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Gold Can Provide Protection Against Looming U.S. Debt Hurricane!

Gold is the ultimate currency. It is an asset that has no liabilities attached to it, unlike fiat currencies. Fiat currencies are essentially debt instruments of governments. You can continue holding USD and risk a sharp devaluation when the sovereign debt crisis hits America or you can flee to gold.

Storms ahead for the stock markets and perhaps it is only gold which may provide some respite against major prospective wealth decline.

Forty-eight U.S. states will be in deficit this year and the combined shortfall will probably exceed $300 billion. That puts Greece’s expected 2010 budget shortfall of around $28 billion into perspective. Indeed Greece’s shortfall is put at around 13.6% of GDP, whereas there are a good number of U.S. states anticipating deficits of more than 20% this year – including some, like California, New York, Florida and Illinois, with far bigger economies than Greece. Indeed there are around a dozen U.S. states with bigger economies than Greece and most of these anticipate 2010 deficits at this kind of level! And look what news of the Greek deficit, once it was generally publicised, did to the markets!

So far the U.S. press seems to have been remarkably effective in playing down – or just not reporting – the dire situation of the U.S. state-by-state economies. Indeed there are only two U.S. states – Montana and North Dakota not anticipating deficits this year and they have two of the smallest economies of all the states. The result is going to have to be massive Federal Government bailouts – or, horror of horrors, defaults. Indeed the economies of the much reviled European PIIGS countries (Portugal, Ireland, Italy, Greece and Spain) look positively healthy in comparison with those of many U.S. states.

Add to this some of the other financial shocks likely to be highlighted in the second half of the year – bank credit card deficits, commercial property defaults, etc. and it is little wonder that the smart money has been pouring into assets which are perceived to offer protection against a market collapse – like gold and silver. Maybe we “ain’t seen nothing yet” and there could be worse ahead for us than we saw in the latter part of 2008 – a true debt hurricane may be about to emerge. If sentiment turns down the fallout could be dramatic.

But even gold and silver may not be immune from a major market fallout – the latter in particular – but their recoveries may also be far quicker. If the overall economy is not seen as turning better by the time the state-by-state and bank problems come home to roost, then one has to consider that a double dip in the markets is more likely than not – and it could be an even steeper fall than we saw in October 2008. One doubts that even China, and other emerging growth economies, could come out of such an economic collapse unscathed. The second Great Depression would be with us – globally.

This may seem to be a Doomsday scenario, but it does look increasingly likely as the year progresses. It’s scary and there is the prospect of people’s wealth – particularly that invested in the stock market – being decimated. Cash savings are paying negative returns and assuming the same remedies are applied by Western governments as in 2008/9 – i.e. printing money – then inflation – maybe even hyperinflation – would seem to be an inevitable result. But perhaps for the savers among us, the saving grace could be an initial deflation phase which would enable regrouping and reallocation, as after this initial phase, as inflation starts to come into play, the markets should then offer some protection against wealth erosion providing one selects companies which can survive the then-prevailing economic crisis.

Gold should also survive the deflation phase as an appreciating asset, but whether it would then survive the inflationary phase may run counter to many economic theories that gold is good inflation protector. Research does not necessarily back this position up, although over a long time period it has proved to be a good wealth store. It’s probably the safest place to be for the time being though. Maybe some of the wild price appreciation scenarios may not happen, but in a deflationary environment even a maintenance of current price levels is a major bonus.

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04-Jul-2010 15:12

Straits Times Index / STI to cross 3000 boosted by long-term investors

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So obvious head n shoulder pattern showing on the charts..

Target is 2663

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02-Jul-2010 19:31

SPH / SPH

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never consider Orchard Rd road damages & liabilities..keke

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02-Jul-2010 15:09

Straits Times Index / STI to cross 3000 boosted by long-term investors

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get the chili crap as ornaments..so can giap the 2 things..

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02-Jul-2010 15:03

SoundGlobal / Sound Global Ltd (formerly: Epure)

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reversal time..76c..

oh yeah...come on baby

s'pore flooded..epure to purify the waters..

ozone2002 ( Date: 02-Jul-2010 10:05) Posted:

OVERSOLD!!!

vested 75c..

fundamentals still intact despite delay in dual listing

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02-Jul-2010 15:01

Straits Times Index / STI to cross 3000 boosted by long-term investors

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again.. the re-appearance of madonna's bra

ozone2002 ( Date: 02-Jul-2010 13:45) Posted:

tongkat ali getting limp.......

ozone2002 ( Date: 02-Jul-2010 09:59) Posted:

MORNING ERECTION AGAIN!!!!!!!!

EROTIC T.A

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02-Jul-2010 13:45

Straits Times Index / STI to cross 3000 boosted by long-term investors

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tongkat ali getting limp.......

ozone2002 ( Date: 02-Jul-2010 09:59) Posted:

MORNING ERECTION AGAIN!!!!!!!!

EROTIC T.A

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02-Jul-2010 13:41

Straits Times Index / STI to cross 3000 boosted by long-term investors

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buy HSI more volatile..

STI is like useless.. not so exciting as HSI

freeme ( Date: 02-Jul-2010 11:40) Posted:

i mean u bot which index's warrant?

ozone2002 ( Date: 02-Jul-2010 11:19) Posted:

yup..chiong = buy put warrants...

