UNEMPLOYMENT RATE INCREASES TO 7.2%

Volatility and concerns about net deflation continue to plague the market with gold down $7 and silver down $.04 in early trading. The precious metals selling down in reaction to a .82 rise in the dollar to 82.36 and a $1.03 drop in oil to $40.67 a barrel. Moreover, the euro fell back on expectations that the European Central Bank will be forced to cut interest rates.

The payroll number was absolutely dismissal showing 524,000 jobs lost in December and with the unemployment rate increasing to 7.2%. That is the worst unemployment rate since 1993. It is interesting to observe that although the country lost 524,000 non-farm jobs last month, analysts were happy because they were worried that we could have lost as many as 725,000 jobs. The November payroll job number was revised to show a greater loss of employment and today's number may also be revised to show that unemployment is much larger than the initial number suggests.

Some think the economic conditions in other parts of the world, particularly Europe, are worse than in the U.S. This gives rise to the expectation that those nations may have to be more aggressive in trying to stimulate their economy than we are here in the United States. With the United States government practically giving away money to anyone who asks for it, it is hard to believe that anyone could be more stimulative than that. However, that was the sentiment today causing the euro to weaken against the dollar and putting pressure on gold.

The Obama stimulus package had better get into motion very quickly or there will be some very dire consequences according to most economists. Even Martin Feldstein who was President Reagan's chief economic advisor is recommending that the stimulus package be very large, perhaps even larger than Obama has been recommending. Part of the problem with all of these proposals is unless an Executive Order is issued to waive all of the regulatory requirements and approval requirements of local and state governments, it is unlikely that any of these projects will get underway soon enough to turn the economy around before the year 2010 and perhaps even not until 2011. The Federal Reserve expects the economy to remain weak throughout this year and into next year.

Most individuals are not prepared for that kind of prolonged difficulty. They do not understand that stocks cannot perform well in an environment where the economy is sinking deeper into recession. In fact, the world could be heading into a global depression, similar to what we saw in the 1930s. In spite of that, the talking heads on television financial programs continue to ask the analysts where to put money to work. A better question would be where can we put our money where we have some reasonable assurance of maintaining buying power. The answer to that question is clearly into gold. Merrill Lynch says they have huge demand for physical gold coins from wealthy investors. They see gold at $1,150 an ounce by June.

Bloomberg Wire Service did a survey of the top 20 gold analysts on the London Bullion Exchange. Those analysts uniformly expected gold will average a higher price this year than it did last year. In other words, they are expecting a significant net gain. Yesterday, MKS Finance gave their opinion that gold would hit a high of $1,180 and silver would hit $15 before this year is over. While they expect a considerable amount of volatility, I believe that they too recognize that gold is an excellent value and diversifier in the current economic conditions.

Currencies are experiencing competitive currency devaluations or what Merrill Lynch refers to as "beggar – thy – neighbor" policies. In that type of environment history demonstrates that only gold performs. Sooner or later all of these currencies will disappoint because they are all fiat and all being exploded in terms of the volume. You cannot wildly increase the supply of money without causing depreciation in the buying power of the currency. Moreover, gold has always been considered a "safe haven" asset. The current situation, particularly in a deflationary environment gives rise to "safe haven" demand for gold. Therefore, on balance I think gold presents an excellent opportunity for people to protect and preserve their purchasing power. As there is a growing awareness of the fact that the dollar is not likely to be able to withstand the tremendous expansion of money supply, more and more people are interested in turning to gold.

Last week the Federal Reserve increased M1 money supply by $14 billion and M2 by $5.3 billion. These are extraordinary amounts of money. In addition to that the Fed purchased $10 billion worth of mortgage-backed securities in the past three days. The Fed is buying these securities at face value from the lenders, even though they could not sell them in the open market for $.50 on the dollar. That is equivalent to dropping cash from helicopters. This is a dire situation. In this environment gold makes a great deal of sense.

To learn more about investing in gold, call Goldline at 1-877-341-2646. You will receive a free information package that will be very helpful to you. That information package includes quotes from Merrill Lynch discussing the dollar falling, along with articles from Forbes.com and from economists at major banks and brokerage firms, all whom believe the dollar will devalue and gold will rise over the coming years. You should also consider acquiring gold for your portfolio. Goldline can assist you in that process. Some of you may wish to acquire Austrian One Ducat gold coins, as did our friend Glenn Beck of radio fame, just in the past few weeks. Others may prefer to acquire British Sovereign coins, which were for hundreds of years the "money of the world." And yet others may wish to invest in bullion assets or other forms of gold or silver. Be sure you ask about the Price Guarantee Program, which gives you a two-week window of opportunity to re-price your order in the event of a correction. Goldline can help you with all of your precious metals needs. Call them at 1-877-341-2646.

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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.