2008: The Year of Surprises
JULY: Dow +.2%, Oil -13%, Gold -1%
YTD: Dow -8%, Oil +30%, Gold +10%
Top 10 financial news daily ~ weekly ~ monthly ~ July 2008
By David Bradshaw ~ live 10a-6p ET ~ email ~ links ~ wisdom
Editor, Real Money Perspectives ~ weekly email ~ daily email
July 31, 2008 ~ features ~ offers ~ (podcast)

1) Thursday GOLD prices rose on a weaker dollar and bargain hunting despite lower oil prices. Gold closed in NY up $7.90 to $913.30/oz., silver rose $.27 to $17.71/oz. Although oil prices closed down 13% in July, gold prices fell just 1%. "This could be taken as an indication of a beginning of the decoupling of gold from the oil price," reports MineWeb. "Volatile stock markets and a lack of confidence in the banking system has boosted demand for gold coins from investors to levels not seen for 25 years," reports Telegraph. So far in 2008; gold is up 10%, oil is up 30% and the Dow is down 8%.

2) CRUDE OIL prices closed down $2.69 to $124.08 a barrel Thursday, despite a drop in U.S. gasoline supplies, a second-weekly decline in crude inventories and production concerns tied to conflicts in Nigeria and Iran. "Furious motorists faced with high pump prices have accused oil majors of profiteering, but as the firms announced bumper profits this week, they said they were making little gasoline sales," reports CNBC. "As the rout in oil prices nears the 20%, many analysts offer a word of caution: Don't mistake a healthy correction for the end of a multi-year bull trend," reports CNBC.

3) "U.S. STOCKS closed sharply lower Thursday, though the market ended with slight gains in the month of July, as economic concerns resurfaced after data showed weaker growth than expected in the second quarter and a big jump in jobless claims," reports MW. "Merrill Lynch said that it had sold almost all of the troublesome investments, once valued at nearly $31 billion, at a fire-sale price of 22 cents on the dollar," reports NYT. "Major U.S. stock indexes, already trapped in bear territory, face a tougher road to recovery, as more Americans crack into their nest eggs to withdraw cash to cope with rising economic pressures," reports Reuters.

4) A trio of crises -- housing, credit and financial -- have badly bruised the ECONOMY. In response, employers have cut jobs for six months in a row, bringing total losses this year close to a staggering half-million -- 438,000. The Labor Department reported Thursday that layoffs rose sharply last week. New claims filed for unemployment insurance jumped to 448,000, the highest in five years. Meanwhile, GDP increased at an annual rate of 1.9% in Q2. That marked an improvement over the feeble 0.9% growth in the first quarter and an outright contraction in the economy during the final quarter of 2007, reports AP.

5) "The US DOLLAR was mostly lower against other major currencies on Thursday after a batch of data rekindled concerns about the health of the U.S. economy. "These reports are a reminder that the dollar's fundamental woes are not limited to banking writedowns and high oil prices, but also a manifestation of weak macroeconomic data, at the top of which is continued deterioration in the job market," said Ashraf Laidi, chief foreign exchange strategist at CMC Markets US," reports MW. "The bear market in the dollar began in January 2001 with the index trading at 120. When it dropped below 80 last August, it cracked a multidecade support floor on its way to setting an all-time low at 71 this past March. That is a roaring bear for the currency in anyone's book," reports Barrons.

6) "Wages are primed to jump as surging oil prices prompt the triumphant return of 1980s-style cost-of-living allowances (COLA), sending the U.S. INFLATION rate to 6% by 2009, said Jeff Rubin, chief economist at CIBC World Markets to FP. "Coming to a store near you: Even HIGHER PRICES. Most INFLATION this year has come from food and fuel, as retailers resisted passing along the higher prices manufacturers charged them. "While these increases have not been passed on at the retail level, it is inevitable that they will be at some point," reports AP.

