Feed: Gold World News - AggScore: 52.0

Gold World News.Picking Stocks Mike Swanson

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There are a lot of newsletter writers and stock market advisory services but I don’t feel comfortable recommending most of them. One exception is Mike Swanson of WallStreetWindow.com. I’ve known him from way back before he even had a site or was charging for his services.

Although it is now almost forgotten, SiliconInvestor used to be a huge trading and investing forum back in 2000. That’s where Mike started to write about his thoughts on the market and individual stocks and setups. I remember it well because it was rare for someone to be so genuine, knowledgeable and to come across as just a really nice guy. If you know anything about internet forums, you know that those characteristics are in short supply. At a time when it wasn’t popular, he was bearish and made a lot of money shorting deflating tech stocks and then going long gold and precious metal stocks.

Eventually he moved to his own site and started a premium service charging for his services. But Mike does things differently. Since access to his membership site is closed for the majority of the year, he spends his time on giving his clients their money’s worth. He only opens it up two to three times a year to new subscribers.

This is your lucky day because today is one of those rare opportunities. And by tomorrow it will be gone.

What I like about Mike is that he doesn’t just say buy this or sell that. He gives you his reasons and really lets you understand his whole trading plan. Although he largely relies on technical analysis he doesn’t ignore other factors like fundamental value and sentiment. Oh, and did I mention he won a Robbins Trading Championship?

So how much does it cost? An annual subscription is $377.00 (or about a $1 a day) while a quarterly subscription is $150.

If you’re still not sure, then you should know that Mike has an unbelievable guarantee that I haven’t seen anyone else dare to offer: If you aren’t happy with your membership at WallStreetWindow, he will refund you 100% of your money.

And on top of that, he will give you $100 (if you ask for it). Yes, read that again.

Can you see now why I feel comfortable recommending this guy?

Here is our recent chat:

What do you think of this stock market?
I think we are in a vicious bear market that is likely to continue throughout the rest of the year. I saw signs of a top in October 2007 due to the faltering advance/decline line of the market and clear problems that appeared in the credit markets. By December I was telling my people that the signs were more than clear and we had to take the bear market seriously. That said though I tried to go long in January 2008 and got stopped out and wasn’t able to position myself on the short side until the market rallied in May.

Did you anticipate that the indices would fall so dramatically?
I thought the market was going to drop, but I was surprised at how this bear market has played out. The most surprising thing to me is how we have not really had many powerful rallies in this bear market. Everyone was looking for a big rally off of the November lows for instance and it didn’t happen. Not even much of a bounce.

What are your thoughts about the ’subdued’ VIX? or the CBOE put call ratios that have not shown any real ‘fear’?
I think it is very bearish for the VIX and put/call ratio not to be showing much fear as the market has been grinding lower the past few weeks. This is textbook action of what happens in a leg down during a bear market.

What do you see going forward and how have you positioned yourself or advised your clients?
I’m position righted not in cash and tell people that is the best place to be for now. I’m hoping for a rally to go short on, but in the end I really think there are going to be great opportunities to go long as a buy and hold investor when the bear market is over. Historically secular bear markets have bottomed out when the cyclical P/E on the S&P 500 falls below 10 and often below 7. We’re at 12 now. But when secular bear markets reach a bottom in terms of valuation you can find good solid companies on sale for ridiculous prices. You can actually buy stocks not just to speculate that the price will go up, but to get a solid dividend. I think these opportunities will actually be widespread next year, which is something I’ve never seen before in the US market and unfortunately most people won’t be able to take advantage of since they’ll be so beaten up by the bear market.

Stock Market Secrets

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Free Information delivered weekly by Mike Swanson

How I identified the start of the US bear market in the Fall of 2007 when everyone else was bullish and the signs that will tell you when it is over.

How you can buy the right stocks in the right sectors that will go up even in the stock market drops.

How to use a simple trading strategy that will enable you to pyramid your profits and take a small account worth thousands to a huge account worth millions.

A method I've been using for years to spot important turning points in the financial markets and that you can take advantage of to stay ahead of the crowd with ease.

And you'll also receive my next sector analysis report. I invest and focus on only the top sectors in the market and you should too, because that is how you make the big money..

Simply click on the Top Story link above

Picking Stocks.

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In the current economic climate many are shying away from the stock market in search of safer pastures,precious metals ,government bonds etc,but what one must consider is that many stocks are at an all time low ,with excellent fundamentals and could represent a very sound opportunity to profit.Although time consuming digging through boat loads of information to find the hidden gems now more than ever in modern day stock investing one should be on the pulse receiving stock pick information on what stocks will lead the next inevitable rally.

There are many sources to obtain professional guidance on these matters,simply by surfing google one can find millions of possibilities ,one source that provides copious amounts of free data from there newsletter and has an author with an enviable record with his portfolio is Mike Swanson.Having increased his gains by more than 50% in this current economic crisis is definitely food for thought with regards to picking stocks.

Due diligence and professional advice go hand in hand with regards to the stock market ,here are a few guidelines that may be of assistance...

* Never Put All Your Eggs In One Basket: you should always diversify. What works today may not work tomorrow, so try to have a well-balanced portfolio. Putting all your trust in one stock can lead to devastating results.
* Always Have a Plan: you have to be very clear about the reason you are investing. It's very important to set your objectives from the start and be very specific about your goals. What to you expect from your investment? Do you want to earn enough money to buy a house or a car? Do you have short term or long term goals?
* Do Not take shortcuts: the get-rich-quick mentality rarely pays off. Following a solid long term policy may not make you a millionaire overnight, but it will give you steady profits.
*Use Your Own Judgment: it is one thing to get professional advice and a completely another to leave all the decisions up to the "experts". Seek guidance from someone who has expertise in the field and listen to their recommendations, but keep in mind that the final decision about any investment should be only yours.
*Do Not Let your Emotions Take Control: when the market drops some people succumb to fear and sell prematurely. Greed is also a problem, because you may end up buying stocks that aren't worth their price.
*Be Sure To Have Dedication: many people get really excited at first, but give up when they meet any obstacle. Always make your investments for the long term and continue to do whatever it takes until your objectives are met.

To acquire free information keeping up to date with opportunity CLICK HERE

Gold World News.Bullionvault

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BullionVault
From Wikipedia, the free encyclopedia
Jump to: navigation, search

BullionVault is an internet gold bullion exchange and physical storage provider, founded in 2005 by Paul Tustain.[1] It is owned by Galmarley Ltd.[2] and based in London, United Kingdom. Purchased gold is held in personally allocated storage with Via Mat International in either London, New York or Zurich depending on the client's preference. BullionVault's commission charges range from 0.8% to 0.02%[3], and its custody charge (or gold storage fee) is 0.12% per annum, with a $4 monthly minimum charge.

Clients of BullionVault hold their gold in vaults controlled by BullionVault, thereby creating a legal bailment. This is different from most other online gold facilities, which purport to create a digital gold currency.

BullionVault enables users to buy and sell their gold at prices set by them, ensuring an open and competitive 24/7 market. To prevent money laundering BullionVault asks new clients to provide proof of identity and address. Also unlike digital gold currency, they do not allow the direct transfer of gold units between user accounts unless they are sold via the exchange facility. This contrasts with digital gold currency which may act as electronic money. BullionVault also undertakes a daily audit to reconcile every client's holdings against the latest bar lists and bank statements.

