Replies to post #31784 on Colorado Goldfields Inc. (fka CGFI)

[MRDALE]

Interesting article about GOLD!




Dear Gold Stock Adviser Member:

A gold correction is in the wind, but not to worry.

As I’ve explained before, there’s a seasonal ebb and flow to gold prices, and November is often a weak month for the metal. So, this normal November consolidation is fine, as I expect it will be followed by a big breakout by the end of the year and into 2012.

Gold on the spot market has been as low as $1,731 today, and I can see it retreating to around $1,700 during this consolidation phase. Of course, a pullback is taking many gold stocks with it, but for those adding to your positions, this moment is an opportunity to jump in at cheap levels before the move higher.

Specifically, we’ve seen the Amex Gold Bugs Index climb to as high as 614 on Nov. 8, but is now consolidating in the high 500’s. I think it could still pullback to 560-570 or so, but it won’t stay down for too long.

Meanwhile, the markets at large are still sorting through the Italian and European debt crisis. I have to say, it is interesting to hear Tim Geithner tell Europeans to get serious about their debt problem, when he is the treasury secretary of a country whose deficit is about 9 percent of GDP this year, and whose debt will surpass 100 percent of GDP next year. How laughable! People in glass houses shouldn’t throw stones, as they say.

Yes, the European debt crisis is bad. However, what is really happening as far as escalating bond rates is not a reflection of inflation, but a reflection of the power (or lack thereof) to print money.

For example, as Italy can’t print money to buy their own bonds, so their rates are going up as people fear a default. Meanwhile, despite the fact the U.S. fiscal situation is just as bad as Italy, it has a central bank that can monetize debt, meaning bond buyers are not as worried about default, leading to lower interest rates.

While that situation will help the U.S. muddle through in the short term, there is indeed a limit to how much new currency you can release before you awaken the beast known as inflation, and ignite bondholder fears. It’s a matter of time.

[M_T_Pockets]

Nah, I know the right was to say it. 21 years will do that to ya.
Even my wife, a NYC girl knows not to throw "ah's" around too much. She laughs at the politicians who come here to fundraise. She says "learn to pronounce it right and you'll get more $!"