I’m off on a cruise around the Cebu, Dumagete region in the Visayan Islands as from the 27th with girlfriend and baby son of 2.5 months in a 50 footer with 14 others. I don’t expect any Wifi or internet access to be available so this might be the last for a while.
Don’t worry. I’ll be back!
In passing, the Pound Sterling seems to be tumbling out of bed as some predicted it would recently. A few weeks ago it touched $2.12. Now it’s $1.975. All the hopelessness of New Labour’s economic management is not lost on the world’s financial community. The Pound is becoming a Sell.
Maybe we’ll see $1.80 before long. Others are saying as low as $1.60.
Gold is strengthening against the dollar in thin trade, but the effect is for gold in sterling is to be trading at UKL412 an ounce (No pound signs on computers where I am). A year ago this was around UKL 310 an ounce. My prediction is for gold to surge now to around UKL 500 an ounce helped by the falling Pound, and the financial shocks coming into view from the world’s banking sectors. Gold could spike to around $875 an ounce if its current build keeps going, currently $812.
If the Euro hits trouble from countries like Italy finding they can no longer stay inside, gold could get a lift to even higher levels.
Shares on the other hand will be struggling to hold position, along with the Pound.
My strategy is to run with gold into next year. I will start selling once we are around UKL 500 an ounce. I bought mostly at around UKL 220 an ounce a while back, but the gains so far have been pedestrian and taken years to achieve. If the Pound starts a fall, as well as gold hitting a spike, the price rises could start to come along faster.
After selling out of gold, I might then buy shares when/if the credit crunch has consigned stock markets to the floor. (Give the process about 12-18 months from now)
My strategy is the exact opposite of Gordon Bown’s. When he sold off Britain’s gold reserves at around $350 an oune that was when I started buying. Gordon’s an investor’s dream, and a banker’s nightmare. He creates financial disasters which are bound to move markets in predictable ways. But by undermining the security of the financial system, he’s going to destroy whole swathes of jobs and companies and peoples’savings along the way.
I would prefer to be investing in businesses, but until Gordon Brown has finally left the stage and a Redwoodian Conservative Chancellor is safely in place, I’m afraid it’s too damned dangerous, not to mention pointless with tax rates where they now are on dividends and Director’s bonuses. Pre-1997 I paid 40% income tax and no Nat Insurance. Since then I’ve paid no tax at all as I won’t bother taking out money from a company at 65% (Income tax and Nat Ins including Employer/employee contribs). In fact I’ve gone to live abroad while I wait for Britain to return to some kind of sanity as regards rewarding its risk-takers, and managers.
And that’s without even mentioning the word Regulation.
It’s Gordon Brown Nemesis time. Buy Gold for now. Then be ready for the recovery once he’s gone. It will be like ten Christmases all at once the day he falls, and some common sense can be allowed back into the frame of British economic management.