The Fed, Gold, and Gold Stocks

by David Galland

As I write, gold is back in record territory, surging from $1,313 a month ago, to over $1,390 as I write. Paid subscribers to our International Speculator service, which focuses on the junior resource companies – mostly gold and silver – have seen stunning gains in recent months.

To make the point, I just grabbed charts of the recent performance of a handful of the stocks we have been recommending in the International Speculator and pasted them below. While I can’t give you the names of those stocks in this publication – for a couple of reasons, not the least being that it would be a mistake to jump into any stock at this point without the ongoing guidance provided paid subscribers – the picture they paint is of big profits.

Especially when you consider that most investors these days are happy to earn 3%, “sort of” keeping up with inflation.

Now, it’s important to understand a few things at this juncture.

First, while certainly helped along by rising precious metals, there are other circumstances – discoveries, big drill holes, and takeovers, for example – involved with the performance of many of our recommended companies. These are thinly traded stocks, and so when a pivotal event occurs for any of them, they take off – with 100% or better short-term gains not all that uncommon.

But it’s important to remember that most junior resource stocks have little or nothing going for them, and buying indiscriminately will likely end poorly, no matter what the metals do.

While these stocks are certainly getting more attention – 10 years ago no one and nobody had any interest in them – we still are nowhere near the Mania stage. The truth in that can be determined by asking your ten best friends or colleagues if they own gold, let alone junior gold stocks.

The mania will occur only when it becomes as apparent to the rest of the world as it to us that – with the scale of the debt and interest rates bumping along near zero – high inflation is the only politically acceptable option left to the government and its friends at the Fed. Bernanke’s actions this week should have made that point crystal clear and, based on the subsequent action in the precious metals markets, it is obvious that some investors are beginning to “get it.”

In this scenario – and try as hard as we do, we can’t see a more likely alternative – the best way to protect yourself will be in hard assets, most specifically gold and silver, but also oil and other tangibles. And, for leverage, high-quality companies involved in the finding, developing, or producing of those commodities will serve you best.

To state the obvious, I can’t wave a magic money wand over anyone and make them rich – but I can do the next best thing, which is to show you where to go to learn everything you need to know about the best of the best investments in these sectors.

And that is to, where you can sign up for a no-risk three-month trial to any of our publications, including the International Speculator (because of the even smaller, early-stage companies followed in the Casey Investment Alert, that service is currently closed to new subscribers).

If you aren’t willing to educate yourself with a subscription, even when you can receive a 100% refund of your subscription fees at any time in the first three months, then I’m afraid you’ll miss out on the best Casey Research has to offer. And a year down the road, you’ll be kicking yourself at the lost opportunity.

You may view that as a “pitch,” and obviously it is. But with the full guarantee and the amount of information that awaits to you without risk, it’s a pitch I am very comfortable making.

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