Gold and Energy Advisor: Gold, Oil & Energy Markets Investment Research
James DiGeorgia, Mr. Macro
- Chief Editor -
Mr. Macro
Geoff Garbacz, Mr. Micro
- Chief Strategist -
Mr. Micro
Dan Hassey, Mr. Retirement
- Senior Stock Analyst -
Mr. Retirement

Gold and Energy Advisor's Real Wealth

Real Wealth #196  09/17/2008

Gold is up over $80 today at this point: Stocks are bouncing back but the danger is far from over!



Dear Subscriber,


I'm writing you this email to make sure I'm on the record and I can sleep at night knowing that I made an attempt to inform and perhaps help you protect yourself and your family.


In truth, I have sent this same email to several of my closest friends and business associates because I believe there's an increasing danger of an even greater economic dislocation than we are seeing unfold in the World's financial markets the past few days.


As you already know, last night the Federal Reserve agreed to provide $85 billion to AIG via warrants. Earlier in the day, the FED declined lowering interest rates asserting the danger of inflation was too great.


This is similar in effect to the shot gun marriages that have been engineered between Countrywide and Bank America, as well as several seizures of banks in the past few months. The Federal Reserve has not traded nor guaranteed more than two thirds of its monetary resources for questionable assets, commonly referred to as "JUNK".


Meanwhile, hedge funds, investment banks, central banks and governments have been selling their best assets in a race to guarantee liquidity. This is clearly evidenced in the precious metals markets. Gold's decline from $1,000 to the low $700s has been largely a result of the panic for liquidity. For example, in the platinum market, the price decline has been vicious.


Platinum has fallen from over $2,000 an ounce to slightly more than $1,000. The experts are saying it's tied to both lower actual and perceived worse auto sales to come. Perhaps in part, but the real story is clearer. Yesterday the Russian stock market was down 20%, and officials actually suspended trading. The financial crisis in Russia is being blamed on lower oil prices.


With oil at over $90 a barrel, it's a ridiculous asserting. What is really occurring is a result of a combination of exposure of Russian investors and its stealth "Sovereign funds", exposure to U.S. and International derivatives and the fear ignited worldwide, and in the Russian investor universe over the Georgian invasion and its short and long term consequences. This has caused the Russian government and major investors looking to improve their liquidity to dump platinum, gold, silver and nickel. It mirrors similar actions taken by private sector parties, funds, and governments worldwide.


The problem with this strategy is the supply of precious metals is finite. The problem with the FED's strategy is more inflationary than cutting interest rates. The Fed's approach is a de-facto nationalization of private companies in the hopes of keeping them private. In the past, when the United States provided bail outs to Mexico – and for that matter, the savings and loan industry – they were able to contain the crisis from ripping the fabric of the world economy. The current crisis in the financial markets is spreading and could reach a meltdown point. In this scenario, paper assets, including currencies, will dissolve.


It's my belief that the sell-off in hard precious metals assets like gold, platinum and silver is largely over. History has proven every time governments and central banks have dumped the gold assets, it's been a signal for a new or next leg up in the gold market.


Bottom line: I believe the downside in gold, platinum and silver is about 30% while the upside may well by 10 to 1 perhaps even 20 to 1. That's right, I believe we could wake up one morning in the very near future and see gold at $2,500 even $5,000 an ounce and the paper assets wiped out. I hope I'm wrong. I prey that I'm wrong. But I know one thing for sure - those without any physical gold, platinum or silver are in great financial danger.


Whether you buy gold, platinum, silver precious metals and Numismatics from me FINESTKNOWN 1-866-697-GOLD (4653) ext. 1406 or some other dealer/broker is not important, although I will make sure your get the best deal possible (Other companies charge ridiculous premiums especially when the market is climbing. I'll also make sure you get the best). What is important is putting some money into physical gold, silver and or platinum bullion and Numismatics quickly, and stuffing it into a safety deposit box.


It's off my chest. I can sleep at night knowing I shared this with you. Please put some physical gold aside.


In addition I also want to once again urge you to subscribe to my Gold & Energy Options Trader . My $99 monthly is still valid and remains valid for another 24 hours. Already gold is up $80 as I write you from yesterday. Subscribing to the Gold & Energy Options Trader for just $99 a month could very well be one of the smartest things you ever do!


We've racked up a net profit of 194% since inception and just grabbed a 64% gain this past week. Those who jumped on our gold recommendations the past few weeks are sitting pretty.


We have and will continue make some long term gold options recommendations designed to make the most of the big moves in gold that I see ahead.


To subscribe for $99 a month, just click the hyperlinks above or just below...



Best Wishes,

James DiGeorgia



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