COMMENTARY–ProspectingJournal.com–A short while ago, we issued an article on the gold boom in Nicaragua and the bright future this precious metal faces as a result of the global economic turmoil. Highlighted in the article were companies we thought worth following, given their placement on Nicaragua’s soon-to-explode Gold Belt, such as Golden Reign Resources (TSXV: GRR), whose stock has been performing considerably well.
But it really isn’t a surprise that gold miners are set for a boom. Having circulated through the fingers of human history for some 6,000 years, gold has consistently proven its worth as sound money, especially in the face of hyperinflation and/or stagflation. Whether gold pleases the doomsayers and becomes the “new” money in the aftermath of the fiat currency’s likely collapse is, obviously, still cause for much speculation. Nonetheless, as nations around the world are each stumbling towards financial doom, gold hit a record high yesterday, as Moody’s (and now S&P) threatened to downgrade America’s non-deserved credit rating.
At the same time, gold gained a very strong push as a video highlighting a Q&A between Congressman Ron Paul and Federal Reserve Chairman Ben Bernanke went viral. The Globe and Mail even covered the story (an oddity for them), commenting on Ron Paul’s recent announcement to step down from his role as Congressman in the U.S. House of Representatives. That’s right, the gold-supporting Congressman won’t be seeking another term for the District 14 seat–no more pestering the Fed with 5 minute attacks. Ironically, the Globe didn’t even bother to mention that this is because he is still running for PRESIDENT in 2012, but the media fear of Ron Paul is a rant best left for another day . . .
Near the end of Paul’s excellent critique of QE2 and the reckless policies that have brought America to its knees was a simple, rhetorical question aimed at Bernanke, followed by a nervous answer:
Ron Paul: “Do you think gold is money?”
Ben Bernanke: . . . “No.” . . .
Ron Paul: “Even if it has been money for 6,000 years, somebody reversed that and eliminated that economic law?”
Looking at the video, I couldn’t help but notice “Helicopter Ben’s” squirm as Ron hit him hard. A devaluation of the dollar of 50 per cent in the last couple years is hardly a cause for celebration, after all, let alone a disasterous US economy. And what were Bernanke’s facts to back up his argument? Soaring unemployment, a horrible fiscal outlook, the very real option of igniting the looming monstrosity known as QE3, and the gaining notoriety of the words “gold standard” showing up on the lips of the average American. Surely Bernanke must know he’s pumping a lie, and it just baffles me that he can do it with a relatively straight poker face.
With the credit rating agency orgy now underway, spreading its tentacles from Europe to North America and threatening the USA’s undeserved AAA rating, it’s just a matter of time (August 2 to be precise) before the SHTF. And what did Congressman Paul have to say about this credit rating threat, these secretive agencies that are the talk of the town with their economic sway over whole nations? He said the US is not worth saving, so put it out of its misery already. ”It should have been marked down a long time ago . . . our dollar is better rated by the price of gold.”
Indeed, a bit of research pulls up this gem: Ron Paul’s official stock holdings for 2010. As you can clearly see, he puts his money where his mouth is, holding stocks such as Agnico Eagle Mines (TSX: AEM), Gold Corp Inc (TSX: GG), El Dorado Gold Corp. (TSX: ELD), and many more. With investor interest now leaning towards gold and silver and Mr Paul gaining traction as a real candidate for the Presidency, gold is set to become the new household name. It’s much better than the current one, “debt.”
A host of Canadian exploration miners are now set to ride the gold wave championed by the majors and Ron Paul. As mentioned, Golden Reign has taken its shareholders for a pleasant ride, brought on by excellent assay results and the news of a second diamond drill on its historic San Albino-Murra Gold property. Close by, Caza Gold Corp. (TSXV: CZY) is ramping up its more than 120,000 hectares of claims in Nicaragua, covering 12 early-stage gold targets. In British Columbia, Barkerville Gold (TSXV: BGM) anticipates gold production for 2011 to total 50,000 oz, with a number of aggressive drill programs on the Company’s Cariboo Gold project. And many more.
The writing is on the wall for fiat currencies and investors are grabbing gold in any way they can: physical bullion, major and junior stocks, stealing old ladies’ jewelery, etc. With the price expected to hit $2000 in the near-future and Ron Paul going all-out to push for its monetary use as he campaigns in the 2012 election, we see interest in the precious metal going nowhere but up.
Chris Devauld
Senior Writer
