January 31, 2008 by david.pennington.

All of the Precious Metals are on FIRE! Those of you who have delayed buying waiting for a correction have missed a very nice move and one that I believe will take us north of $990 per oz gold, and $20 per oz silver. All of the strong fundamentals driving these prices higher are still present. In fact, they are growing. Large sums of “smart” money continue to move into silver and gold, providing a strong floor under the price whenever the bears attempt to take the price down. My advice is still to encourage those on the sidelines to get involved – not with a 100% of your funds but with perhaps 10% each month over the next 10 months. I always say I do not know where the price will be next week or even next month, but I do know that 1 or 2 years from now these precious metals will be a lot higher.

1.     FED HAS DEPLETED US GOLD RESERVES FOR OWN USE

http://www.wnd.com/news/article.asp?ARTICLE_ID=59876 

2.     THE COMING EXPLOSION IN PRICE OF SILVER

http://news.silverseek.com/TedButler/1201020133.php

3    DON’T TRUST THE GOLD AND SILVER ETF’S TO OWN THE METAL THEY SHOULD

http://www.marketoracle.co.uk/Article3473.html

http://news.silverseek.com/SilverSeek/1201542783.

4.     FRENCH BANK SUFFERS $7.14 BILLION FRAUD LOSS

http://news.yahoo.com/s/ap/20080124/ap_on_bi_ge/france_societe_generale_…

5.     WHEN GOVERNMENTS PRINT MONEY – BUY GOLD

http://www.telegraph.co.uk/money/main.jhtml;jsessionid=NVQFT301102FFQFIQ

6.     NY BANKS COERCED TO BAIL OUT BOND INSURERS AMBAC AND MBIA

http://www.ft.com/cms/s/0/ac60d522-ca20-11dc-b5dc-000077b07658.html

7.     MORE BRAZEN MARKET MANIPULATION BY THE PLUNGE PROTECTION TEAM 

http://news.goldseek.com/RickAckerman/1201071660.php

8.      SAUDI’S LARGEST BANK URGES TO REDUCE SOLLAR HOLDINGS 

http://sg.news.yahoo.com/rtrs/20080112/tbs-gulf-currencies-saudi-955c2a1…

9.      MERRILL LYNCH BOOKS A $9.84 BILLION 4^TH QUARTER LOSS

10.  FLIGHT TO GOLD AS INVESTORS LOSE FAIL IN MONEY

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/01/06/ccgold… 

11.  US DEBT REACHES $53 TRILLION AND GROWING 

http://www.financialsense.com/editorials/turk/2008/0109.html 

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January 23, 2008 by david.pennington.

 This is it my friends.The DJII futures are down over 500 points.If the Federal Reserve fails to take emergency action before the US opening tomorrow, you will see the DJII open down 1000 points as the public joins this professional panic.Everything you see happening is what I’ve been writing about here for several years. It will be the catalyst that takes gold again above $887.50 and to $1650.It is a better wager that the Fed will immediately drop rates by 1 full percentage point.It is a slam dunk that all Western central banks will cut loose and flood the world with more liquidity than we’ve ever seen before. President Bush met with Chairman Bernanke today and they are discussing handing out money to every American to spend. Can you imagine the inflation in the future and they continue to drop money from helicopters?If central banks fail to cause a torrent of liquidity from their unending check books then $450 trillion of derivatives will take us to the world of Mad Max.Monetary inflation ALWAYS causes PRICE inflation even without strong business conditions.Prices of hard and transportable assets rise regardless of business conditions.All currencies fall and the stronger currency is the laggard in the race to the bottom. I hate to be the bearer of bad news, but the US markets are sick and the Fed can’t do anything to doctor up the inevitable downward spiral any longer. In the past five trading days alone the Dow has lost over 500 points (4.4%). Meanwhile the NASDAQ has shed about 100 points (4%) and the S&P 500 has lost roughly 75 (5.5%).Driving the whirlpool of destruction are major banks like CitiGroup…
…and Countrywide Financial…This is bad folks. Real bad.In the past twelve months, Citigroup shares have lost as much as 57%. And Countrywide has lost over 90% in market cap over the past year!And listen, this isn’t like PetSmart or Staples or Bed, Bath, and Beyond losing millions in market cap. No. These are the very banks in which US citizens keep their spending dollars losing hundreds of billions in market cap!And the worst part is, John and Jane Regular have absolutely no clue what’s going on. The depth of what most Americans know about the country’s financial markets can be extended to only what they hear from snippets of Jim Cramer’s Mad Money show. They’ll be in for a surprise.Last night China’s Hang Seng index fell another 4.5% and European markets were off overall about 5% with the German DAXX and French CAC 40 leading the way with a 6.9% and 6.6% respective loss. The US markets were closed for holiday today but Dow futures traded over 500 (4.5%) points lower. A bad sign for longs. A real bad sign. And tomorrow I think we could see a historic loss, which may one day be a part of what they’ll call the stock market crash of 2008.On top of the downward pressure from Asian and European markets that’ll weigh down on stocks, Bank of America reports tomorrow. And I can’t imagine that they’ll have anything good to say. Apple also reports tomorrow. I haven’t talked to anyone who believes that they won’t miss tomorrow.From where we stand right now, I don’t think a 750-point drop (about 6%) is out of the question for tomorrow. Of course, Tuesday’s market activity will be largely influenced by tonight’s world market trading. But if there’s ever been a good time to be in gold …it’s right now.I’m not trying to scare you. This is the way it is.  