7) "President George W. Bush signed into law the HOUSING BILL, the government's most aggressive effort to combat the country's housing crisis. The housing package becomes law as bad news continues to mount for the housing sector, reports WSJ. Dr. Ron Paul reports the bill also includes: A provision to increase the national debt ceiling by $800 billion. The Treasury can now buy an unlimited amount of Fannie / Freddie housing securities and stock. Anyone working in the mortgage industry will now be required to be fingerprinted. Every credit card transaction will now be reported to the IRS," reports CFL

8) "US HOME PRICES fell a record 16% from a year earlier in 20 major metropolitan areas, according to the S&P/Case-Shiller home-price index, with every region measured showing year-over-year drops for the second straight month," reports NYT. "U.S. FORECLOSURE filings more than doubled in the second quarter from a year earlier as falling home prices left borrowers owing more on mortgages than their properties were worth," reports Bloomberg.

9) "The United States Mint on Wednesday announced the release of a new 2009 one-ounce ultra-high relief 24-karat gold coin, creating a modern version of what many have called the most beautiful gold piece ever made: the 1907 Ultra High Relief Saint-Gaudens $20 Double Eagle. The mintage of the new coin will be unlimited for one year. The new collectible coin about 50 percent thicker than other United States Mint one-ounce gold coins. Only 2009-dated coins will be minted. The coins will go on sale in early 2009," reports CoinLink.

10) "Government officials have been quietly stepping up COUNTERTERROR efforts out of a growing concern that al Qaeda or similar organizations might try to capitalize on extremely high-profile events in the coming months," sources tell ABC News. "Homeland security is on alert with Olympics near, elections on horizon. Security experts point to next month's Olympics as evidence that high-profile events attract threats of terrorism."

Top stories of the month

1) "Overall price pressures are elevated or increasing," the Fed said in its Beige Book report on the state of the economy released today. Economists predict the Fed will probably leave a key interest rate alone when it meets next on Aug. 5 given all the economic crosscurrents. Boosting rates to fend off inflation would hurt the fragile economy and the already crippled housing market," reports CNBC.

2) "The financial crisis won't be over until U.S. house prices stop falling, which in short means it won't be over any time soon. Direct government intervention is more and more likely the deeper the falls become," reports Reuters.

3) "Forget the BUBBLE TALK. We were in the midst of a long-term secular bull market in COMMODITIES which is still in the early stages," said Deutsche Asset's Theresa Gusman to Barrons. "Bull markets are born on pessimism, grow on skepticism, peak on optimism and die on euphoria," said SIR JOHN TEMPLETON, founder of the Templeton Fund, who passed into eternity at the age of 95 this month.

4) "The Producer and Consumer Price Indexes announced last week were significant; they sounded the death-knell of Bernankeism. No longer will it be possible to inflate the money supply by pretending that inflation in the real economy is not a problem; other means will have to be found to perpetuate the shell-game," reports PB.

5) "U.S. food companies are preparing another round of hefty price increases as soaring commodity costs force them to pass on rises to consumers. Sara Lee, maker of meat products such as Jimmy Dean sausages, said costs would compel it to push up prices on meat lines by up to a fifth later this year," reports FTimes.

6) "The awful reality is that Washington has its back to the wall. Fed chief Ben Bernanke thought the US could always get out of trouble by monetary stimulus "à l'outrance", and letting the dollar slide. He has learned that the world is a more complicated place," reports Telegraph.

7) "Clinging to cash in this environment is akin to trying to tread water holding a boulder. Trying to weather the upcoming storm holding cash you’ll find yourself with ashes slipping through your fingers. Bullion, ETF’s, or mining companies, run to gold," reports MidasLetter.

8) "In the near term, gold will be driven by risk-aversion fears. If gold moves from being a minority-held asset class to a popular safe haven, then our short-term forecast of $1,000 in one month will look very conservative," said John Reade, a UBS AG metals strategist, reports Bloomberg.

