December 3, 2007

Grant's News Letter 

What a rollercoaster ride we had last month. Metals surged to historic highs and then profit taking took hold of the markets sending them back down into buy while you still can territory. Oil teased the magical $100 a barrel price before falling back down to a still high

 According to Bloomberg, Dec 03, 2007 OPEC nations are not going to increase production as anticipated. This means that we are going to see oil prices surging back up, this time I firmly believe to the $100 dollar level. And given how the Bilderberg group called for $100 oil per barrel by year end 2007 I think we will hit $98-$100 oil before New Years Eve.

And while gold has still dominated the commercial airwaves of talk radio, trying to entice new buys into the precious metal market, silver has remained quiet. Last month in the wake of the gold rally to $840 an ounce, silver suddenly surged to well over $15. And while the rally was brief the sudden spike in price and then the sharp fall off lead me to believe we are just seeing the start of a startling raise in the price of silver. If you have listened to my Nov 1^st. newsletter you could have pick up silver for under $14.50 and turned around and sold it when it topped $15.50 an ounce just 6 days later.

And now we see silver trading back under $14:50, prime time to buy, I see silver hitting 17 before it goes back down on the next rally, and the next rally in silver is coming sooner not later. Historically silver has held a 16:1 ratio with gold. Given that gold is about $800 an ounce, silver should be at $50.   

Silver has plenty of room to move up to $50 an ounce. And even without the manipulation of the silver markets that we have seen by the notorious Hunt family in the late 70’s early 80’s silver should be much higher then it’s trading at today. In terms of Time Value Money, silver which hit a high of $54 an ounce would be valued at $116 using the most conservative result from http://www.measuringworth.com/uscompare/, a site that calculates historic vs. current values of currencies.

 And the US Dollar is still doomed to decline. The euro recently hit a milestone, it took $1.45 USD to purchase 1 Euro, no wonder Jay-Z and supermodel Bundchen of Brazil have turned to Euros as their currency of choice. And while a weak dollar is heralded by the establishment media in the US as a good thing, the few sectors of our economy that can benefit from the weak dollar are dwarfed by the steep jump in the prices of imports that the US consumes every day of the year.   

The weak dollar combined with the planned North American Union, the economic merger of the US, Canada, and Mexico, all point out to a Euro style solution for the North American continent. Already called the Amero, this new currency is poised in the wings just waiting for the utter collapse of the US Dollar to justify ushering it in. How soon will we be seeing the Amero openly traded? I can’t yet forecast, but given the trend to an Amero I believe we will see further weakening of the dollar going into 2008, and that come mid 2008 we will see sharp drops in the purchasing power of the dollar.