(Vocus/PRWEB) November 22, 2010

As recently as October, Goldman Sachs upgraded its 12 month outlook on gold to 1650/oz. That’s about a 20% increase over today’s price of 1350/oz. Yet, the average American investor continues to shy away from investing in physical gold because they think it’s too late to get in. The name Goldman Sachs may not carry enough credibility on Main Street America regarding gold’s future trajectory, but if you take into account the many financial heavyweights who are also bullish on gold, perhaps this will compel Americans to take action and diversify in this asset.

Jon Paulson is a legendary hedge fund manager and the topic of the bestselling book "THE GREATEST TRADE EVER". Having forecasted the housing difficulties to come, he cashed in a whopping 4 billion dollars after his hedge fund shorted the mortgage market in 2006. What is Jon Paulson up too now? He created a new 6 billion dollar Gold hedge fund in late 2009. More importantly, he personally invested 250 million dollars into the fund, which is up more than 20% since January. Bottom line is Paulson certainly isn’t an investor America should bet against, and folks out there who think it is unwise to buy gold because it is in a bubble might want to take another look.

Scott Minerd is the chief investment officer at Guggenheim Partners, an asset management firm with 100 billion dollars under management. As recently as October he released a 3-5 year price target on gold for it to hit 5000/oz. Like Paulson, he’s betting on inflation getting much worse. As he sees it, gold prices are still undervalued when correlated to the Dow Jones Industrial average. Historically spot gold has been priced at 16% of the Dow Jones industrial average during relatively good economic times. With the Dow currently hovering around 11,000, a 16% average should give you gold prices around 1800/oz. So it still maybe undervalued according to this logic. More interestingly though is that in times of uncertainty like the Great Depression, spot gold has had an average value of 50% of the Dow. This data should certainly make one think about where prices could go and about potentially buying gold as preparation in case another crisis hits America. Even a Dow of 6,000 could produce gold prices of 3,000/oz under such circumstances. When it comes to an impending future crisis, nobody has a clearer vision about the challenges ahead for the US than the next person on the list.

David Walker is the former Comptroller General who served under the Clinton Administration and Bush Administration. During his tenure as the head of the Government Accountability Office (GAO), he discovered that America’s fiscal problems were much deeper than reported and or publically known. Current populist policy makers in Washington won’t address the issue because it won’t earn them any votes. So who will address this unpopular issue? Much like Winston Churchill or Paul Revere warning citizens of the impending doomsday scenario, David Walker is traveling the countryside on a Fiscal Wake up Tour, warning Americans that a Debt Bomb will go off by 2012 if immediate action isn’t taken. As he sees it, without serious austerity measures put into effect and a moratorium on government spending being enacted, hyperinflation will inevitably result. Meanwhile countries like China, who own large amounts of our sovereign debt, will come to collect through whatever means necessary, leading to a whole new set of problems. For those readers who still think the reality of a future like this a bit extreme, maybe a legendary trader’s perspective on the matter will convince you otherwise.

Victor Sperandeo is a legendary global-macro trader, as well as the former portfolio manager of the Quantum Commodity Fund, a creation of Jim Rogers and George Soros. The fund managed over a trillion dollars and showed investors more than 4,500% returns since its inception. Mr. Sperandeo was recently interviewed on CNBC’s Fast Money noting that the pretext for Hyperinflation is upon America. From his research, he claims there have been 30 bouts of hyperinflation in world history. More importantly, he’s narrowed down specific economic ‘H’ factors that were universal in all of those previous 30 bouts. Unfortunately, ‘Trader Vic’ as he’s known, has concluded that every single ‘H’ factor exists in the American Economy today. As he sees it, without the saving grace of an exogenous shock to the world economy such as an invention of similar magnitude to the internet, the growth of our debt will continue to outgrow the expansion of our economy. The bottom line is that America can only bail water so long before the ship sinks, and what foreign country will want to buy US debt if the promise of repayment can no longer be trusted?

To sum it all up, the 2-5 year outlook for America appears quite bleak according to these individuals. For those who remember the late 70′s and early 80′s, it isn’t a question of ‘can hyperinflation possibly occur’, it a question of when might it occur again. The problem this time around is America doesn’t have a surplus in social security to tap, nor does it have more debt to leverage in our already over-leveraged economy. There is no trillion dollar foreign government loan program out there that’ll bail us out of this time around. A time of reckoning is upon America, and decisive action is a must. Whether or not you believe the doomsday scenario will occur is irrelevant. Americans who practice prudent portfolio theory should have 10-20% of assets allocated in precious metals like gold coins. This way America can be at peace knowing their wealth is protected in the same manner as the wizards on Wall Street.

Precious Metals Brokerage Group (PMBG) believes that the best way to diversify in precious metals is by taking physical delivery (Get them in your possession) as opposed to diversification in paper assets, such as ETF’s, stocks, etc. We provide physical delivery of gold and Silver at Wholesale Prices. Our Retirement Account Department will also help with setting up gold IRA accounts. Call us toll free anytime at (866) 775-3131 and we’ll send you a free gold investment kit.

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