Gold's “Slingshot Effect”
Profit from the crisis and earn up to
4 times more from gold
Right now gold is in the midst of a long-term bull market.
A bull that started in 2001 – when gold hit bottom at $255 an ounce – driving the yellow metal up to today's price of over $1,100. That's an increase of more than 330%.
Impressive? You bet.
Especially when you consider that during this same time period, both the S&P and Dow averaged negative performances – down 2% and 13%, respectively. And this despite the record rally both indices have experienced since March 2009.
As the Wall Street Journal recently reported, "Thanks to global economic concerns... [gold's bull market] could continue for years. The financial crisis will have a long-term, positive impact for gold as a shelter from economic uncertainty."
But this is nothing new. Gold has always performed well in times of crisis. During the Great Depression, gold and gold stocks were among the few assets to skyrocket in value. What's more, gold is an ideal hedge against inflation, due to its superior ability to hold its value.
According to the Minneapolis Federal Reserve, since 1935, the dollar has lost 93.5% of its purchasing power. But take a look at how well gold has held up:
In 1935, when an ounce of gold was worth $35, you could buy:
- a top-quality tailored suit for $19.75 – or 0.56 ounces of gold
- a family car for $500 – or 14.3 ounces of gold
- a house for $7,150 – or 204.2 ounces of gold
It's easy to see that while the value of the dollar dropped like a stone, gold predictably stayed constant and held its own.
But as good as gold is at building and preserving your wealth, an even smarter way to profit from the ongoing crisis is to exploit gold's slingshot effect
and maximize profits from the inevitable rise in gold.
Simply by using the power of leverage, you can increase gold's gains by 4-1 or more
. All without having to touch risky options, gold futures, or junior mining companies.
Take a look at the upshot that gold's slingshot effect has had on these various large-cap gold mining stocks:
||Leverage to Gold
||3.5 to 1
||2.5 to 1
||3.7 to 1
||4.9 to 1
||4.8 to 1
||1 to 1
|* As of Jan 1/2010
Now, let's take a closer look at just one stock from BIG GOLD
– Randgold. I recommended Randgold to my subscribers in December 2007, when gold was valued at $839.60 an ounce.
This table shows gold's slingshot effect at work, by comparing the performances of Randgold to physical gold:
|Randgold vs Gold
||Leverage to Gold
||3.7 to 1
||1 to 1
|* As of Jan 1/2010
You may be wondering how this stock in BIG GOLD
beat gold's impressive increase by nearly 4 to 1 in less than two years.
And more importantly, how a prudent investor like you can do the same.
The answer is pretty simple.
There's no alchemy involved, and no tricks either. It's what I've been telling you about. A naturally occurring event in the gold market that I've learned to capitalize on. A crucial one that many investors know nothing about. I call it...
"Gold's slingshot effect"
This slingshot effect, when combined with the Casey Research team's twenty-five-plus years of expertise, becomes an unbeatable way to profit from today's – and tomorrow's – surge in gold prices.
Investing in large-cap gold miners, mutual funds, and ETFs is a great way to protect and rebuild your retirement fund, because this provides more leverage than simply buying the precious metal itself.
So how does leverage work?
Let's say that it costs a gold producer $500 to mine an ounce of gold, while gold itself is priced at $1,000 an ounce. If bullion prices rise by $100, gold moves up by 10%. But for the gold producer, that same $100 increase translates into a 20% profit, as the profit per ounce jumps from $500 to $600.
This chart shows gold's impressive increase since the beginning of the bull market in 2001:
But this chart, which follows a basket of large-cap gold mining stocks, perfectly illustrates the power of leverage.
Gold's slingshot effect has been the driving force behind the steady gains earned so far in BIG GOLD
. Gains that we at Casey Research believe will continue in the coming months and years.
I'll tell you all about it in this letter. But first let me explain...
Why gold, and why now?
With gold's dramatic rise in price, you may be wondering if you're too late to get in on the profits. Let me assure you that the answer is, "No."
Outside of the investing community, how many people do you hear talking about gold? How many of your friends and family own gold? How many parties have you attended where gold is on everyone's lips?
|Gold fever returns.
A quadrupling of gold prices in eight years and a doubling in four has certainly opened a lot of eyes.
My guess is, virtually none. And for investors like us, that's a good thing.
With the help of BIG GOLD
, you could be profiting from the current gold bull, long before the idea even enters the minds of the masses – as I'm certain it will.
You see, this predictable phenomenon isn't just reserved for gold. Every
bull market eventually hits a Mania stage. It's not a case of "if" but of "when."
Don't just take my word for it. The recent real estate boom and the dot.com craze speak for themselves.
