The greatest wealth transfer ever?

I've talked so much in my previous posts. It's time to take a breather. Half-time entertainment:

I will invest myself in precious metals and commodities. And I'll take a hard look at agriculture. Seems that agriculture is very under-invested by nations right now.

I don't like to make short-term price predictions, but just for fun, prices may hit these levels in 3-5 years' time:

Gold above USD 2,500 (currently below 950)
Silver above USD 40 (currently 14+)
Oil above USD 200 (currently 70+)

What this means is that precious metals/(some)commodities investors can probably see their investments double or triple in value. This may not happen in the next few years, I don't know. I don't have a crystal ball and I'm not a professional trader who tries to time the market. I'm more of a buy and hold kind of value investor.

But some time in the future, these prices will be realized. I am confident of higher prices actually, but that may happen be in 10 years' time. Even if taking into account possible losses from exchange rates and after doing some calculations, I feel that there's still profit to be made. Worse comes to worst, the precious metals will retain the purchasing power of your cash =)

Long-term (5-10 year) predictions:

Gold above USD 5-6k
Silver above USD 200

In fact, apart from physical metals, I think mining stocks will have a stellar performance when all the other stocks are dropping. I will look for small mining companies which have discovered new mining fields. In the future, the bigger companies will buy up these small companies, at a great price. Stocks are more tricky though, so be careful when picking companies.

I am very bullish on gold and silver. The physical precious metals market is so super small compared to the sizes of bonds, derivatives, stocks markets right now. When all these bubbles burst, all the excess currencies are gonna flood into precious metals (and other commodities). I've heard a good analogy somewhere. It's like trying to force all the water from a Hoover Dam down a garden hose. The transfer of wealth from these asset types to the precious metals asset type will be immense.

Inflation of currency supply by the central banks is detrimental to the economy. Most recenly, we heard news that Iceland had become bankrupt. That was quite astonishing to me. I remember a few years back, I was watching a youtube video on Iceland. Back then, I saw a beautiful and pleasantly surprisingly rich country. It went bankrupt! There're riots, food shortages, basically its whole economy collapses. Yet, we do not see much news on Iceland in the media. What about the UK, its closest neighbour? UK is in very serious trouble now. Don't have much info on the country either. On a more positive note, in Asia, smart China has been quietly amassing gold for years, although its gold reserve currently forms < 2% of its total reserves. Anyway, China (and Russia) knows that the USD is going to be devalued by a lot. The USD is still the world's largest reserve currency. It forms about 70% of world reserve currencies. When economic meltdown of the US happens in the foreseeable future, it'll be chaos worldwide.

Finally, of course, all these stuff that I've written in this post are backed up by tons of hard research. There're too much things to write down here, so I won't do that.

Disclaimer: Do your own research first! Don't come and sue me if you lose money =.=



Jin