BIGNESS IS BEST
John Ing
Gold is within a whisker of our oft repeated target of $850 an ounce last reached in 1980. The main driver is the debasement of the US currency. While equity markets rebounded, gold often a measure of inflation hit a 27 year high and yields on 30-year Treasury securities recorded a 28-year high. The dollar continued its slide stetting a record low against the euro. The protracted crisis in credit markets threatens to cripple the US economy. The result has been a crisis of liquidity rather than default. America's tendency to live beyond its means is over. Meanwhile the US greenback is continuing its orderly retreat. And every sign (financial, economic, and political) continues to point to further devaluation. At a time when the US requires more than $2 billion a day to finance its bloated current account deficit, a depreciating dollar acts as a disincentive to foreign investors for additional investments in US securities, particularly when the US reduce rates. Gold's new target is $1,000 an ounce.
Near term rally break out to test $850+ (1980 high) resistance high. Short term technical oscillator is over-extended. Secular bullish trend first target is measured to $1000 new high.
Liquidity, liquidity, liquidity. The big cap stocks are going to lead the way, not because of their maturing growth profile, portfolio of mines or even management but because they are liquid - desirable in an illiquid world.
John R. Ing
Maison Placements Canada
130 Adelaide St. West - Suite 906
Toronto, Ont. M5H 3P5
(416) 947-6040
jing@maisonplacements.com
5 October 2007
The information contained herein has been obtained from sources which we believe reliable but we cannot guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed as an offer to sell for the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that Maison Placements Canada Inc. is to be under no responsibility whatsoever in respect thereof. Directors, shareholders or employees of this company may be beneficial owners of the securities referred to herein.
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