You might also remember the long line-ups at bullion dealers and coin shops in late 1979 and early 1980. This was when the masses got gold fever, when your neighbor was handing out gold stock tips, and when your cab driver knew the location of every gold shop in town. Their frenzied buying pushed gold up to a record $873 U.S. an ounce, making fortunes for early investors.
And this is a story that will soon be retold. When once again the crowd starts rushing in, a mania for gold and gold stocks will begin. And we'll be ready. We'll ride this wave to the top, ever watchful for our cue to quietly cash out before
the golden bubble bursts.
No rush like a gold rush
Despite gold's 350% trip up the profit ladder, the yellow metal still has legs to run – and those legs are long. Even though fortunes have already been made in the gold market over the last nine years, the biggest profits have not yet been realized.
You see, there are three stages that make up a gold bull market:
- The Stealth Stage – which helps gold find its shine.
This is the early stage of the bull market. A time when gold has been so beaten up by the previous bear market that nobody wants to talk about it. The result: many gold mining companies sell for less than their cash in the bank, allowing hard-core contrarians to buy solid gold stocks at almost giveaway prices. Which earns them their first major windfall. Another name for the Stealth stage is the "Easy Money" stage, because almost anything you buy in this phase will make you a lot of money, and with very little risk. During the current bull market, the Stealth stage ran from 2001-2006.
- The Wall of Worry (our current stage) – where the savvy investors leave the crowd behind.
The second stage begins when investors start selling their gold stocks to realize the often huge profits the Stealth stage provided. Prices of most gold companies get temporarily driven down, casting a dark cloud over the mood of most investors and market observers.
They worry that the golden bull might soon collapse. Every drop in gold prices is incorrectly predicted to be the end of the gold bull. Basically, they worry that anything that can go wrong, will go wrong. But despite all the fear, the market slowly climbs the Wall of Worry. For the early investor, this phase of the market is almost as good as the Stealth stage. Because even though the easy money has been made, the vast majority of investors will not have even considered buying gold, which makes this stage exceedingly profitable for those who do invest.
The Mania Stage – where fortunes are made.
|The power behind the coming Mania phase will drive these stocks like the contents of Hoover Dam trying to fit through a garden hose.
The Mania stage begins when the crowd starts rushing into gold. These "trend followers" don't walk – they run to get on board with any stock that seems to be headed up. This is a sweet sight for anyone already invested in gold. The frenzied buying sends the yellow metal price soaring and, thanks to the slingshot effect, gold stocks go through the roof.
Right now we are nearing the end of the Wall of Worry. But in China, the Mania stage is just getting started. Line-ups are spilling out of the doors of banks and post offices, and from the new official mint stores that have opened all across the country. Lines of ordinary people, frantically buying up gold...
1.3 billion people can't be wrong
Right now, there's a striking difference between how Chinese and Americans view gold. While most Americans haven't even thought about gold, 1.3 billion Chinese are literally lining up to convert their savings into this precious yellow metal.
Have you ever heard a TV or radio ad from the government encouraging you to buy gold? Does your bank sell gold bars? Can you buy gold coins at your local post office? Are gold mints popping up in every neighborhood?
For the Chinese, this is reality. And as I write, the buying frenzy continues to grow.
Why? As Bloomberg
says, "Gold is the hedge against currency devaluation" – it can't be diluted, debased, or destroyed. This is why demand tends to pick up when inflation does.
Now that our government claims the recession is over and green shoots abound, it wouldn't encourage you to buy gold.
But this is exactly what the Chinese government is doing.
They're advising their citizens to put at least 5% of their savings into gold and silver – to safeguard their wealth. And this isn't just hollow advice. Since 2003, the Chinese government has increased its gold holdings by 76%, and now owns 30 times more gold than it held in 1990.
As the value of the dollar continues to decay and inflation creeps closer, the Chinese won't be caught off guard. No matter what the U.S. government does, or what happens with the U.S. economy when inflation strikes, the Chinese will be ready.
The question now is, will
If you get into the market now – before the Mania stage moves into full swing – you'll be perfectly positioned to pocket staggering returns.
What's more, thanks to unprecedented government spending in response to the economic crisis, the Wall of Worry phase is being pushed into high gear – virtually assuring a surge in gold prices and speeding up the arrival of the highly profitable Mania stage.
The government's folly can
become your fortune
The government's free-flowing fiscal stimulus has created a massive increase in the money supply. The Fed has already spent about half of the $1.75 trillion in assets it's promised to buy.
And it's only going to get worse.
Since the beginning of the crisis, the Fed has spent, lent, or guaranteed $11.6 trillion.
Since the spending began last fall, the dollar has fallen 15% – which is bullish for gold, and even better for gold stocks.
The result, according to Bloomberg, is: “The world’s money supply has increased and gold hasn’t kept pace. We’re now in a period where gold is catching up.”