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January 15, 2008 by david.pennington.

The nation of India is one of the largest buyers of
gold and silver in the world. It is a very important
part of the culture there, and the Indian buyers are
world renowed as being the saviest buyers in the
world. This article from the “India Times” indicates
demand is still very strong in India. This provides
strong support for the price of gold and indeed could
provide continued impetus to further price increases.

http://timesofindia.indiatimes.com/Cities/Gold_rush_on_despite_high_price/articleshow/2697502.cms

“Gold Fundamentals Indicate Rise to Continue”

“It’s a reflection of market sentiment: Gold is a
hedge against uncertainty, and right now it’s the best
bet,” said Carlos Sanchez, a precious-metals analyst
at CPM Group in New York. “None of the other
investment options look that great, and gold does.”

Still, when adjusted for inflation, gold remains well
below its all-time high. An ounce of gold at $875 in
1980 would be worth $2,115 to $2,200 today.

Gold has had a meteoric rise in the past year –
rising nearly 32 percent in 2007 — boosted by a
falling dollar, rising prices for oil and other
commodities, and increased Middle East instability.
Those trends have increased the metal’s appeal as a
haven: Gold is seen as a safe investment in times of
political and economic uncertainty around the world.

Also driving gold higher was Federal Reserve Chairman
Ben Bernanke’s pledge Thursday to cut interest rates
to boost the economy, which some fear may be sliding
toward recession amid turmoil in the housing and
credit markets.

Lower interest rates tend to depress a country’s
currency and drive investors to shift funds to hard
assets such as gold. A cheap dollar can make
commodities more attractive as an alternative
investment, and also can increase demand among foreign
buyers as their currencies gain strength.

“Concerns of a recession will keep pushing up gold
prices,” Sanchez said. “Depending upon what happens in
the economy and in the Middle East, we could see gold
testing $1,000 an ounce, maybe even this quarter.”

Hedge and pension funds, along with other long-term
investors, also flocked to gold as the U.S. mortgage
and credit crisis intensified.

“The funds are really heavily at play … The momentum
with gold is almost like mania. We keep wondering how
high it will go,” said Jon Nadler, an analyst with
Kitco Bullion Dealers in Montreal.

Investors looking to get in on the gold rush can
expect volatility for the rest of the year, said
Nadler, whose firm forecasts a trading range of $750
to $950 an ounce.

The steep rise in precious metals also will mean that
consumers in the United States — the biggest buyer of
gold after India — can expect to pay higher prices
for gold earrings, bracelets and other jewelry.

“People are going to feel that sticker shock when they
go down 5th Avenue,” Nadler said. “You’ll start seeing
the increase reflected as early as Valentine’s Day.”

