Financial Problems Are Triggering "Flight to Quality Buying"
by Joe Battaglia
Posted: July 15, 2008
Gold and sliver are
both sharply higher as the equity market sells off and oil rebounds. Gold is up over $9 and silver is up $.08 in
early trading. Oil is up $.29 at
$145.49 a barrel and the equity market is down heavily with the Dow falling 179
points and the transports are down 124 points.
The Fannie Mae and Freddie Mac, which have been the subject of a rescue
continue to fall dropping heavily this morning. This demonstrates the problems are far from over. Moreover, other banking stocks are also
falling heavily. General Motors
announced it is suspending its dividend and cutting back on health care benefits
for retires and other major cut backs in labor.
The producer price
index was higher than expected, gaining 1.8% last month. Fed Chairman Bernanke is testifying before
congress this morning and Paulson will give his views also. However, we cannot believe a word they
say. Remember, on Friday Paulson and
Bernanke both said Fannie & Freddie were in good shape and needed no
bailout. Within a few hours, they
announced the bailout. Watch what they
do, not what they say.
We clearly have
stagflation underway and it is probably out of control at this point. The problems in the banking system are
severe and this causes the Fed and the treasury to have very few options. They must continue to inflate the money
supply and take whatever action is necessary to try to avoid a total collapse
of the banking and financial system.
Moreover, IndyMac was the 2nd largest bank failure in
history. Many people will lose
money. The Wall Street Journal referred
to what is going on in the banking system as a "slow walk" on the banks. However, the truth is it is a "run" on the
banking system that has been underway for some time.
Analyst Clive
Lambert told Dow Jones Wire Service that there is flight to quality buying of
gold and things look good for gold to test $1,000 and then $1,033.50. UBS said yesterday gold will hit $1,000
within the month and will reach $1,050 or higher within three months. This morning the key September futures
contract hit a high of $999.40. Silver
was as high as $19.55. Gold may very
well take out $1,000 an ounce this week.
Many analysts are commenting that the geopolitical risk with Iran and
the financial problems are triggering the "flight to quality buying".
Many banks remain
at risk of default with the FDIC forecasting one hundred banks to fail this
year and many analysts thinking as many as three hundred will fail over the
next three years. There is a
substantial chance that a major financial institution will fail. The housing problems are also very severe
and worsening. In this kind of
environment, investors should opt for safety and be conservative. That means you should review all of your
investment assets in your 401(k) plans, your IRA accounts, and your individual
portfolios. Be sure that you are
comfortable that your assets can survive a period of grave crisis ahead.
To understand what
is going on in these markets, you should call Goldline for the free information
package. It includes articles from
several major banks including Royal Bank of Scotland, Barclay's and Fortis Bank,
helping you to understand exactly what is going on and to understand the
potential for a stock market crash.
With the Dow down below 11,000, it is likely to test 10,700. If it breaks through that level, then you
are probably going to see a cascading fall with a challenge of the 7,500 level
possible. Investors ignore the warnings
of these major banks at their peril.
Please call Goldline now to receive the free information package at
1-800-827-4653. Be sure that you give
consideration to diversifying 5% to 20% of your portfolio into gold and silver
assets for the protection and profit potential that they provide. Today is a great opportunity for you to get
into the gold market under $1,000 an ounce.
Gold has the potential, according to many analysts to rise above $2,000
an ounce. This is an opportunity that
should not be overlooked. Call Goldline
now for your free information package at 1-800-827-4653.
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 30th
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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