As of 18 December 2008 and according to their website, BullionVault held 12,355 kg (397,228 troy ounces) of gold in storage

Gold World News.Buying Gold

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Stocks and bars are the most effective way to speculate in gold, investment director for the Sovereign Society Eric Roseman has suggested. Mr Roseman said the best investments in the gold market that may be made at present are in the stocks of firms like Goldcorp, gold bullion bars and those coins that trade close to their market valuation. He not long ago produced a brief advising how gold coins can be acquired at the proper price, avoiding any potential mark-up. Mr Roseman's tips on the sort of investment buyers should look for come in the week when a communication spotted the dear metal has reached its highest worth since last July. Bloomberg stated on Wed that gold for immediate delivery had achieved a size of $974.32 ( £687.38 ) per oz. in Singapore.

Secure Gold Bullion Bullionvault

Gold World News.Gold Seven Month High

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The yellow metal is at present trading at approximately the $980 per oz mark - a seven-month high - after making a robust recovery from an October 28th low point below $700 per oz.. Now Jeffrey Nichol, head of Yank Valuable Metals counsellors, has envisioned that costs will continue to rise sharply, an admission which is created more surprising by the proven fact that he isn't a renowned gold bug. "The [economic] trend is down, and there's not one signpost that announces it's changing yet," he told Bloomberg.

"The investing public has begun to go to that one thing that they suspect it's safe to invest in.".

To Buy Gold today, avoiding wide spreads and storage costs - but still owning your physical Gold Bullion Investment outright with full legal title - be certain to visit BullionVault and claim a free gram of gold now.

Gold World News.Gold jumped above $1,000 an oz.

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Gold jumped above $1,000 an oz.

Today for the 1st time since last March, as fearful merchants and financiers sought refuge among the most recent world dive in stocks.

Gold futures for delivery this month rose as high as $1,004.90 an oz. in NY, up from $976.10 on Thu. . Futures were near $995 an oz. as of about 12:30 pm PST, as stocks bounced back from their worst levels of the session. The SPDR Gold Trust exchange-traded fund was up $1.96 to $97.73 with roughly thirty minutes left in the trading session. Gold has been on a tear since mid-January, when it was trading at $808 an oz.. But with the DJX commercial average down more than 15% this year, it's comprehensible that many speculators worry that things continue to go extremely incorrect. The factors driving gold "are the same as last year -- just more dire now," recounted Larry Young, a trader at Infinity Futures in Chicago. What's more, in the last a couple of days, the buck -- which competes with gold as a hiding place for worried money -- has started to show indications of cracking. If the dollar is headed lower this time around, gold could be left standing alone as a haven. Kaplan's view is that gold is on its way to becoming "just another bubble," like technology plays in the late 1990s and housing for most of this decade.

Gold World News

Gold World News. COMEX Crash To Send Gold To $3,000

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Time for Gold?

COMEX Crash To Send Gold To $3,000

Source Sovereignlife /www.Numismaster.com

As horrible as the financial news for currencies and paper assets has
been since mid-2007, it looks like the worst is yet to come - perhaps
as early as next month.

Over the weekend the Managing Director of the International Monetary
Fund (IMF), Dominique Strauss-Kahn, told a gathering of Southeast
Asian central bankers that the world's advanced economies are already
in a depression and that the financial crisis may deepen unless the
banking system is fixed.

On Feb 4, Paul Wolfowitz, the former president of the World Bank,
said the IMF and similar institutions are incapable of coping with the
global financial crisis because they do not have enough resources.

The market appears to have turned on U.S. Treasury debt. Analyst
Adrian Douglas issued a report on Sunday titled "Bond Market Collapse
Unfolding." He used his proprietary Market Force Analysis on the
price of the 10-year U.S. Treasury Note. Last September and October,
as the value of Treasury debt was falling, it looked almost certain
that the U.S. Treasury entered the market to purchase its own debt!
This had the effect of boosting the price of Treasury bonds.

However, the futures market for 10-year Treasury debt shows that there
have been far more sellers than buyers for more than the past six
months, a strong sign that bond prices are destined to decline in the
near term. For the past eight weeks, Treasury bond prices have indeed
been generally declining (i.e. interest rates have been rising). The
U.S. government is almost certain to intervene again, as the Treasury
debt is the most important in the world, and whose collapse could
wreak havoc across the global financial system.

The problem is that the U.S. government is going to have to float
massive additional amounts of new Treasury debt in order to
immediately finance the second $350 billion of the bank bailouts and
the nearly trillion dollars for the new so-called "economic stimulus"
program. If almost everyone else is selling and the U.S. Treasury is
the primary buyer of its own outstanding bonds, who is going to buy
the newly issued debt?

Non-precious metals prices may have also passed their bottom. The
price of copper recently jumped as much as 10 percent in a single day,
for example.

Treasury Secretary Timothy Geithner is so busy with the crisis over
President Obama's "economic stimulus" program that he announced Monday
he would have to delay dealing with the U.S. banking crisis.

In an interview on www.commodityonline.com released Monday, Marc
Gugeri, the Fund Manager and Advisor to both Gold 2000 Ltd and the
Julius Baer Gold Equity Fund, was asked about the price of gold. He
stated, "The majority of investors purchase Paper-(Gold)-Futures at
the COMEX. The sellers or counterparties of those Gold-Futures are
just a few dominant players. Some of them have an in-official close
link to the U.S. government. So far most of the investors didn't
exercise the gold futures and have accepted cash instead of physical
settlement. This is about to change. I believe that the COMEX will
default and the entire paper gold market will 'crash' and gold could
rise very quickly to 2,000 [or] 3,000 U.S. dollars. When this
happens it will be too late to exercise or to try purchasing physical
gold."

It normally is rare to find such doom-and-gloom commentary appearing
in general financial circles. It is even more uncommon for
commentators to reveal that some of the dominant players in the gold
market have a close link to the U.S. government or that the price of
gold could soon double or triple. Lately, mainstream financial
analysts have been much more willing to talk about gold, to recommend
owning gold for having better appreciation prospects than other
assets, and to specifically recommend purchasing physical gold rather
than shares in gold exchange traded funds or gold "certificates."

The tide has been turning toward gold for the past eight years, partly
because it has been one of the top performing of all asset classes.
Still, the proportion of Americans who own gold is minuscule -
estimates I have seen range from only 3-9 percent of all U.S.
investors. There is much more room for future appreciation despite
how far prices have already climbed this decade.

The money supply of all of the world's major currencies is now
increasing by 10-30 percent annually. With the gold supply increasing
by less than 2 percent annually, it is a virtual certainty that all
currencies will fall in value against gold.

In the past several weeks, several investment advisors have become
more positive about gold because of the relative strength in the price
of silver! In the past, silver has led the way for higher precious
metals prices, which is just what has been happening so far this year.
Late last year, the gold/silver ratio was over 80. Now it is under 70
and falling. I like the prospects for both silver and gold (though I
continue to expect silver's price to outperform gold).

Perhaps most telling of all, the February 2009 COMEX gold contract
fell into backwardation against the March 2009 contract on Feb. 6 and
again on Feb. 9. Last Friday, the February contract price closed at
$913.90, while the March contract ended at $913.80. On Monday, the
February contract finished at $892.40, while March closed at $892.30.
The last time that the COMEX gold contract went into backwardation,
where the spot month traded at a higher price than future months, was
in 1980. Being only 10 cents higher and only being higher then just
the following month may not seem significant, but the fact that this
has not occurred since 1980, as the price of gold exploded, could be
the clearest sign that gold is due for a major rise soon. (For full
disclosure, I note that the less active New York Stock Exchange LIFFE
contract for 100 oz of gold closed Feb. 9 at $892.20 for the February
contract and $892.30 for the March contract.)

