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Gold Climbs Above $1600

Only three weeks ago I spoke about the price of gold falling below $1500 per ounce. What I said was if the economic woes continue even with all the hype of how our economy is improving, I expect gold prices to keep climbing. I also said that I don’t trust any government at this time.

Today gold prices climbed above $1600 after eleven straight days of climbing because of fears of the federal government will not be able to raise the debt ceiling. The precious metal hit an all time record high against the Euro and sterling. Gold has been strong ever since Europe has been trying to bail out Greece for the second time and to avoid the European debt crisis. Add to the fact that the Obama Administration and Congress have been unsuccessful in coming to an agreement to raising the debt ceiling.

If you didn’t think it could climb any higher, I would seriously take a look at the technical charts which seem to point to gold moving above $1700 as soon as this fall and many think a move to over $2000 per ounce isn’t too far fetched as it once was.

When you think about adjusting for inflation, gold is still not as high as it could be in relation to the price in 1980 near the end of the Carter Administration. As I said three weeks ago, I don’t have faith in the federal government to do the right thing and lower the spending and not to raise the debt ceiling. With that in mind, I still think that gold is a great investment at this point. I feel it will remain high until after next year’s election. If for some reason the government can put some sort of plan in motion to reduce the deficit, gold will take a plunge and a big one at that.

In the meantime, silver has also done well over the last three weeks when it closed at $33.59. It closed today at $40.27, topping the $40 mark for the first time since May. Silver has climbed more than 15% in just the last two weeks.

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Precious Metal Prices Dip

The DOW didn’t start the week with a bang, but it picked up speed as the day went on. The DOW finished up today 109 points from it’s Friday close. Late in the day it was up over 150 points. The S&P 500 finished up 11 points which means the two indices are up today by nine tenths of a percent. The best of the big indices is the NASDAQ, finishing up 35 point (1.33%). The rally in the markets today was due to Europe’s announcement of optimistic look on Greece’s debt. Even though the gain was welcomed by many on Wall Street, the strength of the markets may only be temporary. Yes the dollar has gained strength, but lost some steam with the dollar index closing at $75.33 today. The Euro gained 0.6% against the dollar. If the Federal Reserve keeps printing money, it will lose even more of what it recently gained.

In the commodity sector, precious metal prices fall. Gold dips below the $1500 level, settling at $1496.40 per oz. and the price of silver also slipped back a bit to close at $33.59. It seems that many countries are lowering their concerns about inflation. The Chinese Premier Wen said the country’s inflation would be below 5%. With views like that, many see the haven of precious metal not being as needed or attractive as it is during poor economic times. At the current levels of gold and silver, they are both at their resistance levels. The 200 day moving average for gold is at $1415, which can signal a more downward slide in the commodity. So this is a good time to watch to see if the support level will hold. Analysts feel that this will all depend on what happens in Greece. Greece needs to prove that they are serious about their debt and how they get it in order. It’s the only way they will be able to receive any more bailouts from the IMF. If the latest measure fails and Greece can not get any more funds, then gold will continue to rise as more Europeans seek out to purchase more of the precious metal. If it goes the other way, where Greece does get the bailout, then stock markets around the globe should see a rise in trading.

Either way you look at it, precious metals, over the long haul will increase in value. I’ve been building a portfolio which holds 35% in precious metals. I do plan to scale out of it, but my opinion is that we’re not done with the economic woes. Politics have a lot to do with the news we’re hearing and I don’t have too much confidence in any government.

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Commodities: A Gift To My Children

If you’ve been reading this blog for any length of time, you know that I’m expecting to see the stock market take another plunge. So where are we to invest? Commodities, that’s where. Commodities like gold, silver other precious metals, oil, natural gas corn and sugar can not be printed in a few minutes or hours. It can not be manipulated as easily as any government currency. The Federal Reserve is printing money like they’re Kinko’s or something.

I’ve been building up a nest egg of commodities for sometime. It’s not something I’m doing because of the current situation of the U.S. economy (actually I’m am buying more than I’ve done in the past), I’m doing it for my children. My daughters are teenagers and soon enough they’ll be on their own looking to make it in this world. who knows what the world currency is going to look like in just a few short years. If the United States doesn’t do something now to solidify their financial sovereignty, who knows how things will be. Right now oil is traded in U.S. dollars and China and the United Emirates are discussing reducing their holdings in U.S. dollars and not using the dollar has a the way to trade oil.