Bad for the economy... great for gold
There's a lot of newly printed money sloshing around. The result: the economy looks
less devastated than it did earlier in 2009.
But don't be fooled into thinking that the crisis is behind us and happy days are here again.
|This recovery looks like road kill.
-The Associated Press
The inevitable fallout has simply been delayed by a torrent of government stimulus. Despite the cheerleading in Washington and on Wall Street, MarketWatch
reports, "We have barely begun to address the fundamental problem that led to the crisis in the first place."
And that problem is debt.
The government, corporations, and American families are all in hock up to their eyeballs. It's no wonder MarketWatch
says, "When compared with the size of the economy, U.S. debt levels are off the charts."
While most people are looking optimistically at the recent surge in the Dow and S&P, these indices don't paint a realistic economic picture. Here are three other markets that do, and all of them are flashing red:
Yields on U.S. Treasuries have plummeted to historic lows. The 30-year bond is yielding 4.7%, which is well below long-term averages. A drop of this magnitude is a strong signal of tougher times ahead, making the stock market's sunny vision of a swift economic recovery hard to swallow.
|When measured against a basket of currencies from the U.S.'s trading partners, the dollar is now only around 7% above its lowest point since 1971.
-The Wall Street Journal
Years of loose money and budget policies have provided the dollar with a rough ride on world markets. Since 2007, the greenback has dramatically weakened – reaching an all-time low against the euro and a 31-year low against the Canadian dollar.
The same policies that are sinking the dollar have pushed gold up more than 350% in the last eight years. The Washington Times
sums it up nicely...
"Dollar slides, investors hedge, gold soars"
Historically, during times of economic turmoil, people turn to the safety of gold. Why? Because, as I mentioned earlier, gold holds its value. Which makes it an ideal hedge against the wealth-stealing forces of inflation.
|Gold has long been a traditional hedge against inflation, and demand for gold tends to pick up when inflation does.
But whether you're a new investor to gold or a seasoned pro, you may be feeling confused by all of the noise coming from the media.
On the one hand, Federal Reserve Chief Ben Bernanke says the recession is over... Apple and Goldman Sachs report corporate earnings are up... MarketWatch
says, "U.S. stocks hit new closing highs for year"... and Google "sees green shoots of U.S. recovery."
But on the other hand, The Wall Street Journal
reports consumer bankruptcies soared 41% from September, 2008... The Financial Times
says unemployment has risen to a 26-year high of 9.8%... "U.S. mortgage delinquencies set record," according to Reuters
... The Independent reports on a beaten-down dollar, whose reserve currency status is under global attack... the Federal Reserve's Supervisory Capital Assessment Program
shows top U.S. banks could lose $599 billion in two years... and The Globe and Mail
asks, "Green shoots or yellow weeds?"
It's no wonder prudent investors like you are searching for answers.
The truth is, if the economy truly was recovering the way the government and media would have you believe, the dollar would move up and the price of gold would plunge. The chart below clearly shows that the opposite is happening:
And this chart also shows the inverse correlation between gold and the dollar. When one moves up, the other heads down. Right now, gold is clearly on the winning side.
What's more, Nick Barisheff of Bullion Management Services recently reported that "gold will continue to increase in price as long as its mine supply is lower
than the increase in the money supply.” Right now, “mine supply increases by about 1.5% annually.”
Take a look at how the government's response to the crisis has more than doubled
the money supply:
|The U.S. government has printed so much money that the monetary base has swelled from $800 billion to $1.7 trillion. This is the largest expansion in history and a staggering devaluation of the dollar. It means that the U.S. government has created 2.1.dollars for every 1 dollar there was in America one year ago.
With the mine supply increasing at a meager 1.5%, while the money supply has more than doubled, you can see why we at Casey Research believe the price of gold has nowhere to go but up.
Bottom line: the outlook for the economy continues to be bleak. But with BIG GOLD
on your side, the worse things get, the more you stand to gain.
Now that you understand why the price on gold is on the rise, let me show you how to maximize your profits with...
Gold's slingshot effect – the fastest way
to accelerate your ability to make
money in the gold markets
My name is Jeff Clark. I've been the editor of BIG GOLD
for close to three years and have been working with gold for most of my life.
You might say gold runs in my blood...
I’ve worked on my family’s gold claims in Arizona, Nevada, and California. I’ve done it all: digging, sluicing, dry washing, panning.
I've been working with this yellow metal for years. But now, instead of working on mineral claims, I spend my time tracking the market forces behind them.
I understand gold, the industry, and the market. Most importantly, I know how to use my understanding to find opportunities others don't see.
And right now, many investors are missing out on one crucial factor when it comes to investing in gold... leverage.
Without understanding how to put the power of leverage to work, these investors are leaving today's – and tomorrow's – huge gains in gold on the table.