In sum, a variety of factors are coming together very soon that I
think will clobber paper asset values even more than they have
suffered in the past 20 months. As these troubles mount, as the
Managing Director of the IMF and the former president of the World
Bank forecast, the prospects for gold look ever better.

Note: at the huge Long Beach Coin show in California last week, a lot
of rare coin buyers were taking a wait and see attitude - except for
circulated and lower quality mint state US Double Eagles. Between the
start and the end of the show for instance, the wholesale price of the
Mint State-62 $20 Liberty jumped almost 6%, even as the gold spot
price fell slightly! Supplies of these and other lower-premium U.S.
gold coins were the lowest I have seen in more than 20 years attending
this show!

Gold World News.Hyperinflation Will Begin In China And Destroy The Dollar

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Hyperinflation Will Begin In China And Destroy The Dollar
by Eric deCarbonnel

http://www.marketskeptics.com/2009/01/hyperinflation-will-begin-in-china-and.html

The conventional wisdom on China is dead wrong. Specifically, there is a widespread belief, as expressed by Goldman Sachs, that "China will keep the yuan trading within a narrow range in 2009 due concerns about exporters." Worse still, others are even predicting that China will devalue its currency! The sheer wishful thinking is astounding! The idea that "China will keep the dollar peg to help its exporters" ranks all the way up there with "Housing prices always go up" and "You can spend your way to prosperity".

THERE ARE NO FREE LUNCHES

If you have learned nothing else in the last year and a half, you should have learned that if something sounds too good to be true, that is because it IS too good to be true. The media overwhelmingly presents China's dollar peg as a win-win situation: Americans get cheap imports and low interest rates while China gets a strong manufacturing sector. While commentators do sometimes debates whether China will keep lending us money forever, they never talk about the REAL problem with the dollar peg.

Below is a chart which shows how China's dollar peg works. See if you can spot the downside that the media never seems to mention.

http://4.bp.blogspot.com/_EZMGVwURo3M/SXPkbMjeQ8I/AAAAAAAAAcE/fbNjwTjfPLU/s1600-h/ChineseDollarPeg-784851.PNG

The US's trade deficit requires China to print money!

The little discussed downside of the dollar peg is all the money China has to print to maintain it. China's Central Bank puts the extra dollars it receives from its trade surplus into its growing foreign reserves and then prints yuan to pay Chinese exporters. This results in an increase in China's base money supply by an amount equal to the increase in its foreign exchange reserves. While China's ability to keep accumulating US reserves is endless, its ability to keep its money supply under control is not.

The true threat to the dollar peg

If there is one development which could force China to drop its dollar peg, it is out of control inflation. Rampant inflation would result in millions of citizens starving and would create widespread social unrest. Keeping food prices low is a matter of political survival for Chinese authorities. So, facing the choice between losing their grip on power and losing the dollar peg, they will not hesitate for a second to sacrifice the dollar to save their own skin.

So far China been able to contain inflation, but…

In recent years, China has been able to contain the inflationary effects of its trade surplus by soaking up or "sterilizing" all the extra liquidity (printed yuan). These sterilization efforts mostly involved:

A) Raising the reserve requirements of commercial banks. In essence, the PBOC (People's Bank of China) prints money to fund its trade surplus and then increases the amount of yuan banks have to keep as reserves at the Central bank, preventing the printed cash from reaching the economy. As of May of last year, commercial banks' reserve requirements were at 16.5 percent

B) Selling RMB-denominated sterilization bills. The state owned and controlled banking system has been forced to absorb the majority of these bills. As of May of last year, the value of sterilization bills reached 10 percent of bank deposits.
Taken together, these two steps have immobilized roughly 26.5 percent of Chinese commercial banks' deposits. This shows the magnitude China has had to intervene so far, as the value of sterilization instruments outstanding has been increasing at roughly the same rate as its foreign reserves.

PBC Foreign Reserves and Sterilization Instruments (US$ Billions)

http://1.bp.blogspot.com/_EZMGVwURo3M/SXPkcOrrS8I/AAAAAAAAAcc/Xdsk0tvaNq8/s1600-h/Reserves+Sterilization+Bills-788327.bmp

While China has been able to contain inflation to single digits for the last decade, that is about to change. All economic forces are aligning in China for a surge in inflation.

1) China has abandoned its sterilization operations

Currently, the PBOC has abandoned its sterilization efforts all together:

A) The PBOC has lowered reserve requirements by 2 percentage point for China's big banks and by 4 percentage point for all other banks.

B) The PBOC has scaled back sterilization efforts by reducing liquidity-draining three-month and 52-week bill sales from once a week to once every two weeks. As a result of these decreasing sales, the clearing house for China's interbank bond market expects PBOC's 2009 bill issues to be down over 70%, which will increase the Chinese base money supply by 2 trillion yuan.

These actions signify that the PBOC has ceased sterilizing its currency interventions and is focusing on (imaginary) deflation risks. A flood of cash has been unleashed, and a tsunami of pent-up inflation will soon hit China.

2) China is running record trade surpluses

China's imports are crashing much faster than its exports. In December, Chinese imports fell 21.3% while exports fell only 2.8%. As a result, China has been running record trade surpluses these last three months: $35 billion, $40 billion, and 39 billion.

The reason for China's surplus is obvious when you think about it. Consider the following list of goods a country can exports and ask yourself what would hold up best during a severe global economic downturn.

*** Commodities (Oil, gas, steel, etc)
Capital goods (Airplanes, Caterpillars, Machinery for new factories, Machinery for new mining/oil exploration projects, etc)

*** Durable goods (SUVs, CARs, appliances, business equipment, electronic equipment, home furnishings, etc)

*** Luxury goods (brand name products, designer clothing, artwork, etc...)

*** Cheap consumer goods (everything you buy at Wal-Mart)

The answer is that the demand for cheap consumer goods will hold up better than anything else. This can easily be seen in the retail sales this holiday shopping season. Wal-Mart, which imports 70% of its products from China, was the only retail to post a year-on-year increase in sales. So while the world economy might be imploding spectacularly, demand for Wal-Mart's cheap Chinese goods is holding up quite well. The implications of this is that while China's exports will fall, they will fall less than those of any other country.

The current trade surplus is still completely unsustainable. If China's continues running a 40 billion dollar trade surplus all year, its base money supply will double by the end of 2009. Also, since China has halted the appreciation of the yuan, its trade surplus is unlikely to shrink as demand for cheap consumer goods is set to remain strong.

3) The Chinese economy will shrink in 2009

Consistently amazing economic growth is the biggest factor which has helped China contain inflation. Inflation happens when the money supply is growing faster than the economy, and china's economy has been growing fast. This economic growth has helped absorb the enormous quantities of yuan that have been printed to support the dollar. However, this will change in 2009. Due to falling global demand, China's economy is set for zero, if not negative, growth which will remove a significant mitigating force against inflation and amplify the inflationary impact of China's printing press.

