Market Dizzy
Stocks were way up, then way way down, and then ended up – up 172 points for the day. This volatility can make you dizzy.
Bonds continued their gains with lower interest rates – more bad news is expected soon.
The Dollar, Oil and gasoline moved sideways today.
Gold fell again – this time to $715. Buy with both hands and both feet. If you are buying gold, continue buying it as the price goes down. We will not be seeing these levels again for gold and the Dollar – in a year’s time we will wonder how this opportunity came and went so fast. Remember that this is all happening in conjunction with the deflationary actions that the stock market is currently unleashing – and that’s not a coincidence.
In the news today….
Last week’s jobless claims were 478,000 claims. This just another data point that we are headed straight at the recession.
The government is planning to guarantee banks to cover any “re-defaults” if the banks renegotiate with current owners to redefine their current mortgage (reduce the principle amount and change the terms). The banks have hesitated to change anything up to this point because they are worried that a lender will just walk away later. Why would an owner walk away later? Easy – because the value of their house continues to slide downward and it again becomes less than mortgage amount owed. Banks understand that there is no bottom to the house price market. The government continues to say they can put a floor under this market. I say – wait and see. In the meantime, the government is probably going to write insurance that could easily be called on by the banks – ergo a future obligation for the taxpayer (you and me). If these promises must be paid to the banks, it’s just another “bailout.”
Here are Today’s numbers:
Dow Jones 30 Industrial – 8691 (up 172 points)
10 Year Treasury Bond – 3.53% (down 0.08%)
Euro – $1.2910
Gold – $715 (down $21)
Oil – $67.84 (up $1.09)
Gasoline – $1.58 (up $0.01)
Where would you recommend purchasing gold? What type of gold do you recommend purchasing? Would you recommend the American Eagle gold coin? Thank you!
Hi Alllison,
Thanks for your question. A lot of people have the same question. There are two reasons to buy gold:
1. To safeguard your money, and grow it.
2. Possibly to have something at hand in case a “disaster” happens in your neighborhood.
If you are buying gold for only the first reason, you can purchase gold bullion and have it stored by the seller (usually), in a safe deposit box, in your home safe, or in hold in your backyard. However, selling the bullion is always a problem, as you much transport it back to someone who will buy it for the market value of gold. Also, it costs money to store bullion at any institution, and it costs money for a safe deposit box.
You can purchase coins. Coins cost a premium over the bulk bullion price. I recommend purchasing coins with a minimum premium, such as the South African Kruggerand. I also recommend NOT purchasing collectible gold coins, as these have the highest premiums, and a smaller market for disposal.
Gold coins can also be used in times of crisis as a barter “money” if Dollars are not available, or not being taken for any reason. It’s nice to be able to feed your family in times of strife. I’m not predicting that type of crisis, but you can never predict all possible outcomes in the world.
Gold coins must be stored also, and you have the same options for storing them. If you want them close to you in case of disaster, i would recommend a very safe safe. Don’t count on being able to get into any bank in times of a crisis.
Tom