Where's the bubble in gold when hardly anyone owns it?

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Gold Is Still Cheap Despite Record Surge: Marc Faber

By Jeff Fox
CNBC, New York
Friday, April 8, 2011

http://www.cnbc.com/id/42478554

The Federal Reserve's money-printing policies continue to make gold an attractive investment even though it has hit a succession of new highs recently, Marc Faber, author of the Gloom Boom & Doom report, told CNBC.

Faber, sometimes called "Dr. Doom" for his contrarian investment perspectives and often dour views on the economy and stocks, rejected the notion that gold is in a bubble even as it begins to approach $1,500 an ounce.

In doing so, he related a story from a conference he attended this week where he asked the investment professionals in attendance if any had more than 5 percent of their personal assets in gold. No one raised a hand.

... Dispatch continues below ...



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Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit,
Extending the Mineralization of the Southwest Vein on the Property

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.

"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit:

http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf



"If it were a bubble a lot of people would have gold. The whole world would be trading gold 24 hours a day," he said. "But I don't think it's really a bubble. I think gold is maybe cheaper today than it was in 1999, when it was $252.

What makes gold such an attractive investment is due in part to the Fed's move to keep the US dollar cheap as a way to boost asset prices and stimulate a recovery.

Gold is denominated in US dollars, so a decline in the greenback makes the metal -- along with most other commodities -- cheaper to buy on the global markets.

Investments in hard assets will be good buys in the future as Chairman Ben Bernanke and the rest of the Fed continue the liquidity-friendly policies, Faber said.

However, that also will mean bad news for consumers, who will pay more for food, energy and a broad spectrum of other goods as inflation accelerates.

That will occur, Faber said, even if the Fed enacts incremental interest rate increases. That's because small raises won't be able to keep pace with inflation and thus won't slow down the hike in prices in real dollar terms.

"One day they will increase it by a quarter percent. But what does it mean when commodity prices are going through the roof, energy prices are going up, health care costs are going up, insurance premiums are going up?" he said. "Everything is going up. Only at the Federal Reserve is there no inflation."

In that environment, cash and bonds will lose value. Other good choices besides gold, he said, are "commodities, real estate, art, collectibles, and so forth, anything that essentially cannot be multiplied at the same rate as paper money that is subject to the printing presses of Mr. Bernanke."

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