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02-Jul-2010 11:29

GLD USD / Gold going up this year?

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buy on dip..

Oct gold will chiong..

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02-Jul-2010 11:19

Straits Times Index / STI to cross 3000 boosted by long-term investors

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yup..chiong = buy put warrants...

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02-Jul-2010 10:21

Straits Times Index / STI to cross 3000 boosted by long-term investors

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STI will be range bound..

ding dong ding dong.. traders market..

buy on dip sell on chiong

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02-Jul-2010 10:14

China New Town / ChinaNTown

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CHINA NEW TOWN DEVELOPMENT

A Unique Land Development Player In China

A leading niche player in primary land development.

the only listed Chinese company that focuses on land development in China. It has 16.3m sqm of residential land

available for sale, which bodes well for land sales over the next 5-10 years.China New Town Development (CNTD) (CNTD SP) is

Beneficiary of rapid urbanisation in China.

will be built to meet the housing needs of a growing urban population. CNTD is set to benefit from this trend.As urbanisation gathers pace in China, more and more new towns

Plugged into long-term land appreciation in China.

can reap the benefits of land appreciation over a long period of time. This gives it an unparalleled advantage over

home builders who have to replenish landbank every year and take the risk of timing the market.By securing large-scale land development projects, CNTD

High margins.

could become more and more profitable on the back of land appreciation over time. In 2009, CNTD’s gross margin

hit 60%, beating listed Chinese property developers’ 34% average.As CNTD’s entry costs are almost locked in in its agreements with local governments, its projects

Dual listing to be a near-term catalyst.

Exchange by introduction. Although there will be no issuance of new shares, the dual listing should help diversify

CNTD’s investor portfolio, enhance liquidity of the stock and boost the likelihood of a re-rating.CNTD plans to seek dual listing on the mainboard of Hong Kong Stock

Key investment risks:

year, b) huge capex needed at the early stage of land development, c) CNTD being a margin player rather than a

volume player due to capex restrictions and government control of land sales schedule, d) reliance on the Shanghai

Luodian project and Shanghai property market for the next few years, and e) policy and operational risks of the

Shenyang project.a) Volatile land sales and earnings due to limited land sales for each project within each

Decent discount to NAV.

discount to NAV, which is lower than the sector’s 40% discount to NAV.We estimate CNTD’s NAV at S$0.21/share. Thus, the stock is trading at a 48%

52-Wk Range: S$0.155/S$0.100 52-Wk Avg Daily Vol. (m): 12.9 Market Cap: S$428m ROE: 7% NTA/Share: S$0.123

Net EPS EV/

Year to Turnover EBITDA Profit EPS Growth PE EBITDA DPS Yield

31 Dec (Rmbm) (Rmbm) (Rmbm) (Rmb¢) (%) (x) (x) (Rmb¢) (%)

2007 363 109 (287) (34.3) n.a. n.a. 24.5 0.0 0.0

2008 564 (455) (846) (53.4) n.a. n.a. n.a. 0.0 0.0

2009 1,087 342 167 6.0 111.2 9.0 9.8 1.4 2.5

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02-Jul-2010 10:07

Straits Times Index / STI to cross 3000 boosted by long-term investors

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bear trap..

coat with honey then set the bees on em...

freeme ( Date: 02-Jul-2010 10:02) Posted:

from techincal point of view.. i dun see why sti holding up so well.. TA & FA all point to a correction

ozone2002 ( Date: 02-Jul-2010 09:59) Posted:

MORNING ERECTION AGAIN!!!!!!!!

EROTIC T.A

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02-Jul-2010 10:05

SoundGlobal / Sound Global Ltd (formerly: Epure)

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OVERSOLD!!!

vested 75c..

fundamentals still intact despite delay in dual listing

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02-Jul-2010 10:00

Swiber / Swiber

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accumulation mode ...

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02-Jul-2010 09:59

Straits Times Index / STI to cross 3000 boosted by long-term investors

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MORNING ERECTION AGAIN!!!!!!!!

EROTIC T.A

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02-Jul-2010 09:14

OCBC Bank / OCBC

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OCBC keep chionging man...

good for banging..i mean banking..

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01-Jul-2010 22:16

Straits Times Index / STI to cross 3000 boosted by long-term investors

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just go STI or nikkei or HSI warrants

if got P in the share name it's a put warrant..

C it's a call warrant..

hope u all wake up from the dream that the markets will go up..

put warrant all the way to 2663.......

niuyear ( Date: 30-Jun-2010 08:48) Posted:

Ozone, how you 'put warrants'? Can share? tks.

ozone2002 ( Date: 29-Jun-2010 22:51) Posted:

Dow
-243.88
9,894.64
-2.41%
Nasdaq
-66.51
2,154.14
-3.00%
S&P 500
-27.53
1,047.04
-2.56%
PUT WARRANTS IN THE MONEY =)

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01-Jul-2010 09:15

ShareJunction / VIKING offshore

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viking top vol!! chiong ah!!!

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30-Jun-2010 22:08

GLD USD / Gold going up this year?

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With the markets showing signs of weakness.. and stimulus $$ running out..

it's time to park ur precious PAPER worthless money in gold..

only safe heaven since the dawn of mankind..

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