BOB CHAPMAN : I think that on the U.S. Dollar Index (USDX), the dollar could go down to the 45 mark. On the other hand it's about 82 right now, down from 89 and up from 74, six or seven months ago. If you think the dollar is going to go down in value, as I do, in order to hedge against that one could buy Treasury Securities denominated in Swiss francs or Canadian dollars. I think those two currencies will do well versus the dollar.
If you look at the figures for the last seven years, you'll find that every currency in the world went down versus gold. In the first six months of 2010, most of the major currencies went down 12% or 13%. The final arbiter here is gold. The question is who's going to win? Is gold going to become the ultimate currency or is it the dollar or will it be another currency? It's hard for another currency to compete with gold with all the debt out there and all the problems the world's got when you have a fiat currency that's backed by nothing. The only currency out there that has a backing of gold is the euro; it used to be that 15% of the currency was backed by gold, but now it's about 7%. - in the aureport
Bob Chapman : Well, I tell people with gold and silver to always take delivery unless it's impossible to do so. Then they should have it segregated in an account that they can access, whether it's in the United States or another country. Most people are happy to take delivery of gold and silver.
Shares speak for themselves. They're traded on exchanges. The earnings for these companies are what they are. - in the aureport
Bob Chapman : While I do recommend a few gold stocks, I do not buy stocks. I have no accounts. My family has no accounts. Period. I buy bullion and coins and I do it frequently. I'm a big believer in both. I do not recommend exchange-traded funds (ETFs) because I do not believe they have gold and silver in the amounts close to 100% of what they're supposed to be holding. Neither do any of the hedge fund managers because most of them are not getting involved in that area. I think it's going to end up being a scandal. - in the aureport
Bob Chapman : They do it through the President's Working Group on Financial Markets, which was instituted in August of 1988. They are using that to interfere in the market. Look at the markets from day to day. I used to be a tape reader and I was a trader for 25 years. You get rhythms from markets. You can see the Fed in there along with the Treasury department making the market do things that they want it to do.
Bob Chapman : Anywhere between 5% and 8.25%. I would say around 7%.
This went on 2.5 years ago when the government said that inflation was 5.5%, when in fact it was over 14%. It's two different worlds. The proof of that is when you see gold and silver run up like they did 2.5 years ago before deleveraging took place. These days gold and silver are again poking around new highs. That's a reflection of what buyers of gold and silver see coming. They're anticipating that there will be inflation, which is problematic because it steals purchasing power from the public.- in aureport
Bob Chapman : Well, we had an $868 billion stimulus package. The Federal Reserve then created enough money and credit to bring that package assistance up to somewhere between $2.3 and $2.5 trillion. For that, we had approximately 16 months of attempted recovery. During that period of time, five quarters averaged growth between 3% and 3.25%. I feel that was a very, very high price to pay for a relatively sideways movement in the economy. Now we're back to square one. The recovery is not continuing. The Federal Reserve is talking about more quantitative easing. They're talking about buying back the toxic securities they bought from banks at a price they won't disclose. That move essentially cleared up the banks' books but at the same time encumbered the Fed's books, which they're now going to unburden by selling the bonds back to the same people they bought them from. Now, we don't know what the loss factor is because they won't tell us, so we have to ballpark it. Out of this money that's coming and going they have to come up with a figure somewhere in the vicinity of $1.2 trillion. That's what they're going to use for this quantitative easing. - in theaurreport
Bob Chapman : First of all, I found as a broker that a lot of people don't know how to properly invest or trade. Often brokers would have them trade; however it's not something average people normally do because they're not professionally trained. There are not a lot of people who can effectively trade and make money in the market. Perhaps 5% are successful.
But I ran into a lot of people who wanted to trade, and I discouraged them unless they had years of experience. I said you've got to pick a trend. For example, we are now in a long-term bull market in gold and silver. I tell people to get in with a trend and stay with it as long as possible. People were losing money in the market because they weren't doing that. Consequently, I've been helping people set long-term investment goals. - in the aureport