Tuesday, July 13, 2010

Jordan Roy-Byrne Says Gold Bull Market To Go For At Least Five More Years

In the end of a commentary that take the form of a rebuttal to the Wall Street Journal's James Altucher, Jordan Roy-Byrne says the gold bull market has more than five years to go:
In the meantime, precious metals are the only asset (aside from bonds) in a full-fledged bull market.... as we recently showed our subscribers in a report, bull markets typically accelerate in the ninth or tenth year and then begin a final acceleration three to four years later. It is not difficult to see why we are on the cusp of acceleration in the precious metals. European banks still need to rollover $1.65 Trillion in debt by the end of 2011. Our big states are likely to need bailouts by the end of the year. The Fed will begin a new round of quantitative easing in a desperate attempt to help the banks recover so they can lend again.

Furthermore, it is just a fact that the U.S., U.K., Europe and Japan can’t grow their way out of the debt mess. A new currency regime is coming. It is only a question of when. It could be five years or ten years if we are lucky.

Precious metals will continue to crush stocks for another five to seven years. However, a portfolio of quality emerging gold and silver stocks will outperform gold. Eventually silver will outperform gold. While we are bullish on the metals, we do agree with Altucher that silver is preferred and stocks are the way to go- as long as they are gold and silver stocks.

His forecast will pan out as long as gold does not capture the imagination of momentum traders in the next year or so and go parabolic as a result. That occurrence would move gold up more quickly, and send it crashing down earlier than Roy-Byrne's forecast.

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