BUYING GOLD IS A "NO BRAINER"

Gold started lower but quickly moved into positive territory trading near unchanged. Silver is up $.08 in early trading. Safe haven buying continues to support the gold market. There is also strong demand for physical gold coming from the investment sector according to Steven Platt, with Archer Financial. He said, "Safe haven buying is linked to the extraordinary lengths we are going to prop up the economy." He was referring not just to the U.S. stimulus measures but also to efforts by other governments.

The Obama Administration announced a new measure to help homeowners. They are setting up a $75 billion fund to enable homeowners to reduce their monthly payments to no more than 31% of their income. All participants in the TARP program will be required to participate in these loan adjustment programs.

Anderson Cheung head of precious metals at Mitsui said he sees a test of $990 and $1,000 likely in the next two weeks. Whether gold can push above those levels remains to be seen, but a test of those levels is likely according to Cheung. Moodys is warning of possible downgrades of Eastern European banks. Jim Steele of HSBC Bank said the open admission by Russia that it will buy more gold might help push gold up to $1,000 near-term.

In the view of many analysts, over the long term gold is likely to rise substantially above $1,000 an ounce. Therefore, at today's price levels gold looks like a great buying opportunity at under $1,000. While we may see some correction today, which would be perfectly normal and healthy, given the huge up move yesterday, I think the bias remains to the upside and every correction should be viewed as a buying opportunity.

In his announcement of the new housing rescue program, President Obama said the mortgage crisis threatens the stability of the U.S. economy as a whole. Clearly it is having a negative impact on the financial sector. Whether the latest bailout of the housing industry is going to work remains to be seen. However, we can expect trillions of dollars of additional stimulus put into the economy over the next 24 months. Over the longer term this should impact the value of the dollar causing it to fall considerably as a result of the creation of overwhelming numbers of dollars. The national debt may increase to as much as $20 trillion according to some analysts. At the very least we will see an increase to the $13 or $14 trillion level. I don't think it is possible to finance that. I think the government will have to create that money out of thin air and that should be bullish for gold.

The economy continues to show grave weakness. Industrial production fell 1.8% and factory utilization is at 72%. Both of those are poor numbers. General Motors is saying it may need another $16 to $20 billion and they will lay off 47,000 workers. They are saying if they are forced into bankruptcy it might cost the government as much as $100 billion. It seems like the automakers have a bottomless pit of need for money. They are burning through cash at unbelievable rates. So far the bailout is between $75 to $100 billion. Between the auto industry and the financial sector, money is evaporating so rapidly, it is mind-boggling. One bit of good news is that U.S. chain store sales rose .9% in the first two weeks of February. That could represent some pent-up demand or Valentine's Day promotions.

According to the Administration, the new housing rescue plan will help 7 to 9 million families restructure or refinance their mortgages. The bottom line is that all of us are paying for the home mortgage crisis and the price could get even steeper. They think this plan could increase the average home price by about $6,000. In my view, that is doubtful. However, it will contribute to the national debt increasing and deficits going through the roof.

In this environment, I think everyone should want to own some gold as a method of preserving wealth and protecting against further crisis. As I read through the Obama plan, I see the total plan commitment may be as high as $275 billion. That is because it will increase the amount of money that has been given to Fannie Mae and Freddie Mac by $200 billion. They are going have their mandate to buy up these loans extended. As we try to contemplate the magnitude of the money that is being spent by government in an effort to help the financial system, we have to view it as astounding.

Analysts from Merrill Lynch to Citibank to many others are forecasting that the dollar will ultimately fall considerably and that everyone needs to own gold as a hedge or protection against the falling dollar. In fact, Merrill Lynch has referred to buying gold as a "no brainer." They said the outlook for gold is very bullish and should be held by their clients.

I urge you to read some of the quotes from Merrill Lynch's analyst David Rosenberg and others in Goldline's free information package. I also encourage you to ask for and listen to the CD interview of Frank Barbera. He is a prominent analyst. He sells no products. The only thing he offers for sale is his investment information and advice. As a result of these factors, I think it is very important that you listen to what he has to say. Call Goldline at 1-877-341-2646 to receive the free information package.

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To receive the free information package, including articles on the dollar, the economy and gold, call Goldline at 1-877-341-2646. 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 a purchase. Call Goldline at 1-877-341-2646 now to receive your free information package.