9) "American stocks are in a new bear market and anyone who believes otherwise is living on another planet. If the Dow were to simply match the decline that has already occurred in the all-important banking sector, it would sink to the 7,200 level," reasons Martin Weiss of Safemoney.com , reports NYSun.

10) "As far as the stock market, fear has not yet morphed into panic, but I think we will get to that point. On the upside, folks often forget that markets are ruled by people -- who, at the end of the day, are ruled by their emotions," reports MSN.

Gold-friendly trends

"What we are in is a BEAR MARKET that will be punctuated by ferocious counter-trend rallies that are welcome respites, but are rallies in a bear market. Let's try not to assign too much to cause and effect to the news of the day," reports CNBC.

The 28 branches of 1st National Bank of Nevada and First Heritage BANK were closed July 25 by federal regulators. The banks, owned by Scottsdale, Ariz.-based First National Bank Holding Co., were scheduled to reopen on Monday as Mutual of Omaha Bank branches, the FDIC said. Bill Uffelman of the Nevada Bankers Association said the FDIC action "is a reflection of the times for the banks," reports AP.

"Of course the list [of bank failures] is going to grow longer, given the stresses we have in the marketplace, given the housing correction. But again, it's a safe banking system, a sound banking system. Our regulators are on top of it," said U.S. Treasury Secretary Henry Paulson on FacetheNation, 7-20-08.

"The eurozone is tipping into a deeper downturn than America itself despite the tremors in the US mortgage industry, and may already be in full recession for the first time since the launch of the single currency. Dollar bears expect a nasty second leg to the crisis later this year, forcing the Fed to slash interest rates to 1% or lower," reports Telegraph.

"The Gold Mania is nigh. Our research shows this is the last summer you will be able to buy 3-digit gold. Do you have enough? Perhaps the most transparent way to find the answer is to ask: will you feel like you bought enough gold when it’s selling for $2,000 an ounce?," reports FinSense.

"The correlation of the return on coins with inflation over the last 29 years is well above that of other assets, and nearly two times that of gold; thus, the contention that gold is a better hedge against inflation than rare coins is not supported by the data," writes Raymond E. Lombra, Ph.D., reports MineWeb.

"The longer-term trend for gold remained bullish as long as the dollar shows no signs of bottoming and investor demand keeps rising," said Mark Hansen, director of trading at CPM Group in New York," reports Reuters.

"Some of the world's largest sovereign wealth funds are seeking to scale back their exposure to the US dollar in a sign of global concern about the currency. One big sovereign fund has cut its dollar-denominated holdings from over 80% a year ago to under 60%," reports FT.

"Gold is poised to revisit $1,000 an ounce as investors look for a safe place away from the turmoil in other financial markets. Bullion hit a four-month high on Tuesday at $987.75 and is up 18.5 percent year to date," reports Reuters.

"Swiss banker UBS, normally a very conservative organization, is predicting an average gold price of $1,000 an ounce next month. There is a continuing big change in investment sentiment which should continue to be positive for the gold price. Safe Haven status is taking over," reports MineWeb.

"Even the London Financial Times, which has been no fan of gold forever, has declared the new currency of the world is gold," said Gregory Church, founder of Church Capital Management to CNBC SquawkBox.

"Given that inflation is becoming worse by the day as crude oil and other commodities climb higher and given that the Federal Reserve is not raising dollar interest rates to fight inflation and save the dollar from a collapse, it is safe to expect more of the same from gold (appreciation) and the dollar (depreciation)," reports James Turk, founder of GoldMoney.

"Gold is catching a flight-to-quality bid. People are looking for hard assets to put their money in," said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago reports Bloomberg.

"Participants are turning to gold for its traditional qualities as a safe haven and alternative currency. 'There really is no other place to hide. Gold's about the only real currency out there that might hold value,'" Stephen Platt, analyst with Archer Financial Services told DJNews.

