Daily Commentary

Government Contemplating Take Over of Fannie Mae and Freddie Mac

The New York Times reported this morning that the government is contemplating some sort of take over of Fannie Mae and Freddie Mac.  Stocks of these two companies plummeted today, as they have for the past three days.  Today, Fannie Mae was down almost 50% and Freddie Mac fell almost 40% before a slight rebound.  Both of these companies are likely to be put into conservatorship or receivership or some sort of bankruptcy.  Their shareholders value is likely to go to zero.  Remember, within the past year these companies had share prices about $70.  They are now trading around $4 and have lost about 95% of their value. 

This is the kind of risk that people have in stocks, that is not being recognized nor is the public in general explaining this.  Precious metals are assets with real intrinsic value.  They can never suffer losses of that magnitude or at least never in history have they done so.

In reaction to the credit crisis, which is spreading to all of the banking stocks, which are down heavily, gold is up over $22 an ounce and silver is up $.51 an ounce.  Oil is also sharply higher, up $5 at $146.65.  Oil has been as high as $147.27 a barrel.  This is in reaction to reports that Israel's Air Force is conducting maneuvers over Iraq.  They are apparently utilizing U.S. air bases to refuel practicing foreign attack on Iran.  The situation in the Middle East is getting worse very rapidly.  In addition, in Nigeria the rebels have started their activities again and are attacking oil fields.  The equity market in general is a disaster waiting to happen.  The Dow is down 103 points in early trading, after having reached a low of 11,047; it is now about 100 points off of those lows.  The dollar is very weak, down 54 basis points at 71.95.

We have to remember that Fannie Mae and Freddie Mac combined have about $5 trillion in loan guarantees and all together have about $12 trillion worth of mortgages on their books.  This is a very bad situation.  It's the kind of situation that we have been warning about that could cause a stock market crash and a very serious impact on the economy. 

Gold is now building technical momentum, fueled by a break of key technical levels, which signal a major breakout on the upside.  Analysts said: "This is bullish for gold in that inflation is rising but central banks can't do anything about it.  If gold can close above the congested $945 - $955/oz area then that's a very good sign for gains next week."  Indeed, a break out of those resistance levels, which has occurred this morning and may very well last through the close, would be signaling a move above $1,000 an ounce very quickly.  At this point the technicians charts indicate that a target is $1,040.

Those who have not acquired gold yet or do not own enough gold or silver should act immediately to get into this market.  Utilize Goldline's Price Guarantee Program if you would like to do so.  It is available with Swiss 20 Francs and certain other kinds of gold and silver assets.  If you utilize that program, it provides you with a two-week window of opportunity in which to re-price your transaction to get more gold or silver for your money in the event of a correction.  With Dennis Gartman, the noted analyst indicating that gold is now entering another major up leg; there will be a lot of increased demand for gold simply based upon his forecasts.

Call Goldline today.  Ask them for the free information package, which includes these various articles in which we have provided warnings from major banks and brokerage firms that a stock market crash is a real possibility over the next few months.  While we are in a bear market for stocks, when these banks are talking about a "crash" they are talking about a move that is aggressively lower from where we are.  Read what Royal Bank of Scotland, Barclay's, Fortis Bank, The BIS, and Barron's all have to say about this very important issue.  It is vital that all investors review the assets they own to be sure they are comfortable holding these positions.  You need to factor in the possibility that a major drop could occur.  The possibility of equity losses or mutual fund losses on a magnitude of 50% or more is a risk that is present in this market.  Moreover, the potential for gold to double or triple from these levels is clearly highlighted by Citibank.  Read what they have to say along with the comments from Merrill Lynch, who has consistently forecast that gold will be $1,000 before the end of September.

Investors should contact Goldline and ask them to explain the features, benefits and cost structure of the various gold and silver investments that are available to you.  Select those that best meet your own personal and individual investing needs and objectives.  Investors looking for low transaction costs may wish to consider bullion assets such as American Eagles, Krugerrands, Canadian Maple Leafs, Silver Bags or Silver Bars.  However, the Price Guarantee Program is not available with these assets. 

If you would like to take advantage of the Price Guarantee Program, which provides you with a two-week window of opportunity in which to re-price your order in the event of a correction, you must select assets with some collectible value such as Swiss 20 Francs, Double Eagles and Silver Dollars.  When you acquire 29 Swiss 20 Francs, you will receive the 30^th coin for free.  Investors may wish to consider several tubes of these coins to obtain several free Swiss 20 Franc gold coins.  Call Goldline at 1-800-827-4653 for further information.

To receive the free information package including the four articles on the dollar, the economy and gold call Goldline at 1-800-827-4653.  Goldline also provides several other helpful articles.  There are a number of other independent third party source articles that you will find extremely helpful and informative.  You will also receive the Client Account Agreement, a company brochure and a Coin Facts Risk Disclosure Booklet, read these carefully before you make an investment. 

Goldline will also send you a free CD of the special interview with analyst Frank Barbera if you ask for it.  This is a remarkable interview and I think everyone would benefit from listening to it.  Call Goldline now to receive your free information package at 1-800-827-4653.

^{You should carefully read the client Account Agreement and the Risk Disclosure information. These explain important things you need to know before you invest in precious metals, such as: past performance does not guarantee future results. Transaction costs are generally 5% to 10% on bullion and 30% to 35% on coins. This is also referred to as the spread, or the difference between the buy price and the sell price. The market must go up enough to overcome this spread before an actual profit is achieved. All markets go up and down. Coins are a long-term, three- to five-year, preferably five- to ten-year investment, suitable for 5% to 10% of the average portfolio. Please see Goldline's Risk and Disclosure Statement for further details.}

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