BOOM OR BUST?
- Written by Puru Saxena
- Thursday, 03 January 2008
The global economy seems to be slowing down after the massive expansion which has taken place since 2002. Moreover, the recent rout in the equity and credit markets is yet again prompting several prominent analysts to claim that a catastrophic depression lies somewhere ahead. The doom-mongers are back in fashion again; pointing towards high debt levels, US housing recession and the eventual failure of the monetary system when making their dire economic forecasts.
According to this bearish camp, American debt levels are unsustainable, foreigners are on the verge of dumping their US Dollar assets and the world’s reserve currency is about to disappear from the face of this planet. Furthermore, this gloomy bunch is expecting a gut-wrenching decline in US equity and property prices.
Add a commentA Tidal Wave!
- Written by Puru Saxena
- Monday, 03 December 2007
PRECIOUS METALS – As per my expectation, the bull-market is powering ahead due to monetary inflation and the accelerating debasement of currencies. Gold is now trading close to $800 per ounce and the yellow metal is likely to continue its advance until spring next year. At today’s level, adjusted for inflation (even using the understated inflation figures released by the Federal Reserve), gold is still roughly 65% cheaper than where it was in 1980. If you adjust the price of gold in terms of the real inflation we have witnessed over the past 27 years, the price of gold would have to rise several-fold from these levels. Now, I am not saying with any certainty that this is going to take place, but I want you to be aware of the potential should the public wake up to the inflation menace.
THE RAGING BULL!
- Written by Puru Saxena
- Friday, 19 October 2007
We are witnessing a generational bull-market in natural resources. The boom is due to the ongoing urbanisation and industrialisation of vastly populated developing nations in Asia and Latin America. And central-bank sponsored monetary inflation is adding fuel to the already raging fire. It is interesting to note that despite all the “end of the world” forecasts by numerous analysts, my preferred assets continue to power ahead.
Today, some highly intelligent economists are shouting “bubble’ and claiming that this uptrend built on the easy monetary policy cannot last forever. However, I am of the view that we are not in a “bubble” yet and this bull-run is due to the very real fundamental forces of supply and demand. Wherever you care to look in the commodities’ universe, you can see that supplies are extremely tight and failing to keep up with the rising demand coming out of emerging Asia.
Add a commentTime To Shine
- Written by Puru Saxena
- Sunday, 23 September 2007
| Precious metals are on the verge of a major rally within their ongoing bull-market. After consolidating since May 2006, both gold and silver spent the past 16 months building large bases and now it seems that the much anticipated advance has arrived. I started investing in precious metals in 2001 when both gold and silver were significantly cheaper, however even today they represent great stores of value for the long-term investor. In a world of high monetary inflation and elevated asset prices, precious metals are still relatively inexpensive when compared to financial assets such as bonds, non-resource related stocks and leveraged real-estate. It is interesting to note that the S&P500 outperformed gold throughout the 1980's and 1990's. Back then, US financial assets witnessed their biggest bull-market as the world of tangibles contracted. During that period, US stocks rose 15-fold whilst gold's value declined by roughly 70%. However, at the beginning of this decade, the mega trend reversed in favour of gold. And since then, the yellow metal has appreciated much more than the S&P 500. |
Anatomy of a Bottom
- Written by Puru Saxena
- Friday, 24 August 2007
After going through all the technical and sentiment data available, I am more convinced than ever that a major bottom was formed in the markets last week. Below I present the reasons –
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