Aden Sisters: "...stay with gold"

The following is an excerpt from the much acclaimed Aden Sisters newsletter (Mary Anne and Pamela Aden)

..THE CRISIS GOES ON AND ON

Very quickly, the initial Obama optimism essentially dissipated, primarily due to the worsening economy. Job losses are intensifying, the stimulus package isn’t what many thought it would be, the debt load is overwhelming and there doesn’t appear to be an end in sight.
The seriousness of this situation also seems to be sinking in more deeply. Increasingly, people are recognizing that this isn’t your typical recession. It’s global and massive, way bigger than anything ever seen before and it potentially involves the collapse of the banking and financial system.
Obama has been at the forefront repeatedly warning that, “we are facing an economic crisis of historic proportions… our nation will sink into a crisis that we may be unable to reverse… we risk falling into a deflationary spiral”, and so on.

FINANCIAL CRISES OF THE PAST

Most of us in this generation have never suffered through a financial crisis, but they are nothing new. We went back to review financial crises of the past and here’s what we found…
The past 800 years have involved a series of bubbles and busts, debt defaults, banking collapses, excessive speculation, panics, currency devaluations, recessions, deflations, inflation and of course normal times. And ever since the first stocks traded 400 years ago, the markets have had a long consistent history of booms and crashes.
Internationally, there have actually been 148 crises in the past 140 years. In more recent times, an interesting analysis looked at the aftermath of 14 severe banking busts, including the Great Depression, and others in various countries that have followed since then. Most important, the conclusions reinforce that the effects of this crisis could drag on for quite a long time.
So drastic measures had to be taken as every effort is made to soften the blow.

GOLD SOARING ON UNCERTAINTY

These same factors have also been driving the gold market. It soared, briefly rising back above $1000, and within a couple of dollars of its all time, record high.
Gold is once again showing that it is the safe haven and it thrives in times of global turmoil, uncertainty, nervousness and fear. That’s what we’re seeing now and gold is certainly behaving in traditional fashion.
But this is just the beginning. Once inflation eventually kicks in, in reaction to all of this massive government spending, gold is going to soar, but this is going to take time.
It’s not going to happen from one day to the next, but that’s the underlying foundation pushing gold’s bull market higher, and it’s not going away any time soon. So stay with your gold. It’s your best, and probably only solid bet looking out to the years ahead.

Mar 20, 2009
Mary Anne & Pamela Aden