GOLD RISES AS DOLLAR FALLS

One World Currency Inevitable

Gold is up nearly $6 in early trading, while silver has barely moved gaining only $.02 in early trading. Gold is reacting to a softer dollar, down 20 basis points at 79.10 and firmer oil, up $.16 at $67.09 a barrel. However, the gain in gold is greater than one might have expected given those factors. Therefore, I suspect we are seeing end of the week book squaring where investors who had sold positions bought them back on the dip and other dip-buying coming into the market also. 

JP Morgan's recommendation early in the week to buy the dips has proven to be an excellent call. Gold is now moving back up and will likely challenge $950 again next week. Given the fact that it provided little support on the correction, it will probably provide little resistance on the upside. I think at this point, the markets will be targeting $960 on gold and about $14 on silver. Anglo Gold spent $797 million to buy back hedge positions. They see gold at $1,000 an ounce this year.

GDP fell at a seasonally adjusted 1% annual rate in the 2nd quarter, which was better than the 1.5% expected in the Dow survey. An expanding economy will be bullish for gold, as it will ignite inflation pressures due to the enormous expansion of money supply and the various bailouts that have resulted in huge deficits and debt. Even people with almost no understanding of economics, finance or investing are concerned about the enormous build up of debt. They know from personal experience that debt is a killer. Countries have exactly the same problems as individuals do when they build up too much debt; they get to a point where they cannot service that debt and they become dysfunctional. Often, a build-up of too much debt will result in the changing of the political system. We are hopeful that will not occur in our country, however anything is possible.

Because debt is such a serious problem and because our country is accumulating debt at a massive rate, we are dependent upon foreign central banks to help support that debt or help buy that debt. Yesterday, at the debt auctions, even though the Fed was a massive purchaser, foreign central banks appeared to have reduced their participation in the 2-year and 5-year debt auctions. As a consequence, interest rates at the short end of the market spectrum rose. However, on the longer 7-year notes that were sold, there appeared to be better participation, but probably not from central banks. More than likely that increased participation was from smaller investors looking to secure higher yields.

The real crunch is going to come over the next few years as we have nearly exhausted central banks ability to participate in these auctions. For example, China has more than half of its dollar reserves already invested in U.S. government debt. They need to maintain some cash liquidity simply for conducting international trade transactions. Moreover, they are in the process of purchasing debt from the International Monetary Fund in order to secure a new form of international reserve currency, called SDRs. Therefore, the amount they have available to invest in further government debt is extremely limited. Were it not for the Fed's commitment to purchase as much as $300 billion worth of U.S. debt, I think we would see interest rates rising. Next year, look for the inflation genie to be out of the bottle and it will be extremely difficult to stuff it back in. The International Business Times reported, "A one-world currency is inevitable." Americans should prepare for a new currency and devaluation of their savings and wealth.

This is why investors are buying the dip – that's why JP Morgan/Chase is recommending that investors get into the market at these levels with a forecast of $1,000 for gold by early September and Merrill Lynch forecasting gold at $1,000 as early as October. Those investors who are nervous about the potential for further correction, should consider utilizing Goldline's Price Guarantee Program. Call Goldline at 1-877-341-2646 and ask them the details of that program.

I think everyone would benefit from reading the free information package. In there, you will find information from Robert Kiyosaki, the author of Rich Dad, Poor Dad, who said that gold may make an enormous spike upward with the potential to reach as high as $15,000 an ounce. Whether it reaches those levels or not, he has been right on many of his market calls and is highly respected and regarded. As a consequence, even if he is only 10% right, gold would be $1,500 an ounce. That would represent a near doubling of your money from these levels. In addition, we have information from various banks and brokers giving their forecasts for gold and information on the movement towards a new global reserve currency. All of these are important factors suggesting devaluation of the dollar ahead. Be prepared for that and you will find it to be a profit opportunity. Be unprepared and it may cause you a significant loss of purchasing power. Be sure you ask for a free copy of the CD and listen to it carefully. Call Goldline at 1-877-341-2646 for the free information package.

Investors should ask Goldline 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, Swiss 20 Francs, 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 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 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.