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January 8, 2008 by david.pennington.

With gold now above its record high price of $850, it’s a good time to step back and ask: Do I still want to own it? Do I still want to buy it? Is gold still good value? The answer to all three questions is a resounding “yes.”…Still Good ValueAdjusting for inflation, it takes $2,208 today to equal the previous high of $850 reached in January 1980. Comparing gold to the Dow Jones Industrials Average is another useful measure to determine gold’s value. Gold is overvalued when it takes only one ounce of gold to buy the DJIA. For example, in the 1930s one ounce of gold at $35 bought the DJIA, and it did so again in 1980 when an ounce of gold was $850. Though this ratio has fallen from over 40 ounces in 2000, it still takes 16 ounces of gold to buy the DJIA, meaning gold is still relatively good value.…No Counterparty RiskNational currencies depend on the safety of the bank where you have your currency deposited. The Northern Rock crisis has highlighted that risk. National currencies have counterparty risk, but gold does not. As the subprime crisis continues to deepen, the absence of this risk more than offsets any interest income one earns on bank interest.…Currencies Are ManagedAll national currencies are managed by central banks. Some do a better job than others, but all national currencies without exception are being debased by inflation. In contrast, an ounce of gold preserves purchasing power. The following chart of the price of crude oil shows that an ounce of gold has essentially the same purchasing power today as any other time since 1945.…Central Banks Losing ControlAs well documented by the Gold Anti-Trust Action Committee (this research is available free at www.GATA.org), central banks have been intervening in the gold market. Consequently, the gold price is much lower than it would be had there been no intervention. Now that central banks are losing control, the gold price will move toward its free-market price, much like it did after central banks stopped intervening in the late 1960s.…Monetary System Is BrokenGlobal imbalances from trade and capital flows have become so huge that colossal pools of “hot money” are constantly looking for a safe home. The movements of this hot money now dwarfs the flow of capital required for global trade and commerce, and has therefore become a destabilizing force. These imbalances did not occur under the classical gold standard, proving its efficacy. I therefore anticipate that in the not too distant future gold will once again be at centre of global commerce.…SummaryAll of the above factors will increase the demand for gold. This increased demand will cause gold’s rate of exchange to national currencies to rise, meaning gold’s price will rise. Therefore, gold should still be accumulated, month in and month out under a long-term savings plan. Instead of saving fiat currency, everyone should be saving sound money — gold.

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January 2, 2008 by david.pennington.

GOLD CLOSES YEAR UP 31/2%What a year for Gold and Silver during 2007!! As the market closed today, Gold closed up 31,2% for the year, or 200%.  This ends the sixth year of the Precious Metals Bull Market. What an incredible return and yet the majority of people are still not even aware of this sector. The mainstream media keeps this as quiet as possible so the investing public will not enter the market thereby driving up the price of gold higher. But I CAN ASSURE YOU GOLD BE HIGHER AGAIN NEXT YEAR!   We are still in the early stages of a 20 year bull market in hard assets. With the Olympics just months away in China, you can be assured that the price of all metals will continue to rise during 2008. If you are not in this market yet, I urge you to do so before everyone is jumping in and the prices will be too high. Let me hear from you if you’re interested in talking @ 425-868-4966.

SILVER CLOSES YEAR UP 14.5%As the Chart below indicates, 2007 was another good year for Silver – it increased over 14.5%.This is the sixth consecutive year of increases for silver. As the supply continues to dwindle and the demand continues to increase, the outlook looking forward into 2008 is very positive for silver. In fact, beginning with the new  year I expect Silver to start outperforming Gold. The percentage increases over the next several years should exceed the increase in the price of gold. Remember Gold will soon set an all time record while Silver would have to go from $14.75 per ounce to over $50.00 per ounce. Eventually it will and the returns will be spectacular. Coins are the best way to participate in this coming boom. Gold and Silver stocks are very volatile and the stock brokers themselves face financial uncertainty. Stock certificates are paper and can burn just like the dollar. Gold and Silver are hard assets and will last through the coming crisis. It’s time to take the plunge and get invested in Silver. Call Mike @ 425-868-4966.

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