Side note: China's economic strength is underestimated

It is important to note that, while economic growth will go probably go negative, China's economy will not crash. The strength of the Chinese economy is widely underestimate in the media today. In addition to the resilient worldwide demand for its cheap consumer goods, China is also benefiting for import substitution at home. This is why imports to China are falling so fast: Chinese are switching to cheap domestic product instead of expensive foreign imports. So while there has been a sharp drop in Chinese demand for big-ticket brands (Dior, Chanel, Hermes, etc…) and others luxury items, knock-offs and other cheap goods are still flying off the shelves. Chinese consumers are downshifting, but they are still spending strong, as reflected by the 21% year-over-year growth in 2008.

However, despite China's strong fundamentals, the current worldwide downturn is too strong for it to escape. The worldwide financial carnage is so severe that even the demand for cheap consumer goods will decrease. As a result, while China may outperform every country on Earth, its economy will still suffer in 2009.

4) Deflation in China would be too good to be true

China has been in a constant war with the inflation caused by the dollar peg. Economic growth and sterilization operations alone have not been enough to absorb the growing liquidity, and China has been forced to turn to ever more drastic steps in its efforts to contain inflation. These stifling policy measures together with its sterilization efforts have enormously suppressed domestic demand and have distracting the government from developing key services enjoyed by other developed nations. This suppressed domestic demand has also distorted China's economy, as reflected by the undersized service sector, and has lowered the quality of life for Chinese citizens.

Chinese financial repression and market socialism

In its losing battle with inflation, China has adopted stifling policy measures to suppress domestic demand and keep prices down:

(these are only a few of the anti-inflation measures China has adopted)

A) Strict price controls. (ie: Large wholesalers must seek central government approval if they want to raise prices by 6 percent within the space of 10 days or by 10 percent within a month.)

B) Credit ceilings. (limits on how much commercial banks can lend)

C) Floors on lending rates and ceilings on deposit rates

D) Strict rules governing lending decisions

E) Tight land purchase and lending requirements

F) Direct government intervention to limited expansion in certain industries (ie: aluminum, steel, autos and textiles sectors in 2004)

G) Penalty taxes on anyone buying and selling real estate in a short period of time.

H) Forcing local government to cut back spending by delaying approval of their investment projects

I) High sales taxes.

J) Etc...

Suppressed domestic demand has distorted China's economy

The distortions caused by sterilization operations and stifling policy measures are best seen when comparing China's and the US's economy:

A) US home buyers get tax incentives VS Chinese home buyers get tax penalties

B) US gets artificially low interest rates VS China's artificially high interest rates

C) US's "service economy" VS China's "service-less economy"

D) Etc…

In the US, the overvalued dollar and easy credit environment have caused the service sector to become oversized, artificially raising America's standard of living. In contrast, China's suppressed domestic demand has led its service sector to become undersized, artificially decreasing its standard of living.

Focus on inflation has lead to a lack of key government services

With Chinese authorities sidetracked by their export oriented focus and battle with overheating, the development of key government services enjoyed by other developed nations has been neglected. As a result, Chinese citizens' lack of social security, free education, and available consumer credit, which has forced them to save far more than their Western counterparts, leaving them with less disposable income.

Deflation would be a godsend to China

Chinese authorities must be thrilled about the prospect of fighting deflation instead of inflation. Fighting deflation would allow China to:

A) Scale back its increasingly costly sterilization efforts.

B) Lower interest rates.

C) Get rid of all the controls which are distorting domestic property markets.

D) Promote consumer spending without worrying about the inflationary impact.

E) Develop a comprehensive social security net.

F) Increase funding of public education.

E) Accelerate the development of a system to rate people's credit.

F) Encourage growth in underdeveloped domestic sectors (housing, health care, education, entertainment, etc)

G) Etc…

Most of the steps above are already being taken by Chinese authorities. Unfortunately, there are no free lunches. The possibility that China can maintain a highly inflationary currency peg, reverse years of anti-inflation policies, release a flood of sterilized yuan back into circulation, and go on a Western-style stimulus/bailout binge without experiencing double digit inflation is zero.

5) No deleveraging

There is no chance of real deflation happening in China. None. The Strength of China's Banking System makes it impossible.

A) Apart from Bank of China, Chinese banks have little exposure to overseas debt. So, although toxic US securities were sold to banks around the world, China's capital controls protected its banking system from America's bad debt

B) As a side effect of the country's sterilization operations, 26.5 percent of Chinese commercial banks' deposits were placed with the central bank last year (reserve requirements and forced underwriting of PBOC bills).

C) Unlike Western banks, who have been enjoying a credit bonanza for decades, Chinese banks have only recently gotten into the credit game, after years of being ridiculed for being overly cash-centric. Because of this late entry, Chinese banks completely missed the subprime party.

D) China is also in the enviable position of being one of the few countries which doesn't need to deleverage. While Western banks were going insane with high leverage and off-balance sheet financial vehicles, Chinese banks were doing the opposite, as can be seen on the chart below (from Tao Wang of UBS).

http://2.bp.blogspot.com/_EZMGVwURo3M/SXPkbzf1bOI/AAAAAAAAAcU/8X4eU2vUNu8/s1600-h/09-01-12-MWA3a%5B1%5D-787966.gif

E) China has been waging a war against NPLs (non-performing loans) in the last few years. For example, with heavy penalties having been imposed on bank managers responsible for new NPLs, Chinese banks have become much more concerned about the loan safety than profitability. This battle again NPLs has paid off. As of September 30, 2008, nonperforming loans totaled only 2 percent for Chinese banks, compared to the 2.3 percent for FDIC-insured banks in the US. Loan loss provisions have also improved substantially, with provisions of Chinese banks amounting to an impressive 123 percent of their NPLs.

F) Finally, China's money supply itself is underleveraged when compared to the rest of the world. For example, the US's M2 to M1 ratio is 65% higher than China's. The Chinese M2 to GDP ratio is also more 160 percent, perhaps, the highest in the world.

When considering the strength of Chinese Banks and underlying strength of China's economy, no debt deflation is possible.

If there is no chance of deflation, then why is China's cpi slowing down?
There are three main reasons for the slowdown in China's cpi:

A) The bursting of the commodity bubble. Because of speculator dominated futures markets in the US, commodity prices were boosted to artificial level going into the summer of 2008. As these inflated commodity prices fell back down to Earth, they caused a temporary worldwide slowdown in inflation.

B) In the second half of the year, deleveraging and hedge fund redemption caused the outflow of a large amount of hot money from China. This outflow temporary depressed asset prices.

C) The unwinding of the commodity bubble spread deflation fears worldwide and caused the velocity of money to drop.

6) Deflation fears are paralyzing China's money supply

"deflation fears" have slowed the Chinese money supply to a crawl. While they are still spending, Chinese consumers are delaying big purchases and downshifting to discount stores. Businesses are strapped for cash, and scared Chinese banks are dumping riskier borrowers, like credit-card holders. China is experiencing one of the brief deflationary periods which typically precede hyperinflation.

Deflation fears in China also provide the perfect example of how a slowdown in the "velocity of money" and makes prices fall. Right now, Chinese banks are hoarding cash and delaying payments on personal credit cards. Only a year ago, most banks paid credit-card transactions in 14 days, but now merchants are having to have to wait 20, 40 or even 90 days to get paid. With lenders making credit-card transactions as unattractive as possible, many merchants are refusing to take credit cards from Chinese consumers. Think about that for a second, all that purchasing power from Chinese credit cards wiped out due to nothing but fear itself.

The important point to note about the price deflation caused by the deflation fears is that it will reverse sharply once inflation picks up. Banks will begin paying credit cards normally, and merchants will start accepting them again. The enormous amount of purchasing power which disappeared will reappear just as suddenly, causing a wild jump in inflation.

