Daily Commentary

Banks Around The Globe Failing

by Joe Battaglia
Posted: September 29, 2008

The bank bailout bill was agreed upon by members of Congress but has yet to be put to a vote.  It is likely it will pass.  However, banks around the globe are failing.  Five European banks failed, some were bailed out.  Wachovia Bank failed here in the United States.  Citigroup took them over, but has limited its liabilities to $42 billion.  The Federal Government, through the FDIC, will pick up the remainder of the losses, which are unidentified as of this point, but huge.  Citigroup itself is somewhat of a basket case, so one wonders what will happen there.  The combination of the two banks will be so large that no one can allow them to fail.  Remember, when you think in terms of equities, Wachovia was about $18 a share a couple of weeks ago.  Today, it is around $.80.  That is a complete wipeout in two weeks.

 

The Dow Industrials is reacting negatively with the Dow down 300 points, the Nasdaq down 96 points, and the transports down 165 points.  All the money is now going into the dollar and gold.  Gold is up $15 in the first hour of trading and the dollar is up 92 basis points.  Oil and other commodities on the other hand are being hammered.  Oil is down $5.58, and silver is down $.33. 

 

Gold is now demonstrating its worth as a "safe haven" asset.  Remember, it is the money of last resort.  All investors should have some diversification into gold.  Now we have central banks talking about increasing their gold positions.  Dow Jones Wire Service report: "Central banks that currently have little or no gold in their reserves could be considering buying gold to mitigate foreign exchange movements, Austria's National Bank Manager of Foreign Reserves said Monday."  There is also a good deal of market commentary on the possibility that China and Russia central banks may be buying gold to diversify their enormous dollar holdings.  Dow Jones also reported: "The credit crisis and fears for the dollar's demise has again shown a spotlight on gold as part of central bank reserves. 

 

This credit crisis is reminiscent of 1929.  The markets could experience severe dislocation in the coming months.  This crisis will not be over soon.  For example, if the bill passes today, which it may not, they still have to write the rules and regulations for implementing the bailout law.  On top of that there has to be negotiations and clearing with the various banks they hope to assist.  In this environment there is going to be a massive amount of money printed on a global basis.  That expansion of the money supply in an effort to bailout the financial system has to be inflationary on a global basis.  The era of competitive currency devaluations is at hand.  Moreover, the era of the dollar as the world's sole reserve currency is finished. 

 

Those who have not diversified with gold yet should do so at once.  Call Goldline at 1-800-827-4653 for assistance in getting started with gold assets.  Be sure you consider utilizing Goldline's Price Guarantee Program, which provides you a two-week window of opportunity to re-price your transaction to obtain more gold or silver for your money in the event of a correction.  Also, ask Goldline for information on how you might be able to receive free gold coins in conjunction with your transaction.

 

Goldline offers a terrific free information package that will give you great insights into the problem at hand.  You might also wish to review all of the articles and information discussing the gold market.  Call Goldline now, 1-800-827-4653.

 

Investors should contact Goldline and ask them to explain the features, benefits and cost structure of the various gold and silver investments that are available to you.  Select those that best meet your own personal and individual investing needs and objectives.  Investors looking for low transaction costs may wish to consider bullion assets such as American Eagles, Krugerrands, Canadian Maple Leafs, Silver Bags or Silver Bars.  However, the Price Guarantee Program is not available with these assets.

 

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 Swiss 20 Francs, Double Eagles and Silver Dollars.  When you acquire $6,000 of private gold, you will receive a free gold coin.  Investors may wish to consider a tube of these coins to obtain two free coins.  Call Goldline at 1-800-827-4653 for further information.

 

To receive the free information package including the four articles on the dollar, the economy and gold call Goldline at 1-800-827-4653.  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 an investment.  Call Goldline now to receive your free information package at 1-800-827-4653.

 

 

 

^{You should carefully read the client Account Agreement and the Risk Disclosure information. These explain important things you need to know before you invest in precious metals, such as: past performance does not guarantee future results. Transaction costs are generally 5% to 10% on bullion and 30% to 35% on coins. This is also referred to as the spread, or the difference between the buy price and the sell price. The market must go up enough to overcome this spread before an actual profit is achieved. All markets go up and down. Coins are a long-term, three- to five-year, preferably five- to ten-year investment, suitable for 5% to 10% of the average portfolio. Please see Goldline's Risk and Disclosure Statement for further details.}

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