Wow! Just over a month ago, investors were panicking, selling oil and gold stocks like crazy, while dumping other natural resource assets for no rational reason.
But I stood my ground, telling you it was nothing more than irrational fears and panic selling. I told you to hold all positions … that these markets would soar back with a vengeance … and that we’d see some of the best buying opportunities of the year.
Now, here we are:
- Gold has soared back from a low of about $540 an ounce to as high as $670 — a huge $130 move, in just a month.
- The price of oil — which never really fell much to begin with — has skyrocketed to a new record high.
- My Real Wealth Report oil and gas positions are soaring back too, with average gains 12% in the past month.
The reason I’ve been so confident all along: My conclusions are not based on what Wall Street says or wants. They’re based on hard data and common sense.
Let’s go back to February 9 of this year. In “The Cycle of War”, I wrote:
“World events are building up toward a peak in the cycle of war — a combination of forces that could drive financial markets until the end of this decade.”
I went on to tell you that neither Iran nor the U.S. was going to back off. And I warned that the events in Iran could be “the beginning shades of nightmares to come.”
The current war cycle, I explained, has two more years to go before it peaks.
Today, my analysis hasn’t changed a bit. I expect higher prices for regular gold, black gold, and what I call “edible gold.” More on these three investments in a moment.
The World Is Coming
Apart at the Seams
Iraq is getting worse … Iran is on a collision course with the West … and much of the Middle East could easily explode. To make matters worse, there’s the situation in North Korea.
What’s next? I expect a region-wide war in the Middle East involving Israel, Iran, Syria, Lebanon, the Gaza Strip and the U.S.
And we’re going to hear more from Kim Jong Il throughout this period. Right now, the continental U.S. is not threatened by North Korea’s missiles. However, no Pentagon strategist can rule out the possibility that, if pressed to the wall, Kim Jong Il could lob missiles into South Korea, paralyzing a major Asian economy and directly threatening the 30,000 U.S. troops stationed there.
One point I want to make very clear right now: Oil is at the root of nearly all the sectarian and international violence that you’re seeing around the world today.
My view: The price of oil is going to head much higher. Expect $100 a barrel this year, and as high as $140 next year. Unleaded gas will soon hit $4 a gallon, and $5 a gallon next year.
But it’s not just black gold that’s going to soar …
“Edible Gold” Is
Also Taking Off
First, I want to talk about another “gold” that tends to rise in value in wartime, and certainly when inflation is accelerating.
It’s the kind of gold you can eat: food. In my report, “Food Prices Starting to Soar,” I tell you why they’re headed much higher.
Sure enough, wheat gained as much as 11% … soybeans were up 7% … and corn rose 15% in just over three weeks, before receding in the past few days.
My view: Accelerating demand around the world … the beginnings of hoarding due to wars and avian flu … plus deteriorating supplies … should continue to send basic food prices much higher in the weeks and months ahead.
The companies I mentioned in my report on food are also trending higher:
- Sadia S.A. (SDA) – a Brazilian food producer with operations in Brazil, Argentina, Chile, Uruguay, Paraguay, and Bolivia – is up as much as 20% since June 22.
- Archer Daniels Midland (ADM) – an agribusiness giant that grows and processes corn, wheat, soybeans, barley, and other foods – has risen almost 17% since June 19.
- Cresud Inc. (CRESY) – an Argentina-based company that grows wheat, corn, and soybeans and raises cattle – has gained as much as 14% since June 28.
Don’t expect the gains to stop here. Meanwhile …
Core Gold Positions Show
Open Gains as High as 79%!
In my opinion, you ain’t seen nothing yet when it comes to gold itself!
Its inflation-adjusted price right now should be closer to $1,500 than $700. That’s more than a double from here.
And everything is in place to push it that high:
- Inflation is rising. We saw the latest addition to the inflation equation just last month, with wages rising .5%, equivalent to a 6% annualized rate.
- Despite the accelerating inflation, Ben Bernanke and his minions remain well behind the curve on interest rates. Bernanke’s testimony yesterday is a case in point: He’s downplaying the danger and, if anything, just stoking the fires of more stock market speculation and more inflation.
- As I told you earlier, the Middle East powder-keg is exploding, further boosting gold’s appeal.
Who wouldn’t want to own gold?
In the coming weeks, gold could rocket much higher. Don’t expect a straight shot up though. The metal has already gained $130 in a month. Another pause and pullback is in order.
But when the next move comes, be ready to jump on it! Consider it a gift. Grab it!
Our core gold positions have performed very well in the past month as a result of recent market forces. Here’s a rundown of our positions since initial recommendations:
- Our recommended gold bullion holdings are up 53% and 67%.
- Our two recommended gold funds are up 59% and 79%!
- Our latest gold share recommendation is up 15% in just over a month.
Sit tight, hold all positions, and get ready to ride this wave to some serious gains.
Best wishes,
Larry
P.S. For just $2.72 per day, go for triple-your-money profits. No options. No futures. No small caps. I’m planning to send out the recos on Monday. So your deadline to join is this coming Sunday night.
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About MONEY AND MARKETS
MONEY AND MARKETS (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Sean Brodrick, Larry Edelson, Michael Larson, Nilus Mattive, and Tony Sagami. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM. Nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical inasmuch as we do not track the actual prices investors pay or receive. Regular contributors and staff include John Burke, Colleen Collins, Amber Dakar, Ekaterina Evseeva, Monica Lewman-Garcia, Wendy Montes de Oca, Jennifer Moran, Red Morgan, and Julie Trudeau.
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