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One of our clients sent us the latest article by Nick Guarino (Wall Street Insider – wasn’t it called Wall Street Underground a few years back when he was selling his advice, for thousands of dollars, on how to use futures and options in the stock market and make a fortune – before the crash of 2008? I suspect it did not end well for those who listened to Nick back then).

I have a couple of interesting charts for you to consider. For those of you who are worried because of the deflationary position put forth by Nick Guarino, I have this to say: Are you kidding me? I have followed Nick, off and on, since the late 80’s. If I remember correctly, in the 80s Nick used to say, “But what do I know? I’m just a dishwasher.” I am underwhelmed. His premise that gold is the biggest bubble of all, that there is no inflation and that you should sell all of your gold and silver and invest in US dollar-based treasuries and Euro bonds is wonderful advice – if you want to end up in the Poor House. His prediction that gold will fall to $200 an ounce is insane. Every gold mine in the world would shut down long before that happened since the break-even cost of gold mining must be closer to $1000 an ounce than to $200 an ounce.

The first chart shows the US Monetary Base. No inflation? Huh??

The second chart, courtesy of Frank Holmes, puts the “gold bubble” in proper perspective. A bubble? Huh??

The difference between YOUR success or failure lies in WHOM you choose to follow. There’s Guarino and then there are people like Bill Gross, Pimco CEO and bond maven who dumped his bond funds US treasures, and Mr. Gold, Jim Sinclair who has been right with virtually every prediction he has made for the last decade and who is now talking about gold above $10,000 and the dollar losing at least half its value.

If you buy some silver coins with the money Nick the Dishwasher charges you for a subscription to the Wall Street Insider you could make a nice profit. But then – what do I know?? I am one of the guys he is talking about who is misleading you. What do you think?

A few words and a chart from Five Min. Forecast:
A far more accurate gauge, we submit, is a straight-up percentage gain from the same starting points— a gauge that U.S. Global Funds chief Frank Holmes submitted to us last spring:

The vertical axis in this chart reflects the percentage gain of each asset class over like 12-year periods. By these accounts, gold is rising at a steady clip. And is in a relatively stable uptrend.