7) Sterilization operations have become a loss generating ventures

Until last year, China's sterilization operations had been profitable, since the rate of interest that Beijing earned on foreign exchange reserves (mainly US Treasuries) had been higher than the rates it was paying on its yuan-denominated sterilization bills at home. However, now that the fed has lowered US interest rates to zero for the foreseeable future, China's dollar peg has become a loss-making policy. When inflation hits china and interest rates rise again, China's losses from its currency sterilization will become staggering.

Cool China likely to attract a flood of hot money in 2009
China has had a problem with hot money inflows in the past, and those problems are likely to get worse this year. Hot money refers to the money that flows regularly between financial markets in search for the highest short term interest rates possible. This hot money has found ways around China's capital controls and flows freely in and out of China to the authorities great frustration.

When hot money flows into china, it forces the PBOC to print money the same way as the trade surplus does. At the beginning of last year, these hot money inflows were one of China's biggest problems, bringing inflation up to 8.6 despite the authorities best efforts. The country's hot money problem ended temporarily with the bursting of the commodity bubble.In the second half of last year, deflation fears and hedge fund deleveraging cause much of this hot money to leave China and seek the "safety" of US treasuries. This small exodus is what is responsible for the brief fall in China's foreign reserves. However, the outflow of hot money from China has ended, and it now looks set to reverse.

In the next month or so, rising inflation will start pushing up Chinese interest rates at a time when central banks around the world have set their rates at or near zero. Since the entire world knows that the yuan is undervalued, these higher rates will make China the most attractive destination on Earth for those seeking safe high yielding interest rates, and the hot money problem will return with a vengeance.

9) Chinese authorities are pulling out all the stops

Chinese authorities are pulling out all the stops to get the country back on track. In order to prop up economic growth, Chinese authorities have:

A) Raised tax rebates for exporters of everything from high-tech and electronic products (motorcycles, sewing machines and robots, etc) to some rubber and wood products.

B) scraped export taxes for some steel products, aluminum, rice, wheat, flour and fertilizers

C) Cut the lock-up period beyond which people can resell their property without paying a business tax from five years to two years.

D) scraped the urban property tax for foreign firms and individuals

E) Allowed people to buy second homes on the same preferential terms normally reserved for first time buyers.

F) Announced plan to spend 900 billion yuan over three years to build affordable housing

G) Cut the deed tax payable by first-time buyers of homes smaller than 90 sq m is to 1 percent.

H) Announced measures such as cash subsidies and tax cuts to encourage home purchases

I) Announced plans for a 4 trillion yuan (586 billion) stimulus package to boost domestic demand through 2010.

J) Announced plans to invest 5 trillion yuan roads, waterways and ports in the next three to five years (over 2 trillion yuan more than originally planned).

K) Approved 2 trillion yuan for railway investment

M) Announced a tax break for public infrastructure projects.

N) Abolished the 5 percent withholding tax on interest income.

O) Scraped the 0.1 percent tax on purchases of equities.

P) Instructed Central Huijin (a government investment arm) to buy shares of listed Chinese firms.

Q) Encouraged state-owned firms to buy back shares.

R) Raised minimum grain purchase prices by 15 percent

S) Approved landmark reforms that give peasants the right to lease or transfer their land-use rights

T) Issued a stimulus package for its auto sector, including a tax cut

U) Set a price floor for air tickets

V) Handed out cash gifts to brighten the mood before the Chinese New Year

W) Etc...

10) Banks are flooding the economy with new loans

Chinese authorities are pushing banks to extend credit and help fight "deflation". To encourage this money supply growth and new lending, the PBOC (the People's Bank Of China) has halted sterilization operations and has cut the benchmark one-year lending rate by 2.16 percent and the deposit rate by 1.89 percent. Also, as part of these efforts, Chinese officials are reversing decades of financial repression and freeing up their banking system.

As China lifts restrictions on lending, banks are flooding the economy with new loans. Credit ceilings under which commercial banks have been operating have now been removed, and credit controls have been relaxed to give banks more leeway in making lending decisions. Chinese lenders will now be able to restructure loans and adjust the types and maturities of debt. Banks are being pressured to use this new financial freedom to "promote and consolidate the expansion of consumer credit".

In addition to stimulating consumption, credit constraints are being relaxed to give loan access to small and medium privately owned businesses, which have until now been mostly shut out of credit by the state-owned financial system. As part of this effort and in order to help banks overcome their deflation fears, China has said it will tolerate more bad debt. This step is particularly significant, as the heavy penalties imposed for the creation of new non-performing loans has been a big restraint on credit expansion.

Finally, the commitment of Chinese authorities to fight deflation is so great that regulators have stated they will support the sale and securitization of loans. I repeat, China is moving towards securitization of loans! The adoption of securitization holds the potential to enormously accelerate money supply growth.

China's efforts to boost lending are working. In December, China's M2 money and loan growth soared. Just look at the graph of Chinese money supply growth below.

http://2.bp.blogspot.com/_EZMGVwURo3M/SXQPJQWmUfI/AAAAAAAAAck/21IbQkIX1lc/s1600-h/ChineseMoneyGrowth-721717.PNG

Does it look like China is headed towards deflation to you? (this chart will become much scarier once January's numbers are added in)

ConclusionI view hyperinflation in China as absolutely guaranteed. Zero doubt. China is dismantling all the measures it has put in place over the years to fight inflation. It is dropping restrictions on purchasing property, eliminating price controls, getting rid of loan quotas, lowering interest rates, ceasing its sterilization efforts, etc… It is also pulling out all the stops to boost government spending and new loan creation.

Meanwhile, China's 40 billion dollar trade surplus means that its base money supply looks set to double in 2009. There is also the fact that China's money supply is frozen due to cash hoarding and will cause inflation to increase when it accelerates. Finally, the commodity bubble has finished bursting, and China's economy looks set to shrink.

Every economic factor in China suggests an enormous wave of hyperinflation will begin early this year. While I have written about the threats facing the dollar, this will be the event that finally ends the US's borrowing binge and destroys our currency.

Hyperinflation in China will be a monumental event

Because China makes most of the world cheap consumer goods, it will export its hyperinflation around the world. This means that no fiat/paper currencies will survive this with its purchasing power intact. Some will lose all value (dollar) while others will survive while experiencing a loss of purchasing power (yuan, euro, yen, etc...). The only money that will retain its full value in the face of Chinese hyperinflation is gold.

China will sink the dollar to save the yuan

Once hyperinflation kicks into gear, Chinese authorities will find it impossible to bring it under control without sacrificing the dollar. Since hyperinflation would hurt Chinese exporters as much as losing their US exports, China will face a clear cut decision. By dumping the dollar peg and selling its USD holdings, China will help contain domestic inflation in many ways:

1) China will no longer be printing massive quantities of yuan to support the dollar.

2) By selling dollars in exchange for yuan, China will be able to take those yuan out of circulation, shrinking its monetary base.

3) Since the yuan will strengthen enormously again foreign currencies, Chinese exports will fall and that means there will be a lot more goods available for domestic consumption.

4) Since the yuan will be stronger against foreign currencies like the dollar, Chinese imports will rise. That means cheaper commodity prices across the board.

5) Dropping the dollar peg will make the yuan a major reserve currency. That means lower interests rates in China as foreign central banks build up yuan reserves.