So what should you be buying? Gold and silver are the best things at this moment that average investors could and should be investing in. Gold is trading this morning at $1,518 an ounce and silver is trading at $34.74 an ounce. I know you’ve heard the advertisments, seen the ads and listened to the stock news programs stating that we should be buying gold and silver. So have you been buying gold and silver? If you haven’t, remove your head from your butt and do so. Yes gold was trading at less than $1200 on ounce last year and silver was going for about $12 an ounce, but they’re going to be much higher next year so don’t waste time.

There’s a new book out from a man who retired at the age of 37 after making his money the old fashion way…he earned it. Jim Rogers worked as a young kid and a teenager, to investing his money in the markets. His new book, ‘A Gift to My Children A Father’s Lessons for Life and Investing’ helps us prepare our children for the trouble times that are coming in the near and the distant future. Jim discusses the troubled times ahead for the U.S. dollar, he actually believes it’s “doomed”. The book is a great source for teaching our children about investing and other life lessons they’ll need to survive in this world.

Click the book to view or purchase.

I’ve been showing my girls how to trade stocks, look into real estate investments and investing in precious metals. This book helps to bring the message home about how important it is for parents to teach their children how to prepare for the future. I feel that too many of the younger generation is not aware of how to be financially savvy. Especially since the public school system doesn’t have time to teach the students how to balance a checkbook, nevermind invest in themselves.

So pick up Jim Rogers’ book ‘A Gift to My Children A Father’s Lessons for Life and Investing’ at Amazon or any bookstore. You won’t be disappointed.

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Top Gold ETF To Buy

For those of you considering investing in gold as a preventative measure against paper currencies and the mismanagement of governments, the best loved and unarguable top gold ETF to buy is GLD – also called SPDR Gold Shares. The unique feature of this Gold ETF centers on its relationship literally matching the valuation of gold. Although one could reasonably assume this to be standard, where ETF’s, or Exchange Traded Funds are concerned, it is certainly not. Numerous ETF’s operate with futures contracts that are generally less predictable and so riskier investments. Although past performance is no guarantee of future results, gold ETF funds like GLD, prove to be a less risky option than alternative commodity investments, particularly for those that understand well what is happening with the economic picture.

There are those investors who feel confidant that deflation has already begun, and that would prove to be gold bearish. A few of them will indicate television advertising, claiming that after the public catches on to an investment, it is time to sell. Yet different investors believe that because of the government running the printing presses overtime to create more money, the value of gold will keep going up. Gold more or less proves to be protection against a declining dollar, and its performance is based on other country’s currencies and economies as much as it is on those of ours. Could our economy perform sufficiently for us to build up our currency’s value, or might we have to maintain a weaker dollar to be able to compete internationally? Perhaps more involved than before in history, this involves a complex series of actions and reactions.

Despite all of the background noise going on, a constant concept emerges. The majority of both gold bears and bulls concur with gold maintaining the upward trend over both the medium time frame, as well as internationally. A number of investors today feel certain that one day the specter of hyperinflation will rear its ugly head, causing GLD, and also UGL (ProShares Ultra Gold), to both be solid investment ideas for all long term minded investors.

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Alternative Energies and Fuels

It’s amazing how the price of oil has moved over the last eighteen months. After reaching an all time high of $147 per barrel, oil prices have come down to the $42 range. How long will it stay these levels is anyone’s guess, but if OPEC has anything to say about it, it most definitely won’t be there for long.

Yesterday the 111th Congress was sworn into office. I hope that they don’t abandon the idea of alternative energy. I’m a big supporter of getting away from the dependency of foreign oil which has crippled this country in totally becoming the free and independent entity that it was meant to be. The United States imports nearly 70% of the oil that we use. how can that be when we have enough oil of the coast of Texas and Florida along with ANWAR that could support all of our needs for the nest 30-40 years. By the time we deplete the mass resources within our own borders, we could have most of our energy needs from nuclear, solar, wind and natural gas.

In regards to natural gas, we (United States) sit on the world’s largest deposit of natural gas than any other country. How can the politician be so blind and/or stupid to what really needs to be done. The U.S. in at the mercy of the foreign countries of the most unstable area on this planet unless we do something now. Yes, we will still need to get our oil from them for quite some time, but if you think about it, if we started 30 years ago, we would be at the point of not needing their resources by now.

Over thirty years ago we had the nuclear scare of our lives at Three Mile Island in York, Pennsylvania and since then, we basically stopped building and expanding that technology. Fortunately, that is starting to change now. Florida has just approved the building of two nuclear plants in central part of the state.

If we don’t do our American duties and contact our local and state politicians to inform them of what is best for the country and the American people, I feel that they’ll just sit on their butts and do what they did to the financial crisis before it happened…NOTHING!

