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Gold prices extended their record breaking run on Wednesday, pushing towards the $1,100 an ounce level, following Tuesday's news that India's central bank had bought 200 tonnes of bullion from the International Monetary Fund.
Gold hit a record $1,093.65 a troy ounce, gaining 3.3 per cent since the news from India broke, and up 24.5 per cent this year.
Eugen Weinberg of Commerzbank said the deal between India and the IMF was "an indication that central banks from emerging economies are still willing to accumulate gold to diversify their currency reserves in spite of the current high prevailing gold price".
Gold hit a record $1,093.65 a troy ounce, gaining 3.3 per cent since the news from India broke, and up 24.5 per cent this year.
Eugen Weinberg of Commerzbank said the deal between India and the IMF was "an indication that central banks from emerging economies are still willing to accumulate gold to diversify their currency reserves in spite of the current high prevailing gold price".
- Financial Times
Without any haggling India took the gold at a near-record price. This could be the beginning of a panic for gold "at any price."
China, Russia and Brazil are rumored to be eager to buy the rest of the IMF that's gold for sale. How long can it be before the world follows in India's and China's footsteps?
Do you want to know where the wealth and the power are heading for? Then follow the real money, and the real money is, and always has been – gold.
China, Russia and Brazil are rumored to be eager to buy the rest of the IMF that's gold for sale. How long can it be before the world follows in India's and China's footsteps?
Do you want to know where the wealth and the power are heading for? Then follow the real money, and the real money is, and always has been – gold.
- Richard Russell, Dow Theory Letters
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How and Why China Will Flood the Gold Market
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Get Your Money Saved for This Right Now
by Dr. Steve Sjuggerud Friday, October 30, 2009 Get Your Money Saved for This Right Now
A Still-Safe 18% Dividend
By Dr. Steve SjuggerudThursday, November 5, 2009
Exactly one year ago in DailyWealth, I told you about "the greatest moment in American finance." My headline was "You Should Take Advantage of This No-Risk Trade Right Now."
If you took my advice and bought shares of "virtual bank" Annaly, you're up 42% today... And we're only halfway through the trade.
A year ago, I told you we had the opportunity for 85% capital gains, PLUS 39% in dividends – for a total return of more than 120% in two years.
While I told DailyWealth readers about Annaly, I told my paid subscribers in True Wealth my favorite way to play it... through shares of another virtual bank: Hatteras Financial, which has done even better.
The "virtual bank" business is incredibly simple... They borrow money at a low interest rate and invest it at a higher interest rate in an ironclad safe, government-guaranteed investment. They earn the difference – the "spread." As I told you last year, when these guys are in their sweet spot, they make a fortune.
Right now, they're in their sweet spot. And there's still plenty more in profits ahead. But the share prices have fallen lately.
I'm not worried. The trade is still on track. Look, Hatteras should pay $5 in dividends in 2010. With its stock price around $27.50, Hatteras' dividend yield is about 18%. Let me be clear...
That's an 18% dividend, with your money invested in government-guaranteed investments.
Hatteras is now trading for a reasonable price again, at only 1.09 times book value, as opposed to its recent peak around 1.4 times book value.
In short, I'm not worried about Hatteras or Annaly. They're both great income vehicles... They capture the spread between what they earn in interest and their interest cost. That spread is currently around 3% – that's huge.
And the Federal Reserve can't raise rates until at least next summer (2010). So Hatteras and Annaly will be able to borrow money cheaply for at least another six months.
My plan with virtual banks is to sell well before it appears the Fed will raise rates. So for 18% dividends... plus even bigger potential capital gains... own Hatteras or Annaly now. Plan on selling once they rise above a price-to-book value of 1.4 (for a capital gain of 30% or more from current levels, PLUS dividends). Or sell sometime in the first quarter of 2010, well before the Fed considers raising rates.
This should be easy money... If you bought a year ago, when I told you about Annaly in DailyWealth, you'll end up with more than 100% in capital gains and dividends. Even if you didn't buy then, you've got a great chance now: a safe total return (capital gains plus dividends) approaching 40% in less than six months.
Good investing,
Steve
If you took my advice and bought shares of "virtual bank" Annaly, you're up 42% today... And we're only halfway through the trade.
A year ago, I told you we had the opportunity for 85% capital gains, PLUS 39% in dividends – for a total return of more than 120% in two years.
While I told DailyWealth readers about Annaly, I told my paid subscribers in True Wealth my favorite way to play it... through shares of another virtual bank: Hatteras Financial, which has done even better.
The "virtual bank" business is incredibly simple... They borrow money at a low interest rate and invest it at a higher interest rate in an ironclad safe, government-guaranteed investment. They earn the difference – the "spread." As I told you last year, when these guys are in their sweet spot, they make a fortune.
Right now, they're in their sweet spot. And there's still plenty more in profits ahead. But the share prices have fallen lately.
I'm not worried. The trade is still on track. Look, Hatteras should pay $5 in dividends in 2010. With its stock price around $27.50, Hatteras' dividend yield is about 18%. Let me be clear...
That's an 18% dividend, with your money invested in government-guaranteed investments.
Hatteras is now trading for a reasonable price again, at only 1.09 times book value, as opposed to its recent peak around 1.4 times book value.
In short, I'm not worried about Hatteras or Annaly. They're both great income vehicles... They capture the spread between what they earn in interest and their interest cost. That spread is currently around 3% – that's huge.
And the Federal Reserve can't raise rates until at least next summer (2010). So Hatteras and Annaly will be able to borrow money cheaply for at least another six months.
My plan with virtual banks is to sell well before it appears the Fed will raise rates. So for 18% dividends... plus even bigger potential capital gains... own Hatteras or Annaly now. Plan on selling once they rise above a price-to-book value of 1.4 (for a capital gain of 30% or more from current levels, PLUS dividends). Or sell sometime in the first quarter of 2010, well before the Fed considers raising rates.
This should be easy money... If you bought a year ago, when I told you about Annaly in DailyWealth, you'll end up with more than 100% in capital gains and dividends. Even if you didn't buy then, you've got a great chance now: a safe total return (capital gains plus dividends) approaching 40% in less than six months.
Good investing,
Steve
A SLOW, STEADY BULL MARKET IN PRECIOUS METALS
Platinum isn't "super cheap" like we pointed out in February, but it's in a bull market.
Platinum is an odd bird in the commodities complex. It has precious-metal attributes like gold, which means people use it as a store of wealth and for jewelry. It also has industrial-metal attributes like copper. Industry uses it to make catalytic converters for autos. Naturally, industry insiders expect Chinese platinum consumption to soar in the next decade as the country grows wealthier.
Platinum suffered a brutal decline from $2,200 an ounce to $800 late last year. But as you can see from today's chart, it's enjoying textbook bull market action of "higher highs and higher lows" off its bottom.
Keep platinum on your trading list... If we experience an inflationary boom, platinum will benefit from a flight to precious metals... and it will benefit from increased industrial activity. These two factors spell higher prices for platinum.