My goal is to make sure you are a better-prepared, more educated investor. And to show you how to safely use gold's slingshot effect for maximum large-cap profits, with minimum risk.
Here's what I'm talking about...
When gold goes up, gold stocks soar
Since the big market crash in October 2008 – when the Dow and S&P indices each collapsed by more than 40% – my subscribers have watched their gold stocks soar.
Kinross is up 166%... Lihir has jumped 196%... Minefinders surged up 205%... Randgold shot up 261%... and Royal Gold is up 108%. All in a little more than one year.
|"Made considerable more money that I ever have..."
Thank you kindly for keeping me on track. I appreciate your information, talent and honesty. In the last year I have made considerably more money than I ever have and it's because of the stock info and guidance: to stay long when I should... and to lighten up on any position when appropriate.
"Invaluable insight that cuts through the noise..."
The Casey newsletters are hands down the most valuable of the newsletters I subscribe to... The stock picks are invaluable... and provide an invaluable insight that cuts through the noise. Great job and much appreciated.
"The best I know of..."
Casey Research is the best I know of. I have been a subscriber to Casey for a number of years, with gains that average over 200%
I wish to thank you for all the great investment ideas, the details on each investment, and your loyalty to current subscribers.
-J. Keely, Geologist (ret)
"The first dollar I invested is up over 1,000%!!"
Over the last seven years my investments have risen by an average of 42,9% per year... The first dollar I invested is up over 1,000%!! Keep up the great work.
These are the kinds of gains that put a smile on your face. And once the Mania stage hits, you could be wearing a permanent grin. But only if you have a team of experts behind you, working to make sure you know exactly when and where to invest.
And something else you should know is that BIG GOLD
is not just about gold and large-cap gold stocks. We also cover gold funds, ETFs, silver, and other resources. And as a bonus, you'll learn everything you need to know about buying physical gold, and how to safely store your gold.
Important: your easy next step
That's why I'm writing to you today. To show you how my research service, BIG GOLD
will open the door to the safest opportunities available in the gold and resource markets.
Here's how I do it:
Along with the help of the Casey Research team, I put my gold insider's perspective to work by:
analyzing the big trend
- looking for new, safe, and profitable ways to capitalize on the current bull market
- researching new companies to recommend to my subscribers
All of this is designed to give you an in-depth introduction to the profitable world of gold and resource investing. It's an invaluable education that you simply can't find anywhere else. We don't just hand you another stock pick; we make sure you understand the whys and hows of every recommendation, so you can think and decide for yourself.
This is what truly sets BIG GOLD
apart from other newsletters. And it's why I am inviting you to let me be...
Your personal guide to
the gold and resource markets
In every issue of BIG GOLD
, you'll discover:
- Easy-reading analysis that gets straight to the point
My monthly explanation of the ever-changing economic forces driving today's accelerating gold, silver, and resource markets.
- Answers to important questions about gold and other resources
I answer all of your questions about: how – and if – you should put gold in your IRA; how to sell your precious metal jewelry for cash; the best ways to protect yourself from the falling dollar by investing outside the U.S.; and much, much more.
- In-depth investigations into the world's leading resource mining companies
Every month we search out proven companies with experienced management, cashed-up balance sheets, and profitable projects with ounces in the ground.
my insider's perspective on the best ways to put together a precious metals portfolio and squeeze out risk. For example:
- which stocks you should buy right now
- which stocks to sell ahead of the crowd... and when
- which gold stocks to avoid... and why
- the best precious metals funds
- the pros and cons of gold and silver ETFs
And much, much more, including all the breaking news that has a direct impact on your precious metals investments.
And right now you can start your no-risk
, 90-day trial subscription at a new, low price.
A special offer for new subscribers to
Normally, a one-year subscription to BIG GOLD
would cost you $79. And considering everything you'll receive, I'd say that price is more than fair. But if you agree to try my research today, I'd like to offer you an even better deal:
Subscribe now and receive a full year of my expert advice, research, hand-picked recommendations, and special reports – for just $79.
That's $50 off the current list price. Not only that, but your satisfaction is 100% guaranteed.
If for any reason BIG GOLD
doesn't live up to your expectations, simply give us a call within the first 90 days, and we’ll immediately refund every penny you paid.
No questions, no delay, no risk. You like it, or your money back.
There's never been a better time to join the savvy investors who are already profiting from the expert guidance in BIG GOLD
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The spreading financial crisis is setting the stage for tomorrow’s big money-making opportunities… but only if you know when and where to invest. Don't try to navigate the complicated gold and resource markets on your own.
Join BIG GOLD
today for only $79. I'm confident it will become your most valuable investing tool. But don’t just take my word for it. Join us today for just $79
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