Gold and Energy Advisor
Real Wealth #299 08/30/2011
Notes From The August Federal Reserve Meeting Prove Very Important
It is very clear from the notes from the August Federal Reserve meeting that the majority of its members including Fed Chairman Bernanke want to maintain a very accommodating monetary policy i.e. low interest rates and possibly more quantitative easing as well.
While this is extremely bullish for gold, events in Europe may bode even more bullish for the gold market.
The European Central Bank (ECB) has been leaning in the opposite direction of the U.S. Federal Reserve and has actually raised interest rates; fearful of inflation. In many respects the ECB is reacting to the economic dislocation we've seen emerging in Europe the way the Federal Reserve reacted to stock market meltdown and banking crisis of 1929 which made the great depression of of the 1930's inevitable.
With Europe's banks in so much trouble raising interest rates makes no sense what-so-ever. I'm convinced that now that Europe's economy is stagnated, poised to dip in recession and in growing risk of an all out banking crisis similar to what occurred here in the United States in 2008 and 2009 the ECB will be forced to join the Federal Reserve in the same accommodating monetary posture.
If the ECB does as I suggest it should mean gold will rise to $2400 very quickly from current levels. This would complete the first leg of this bull market in gold and mark the beginning of the next leg up.
If on the other hand, the European Central Bank takes no steps to loosen monetary policy, we could see a massive European Banking failure that would catapult gold to well over $3,000 an ounce.
Gold is now in the unique position of being in a win-win situation in my opinion. It is the reason that mainstream financial analysts like Jim Cramer are recommending holding 20% of your investment portfolio in gold.
Interbank lending is drying up in Europe. Banks are hoarding cash. The European economy is slowing to a stall and negative growth may actually be just over the horizon. In many ways this is exactly what happened just before Bear Stearns and Lehman blew up and almost took down the entire U.S. Economy.
This is a very important time period. The danger is growing.
While its true that Wall Street's indexes are rising, its also true that little has changes in the last few weeks. The economy is sluggish, unemployment remains uncomfortably high and while its true most U.S. Banks are not endangered its also true that there are far fewer banks in business thanks to the fall out from 2008 and 2009. Even more important consider the estimated $1.2 trillion dollars U.S. banks have borrowed from the Federal Reserve at one quarter of one percent and lent to European governments and banks for 4% to 9%.
A banking crisis in Europe would quickly undermine U.S. Banks all over again. Especially if European banks are nationalized - as I suspect we'll see in the heat of emerging meltdown.
The global nature of the world economy simply makes it impossible to ignore the very real risk of another global financial crisis approaching. Don't be fooled by rallies in the S&P and Dow Jones. These rallies and sharp declines are computer trading programs trying to work their magic.
P.S. Gold and Energy Options Trader on Fire!
This could be also a great opportunity to take a subscription to my options trading service. I've had couple of losing trades recently but since the beginning of 2011 my closed trade recommendations have racked up a cumulative 160%+ profit.
Since the inception of the Gold and Energy Options Trader its model portfolio of closed positions is up an amazing 3731.33%* assuming subscribers are buying 10 recommended contracts for each recommendation it would have produced about $97,390 in profits.
* Average cost per recommendation is, $321.80, assuming 10 contracts $3,218.*
* Average dollar profit per recommendation, $627.16 assuming 10 contracts $62.71.*
* Average holding per period recommendation just 23.81 days.*
While I know there are many options services and trading advisories that issues dozens of trades each month we do not believe the quantity of trade recommendations made is the important criteria.
Instead I believe it’s the quality of the trade recommendations made that counts. I recommend approximately 3.4 recommendations per month but reserve the right to increase or decrease the number of trade recommendations made based on market opportunity determined by the fundamental, technical and sentiment analysis I and my staff use to determine and pinpoint our trade recommendations. We assume a base investment of $5,000, and it is used to generate the above profits. Fast turnover of investment capital is another key to our high returns.*
Bottom line our track record tells the story. Since inception the Gold and Energy Options Trader has closed, 157 trade recommendations with 127 wins (80.9%), 28 losses (17.83%) and 2 break even.*
This is an astounding track record when you consider our year by year track record also ...
Returns for each year assuming 10 contracts:
* 2007 23% = $6,620 (profits generated)*
* 2008 470.29% = $27,000 (profits generated) *
* 2009 594.62% = $32,670 (profits generated) *
* 2010 2,696.85% = $27,230 (profits generated) *
I make subscribing very easy. Take the first 30 days for just $1.
To subscribe and to lean more including * a full disclosure statement please go to here:
Gold and Energy Options Trader
* The Gold and Energy Options Trader is strictly intended as an educational and entertainment service. All Track Record Results are Hypothetical. Subscriber results will differ because of commissions, time of execution, broker efficiencies and potential slippage (price difference between recommended price and execution price). The Publisher and Editor of the Gold and Energy Options Trader James DiGeorgia is not a registered investment adviser. The above performance information is for closed positions only. It does not include performance on open positions.
*Past Track Record Results are no guarantee of future success. Option Trading is EXTREMELY speculative. Consult a professionally licensed investment advisor with Options Trading Experience before trading.
Please see risk disclosure link below.
Copyright ©2022 Finest Known, LLC. All rights reserved.