Stewart Thomson says "silver investors should be going into 2018 with a feeling of great confidence" Here's the details...
By Stewart Thomson of Graceland Updates
Jan 2, 2018
The world's most awesome asset is taking the world gold community into the new year with grand style. Please click here now. Double-click to enlarge. Gold has stunned most analysts and roared to my $1310 target price without missing a heartbeat!The bull wedge pattern is both majestic and powerful. The ultimate price target of this pattern is a minimum price of $1350 and arguably as high as $1490.When "QE to Infinity" and the death of the American economy was accepted as "the new normal" in both the gold and mainstream communities, I argued vehemently against that view.Instead, I laid out an intense scenario involving an imminent multi-year process that would involve a taper to zero, relentless rate hikes, quantitative tightening, and ultimately a massive reversal in US M2V money velocity.I've predicted this reversal will create a powerful bull cycle in gold and silver stocks, making them one of the best performing assets on the planet.Please click here now. I think many gold investors are underestimating just how little inflation it really takes to create an institutional panic in US stock and bond markets.I've predicted that this inflation likely happens by mid-2018. Clearly, institutional investors view even a modest rise of inflation as a major concern, if not outright panic. Please click here now. This is the type of statement that entices institutional money managers to buy lots of gold, silver, and mining stocks.They like to see consistent price appreciation with reasonable volatility, and a modest rise in inflation is exactly what the doctor has ordered to make that happen.I realize that the election of President Trump has been wildly celebrated by many gold market investors. They are fed up with the endless socialism and war mongering policies that have hallmarked recent administrations, but I would caution investors that presidents don't change the nature of business cycles.The policies that presidents enact tend to slightly limit or magnify the business cycle, but most of what happens in business is not related to the actions of the president. It's related to inflation, wages, interest rates, corporate earnings, demographics, and stock market valuations.There has been a sudden focus in the gold community on US GDP growth being "set to rise" under Trump. In contrast, like myself, most institutional investors are now focused on the rise of inflation in this late stage of the business cycle.This inflation tends to appear suddenly and can cause great harm to stock market investors. At the current point in the business cycle, tax cuts without government revenue cuts are inflationary. Imminent bank deregulation is also inflationary.The bottom line for President Trump: From a fundamental perspective, almost everything he is doing can boost growth in the next business cycle, but it will boost inflation more than growth at this stage in this cycle.Around the world, the situation is similar. The government in India is taking action that should boost growth, but boost inflation more than growth.Inflation is also beginning to pick up in Japan, and the end of QE there could move enormous amounts of capital out of the deflationary hands of the central bank and into the inflationary hands of the fractional reserve commercial banking system.Look at this fabulous silver chart.
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St
Stewart Thomson
Graceland Updates
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