Soaring Inflation

"Consumer prices shot up 1.1% in June, the fastest pace in 26 years with two-thirds of the surge blamed on soaring energy prices," reports AP. Consumer inflation is now officially 5% year over year, the highest since 1991.

"Soaring gasoline and food costs pushed wholesale inflation up 1.8% in June, the fastest pace in 27-years. The economy showed the depth of its twin problems, slow growth and rising inflation, as the nation wrestled with a teetering financial system, a slumping dollar and rising prices for food and fuel," reports AP.

"The federal budget DEFICIT for this year will set a record high approaching $490 billion, senior administration official said Monday. The deficit is being driven to record levels by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling into a deep recession. A deficit approaching $490 billion would easily surpass the record deficit of $413 billion set in 2004," reports CNBC.

"Savers in America are being punished with negative real returns ranging between 2-8%. It is clear that inflation is out of control, and appears set to get worse as the government cranks up the printing presses to provide liquidity for massive bailouts," reports Swiss America CEO Craig R. Smith.

"There’s not enough lipstick to put on this pig," Richard Moody, an economist at Mission Residential, wrote in a note to clients. "No matter how one slices and dices, the bottom line is that U.S. workers are falling farther and farther behind," reports NYT.

"The US Treasury is running out of time before foreign patience snaps. Merrill Lynch has warned that the U.S. could face a foreign 'financing crisis' within months as the full consequences of the Fannie Mae and Freddie Mac mortgage debacle spread through the world," writes Ambrose Evans-Pritchard in Telegraph.

"Historians say that just because Americans don't throw up their hands about free markets and rush to socialism, it doesn't mean that change isn't underway. "What people may be demanding is New Deal lite," said economist Robert E. Litan of the Brookings Institution," to LATimes.

Latest Special Report:


Banking on a bailout

"Alarmed by the sharply eroding confidence in the nation’s two largest mortgage finance companies, the Bush administration asked Congress to approve a sweeping rescue package that would give officials the power to inject billions of federal dollars into the beleaguered companies through investments and loans," reports NYT.

"IndyMac was not on the government's troubled bank list this spring — an indication that other troubled banks may be below the radar. The FDIC has $53 billion to reimburse consumers for deposits lost at failed banks. IndyMac will eat up $4-$8 billion of that fund and could force it to raise more money from the banks it insures," reports IHT.

"More U.S. banks may fail after the collapse of mortgage lender IndyMac Bancorp, straining a financial system seeking stability after years of lending excesses. 'More than 300 banks could fail in the next three years,' said RBC Capital Markets analyst Gerard Cassidy," reports CNBC.

"The federal regulators who seized IndyMac Bank late last week reiterated that its branches would be open as usual Monday morning but said home equity lines of credit issued by the bank would be frozen pending a review of each account," reports LATimes.

"Indymac's failure marks the opening of Part Two of the credit crunch. Best credit crunch line: UBS, which has taken the biggest hits globally, stands for "Used to Be Smart", reports NPost.

"Sources in the Iraqi Defense Ministry said Israel Air Force war planes are practicing in Iraqi airspace and land on US airbases in the country as a preparation for a potential strike on Iran. The U.S. Dept. of Defense and Iraq officials denied this report," reports JPost.

"If Israel attacks Iran expect $200 oil and $1,100 gold overnight. The Iranians will shut the strait of Hormuz instantly and 25% of the world's oil will stop flowing," said Swiss America CEO Craig Smith.

"Treasury Secretary Henry Paulson said Friday the government is not planning an imminent bailout of Fannie Mae and Freddie Mac," reports MW.

"Bush administration officials are considering a plan to have the government take over Fannie Mae and Freddie Mac and place them in a conservatorship if their problems worsen," reports NYT.

