U.S. HEADING TOWARDS SOCIALISM?

by Joe Battaglia | April 29, 2009

Gold is trading up $5 this morning after reaching a high of $902.70 on the nearby contract. It would be helpful if gold would close above $900 today. However, any reasonable gain will be viewed as a positive development. Silver reached as high as $12.71, before profit-taking set in but is still up $.27 at $12.67.The Dow is up over 100 points and oil is up $.55. The dollar is down 43 basis points.

The Fed committee winds up its two-day meeting today and we will have the results later in the day. First quarter GDP fell 6.1%. It has been expected to fall only 4.6%. However, Dr. Roubini correctly forecast the GDP decline, as he correctly forecast the crisis we are in today. Dr. Roubini doesn't see a recovery beginning until sometime next year and he sees unemployment rates rising aggressively from today's levels. He also sees inflation ahead. As a consequence, there should be a continuing safe haven demand for gold as well as some inflation demand as we anticipate inflationary pressures coming out of this recession.

There are rumors that at least six banks will fail the "stress test" when the results are released. The Wall Street Journal has indicated that Bank of America and Citigroup will be among those that are required to raise additional capital. This will probably be done by the government converting preferred shares into common shares, thereby becoming the owner of the troubled banks. This is a major move towards socialism as is the potential for the government to socialize or nationalize GM and perhaps Chrysler. Many believe this is a slippery slope of government involvement and it cannot end well. Clearly, the government is not capable of managing any company in a reasonable fashion. They can't manage their own finances and affairs – one has to question how they could possible manage the affairs of a bank or major industrial corporation.

CPM Group reported today that investors will likely remain active buyers of silver this year and they think continuation of safe haven demand may send silver back above $18 an ounce. In fact, silver demand may be as much as 182 million ounces, which approaches the record of 222.2 million ounces purchased worldwide in physical silver when prices went from $5 to $50 in 1980. They said the big driver in silver, as in gold, is investment demand. They expect investment demand to remain strong this year, picking up especially in the fourth quarter.

President Obama requested $1.5 billion for dealing with the Swine Flu epidemic. Everyone is concerned that this will turn into a full-blown pandemic with serious human economic consequences. If the situation with the flu worsens, it could have an impact on economic growth and indeed on the markets. In the Middle East, Egypt ordered the slaughter of all pigs due to fears of spreading the swine flu.

Clearly, the market conditions are such that the potential on the upside is quite good. We continue to have analysts forecasting gold anywhere from $1,100 to $1,500 on the upside. This represents an excellent opportunity. To get started with gold today or to add gold to your holdings, call Goldline at 1-877-341-2646. Ask them to explain the features and benefits of the British Sovereigns, 20 Francs, Double Eagles and Maple Leafs. Compare features and benefits and select those assets that best meet your own personal and individual needs. Ask them also to explain the details of the Price Guarantee Program, which provides you a two-week window of opportunity to re-price your order in the event of a correction. Call Goldline at 1-877-341-2646.

Be sure you ask Goldline for the free information package. You will receive a free copy of the American Advisor Newsletter, a $25 value, along with a CD interview I did with Frank Barbera. You will also receive articles discussing the potential replacement of the dollar as the world reserve currency along with articles discussing the potential devaluation of the dollar. Call Goldline at 1-877-341-2646 for your free information package.

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 a purchase. 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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