SPECIAL REPORT: 2004: What's In Store?

Jan. 5, 2004

By Craig R. Smith
CEO Swiss America

INTRODUCTION

"It's better to be thought of as a fool than to open your mouth and remove all doubt," a wise father once told his son.

When is comes to predicting financial trends in the 21st century, most economists should have heeded this wise, fatherly advice because the majority of economic pundits have been wrong.

* No job-creating economic recovery has began yet,
* The U.S. Dollar has not remained "strong" ...
* Oil is still over $30 a barrel and rising ...
* Stocks are too overvalued to sustain a new bull...

... but, Gold is now up over 60% since the bottom in 2001 ... and is already up again in 2004 -- hitting $425 (up $8) on the first trading day of the year!. (Although I expect a small pull back in the gold markets some time soon -- which is a characteristic of a healthy bull market).

Since 2001, a small but growing number of economists and responsible journalists have announced to the world that gold is in a confirmed "secular" bull market which could last years for many good reasons.

ENDING INVESTOR CONFUSION

In 2003, gold made the headlines in virtually every major financial publication; USA Today, NY Times, WSJ, Investor's Business Daily, etc. yet Americans have been slow to grasp the new gold rush. [READ "2003 Real Money Perspectives Archives."

In fact, NY Times recently wrote "These are the most confusing times for investors in the last 20 years." Why?

* Could it be that the meaning of popular investment terms has fundamentally changed in the 21st century? That "Asset Diversification" now MUST include gold for safety, privacy and profit potential?

* * Could it be that "Financial Markets are Out, Tangibles are In" as the Aden Sisters wrote back in 2002?

* * * OR, perhaps it's just denial. Denial that the U.S. dollar could drop enough to actually drag the American standard of living down. As Dow Theory Letters editor, Richard Russell recently stated ...

"Many years ago the dollar “was as good as gold,” since you could turn your dollars into the government and receive gold. Today the government is implying that the dollar is still “as good as gold.” After all, you and I continue to work for dollars, don’t we? Yet today the dollar is simply as good as our confidence in the dollar. Intrinsically, the dollar is worth nothing, and dollars can and are printed by the billions every week by the government. Yet by law we must accept dollars because the U.S. government states that they are “legal tender.” Logically, this tells us that the dollar as a store of value is doomed. It’s only a matter of time before the dollar falls, and falls big time [30-40%.]" READ: "2003-04 Economic Fundamentals by Richard Russell."

THE SEARCH FOR REAL VALUE

I think the key issue today is where can real value to be found in the marketplace? In stocks, which are still priced for perfection - averaging 30 times earnings? In real estate, with urban home prices sky-high - virtually requiring two incomes to support? Perhaps, but I would not bet the farm on it.

Gold, silver and U.S. rare coins represent true value to a growing number of investors and analysts, based on rapidly growing global demand and shrinking supply. This new global bull market in gold and other commodities could last a decade or more.

As the bestselling author of Financial Reckoning Day Bill Bonner aptly stated in his new book, "Gold is The Trade of the Decade."

Even the most bullish stock market analysts will concede that the potential of a long-term bear market in stocks and the U.S. dollar is very possible -- because all markets are cyclical in nature.

In the 21st century I see a major paradigm shift, leading investors to sell dollar-denominated assets and buy hard assets -- like gold, silver and other commodities. And I am not alone. Dozens of economists and respected financial commentators now agree that "gold is the BUY of a generation!" READ, "THE NEW GOLD RUSH, PT. II INTRODUCTION"

2003 REMEMBERED

How will you remember 2003? As the year ...
->America went to war with Iraq (and stayed)?
->Greenspan fought bears with interest rate cuts?
->Wall Street scandals became almost daily events?
->Unemployment discredited "the new recovery"?
->Global Islamic terrorism increased?
->U.S. debt reached $7 trillion?
->The dollar dropped to historic lows against the euro?
->Gold touched 8-yr. highs of $416/oz.?
->ALL OF THE ABOVE?

Last December, we published our annual financial recommmendations for 2003, entitled, "2003: NOT JUST STOCKS, GOLD!" It turns out that our advice was mostly right.

Last January, in a radio interview I told WSJ ... "Gold prices topped $370 today, next stop $400, or perhaps $350, which appears to be the new base price for 2003." The question often asked... "How can gold coin buyers be sure that you are getting value for your money ... at any price? Read: ANSWER: "IS THE PRICE RIGHT?"

In June 2003, I recorded ten educational 2-minute radio feature "The History of Your Money" because I feel strongly that history is our best friend during times of crisis and uncertainty. Since then, I have done hundreds of radio interviews discussing my simple diversification stratgy.

TRUE WEALTH IS TANGIBLE

So far, very few people have noticed that gold is the best performing market sector in the 21st century, and more importantly, that gold's uptrend is just beginning.

The last time we saw this major shift into hard assets was in the early 1970's when gold rocketed from the low $140/ounce to $850/ounce in January 1980. Bullion rocketed 600% and U.S. rare coins jumped over 1000%!

Remember: All gold is NOT created equal, nor does it perform equally! High quality U.S. gold pieces ($20 Liberty and $20 St. Gaudens) prices exploded upwards during the last gold rush in 1979. Prices have already quietly creeped up 42% to 80% -- just since January 2001. (See charts)

... but prices are still less that one-half of the market highs during the last bull market in 1989.

High quality U.S. gold pieces are 100% private and very liquid. So, over the last (nearly) three years; a $20 Liberty in Mint-State 65 condition has grown 80% ... while gold bullion grew by 50%.

This historical growth differential clearly underlines why I feel that the best way to take advantage of the emerging bull market in gold, as well as having personal financial protection, is by purchasing investment-grade U.S. gold numismatic coins.

In 2001, we said is was time to Rediscover gold ...
In 2002, we said The New Gold Rush was on ...
In 2003, we've said Gold is The Color of Hope ...
In 2004, we're saying "True Wealth is Tangible!"
... AND YOU CAN QUOTE ME ON THAT!

Please, don't put it off another day, register today to request any of our FREE educational resources ... to help you "do your homework" in preparation for the next phase of The New Gold Rush! To help with your education read our other Special Reports and visit our Multi-Media Archives to listen and watch interviews with CNNfn, Michael Savage, Chuck Harder, Lars Larson and many more.

May 2004 bring you closer to your true purpose in life and by grasping the meaning of true wealth may God grant you the wisdom to gain financial prosperity -- no matter what the future may bring. Also, please read my 2004 Investor Resolutions. -CRS.

Craig R. Smith,