DOLLAR RALLIES ON SOVEREIGN DEBT PROBLEMS

The dollar rallied enormously again this morning, up 70 basis points at 77.69 on the index. It was as high as 77.85. This caused all commodities to pull back along with the equity market. While gold is down $16 in early trading and silver down $.22, they have both bounced back from their lows. The Dow Industrials are down 63 points.

The euro fell sharply and the dollar rallied as S&P downgraded Greece's credit rating following the Fitch downgrade earlier in the week. Clearly, the worries over sovereign debt are enormous. In addition, we have leaders from Dubai meeting with Treasury Secretary Geithner trying to figure out what to do with their enormous debt burden and their U.S. bank investments. The United Arab Emirates have a big stake in Citigroup and have a huge loss. In addition, the offering of stock by Citigroup went poorly, causing the U.S. government to withdraw from its offer of government owned stock. All of these things helped to cause the dollar to rally aggressively.

Investors should bear in mind that corrections in bull markets tend to be aggressive, while advances are more modest. Nevertheless, the bull market climbs a wall of worry, trending ever higher. That is the case with precious metals. On the other hand, bear markets tend to have aggressive rallies and more modest declines that keep the market sliding down a slippery slope of hope. That's what the dollar seems to be doing.

Other economic news that helped the dollar to rebound was the fact that jobless claims rose 7,000to 480,000 last week. That was higher than expected. However, continuing claims seem to have declined. At this point,we do not know whether that is because of workers dropping out of the system or due to some improvement.

The problems with sovereign debt are continuing to raise grave concerns in the markets. Many countries are on the brink of failing to be able to pay their debt as it matures or to roll it over. Those countries include Spain, Greece, Portugal, Ireland, Italy, Latvia, Ukraine, Argentina, Mexico, Ecuador and other countries. The list of countries that are experiencing sovereign debt difficulties is growing by the day. If there are defaults on sovereign debt, it impacts the banking system. Banks own a lot of the sovereign debt. Consequently, this could cause another major problem in the international banking system, including the U.S. It could be a lot worse than the sub-prime crisis.

While gold may have further downside during this period of correction and consolidation, it nevertheless presents an excellent buying opportunity as most of the key players and analysts at major banks and brokerage firms believe that gold has solid underlying support. In spite of this corrective process, Morgan Stanley raised its gold forecast for 2010 by 20% to $1,200 an ounce. These investment-banking firms are generally very conservative with their forecasts and are often substantially below market prices that are actually achieved. Consequently, the outlook for gold is good, especially for those who acquire gold on this dip. When you can only earn a fraction of 1% on treasuries or CDs, a potential 7% to 15% increase in the gold price is a much more attractive opportunity.

If you would like to add gold to your portfolio, call Goldline at 1-877-341-2646. Ask them to explain to you the Price Guarantee Program, which provides a two-week window of opportunity to re-price your transaction in the event of a further correction. Call Goldline today at 1-877-341-2646 and ask them for the free gold and silver investor information package. That contains aspecial 2010 forecast by BofA/Merrill Lynch, along with a special report by Philip Klapwijk in the new American Advisor Newsletter, which you can receive for free. Call Goldline now at 1-877-341-2646.

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 20 Francs, Double Eagles and Silver Dollars. Call Goldline at 1-877-341-2646 for further information on the Price Guarantee Program.

To receive the free information package on gold investing, call Goldline at 1-877-341-2646. 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 gold investors package.