Those expecting deflation are in for a surprise

Western nations who are lowering interest rate very sharply, without fearing inflation, are mainly concentrating on the domestic dynamics of their economies and the value of their currency. My bet is that no one is even considering the possibility that inflation could be imported from China, and, when cheap Chinese imports stop being cheap anymore, it will catch everybody completely by surprise

Free Gold — Now Waiting for You in Zurich

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How to Claim a Free Gram of Investment-Grade Gold Today

IF YOU LIKE buying low and enjoy selling high, then you can't ignore this free gift of gold today.

"Gold rose 600% in the 1970s," says Jim Rogers, world-famous fund manager and best-selling author of Adventure Capitalist.

"Then gold went down nearly every month for two years. Most people gave up.

"But then it went up another 850%."

Gold just pulled back again in early 2008. But "that's what happens in bull markets," as Jim Rogers says. And buying gold to join this bull market now could prove very rewarding if his forecast comes good.

Why not find out for yourself — starting for free today?

To claim a gram of FREE GOLD with the compliments of BullionVault — the world's fastest growing private gold ownership service — simply click through now.

Worth more than $27 at today's prices, your free gram of gold is safe and secure inside a specialist vault in Zurich, Switzerland.

It's yours if you'd like it, for free, today.

Accepting this gift won't put you under any obligation to buy or sell in the future. Nor will BullionVault ever rent, sell or abuse your email address.

This free gift of gold is simply to show you how easy it is to own investment-grade gold outright in your name with no risk of default.

BullionVault offers you direct access to the same investment-grade gold as the professional gold market trades. This means you can also access the same low dealing and storage fees that professional gold traders enjoy, too.

Using BullionVault, you may buy and sell from as little as one gram of gold up to 20 kilos or more. All deals at BullionVault are settled immediately with gold that's already safe and sound inside the vault.

Only ownership and cash ever change hand, reducing your dealing costs "dramatically" as the Financial Times recently put it.

You can claim your FREE gold bullion here today.

BullionVault's online order-board also lets you quote prices and trade directly in Euros and Sterling, as well as in US Dollars.

So there's a big saving here if you don't have a US bank account, or you'd like to hold your savings in Euros while you wait for a dip in the gold market to get back in again. Because BullionVault cuts out the cost of currency exchange entirely.

The website's full daily audit also shows that you own a unique quantity of investment-grade gold. Published each and every working day, this audit gives you a proven record of outright gold ownership, protecting your property rights against the financial performance of BullionVault, its suppliers and bank.

And your free gram of gold? It's part of a large 400-ounce bar, warranted to be 99.5% pure gold or better. It's sitting in a gold vault in Zurich right now, a vault used by professional gold dealers and banks, government agencies, global investment funds and ultra high net worth individuals.

You can now join them in owning investment-grade gold offshore in Switzerland. And choosing to own physical gold bullion, with no risk of default, might prove a valuable decision as today's bubble in cheap debt explodes.

To claim your gram of FREE GOLD right now — and to start trading physical gold bullion on ultra-low fees — simply visit BullionVault here.

PLEASE NOTE: We will receive a small referral commission for any accounts opened through this email. But the tiny dealing fees and storage charge you will pay would be no smaller without it.

And this ground-breaking service really does give you unique access to live gold market prices, cutting out the middleman and slashing the costs of investing in gold.

To find out for yourself, go to http://www.bullionvault.com now.

© BullionVault.com 2008 - Buy gold online at live gold prices.

How to Buy Gold

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Inflation Ahead? How to Buy Gold Safely, Simply and at Low-Cost Today

WHY ARE MORE and more private investors choosing to buy gold today?

"People rightly buy gold when they see inflation ahead," said William Rees-Mogg, a former advisor to Margaret Thatcher and editor of the London Times, at a recent meeting of private investors in the City.

In fact, with the world's major central banks now struggling to maintain their inflation targets, the current lull in gold prices could prove a "table banging opportunity" to buy gold in "decent amounts" as John Reade at UBS has said.

But what's the best way to go about buying gold? Type "Buy Gold" into Google, and you'll be met with a huge range of choices. Most carry their own advantages and drawbacks, depending on your aims and concerns.

Here are the four options now open to private investors wanting to buy gold today:
Buy Gold for Physical Possession

Buying gold to hold in your hand remains the ultimate in tangible wealth. But the big problem with storing gold coins at home or keeping gold bars at your local bank is the gap between prices to buy and prices to sell.

Gold stored and traded by professional bullion dealers in the wholesale market is what creates the "spot" price you see quoted in your newspaper and on the internet. It comes in large, 400-ounce bars — until now, inaccessible to the private investor.

This gold also comes with an absolute guarantee of its history, weight and purity. If you buy gold outside that professional system, your gold will lack this guarantee — and loss of integrity is the single greatest cost in private gold ownership.

In Europe and the US, expect to pay spreads of 4% and above, both on purchase and sale, when trading with a gold-coin dealer. For modern-day bullion coins, such as the Chinese Panda or Australian Nugget, don't be surprised to get only "melt" value when you come to sell, even though you will pay up to 16% above the spot price of gold when you buy.
Buy Gold through a Storage Programme

If you're willing to cede outright ownership when you buy gold, then an "unallocated pool programme" will let you buy gold as an entitlement only, stored at low cost, with a view to taking physical delivery sometime in the future.

The leading providers quote around a 1% dealing spread. One firm also offers an "allocated" programme, where buying gold bullion outright in your name costs an extra 1.5% per year in storage fees, plus a $50 flat fee with a minimum gold investment of $10,000.
Buy Gold via a Trust-Based Fund

The exchange-traded gold funds (ETFs) launched over the last half-decade let you track the price of gold — if not actually buy gold to own it outright — by trading a security on the stock market. The leading ETFs buy gold and hold it in trust at HSBC in London; ask your stock broker about LxyOr GBS in the United Kingdom and Europe, or StreetTracks GLD in the US.

These shares can only be traded during your local stock market hours. They will also require a transfer of cash into dollars if you're not buying gold from the US.

Another drawback of buying gold through the gold ETFs is their daily shrinkage. These funds all charge 0.4% per year to cover storage, insurance and administration fees, deducting this fee from the physical gold backing each share. But while the amount of gold backing each share shrinks a little each day, the title on each share remains the same — typically one-tenth of an ounce.

Over time, this gap only grows wider; the shares in Australia's Gold ETF now represent less than 9.876% of an ounce after just four years. By 2010, they will come to represent less than 9.75%. The sponsors of the leading gold ETF programs are likely to consolidate the shares soon, repricing them to account for this shrinkage.
Buy Gold Like a Professional Dealer

Thanks to the cost-savings enabled by the internet, there is now a way you can buy investment-grade gold bullion, outright in your name alone, at low cost. Stored in secure professional vaults in London, New York or Zurich (you choose which location you prefer), gold held at BullionVault costs just 0.12% per year, with insurance included, starting from a minimum of only $4 per month.

Buying gold at BullionVault couldn't be simpler, nor more secure. The site lets you set your own prices using a 24/7 online order board, and it gives you instant settlement with zero credit risk. One investor who chose to buy gold at BullionVault recently wrote to say that:

"Having ownership of physical gold in BullionVault's London vault is better than having AAA-rated bonds. Yes, we could have saved a miserly 0.12% per year by buying unallocated gold with a bullion dealer, but we now call that 'sub prime' gold!"

To find out more about buying gold at low cost today, be sure to visit BullionVault and claim a complimentary gram of free gold — stored in Zurich, Switzerland — now...

