As you may be aware, I'm very expectant of commodities and in particular, gold and silver to perform significantly over the next 10 to 15 years or so. I'm also particularly partial towards investing in commodities in primary producing nations like SA, Australia and Canada for at least the next 10 - 15 years; countries that produce goods though mining, agriculture and industry. I'm expecting the South African rand to strengthen relative to the pound and the dollar as these currencies weaken.
Here's an technical article by a South African, Peter George, that backs up these views: SA GOLD and the RAND - “moenie worry nie”. Peter was both a stockbroker in SA in the 70's, and later a chairman of one of the South African mines. This article was written and published more than 5 year ago in 2003, well before the stock and property market crashed, before Fannie Mae and Freddie Mac got into trouble, before the sub-prime crisis (junk bonds) and before the current sell-off of US treasury bonds. It seems history repeats.
Here's a quote taken from the article:
"Sooner rather than later, many instruments of debt will become like poison pills. From junk bonds to long-dated Treasuries, they will be dumped and are therefore to be avoided unless there are sound reasons to make an exception – as in the case of South African Government Bonds. In the US, Fannie Mae and Freddie Mac – America’s giant mortgage providers - will eventually be history.
The long term bear in world equity markets will eventually resume with a vengeance. When it does, the property markets will follow suit. The new bull market in gold will begin to accelerate. We believe the next decade in gold will mimic the previous run from 1970 to 1980. However, instead of going from $35 to $850 between 1970 and 1980, gold will go from $350 to $8500 between 2002 and 2012. The average 34% per annum compound rate of growth enjoyed in the first period, will simply duplicate itself - but with a ‘nought’ attached to all the relevant figures. The compound rate will remain the same."
If you have the time and want a really good read, read Peter's story here: http://www.investmentindicators.com/TestimonyAugust2005.pdf
Lastly, when gold finally breaks above $1000/oz, it won't be coming back down. Gold is by historical standards, still very cheap. Silver is even cheaper.