“My advice is if we get a dip in gold, I would buy
that dip. Gold has a lot of support. I think long-term and that’s a bet that
I’m always willing to make. I haven’t sold a single ounce of gold or a single
share of a gold stock. That is because I am positioning and I am thinking about
the long-term.
I am going to tell you what reassures me....
“China is what reassures me. Data came out of China
on Monday that their gold purchases increased by a huge percentage from August
to September. China, year-over-year, has increased their purchases of gold by a
staggering three-fold.
China is in this to make sure they have something
tangible they can trade for commodities, which they know they are going to need
at some point in the future. People talk about China and say it is overbuilt,
but that’s not entirely true. If you look on a per capita basis, China has 1/15
as many railways as the US has.
Why is that important? Because railways are a way of
saving energy and a way of transporting commodities from coast to coast, across
the country. Why did Warren Buffett make his biggest investment into Burlington
Northern? He gets it and it’s all about commodities and transportation. This
is about building out infrastructure.
China wants gold so they can continue with their
plans. They want their currency backed up in gold and they are going to
continue to buy it. So gold may weaken, but if it does people should buy it.
Once gold starts taking out the all-important $1,800 level, you are not going to
have a chance to get into the market. It will not let you in..."
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