Then where will we be at in another 30 years?

Ethanol And Alternative Energy

stock market
photo by plan my green

Now with the price of oil being down over 60% since it’s July high of $147 per barrel, it seems that ethanol and other alternative energy sources have fallen out of flavor with investors. It was obvious to see that we needed to find other means to supply our fuel needs when we were paying $4.11 per gallon of gas (national average July 7, 2008), but with the price of gas now at $1.89 (Nov. 24,2008) people and investors are being blinded by how cheap it is at the moment.
Ethanol is a fuel source that is derived from corn. A fuel source that has been in use for many years. Unfortunately, it has cause the price of corn to be very volatile and may cause a food shortage if we’re not careful.
Other alternative energies consist of wind, solar, nuclear and natural gas. All of which we can produce and manufactured in our own backyard without the assistance of foreign countries.
The problem is that with the price of oil falling to where it was in March 2007, it has made the idea of alternative energies less competitive. The credit crisis has also made it even harder to get the funding that is needed to expand on these ideas.
T.Boone Pickens plan of have a major wind farm built in Texas has been delayed because of the lack of financial lending.
It now seems that President-elect Obama is getting on board with Mr Pickens and his ideas to free this country from the dependency of foreign oils. Word is spreading that within the next stimulus package, alternative energies will be added in.
Out of the choices that were listed in this post, ethanol is the one that Obama is favoring the most. If that’s the case, ethanol stocks may be something that might interest you. I do not recommend any ethanol stocks because of what is going on with the industry. VeraSun Corp. (NASDAQ:VSE) has filed bankruptcy last week and it’s leading competitor Poet LLC, a private held company is looking to acquire them.

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Alternative Energy: Ethanol

For some time we’ve known about ethanol and how it will help our dependency on oil. A fuel source derived from corn. Is it really worth the effort to go this route?
When this idea was first presented to the American people, It was packaged and sold to us that this is the way to go to remove ourselves from the need of foreign oil. It’s been several years now and lets take a good look at what ethanol really does for us.
Ethanol has been used in gas products for decades and offers a way for a cleaner burning fuel. Unfortunately it’s not true, well the fuel burns cleaner, but to make the fuel it causes more pollution than if we just used the gas without the ethanol.
As for the corn that is needed to make the product. We use 20% of the nations food supply (corn) to make 3% of the fuel that we burn. Mathematically that doesn’t seem like an equation that makes sense. We’re creating a new problem while trying to eradicate another.
It is believed that it will take about 60 million acres dedicated to corn growing to remove our oil dependency without effecting our domestic food supplies, but what about the exporting of those products. We export quite a bit of it to other countries and what’s to come when we don’t have enough.
Take into consideration that ethanol can not be transported by pipelines, so we need to use trains, trucks and barges to move it, which in turn becomes more expensive and involved than using a pipeline.
Ethanol contains less energy than gas. That means drivers have to make more frequent trips to the pump. it is estimated that vehicles get 25 % less mileage with ethanol than it does with fossil fuels. It is stated that the new vehicles will get better mileage as the car manufacturers improve the vehicles, but we know that they (with the help of politicians) will only improve the cars so much.
So you make the call. Is ethanol really worth the effort? In my opinion, no.

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Alternative Energy

This week will be an interesting one for the alternative energy companies. Especially when it comes to wind power energy. On Thursday the Texas Public Utility Commission takes up a significant wind power infrastructure initiative. This could be a day to remember in the wind power industry.

With the price of oil at $138 for a barrel, something need to be done in the alternative energy sector. The price for wind energy is about $.04 a kilowatt, it is the cheapest form of energy that is out there today. With the Texas Public Utility Commission decision on Thursday, the wind power industry could get the boost in the arm that it needs really needs.

 The ruling could create eight renewable energy zones that would be connected the states power grid. This could possibly set the stage for other states to follow. The consensus is that the commision will rule in favor of this decision. One can only hope, since our dependency on foreign oil is out of control and with the conflict of drilling in our own country is to continue for some time.

As for solar energy, there are actually two type of technology. One is photovoltaic panels that convert sunlight directly into electricity right inside the panel. The other is a little more crude. It uses the thermal heat generated by magnified sunlight to turn water into steam, which is then used to a turn a generator.

The is a difference with cost per kilowatt between the two solar thermal power costs about 15 cents per kilowatt hour to produce. Photovoltaic electricity costs about 20 cents per kilowatt hour to create.
Solar power has it’s set backs which include, but not limited to being built where the sunlight is the strongest to maximize efficiency. Other cost that are involved are about $1.5 million for each mile of transmission lines.

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