s nothing to suggest that these trends are going to end any time soon.

JON NONES: What about increases in interest rates?

DALE DOELLING: The Fed is between the proverbial “rock and a hard place.” They are in a position that I don’t envy whatsoever. The Fed’s stance on higher rates simply confirms my belief that the end will be really ugly.

JON NONES: Where do you see gold at the end of the year and beyond?

DALE DOELLING: Trend followers avoid making predictions on where prices are going because nobody knows for sure. If they think they do then they are delusional. But, if you put a gun to my head, I’d tell you that gold will be north of $500 and, quite possibly, $600 by the end of the year. Eventually, I won’t be surprised to see gold trading at $1,000 and beyond.

JON NONES: Is now a good time to buy?

DALE DOELLING: If you aren’t long gold now then you should be. The question is, do you wait for a pullback since we’re at fairly overbought levels or do you just take a position now? That depends on the individual’s circumstances and resources. But, frankly, I believe everyone should have at least 10%-20% of their investable assets in commodities right now and a good portion of that should be in the precious metals markets.