"Stocks tumbled Friday as investors focused on troubles at mortgage companies Fannie Mae and Freddie Mac and watched oil prices climb further into record territory. The Dow fell more than 170 points and neared the 11,000 mark for the first time in two years," reports AP.

"Creation of vast amounts of money necessary to bailout the "too big to fail" entities will spur huge drops in the dollar, propelling oil and gold prices much higher," said Swiss America CEO Craig Smith.

"Congress ought to recognize that these firms are insolvent, that it is allowing these firms to continue to exist as bastions of privilege, financed by the taxpayer," said former St. Louis Fed President William Poole, reports Bloomberg.

"The weak dollar also helped give a boost to commodities last week, which are seen as safe investments amid the current financial market turmoil. The dollar was down against the euro Friday morning, trading at $1.583 against the euro," reports Forbes.

"World leaders, particularly among major oil and gas producers with large foreign currency reserves, are coming under pressure to ditch one of the greatest causes of global inflation today - the fast-declining US dollar," reports ALJAZ.

"Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson will either have to prepare America for a lot more pain or employ all their resources to bail everyone out of the mess with piles of freshly printed money to keep the spending orgy afloat," reports WND.

"In 25 years on Wall Street, I have never seen things this bad. Sell everything. Nothing’s working. Revisit when the prices are adjusted for a big recession, soaring inflation, and a crushed consumer. Sell at 12,000 and come back at 10,000. Even better: short it," says Thestreet.com founder and perma-bull Jim Cramer, reports NewsMax.

"Fannie Mae and Freddie Mac, ranked Aaa by the world's largest credit-rating companies, are being treated as if they are rated five levels lower by derivatives traders," reports Bloomberg.

"What's really got investors spooked is a growing realization the government will have to nationalize Fannie and Freddie," says Kevin Depew, executive editor of Minyanville.com to Yahoo.

"The head of the OPEC warned that oil prices would see an "unlimited" increase in the case of a military conflict involving Iran, because the group's members would be unable to make up the lost production," reports IHT

"IndyMac, one of the nation’s largest independent mortgage lenders, faced what amounted to a run on the bank on Tuesday. As depositors rushed to withdraw money, IndyMac’s share price, already in a free fall, spiraled even lower," reports NYT.

"Americans are losing their homes at a rate not seen since the Great Depression. In the summer of 2007, the subprime empire that Wall Street had built all came crashing down. 'Chain of Blame' is a comprehensive examination of a crisis that affects us all," according to CNBC's Scott Cohen.

"Wall Street is starting to send a sobering message: The worst is yet to come, as U.S. home prices decline and Washington struggles to end the economic malaise," reports NYT.

"Ben Bernanke said the Fed will issue new rules aimed at protecting future homebuyers from dubious lending practices next week. Bernanke also says the Fed may give squeezed Wall Street firms more time to tap the central bank's emergency loan program," reports AP.

"Legendary oil investor Boone Pickens stood by his forecast that oil prices will hover around $150 a barrel now and may fall to about $100 in two years," reports CNBC.

"The mood of the country and the regulators is now to get people out of commodities.Higher commodity prices hurt the economy and encourage massive inflation," said Leonard Kaplan, president of Prospector Asset Management, to Bloomberg.

"Treasury Inflation Protected Securities (TIPS) aren't living up to their name for bond investors who say they can't trust the way the U.S. government calculates the rising cost of consumer goods," reports Bloomberg.

"The almighty dollar is mighty no more. It has been declining steadily for six years against other major currencies, undercutting its role as the leading international banking currency," reports CNN.

"Standard & Poor's 500 Index fell into a bear market on Monday, as concern that banks will be saddled with more losses from mortgage debt. Fannie Mae and Freddie Mac, the two largest U.S. providers of financing for home loans, tumbled on speculation banks were unloading more mortgage bonds," reports Bloomberg.

The Dow also slipped back into a bear market this week, falling over 20% from the October 2007 high of 14,165 to 11,221. Meanwhile, gold prices are up 40% year-over-year, with over 10% growth so far in 2008.

