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Gold and silver are precious metals that have monetary value and can shine in an economic contraction. Copper, zinc and nickel are base metals that have a positive correlation to the economy. Uranium is an important source of alternative energy that will be needed due to developing economies like China and India. Global stock markets are increasingly connected and tend to rise in bull markets and fall in bear markets together. This is magnified by communications technology which makes market news readily available in real time. Currently, in late 2007, major worries are evident in the credit markets with a focus on cdo, subprime and other mortgage and bond markets. Rising credit spreads and a rising yield curve are signs of this trouble. Again, gold, silver, uranium and oil, along with base metals are vital hard assets and resources (in a world full of bonds, stocks and various leveraged paper) with gold (and sometimes silver) also receiving a monetary bid. Gold is a safe haven and we believe it belongs in any portfolio that is geared toward risk management.  ETF's such as GLD, IAU and SLV and dealers such BullionVault offer convenient access to the gold bullion market.

As the bull market ended in 2000 and a cyclical bear market began, it became apparent that secular changes were at hand. No longer were stocks the only asset class to own. In fact, to this point in 2007 a wide range of commodities have out-performed stocks. Commodities like uranium, oil, natural gas, copper, nickel and agricultural commodities like corn, grains and coffee. With the industrialization of China, India and other developing nations, resources and commodities of all kinds have been in high demand. Silver is unique in that it is considered money by many but also has productive commodity characteristics. 

Gold, while having value in jewelry and some industrial applications trades as if it were money. It especially trades this way in times of financial system stress. Gold is undervalued after a 20 year long bear market and now a 7 year bull market. Most people still do not seriously consider gold as anything but a 'barbarous relic'. This is curious at a time when global currencies like the us dollar, euro, yen,  Canadian & Australian dollars are being inflated and devalued. Even the Swiss franc is not what it used to be. 

 

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