Gold just taking a break before next run this fall...

Gold went on a great one month run this summer which timed exactly with the cyclical season. Gold stocks then followed and we have seen some massive gains in a lot of stocks we follow including Creso Exploration going from .28 to $1, Kaminak going form $1.50 to $3.20 and several other hot gold plays that have seen steady increases over the last month to month in a half.

This is just the first part of this years run that should see gold push past $1300 for the first time ever this fall. Where it goes it is hard to predict when the yellow metal is making new highs but I would suggest an exhaustion price target of around 1330 -40 area before we see a serious sell-off again. I am not saying that the price won't go higher this fall but I am still expecting an extended gold bull market for years to come, contrary to quite a few analysts opinion's that this is the year that gold goes parabolic and that gold's bull exhaustion peak is close. I just don't buy it and will continue to go with the wall of worry that gold prices seemingly climb every year.

What makes me confident that POG is just resting is the current price level. As long as POG holds $1230, I am confident that the current gold run will continue with $1230 b e very key area to hold over the coming weeks.

Some high quality explorers that I think ave huge potential are KAM, NTR and ATC in the Yukon White Gold District. CXT at .72 is a great entry point after a huge run and FAU at .52 represents another good buy. Let me stress that CXT and FAU are investments that are at the opposite ends of the gold investing spectrum. CXT is an open deposit looking to add millions of ounces and looking for the huge discovery while FAU is a closed deposit with little chance at greatly increasing reserves, but is a fully functional turnkey mining operation that could be in production as early as next spring. The plan is to start up the mine and hopefully add ounces every year that will extend the mine life. Which is a very good possibility although what gives FIRE River gold an advantage is they are in highly prospective area for exploration and discovery. They may not add significant ounces to the Nixon Fork Gold Mine, but if they can make it profitable venture for the coming years then it gives them a good foothold to further explore and make discovery in Alaska.

There are several other stocks that I hold in high esteem and if you want to see what is on my gold watchlist... look no further than my HOT GOLD DISCOVERY Portfolio.

Click here to see what is high on my shopping list.

Drastic Budget Cuts to Euro Nations Signal Impending Disaster Ahead

One idea that I cannot stress enough that I mentioned last post was that the drastic budget cuts some of these indebted European nations are making could signal impending economic disaster for Europe, making default for this high debt countries even more probable. On the surface, obviously cutting government spending looks to be a good thing because governments will not be racking up more debt. But it severely hampers a governments ability to pay back what they currently own with lost revenue. Let's face it, government spending stimulates the economy to some extent, so depending on what the governments are cutting back on could be a big mistake.

If a government is forcing the worker to work 5 extra years... That is good because it is not a value added benefit. It also helps alleviates pension problem by forcing the worker to pays 5 more years and the obligation is 5 years less at the end of the life which is significant with compounding. With the average age of people getting older every generation it is not unreasonable to raise that age to 70+. This is a very easy solution in my books.

If the government stops building roads and highways, cuts back on education and health care and other economic stimulating strategies, this will have an immediate adverse effect on local economies with the end result being drastically reduced government revenues.

Problem with European consumer nations is that they have a lot of fat and most governments will find it easier to cancel government contracts and grants than raise the age of retirements and cut back vacations and reduce pensions.

The proof is in the pudding with Argentina when the drastically cut back which reduced their revenues to the point where they defaulted. Leverage is important if it is used to stimulate growth, science, the arts the economy and not pay someone to sit in their vacation home in the Mediterranean at 55 till they die.

Are the PIGS about to make the same mistake Argentina did? But on a much grander scale?

Anyway it is shaping up, this fall is going to be some exciting times. Personally, I am starting more and more to move to the double dip camp... Just on entertainment value alone, another severe crash with wild rebound is much more fun than chop chop for the next 2 years. Don't you agree?