Nov 25, 2005 Gold, Gold, Gold! Bill Bonner 321gold . . . Inc

Gold, Gold, Gold!

Bill Bonner
The Daily Reckoning
written November 23, 2005
November 25, 2005

... Again, the yellow metal rose yesterday. It is now so far above our $450 buying target that we can barely see it.

Our friend Steve Sjuggerud wrote yesterday to tell us what idiots we are. He begins by quoting us, "Right now, we rather regret it. Because gold has, so far, been unwilling to correct to our current buying target: $450. This leaves us to wonder whether we should buy at the market price - whatever it is - or continue waiting."

Then, he offers advice: Bill... stop wondering. Buy. Gold is cheap.

"Adjusted for inflation, gold today is at the same price it was 30 years ago. Gold peaked at above $1,400 an ounce in 1980, adjusted for inflation. So we're two-thirds below the price 25 years ago.

"Bill, you're quibbling over 6% here. When gold's at $500... or $600... you'll wish you hadn't.

"Look, there isn't much value to be found around the world right now. Stocks aren't particularly cheap, real estate is getting ridiculous in most places, and you sure won't get rich in bonds. When things are like this, gold looks better and better as a safe store of wealth.

"We're in a bull market in gold. It's a secular bull market, which is just a fancy way of saying the general uptrend will stay in place for many years. And we're only near the beginning."

Resource Trader Alert's Kevin Kerr chimes in:

"The market for raw resources is raging. Because of China. Because of India. Because of surging oil demand and plunging energy supplies and the crushing effect of hurricanes on offshore U.S. oil.

"Huge events can create huge tension in commodity prices. Hurricane Katrina caused 17 different commodities to spike...and pushed the Commodities Research Bureau index to its highest level since November 1980.

"Oil prices shot up 70% just after the storm. Over 27% of America's coffee beans got stuck in New Orleans ports. Over 750,000 bags of coffee were destroyed, sending coffee prices up 10%. Sugar cane crops were destroyed. Over 1 million feet of stored wood were destroyed, sending lumber prices up 7%. Nearly half the zinc stockpile for the London Metals Exchange was destroyed in New Orleans warehouses."

Jim Rogers, who made his own fortune in the resource market and who teamed up with George Soros to launch the hugely successful Quantum Fund even says, "People who have always ignored and scoffed at commodities can no longer afford to do so."

[Ed. Note: Because of the skyrocketing world demand for just about every raw resource on Earth, along with big events (like hurricanes), as tragic as they are for the people involved, tear wide open a whole new run of opportunity for smart resource traders. If you're in the right place at the right time, you can get very rich. That's a trend Kevin Kerr intends to monetize for you with the help of his private Resource Trader Alert service...

Resource Trader's Thanksgiving Special.

November 23, 2005
-Bill Bonner
email: DR@dailyreckoning.com
website: The Daily Reckoning

Bill Bonner is the founder and editor of The Daily Reckoning.

Bill's book, Mobs, Messiahs and Markets: Surviving the Public Spectacle in Finance and Politics, is a must-read.

He is also the author, with Addison Wiggin, of The Wall Street Journal best seller Financial Reckoning Day: Surviving the Soft Depression of the 21st Century (John Wiley & Sons).

In Bonner and Wiggin's follow-up book, Empire of Debt: The Rise of an Epic Financial Crisis, they wield their sardonic brand of humor to expose the nation for what it really is - an empire built on delusions.

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