SDR'S ARE BEING USED AS NEW GLOBAL RESERVE CURRENCY

by Joe Battaglia | August 11, 2009

Gold and silver started the day higher, but fell slightly after the open. Gold is down $2 and silver is down $.10. Both are reacting to a firm dollar. Also pressuring gold was the fact that oil is down $1.21 at $69.38 a barrel and the Dow is down 76 points at 9,262. With the exception of the dollar, all markets are lower.

The Fed meeting started today and many are awaiting the decision of the Fed tomorrow afternoon. However, it is likely the Fed will maintain the same bias as they did in the last meeting. Consequently, it should have little impact on the markets.

For the moment gold has support at $943. Below that support comes in at $937 and then $921. Barclay's Bank said if gold trades down towards those support levels, it would attract fresh demand, which should provide stability. UBS Bank said it believes gold will be trading at $950 within the month and many analysts continue to see gold trading in the $1,000 to $1,100 range this year. Goldman Sachs joins the chorus of voices who believe gold will remain around current high levels, supported by a low interest rate environment. Goldman Sachs also confirms that central bank gold supplies will be reduced by 20% or more and that smaller supplies provide further support for the gold market. Almost all analysts believe the seasonal factors that typically prevail in the precious metals markets will again drive gold to higher levels from September through December. A good many analysts believe that January through April are going to be strong months for the precious metals.

Given the views of these banking analysts, I think gold is a continuing buying opportunity at these levels. While we would all like to see gold forging higher in a briefer time span, the fact that it is continuing to gradually grind its way upward, building strong solid bases in the meantime, is a constructive development.

Moreover, the cat is out of the bag with regard to SDRs. The world is beginning to use SDR's as a new global reserve currency to replace the dollar. That use is reflected in the fact that the Montreal Convention, which governs airline liability on international flights is now designated in SDRs rather than dollars, as it used to be under the Warsaw Convention. In addition, even the United States Postal Service is utilizing SDRs as the cost of postage on international transactions. Their manual actually provides conversion tables to enable Americans to convert their dollars into SDRs when purchasing postage for international mail. Jim Sinclair says China is pushing to have the SDR become a global "super currency" by the end of this year.

Many may be concerned that I am overstating this issue. However, the facts prove that I am not. If you call Goldline at 1-877-341-2646 for the free information package, you will see included in the package copies of the Postal Service conversion tables for dollars into SDRs for use in postal transactions. In addition, if you examine any international travel tickets, you will find the liability limitations are likewise set forth in SDRs. At some point the world will become more cognizant of the fact that the dollar is going to be replaced in international transactions. As this process develops, central banks will hold fewer dollars and more SDRs and gold. That process will provide tremendous support to the gold market, enabling it to move to dramatically higher levels substantially above $1,000 an ounce.

To learn more and to receive the free information package and the excellent articles explaining this process, call Goldline at 1-877-341-2646. Ask them also for the free CD and for information on Goldline's Price Guarantee Program, IRA and 401(k) rollover accounts and other information that maybe helpful to you. Call Goldline now at 1-877-341-2646.

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.

†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

You should review Goldine's Account Agreement along with our risk disclosure booklet, Coin Facts for Investors and Collectors to Consider ®, prior to making your purchase. Goldline has a spread or price difference between our selling price, called the "ask", and our buy-back price, called the "bid". That spread varies depending on coin or bar you acquire. Spreads on 1 oz bullion coins, 90% silver dimes and quarters, and one ounce and larger bullion bars are 13%. All other coins have a spread of 28%. There is also a 1% liquidation fee when you sell your coins back to Goldline. The market must go up enough to overcome this spread before an actual profit is achieved. Precious metals and rare coins can increase or decrease in value. Past performance does not guarantee future results. Coins are a long-term, three- to five-year, preferably five- to ten-year investment. We believe precious metals are suitable for 5% to 20% of the average investment portfolio though others may recommend a different percentage.

To receive free information package on gold and precious metals investing, call Goldline at 1-877-376-2643.

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