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Witness Again the Perfect Storm

Witness Again the Perfect Storm

By Al Korelin
Feb 25 2009 10:47AM

www.kereport.com

All of the bad luck experienced by George Clooney a number of years ago in that great movie, “The Perfect Storm”, is about to be replaced by good things assuming that Mr. Clooney is an investor in gold.

As readers of my work and listeners of my radio program which now, by the way, is broadcast live on the Talkstar Radio Network between 2 p.m. and 4 p.m. east coast time, are aware I have been a gold bull since way back when you could buy an ounce for $250. At that point our radio program focused on conventional business issues and our guests included executives from companies like The Boeing Airplane Company and Microsoft.

For the last eight or nine years, that has not been the case. Now I talk weekly with experts like Congressman Ron Paul, James Turk, Jay Taylor, David Morgan and others. We don’t discuss the conventional stock market, we talk about asset based investing, worldwide economic events and asset based investing.

Why the big change?

Well, in the late 1990’s, I realized that the U.S. economy was right around the corner from being in serious trouble. All people were interested in was “something for nothing” and “instant gratification”.

At the time I had been a member of the Board of a bank for about fifteen years. I was aware of a couple of startling factors.

First of all, the debt loads of individuals was reaching astronomical proportions. While on the Bank’s Loan Committee, I saw the balance sheets of applicants that were unbelievable and these people actually wanted more credit.

Secondly, thanks to the Community Reinvestment Act, the government was telling us that we had to lend money to people who were not qualified to buy homes.

Everyone, the federal government, the state governments and the average Joe in the street, was living on funny money. Our currency was based on absolutely nothing and people’s spending was based on absolutely nothing. If the government wanted to spend more than it had, more money was printed. If people wanted to spend more money than they had, they simply took on more debt.

Realizing that the Emperor was not wearing any clothes, I went on the air and announced that from that day forward the program would deal with nothing other than asset based investing because it was the only way that, I felt, people could protect themselves and their families from eventual financial ruin.

Well, as you are aware, during the next eight years or so the price of gold went from that $250/oz level to over $1,000/oz. That’s about a fivefold increase with silver doing about the same. Am I tooting my own horn? Absolutely not, anyone with a lick of economic sense could see it coming.

I am convinced that today we are in, as James Turk recently said on our show, the “perfect storm” for investors in gold.

Many people are hoping that financial disaster will be avoided by the economic stimulus package recently passed by the U.S. House and Senate.

Congressman Ron Paul, Jay Taylor, Roger Wiegand and other guests on our program have this to say about the package, “it stinks.”

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http://www.kitco.com/ind/korelin/feb252009.html