PLEASE NOTE: We will receive a small referral commission for any accounts opened through this email. But the tiny dealing fees and storage charge you will pay would be no smaller without it.

And this ground-breaking service really does give you unique access to live gold market prices, cutting out the middleman and slashing the costs of investing in gold "dramatically" as the Financial Times recently noted.

To find out for yourself, go to http://www.bullionvault.com now.

© BullionVault.com 2008 - Buy gold online at live gold prices.

Five Myths of the Gold Market Exposed

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LOOKING to buy gold today?

There's a secure store of gold bullion in Zurich where every last gram is owned by private individuals like you.

It outweighs most central-bank gold reserves, sheltering its owners from currency shocks and the risk of credit default.

And you can join them today — at no cost to yourself — in owning professional-grade bullion offshore in Switzerland.

You will also receive a detailed report on Five Myths of the Gold Market, so you can judge for yourself whether investing in gold could help defend your savings in 2008.

Claim this in-depth report, plus your complimentary gram of Zurich gold, at BullionVault now.

"Gold rose 600% in the 1970s," says Jim Rogers, world-famous commodities trader and best-selling author of Adventure Capitalist.

"Then gold went down nearly every month for two years.

"Most people gave up — but then it went up another 850%."

Gold pulled back again after a huge surge in early 2008. Now it's trading more than 10% below the all-time record it set versus the US Dollar above $1,000 an ounce. It's slipped back against the Euro and Pound Sterling, too.

But that's simply "what happens in bull markets," as Jim Rogers says. And joining this bull market now could prove very rewarding if the Dollar, Euro and Pound all continue to slide against bullion.

Why not find out for yourself, starting for free today?

To get hard facts — instead of just hype — simply accept this free gram of gold, plus this in-depth report at BullionVault.

Very few investors or savers own gold outright today. Fewer still hold gold offshore in professional storage. And accepting this gram of gold today won't put you under any obligation to buy or sell in the future.

No salesman will call. Nor will BullionVault ever rent, sell or abuse your email address.

BullionVault simply makes buying gold and selling it easy. No hidden charges, plus very tight spreads, make it the most cost-effective route to owning physical gold bullion for private investment.

That's why London's Mail on Sunday featured its gold-dealing service last summer. BullionVault has been reviewed by Der Spiegel and Capital magazines in Germany. Britain's leading financial newspaper, the Financial Times recently ran a full-page interview with Paul Tustain, the founder and director.

It confirmed that BullionVault "dramatically" cuts the costs of private gold ownership.

If you'd like to learn more and receive this in-depth report on How the Gold Market REALLY Works today, claim your free Zurich gold at BullionVault now.

PLEASE NOTE: We will receive a small referral commission for any accounts opened through this email. But the tiny dealing fees and storage charge you will pay would be no smaller without it.

And this ground-breaking service really does give you unique access to live gold market prices, cutting out the middleman and slashing the costs of investing in gold.

To find out for yourself, go to Gold Market Myths now.

© BullionVault.com 2008 - Buy gold online at live gold prices.

The Purest Gold at the Tightest Prices

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How to Make Investing in Gold Simple, Secure & Cost Effective

DEEP UNDERGROUND in a secure vault in Zurich, Switzerland sits a gram of gold.

It's yours if you'd like it, for free, today.

The gram is part of a 400-ounce gold bar, the only kind of bullion that professional dealers and international banks will buy and sell. It is 99.5% pure gold or better.

And it's never left the care of professional bullion vault operators...not since the day it was first cast, assayed, and delivered by armored truck through the streets of Switzerland.

This means your free gram of gold is guaranteed to be top-quality. So you can forget about wide "dealing spreads" between the buying and selling price. It will trade on the international gold market almost bang on the 'spot' price you see quoted on the internet and in your newspaper.

Find out more, and to claim your free gold here.

No, you can't fly out to Zurich tonight and collect your free gram of gold after breakfast tomorrow. It has to remain within that 400-ounce bar to keep its integrity and value.

And that bar — worth more than $365,000 at today's price — has to stay in the bullion vault.

You see, the quality of a gold bar must be guaranteed if it's going to trade on the international gold market. Wall Street banks, London bullion traders and Tokyo investment funds only deal in top-quality warranted gold.

And now you can join them.

BullionVault enables you to trade the purest gold at the tiniest spreads...with no delivery charges, minimal insurance fees, and storage costs to make your local bank blush.

Your free gram of pure gold — just like the seven tonnes of gold BullionVault now stores on behalf of people from 62 different countries worldwide — is held in the form of 400-ounce "good delivery" bars. It will retain full resale value on the professional market.

And most importantly, your free gram will belong to you outright if you choose to fund your account and add to this gold, just as it would if you bought it and kept it at home.

This is the crucial difference between BullionVault and holding "unallocated" gold with a bank, or dealing in exchange-traded gold shares through a stockbroker.

When a bank sells you unallocated gold, you become the bank's creditor. It owes you the gold in other words, and you do not own the asset you've bought. The gold is only available to you if the bank remains solvent.

And if it doesn't...?

Your BullionVault gold, on the other hand, will never be used, lent or sold by the vault where it's stored. Nor is it merely "backed" by gold like a trust-based certificate.

Legally and in all eventualities, even a run on the banks...the collapse of the Dollar, Sterling or Euro...a stock-market meltdown...or a crash in the $700 trillion global derivatives market...your gold will be yours.

You can find out more at BullionVault now.

BullionVault offers you an easy, cheap and safe way of buying, owning, storing, and selling gold. Because it marries two technological breakthroughs that had both passed the precious metals market by entirely.

The first innovation is the Depository Trust Company's model for making financial trading simple, safe and efficient. Just like CREST — the UK's central stock depository in London — it keeps shares and government bonds in safe-keeping, immobilising them in a physical location.

Only ownership needs to change hands between buyer and seller, making for much faster and cheaper settlement. And at BullionVault — whose founder and director, Paul Tustain, developed I.T. systems to handle CREST dealing for Europe's very biggest investment banks — this means all trades are settled instantly with gold that's already safe inside the vault.

That cuts your risk of counter-party default down to zero.

The second innovation is modelled on Betfair, the internet-based gambling system based in the UK which matches orders from private buyers and sellers directly across the internet. This cuts out the middleman entirely at BullionVault, reducing your costs once again and giving you direct access to the dealing spread.

To test-drive this ground-breaking service for yourself today, starting with a free gram of Swiss gold, go to BullionVault now.

No middlemen, no delivery costs, and no risk of losing your gold if crisis hits the banking world. You can buy or sell whatever quantity of gold you like, starting from just one gram today.

Your gold investment will be stored and insured by ViaMat, the privately-owned Swiss storage company in your choice of New York, London or Zurich.

So if you don't trust the government to leave your investments entirely in your hands, the option of storing gold deep underground in Switzerland may be of interest!

If you've not heard of ViaMat, don't be surprised. This professionally-recognized bullion transporter and vault operator likes to remain quiet and discreet, just like its wealthiest clients.

But be clear on this point — ViaMat is not a bank. Instead, and for the last 62 years, it has simply stored valuable goods without getting involved in unallocated arrangements and other financial wizardry.

Keeping your gold in ViaMat's high-security vaults makes the actuarial risk of loss so small that it costs only 0.12% per year to store your gold with insurance included. That's less than a third what you'll pay to store gold in a bank through an exchange-traded gold fund.

