Gold Even At 1055 Still A Lousy Investment

The gold bugs are finally enjoying their moment in the sun. After 20 horrible years, in which gold dropped from $800 to $250 an ounce, the sometimes-precious metal is now roaring to all-time highs.Some folks, moreover, think this is only the beginning. Peter Schiff recently told Tech Ticker gold is headed to $5,000 an ounce.But that doesn’t mean it’s a great investment!In fact, says our guest Jon Najarian of OptionMonster, even with the run over the past five years, gold is still trading at about half it’s all-time peak after adjusting for inflation. Given that gold is supposed to protect you from inflation, this performance is abysmal.What’s more, gold has actually performed poorly this year relative to other more-boring metals–like copper and silver.Why?In part because those metals are actually used for something. China’s building houses again, which means they’re scarfing up all the copper in the world. But one thing is for certain: The higher gold prices go, the more people will be convinced it is a great investment. And the more people will fight each other out of the way to put it in their portfolios.

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Peter Schiff – U.S. Rally Is Doomed Gold Will Hit 5000

Unlike the “legitimate bull markets” of many foreign markets, Peter Schiff believes the U.S. is merely experiencing a “rally in a bear market,” and is lagging the rest of the world “for a reason.”The worst is not over, according to Euro Pacific Capital’s Schiff, who predicts the Dow will fall another 90% from current levels when measured against gold.A longtime dollar bear and gold bull, he foresees gold hitting $5000 per ounce “in the next couple of years,” and predicts the Dow and gold will trade on a one-to-one ratio vs. the current level of around 9.7-to-1.Schiff believes gold is currently “climbing a wall of worry” but will eventually become as hot as tech stocks in 1999 and start moving up $100 per day.Schiff’s forecast is based on his view the U.S. dollar is going to collapse under the weight of our massive deficit and reckless policies of the Obama administration, which he compares to the massive spending programs of the 1960s, which paved the way for gold’s ascent in the 1970s. “Obama is making the same mistakes as Bush, but he’s doing them on a grander scale,” says Schiff, who is running for U.S. Senate in Connecticut as a Republican.In addition to gold, Schiff remains bullish on Asia, most notably China. His firm recently launched the Euro Pacific Halter China fund, and Schiff believes “there’s a lot of value” in China and thinks the renminbi could “double or triple” when it’s depegged from the dollar.That will make Chinese assets more valuable when measured in dollars, he says.Schiff presciently called the bursting of the debt bubble and subsequent rout in financial assets, and his current forecasts may very well come to fruition. But Schiff’s confidence that the rest of the world (notably Asia) will prosper as the dollar loses its reserve status and America’s economy collapses seems dubious, at best.Then again, Schiff is nothing if not (supremely) confident.

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Rio Tinto Offer for Alcan

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Rio Tinto (LSE: RIO)(ASX: RIO)(NYSE: RTP) has received US antitrust clearance for the proposed acquisition of Alcan by a subsidiary of Rio Tinto.

Receipt of this, and other regulatory clearances, is a condition to Rio Tinto’s offer to acquire the outstanding shares in Alcan.

About Rio Tinto

Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

Rio Tinto’s business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa. Continue reading