Most all of the rich and powerful here in New York are of the opinion that gold is much, much too expensive. What they do not understand is that money is being printed like mad and that gold is actually very cheap, compared to its all-time high in 1980 when its nominal price rose to $850 per ounce.

I keep track of the historical, "real" price of gold based on the government's own numbers, which are by all accounts largely understating inflation. But even using the government's bogus statistics, we see that the current price of gold is a long, long way in real terms from the historical price of gold. In other words, in real terms, gold is not expensive. In fact, it has not even risen to its dead cat bounce of the mid 1980s. Moreover, as Peter Schiff pointed out, the government is going to print money at an evermore-rapid pace. Gold is one of the few ways to protect your wealth against the impending calamity that will unfortunately come along with the declining status of the U.S. in the global economy and as a superpower. If we are to salvage anything of our past, I believe we need someone, like Ron Paul, to tell the American people the truth, rather than someone who will continue telling us what many of us want to hear.

Ultimately of course, our fate is in the hands of God our Creator. But we can and should do the best we can to help our fellow citizens realize and understand the problems that we have gotten ourselves into and also to help on a personal basis to salvage life-sustaining wealth. Certainly that objective is at the heart of our IDW, our Model Portfolio strategies, and the stocks we recommend in this letter. We don't always get it right, but we are sure that we are in the right sectors, because we can say with virtually no hesitation that America and its currency are on their way down simply because we have defied the most basically sound economic policies. We have chosen to live for today at the expense of our children tomorrow. As Peter Schiff noted in my interview, we are already a bankrupt nation. It's only a matter of time before we begin to live like it.

May 5, 2007

Jay Taylor, Editor of J Taylor's Gold & Technology Stocks
www.miningstocks.com