And thanks to BullionVault's instant online trading and settlement system, you can take profits or add to your position the very moment gold makes the move you've been waiting for.

The live gold-market order board is open 24 hours a day, 7 days a week. That gives you the chance to trade gold long after the London stock market closes, and even before Asia opens the next morning!

The crucial thing is that your gold will have stayed inside that specially approved bullion vault. So its resale value will be right up there with the "spot" price you see quoted in the newspapers and on the internet.

To find out more, and claim your complimentary gram of Zurich gold, just go to BullionVault now.

When you buy gold through BullionVault, you do NOT buy a financial security, like a share or a warrant. You're buying the metal itself. It's your property; it belongs to you.

But to keep your costs low, and to make sure you can sell your gold straight back onto the international bullion market...where the spread between 'buy' and 'sell' prices runs almost to zero...you simply take legal delivery via a custodian — ViaMat International, the leading secure vault operator in Switzerland — without taking possession at home.

You see, your gold is part of a Good Delivery bar. Weighing 12.4kg, these bars have a minimum assayed purity of 99.5%. BullionVault buys these guaranteed, market deliverable gold bars, and store them at ViaMat on your behalf.

"Of course, we accept the sensitivity of what we are doing," says Paul Tustain. "Which is why we publish our daily audit. This means you can safely check your holding within the vault — from any internet computer anywhere in the world — and prove it to the actual physical bars evidenced by the ViaMat bar list that's issued to us."

This is so simple, but so important. When you open an account with BullionVault, you are given your own unique 'nickname'. It's only known to you, of course. No one else will know that you're storing a portion of your wealth offshore.

Every day, BullionVault then publishes a full list of every single 'nickname' holding gold through its unique system. This list is published on a public internet page. And the sum value of the list (with your nickname on it, remember) adds up exactly to the value of the bar list issued by ViaMat.

In short, this means that you can see in a transparent yet discreet way what your holding in the system is, every day.

To open your account — and to start trading your complimentary gram of Zurich gold now — click through to BullionVault today.

"Love the service and the site," says one British user of BullionVault. "Actually, your whole business model is a good one and like many excellent ideas is simple and just leaves me wondering why it hasn't been done before."

"If there is an easier route to purchasing bullion I have not found it."
TH

"I have yet to find a more convenient way to own investment-grade gold bullion...Excellent customer service, total security and peace of mind."
Garry Knott, sovereignlife.com

"I think you have the best online service bar none. It seems to me the customer is guaranteed to obtain the closest to the spot price of gold via your service"
JT

"Everything has been of excellent quality: service, information, explanatory steps (Help file) etc...Thanks a lot to you and your team."
EFR

"Just a quick message to say I absolutely love BullionVault. Your website provides one smart, efficient service...I can't see how it could be improved on!"
TJ

"I am new to gold ownership and had been looking to add some to my investment portfolio for some time...I came across your web-site and it was exactly what I was looking for - an easy method of buying, selling or just holding gold without any hassle, and at very reasonable commissions. The order board is very simple to use, even for a novice like myself."
JS

"Your company is just what I was looking for, great site with excellent information and a very intuitive navigation system."
JDC

"FIVE STARS...The website scores highly for being easy to read and well-designed. It is clearly laid out for even an inexperienced user and the home page has links to detailed but simple instructions and FAQs..."
thegoodwebguide.com

"It's an absolutely incredibly good service/website, from everything to presentation, ease of use and security it's very clear and a pleasure to use."
BR

Just what is it that's got all these people so excited? To find out more — and claim your complimentary gram of Zurich gold now — go to BullionVault now.

PLEASE NOTE: We will receive a small referral commission for any accounts opened through this email. But the tiny dealing fees and storage charge you will pay would be no smaller without it.

And this ground-breaking service really does give you unique access to live gold market prices, cutting out the middleman and slashing the costs of investing in gold "dramatically" as the Financial Times recently noted.

To find out for yourself, go to http://www.bullionvault.com now.

© BullionVault.com 2008 - Buy gold online at live gold prices.

Investing In Gold

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Why Gold? Why Now?

The Case for Investing in Gold Today

IF YOU'RE LOOKING to store wealth in something both rare and secure today, you will find nothing to match gold.

Gold always tends to reward cautious savers in times of financial stress, because it is both hard to destroy and tightly supplied.

In short, it is the very opposite of debt.

Gold doesn't corrode or tarnish, and it's relatively useless to industry. That's why almost all of the entire stock of gold mined over the last 4,000 years remains unused today. It exists as either jewelry or bullion, both of which act to store wealth and value.

The world's total store of gold now stands near 160,000 tonnes. But the metal is so dense that, if formed into a single a cube, it would have an edge barely 22 yards in length.

That wouldn't even cover a tennis court!
Gold vs. Paper-Money Inflation

New gold is being found and mined today at the rate of some 2,600 tonnes per annum.

That's a modest increase of 1.6% per year to the above-ground supply. And critically for the value of gold, this annual growth-rate lies beyond the power of politicians or investment banks to increase.

The supply of Euros, in contrast — the most hawkishly-managed major world currency right now — is currently expanding by 11.5% per year.

Thanks to this tight supply, gold grew its purchasing power more than nine times over during the 1970s — the last worldwide surge in inflation. In terms of business assets, it rose 23 times over by the start of 1980 as measured against the Dow Jones Industrial Average.

During the financial collapse of the 1930s — but this time amid a deflation caused by half of all banks in the United States failing — gold bought 17 times as many financial assets as it did before the Great Crash of 1929.

Now debt defaults and inflation are working together today, forcing a fresh crisis in the value of money. Gold has already risen three-fold against the New York stock market since early 2000. It's recently turned higher in terms of residential and commercial real estate, too.
Time to Buy Gold?

Gold doesn't care whether a financial collapse destroys the value of money (inflation) or the value of debt (deflation). Its unique characteristics — indestructibility and tight supply — mean its owners can thrive amid either.

But that doesn't make gold a "forever" investment. Gold will always lose value during stable periods of strong economic growth.

Over the twenty years to 2000, for example, gold lost 95% of its value in terms of US real estate. So it's no surprise that, as a proportion of world investment portfolios, gold fell from around 2% to effectively zero.

The trend in gold prices finally turned higher at the start of this decade, just as Gordon Brown — now the British prime minister — sold half the UK's national gold reserves at less than $300 an ounce.

Since then gold has trebled and more. But this gain remains small in the context of previous gold trends. It's also been limited by Western governments persuading their citizens that "core" inflation in the cost of living is running at just 2% per year or below.

These official CPI figures, of course, exclude the cost of housing, mortgages, taxes, fuel and saving for retirement. But this trick cannot go un-noticed forever.
New Investment in Gold

New gold investment will continue to grow if the world's major currencies — gold's main competition as a store of value — plunge into the inflationary spiral that many economists fear.

Until there's a dramatic change in monetary policy, the over-supply of Dollars, Euros and Yen look set to keep pushing gold prices higher. And it took a dramatic change in central-bank policy to finally kill gold's last inflation-led surge.

At the start of the 1980s, the Federal Reserve pushed US interest rates up to 18% and above, restoring the world's confidence in its currency and kick-starting the "long boom" of the next 20 years.

Could America survive such strong medicine now? Would Ben Bernanke even dare risk it?

If you think the world's central bankers are about to set interest rates far above the real rate of inflation, you should steer well clear of gold.

But if you fear for your savings — and you want to start investing in gold — you can start today, for free, at BullionVault.

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