DENVER, CO -- With so much fiat money seeking safety in gold, the noble metal will have no where to go but to much higher levels. How high is anybody's guess. But I wouldn't be surprised at all to see gold knocking on $1,000 an ounce in the next six months.
What were you doing at 5:58pm Christmas Day, 2004?
Eating?
Spending time with family?
Enjoying something you received as a gift?
At 5:58pm, Mountain Daylight time, December 25, 2004, a massive earthquake measuring 9.1 on the Richter scale -- the second largest ever recorded -- struck in the ocean 100 miles off the west coast of Sumatra, Indonesia.
The earthquake lasted almost 10 minutes. Its effects were felt around the world -- it is said that it caused the entire planet to vibrate at least one half of an inch.
The earthquake spawned numerous tsunamis -- killing over one quarter of a million people. Waves over 100 feet tall hit seaside villages, destroying them and killing virtually everything in their path. Some of these villages and cities were 5,000 miles away from where the earthquake originated.
Yet one village society located near the epicenter of the earthquake lost not one single soul, even though their village was completely destroyed. How was this possible?
One thing in particular that they were careful to teach was what to do when the ocean receded. According to their traditions, when that happened, the "Laboon" -- a wave that eats people would soon arrive.
When the elders of the village saw the dreaded signs on December 25th of 2004, they shouted to everyone to run to higher ground.
Not everyone listened. One elderly fisherman said, "None of the kids believed me." In fact, his own daughter called him a liar. But the old fisherman would not relent until all had left the village and climbed to higher ground.
The Moken people were fortunate that day in that they had someone with conviction who warned them of what would follow. The villagers were fortunate because they all eventually listened. Had they not, most would have perished in the tidal wave that followed.
Aside from the Moken people, most other shores hit by the tsunamis saw tremendous destruction and loss of life. They did not have that voice of conviction or someone of experience telling them to run to higher ground.
We too have many voices of conviction today warning us of receding waters in the financial world. They are warning us to run to higher, safer, financial ground as the ocean of U.S. debt and massive inflation begins to cause their own 100 foot waves of destruction. Yet very few believe.
The long anticipated, and frequently postponed financial consequences for the United States due to the abuse of its system of credit, is now on the horizon. More and more people are starting to take notice. The waters have begun to recede.
The end game for all the financial shenanigans and unsustainable debt of the U.S. has always been the moment foreigners stop buying and holding U.S. treasury bills and dollars.
The U.S. -- because of its military might, economic power, and benchmark currency status -- has been able to postpone these consequences for many years even though the debts continued to rise.
And despite outrageous, unsustainable debt levels and trade imbalances, foreigners were still willing to show up in masse at the treasury bill auctions and currency markets to buy U.S. paper and stave off any real consequences for the U.S. government. That is until recently.
Looking at the data, the thirst for U.S. paper is starting to fade as Central banks around the world are now net buyers of gold. These banks and other big financial houses are increasingly looking to diversify their portfolios away from U.S. paper and debt instruments.
The fact that this process is well underway clearly shows the time to move to higher financial ground is now! The voice of warning is being heard in more and more circles as of late and I believe we are about to witness a significant move into gold this fall as more investors worldwide take cover.
With so much fiat money seeking safety in the noble metal, gold will have no where to go but to much higher levels. How high is anybody's guess, but I wouldn't be surprised at all to see gold knocking on $1,000 an ounce in the next six months.
Because of the horrendous physical tsunami that killed 250,000 people, the world now knows to run for higher ground whenever the water recedes.
It appears to me that as we stand, most investors are not listening to the voices of warning and will unfortunately only learn to run for higher financial ground after the financial tsunami hits. Too late!
Here's hoping I'm wrong. BUY GOLD!
- Greg McCoach
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