ECONOMY TO CONTINUE TO WORSEN THROUGHOUT THE YEAR

Gold is up $5 in early trading in spite of the fact that the dollar is up 115 basis points at 84.17. Oil is up $.40 at $38.01, which isn't contributing to the strength in gold. The equities are up 13 points on the Dow, and silver is down $.13 in early trading. The correction in gold yesterday was probably overdone by a considerable margin. We will now see whether gold continues to push upward to regain some of the ground lost yesterday.

There seems to be a considerable amount of volatility in the gold market this morning and that should be resolved with a recovery. Technical buying is a notable feature in the market. This is solid technical demand between $810 and $820, which helped gold hold off follow through selling from yesterday. Once gold pushes back above $840, it will confirm a new short-term rally. A break above $840 brings $865 the next resistance level into view.

Fed Chairman Bernanke gave a presentation to the London School of Economics today. In that presentation he recommended setting up "bad banks" to buy the "bad assets" from banks we want to survive. That may be necessary as we now see Citigroup in trouble once again and looking for a buyer. Bernanke also said the government should go back to its original proposal to buy troubled assets from banks. A return to the original intention of the TARP (Troubled Asset Relief Program) would greatly alleviate some of the pressures in the financial sector. Some economists are also strongly urging changing the mark to market rules eliminate the requirement to write-down these toxic assets on the books of the banks.

Standard & Poor's put Spain and Greece both on credit watch today. There is some discussion of the possibility they may withdraw from the European Union. If they were to do that, it would put the euro under pressure. The trade deficit narrowed in November, down to $40.4 billion largely in reaction to declining oil prices. Exports were also down, but not as much as oil fell. That created a narrowing of the trade deficit.

Turning back to Bernanke, he also said the economy will continue to worsen throughout this year. They are looking at a 1.5% decline in GDP and continuing job losses. The expectation in general is for the unemployment rate to rise to 8.1% by year-end. Bernanke also commented that the government is going to have to take more steps to revive the ailing economy. He said the focus should be on strengthening the financial system. He indicated the government might need to provide more capital injections to financial firms to stabilize the markets.

Industry after industry is now requesting government assistance. First the banks, then the funds, then the autos, and now retailers and commercial property developers are all asking for assistance. The question is can the dollar survive this kind of massive deficit spending and fiscal stimulus? I doubt it. The deficits are in excess of 8% of GDP. No country has ever been able to survive deficits greater than 6% of GDP without its currency collapsing.

At the present time, all currencies are collapsing against the one true money – gold. Look at the performance of the dollar, yen, euro, rupee, or other currencies and you will find they all declined against gold. This is a period of "beggar – thy – neighbor" policies and competitive currency devaluations. Over time, that should strengthen the gold market. At some point, we will see an explosive phase upward in the gold market. That phase is likely to carry gold to dramatically higher levels. Just last week Merrill Lynch forecast that gold will be at $1,150 an ounce prior to June. Citibank thinks there is a possibility gold could reach over $2,000 an ounce this year. A former policy maker at the Bank of England thinks the dollar is going to collapse. All of these comments and observations by responsible economists and analysts suggest investors should acquire some form of precious metal protection for their portfolios.

The current edition of Barron's Magazine has the annual Barron's Round Table. The Round Table participants are recommending that investors protect themselves against an increase in inflation. Fred Hickey a very prominent analyst said, "You have to protect yourself against potential hyperinflation. All the central banks are printing money now. The bull market in gold was rather orderly for the first eight years. We haven't seen the blow-off phase you get in all bull markets. That's coming." Fred Hickey also said, "Gold could go to $2,000 an ounce this year, or next." Mark Faber said, "In the very long run, each citizen must become his own central bank. Every responsible citizen must hold some physical gold, platinum and silver – physically, not through derivatives."

Given the comments in Barron's Magazine, I think every investor should have some diversification into gold or silver assets. Contact Goldline at 1-877-341-2646 for assistance in getting started. Ask them about their Price Guarantee Program, which provides a two-week window of opportunity to re-price your transaction and get more gold or silver for your money if there should be a correction. In addition, be sure you ask for the free information package, which will include quotes from some of the most prominent analysts in the business including Merrill Lynch, Citibank and many others. Ask particularly for a free copy of the CD where I interview noted analyst, Peter Grandich. Call Goldline at 1-877-341-2646.

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. Call Goldline at 1-877-341-2646 for further information on the Price Guarantee Program and how you may be able to receive free coins.

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 an investment. Call Goldline at 1-877-341-2646 now to receive your free information package.