THE GREAT GOLD DEBATE -Editor

Jan 09, 2004

PHOENIX, AZ -- The heartland of America got a shot of economic reality this morning as Craig Smith explained to KSAL host Rich Alexander exactly why we should be skeptical of an economic rebound in 2004 and why gold hit a 15-year high during the first week of 2004.

Mr. Alexander first asked Craig to defend gold as an "investment" over the last 20 plus years.

Mr. Smith then clarified that gold bullion is not an "investment", per se, but rather financial "insurance." "If you are looking for real growth in the gold market you should be looking at early U.S. gold pieces or U.S. gold commemorative coins," says Mr. Smith.

"During the last two decades, before gold bullion began to rise in 2001, many rare U.S. gold coins have appreciated just as much as stocks have, without as much downside risk."

The topic then turned to the prospects for a real economic recovery in 2004 that adds jobs. Smith's response was that the unemployment numbers today were very disappointing. Non-farm payroll jobs were expected to be up 50k-150k jobs and came in at just 1,000, with the job force shrinking by 309,000!

These numbers are not good news for the recovery and well below what the "experts" expected. This is bad news for stocks and could cause the market to hiccup a bit today.

Add to that the fact that next week fourth quarter earnings begin and you may just have "a perfect storm" ... causing a big drop in the Dow, unless earnings are on average 26% or better. Then there's the IMF warning the world that U.S. deficits could cause serious problems.

After saying all that Mr. Smith, said he's no "doom and gloomer," but that Americans need to prepare for ongoing economic uncertainty by owning tangible assets like gold, but the key is getting educated first. In a nutshell, gold bullion for insurance, rare gold coins for growth.

The show closed with a laugh as the hosts chuckled over Mr. Smith's humorous recommendation about financial preparedness: Skip the banana chips and machine guns ... but stick with gold, or a least read his latest newsletter, Real Money Perspectives to see what Alan Greenspan, Richard Russell and over 30 over analysts have to say about gold and the economy before popping the cork on the great recovery of 2004!

Bravo to KSAL for allowing enough time for your guests to tell your audience the truth! -db

** REQUEST A FREE COPY OF CRAIG'S NEWSLETTER, REAL MONEY PERSPECTIVES. Since 2001, a growing army of analysts, economists and responsible journalists have announced that gold is in a confirmed, fundamental, technical or "secular" bull market. Gold is up 50% since 2001 and quality gold coins are up as much as 80%! But that's just the tip of the iceberg!