"Signs of bear-market fatigue already are becoming evident. Investors have yanked more than $80.4 billion from domestic equity funds in the past 12 months, according to Investment Company Institute data parsed by Bianco Research. Overseas funds drew $75.7 billion from American mutual-fund investors, leaving a net equity fund outflow of $4.7 billion," reports Barrons.

"The Commodities Futures Trading Commission is on an "emergency" footing, under orders from the Democrats on Capitol Hill to smash speculators. I suspect that the energy markets have fallen prey to their own version of the 'shadow banking system' that so astonished regulators when the credit bubble burst," reports Telegraph.

"Adjusted for inflation and dividends, the return on the S&P 500 was negative for the decade that ended on June 30. During this lost decade — commodities, bonds and even cash were better investments than stocks," reports WSJ.

"When measured in ounces of gold, the Dow has been in a secular bear market since peaking in late 1999. A chart of the DJIA priced in gold shows the markets are not as healthy as one might think due to the decline of the US dollar," reports SeekingAlpha.

News of the month

"Gold is one of the biggest laggards and the one that confuses investors most. Gold would have to rise to around $2,500 an ounce at present to restore the gold/oil ratio to its historic norm," reports Telegraph.

"Call this the Age of Commodities. Also think of this as the age in which commodities, long relegated to the cellar by economists and markets, have fought back. They have fought back with such vigor and catastrophic effect on global business that they may be the determining force in the November election," reports NSW.

"Gold won't likely get a break this summer as investors seek out alternatives to falling confidence, and the strong investment demand may couple with physical demand in the fourth quarter to lift prices back into record territory, analysts said to MW.

So far, rising inflation is coinciding almost perfectly with the 200-year commodity cycle. If this continues there's a lot more inflation to come in the years ahead. It's going to boost demand for gold as a safe haven during inflationary times and stay with our gold and precious metals positions," report AdenSisters.

"Employers trimmed jobs from their payrolls in June for the sixth straight month, showing continued weakness in the labor market. The Labor Department reported a net loss of 62,000 jobs in the month," reports CNN.

"Fundamentally, I remain very bullish on gold. With geopolitical problems over Iran, oil prices high and inflation brewing, this is the perfect storm for gold," said Adrian Day, president of Adrian Day's Asset Management in Annapolis, Maryland to Bloomberg.

"Caught between a fragile economy and banking system and rising inflation -- being stoked in part by negative real U.S. interest rates -- Bernanke and the Fed seem to have arrived on a strategy of jawboning the dollar higher and inflation lower," reports Reuters.

"Banks would suffer under further strengthening of the euro, which would widen yield spreads and tighten credit and liquidity. From a trading perspective, that would mean more weakness for a sector that can hardly stand more bad news," reports CNBC.

"6,000 U.S. banks will fail within the next year or two," according to Fortis, a Belgium-based major international banking and insurance services firm," reports RichterReport.

"The U.S. is doing much worse than we had thought... but the same goes also for Citigroup and General Motors, and thereby starts a complete meltdown in the U.S," said Fortis' Chairman, Maurice Lippens.

"It's a slow-motion recession," said Ethan Harris, chief U.S. economist for Lehman Brothers. "In a normal recession, things kind of collapse and get so weak that you have nowhere to go but up. But we're not getting the classic two or three negative quarters. Instead, we’re expecting two years of sub-par growth. Growth that's not enough to generate jobs. It's kind of a chronic rather than an acute pain," reports NYT.

"Some countries are at a tipping point. If food prices rise further and oil prices stay the same, some governments will no longer be able to feed their people," said Dominique Strauss-Kahn, the IMF's managing-director to Telegraph.

"If there were any confrontation over Iran's nuclear program, Iran would try to hurt Western economies by targeting oil. Iran's Major-General Mohammad Ali Jafari warned, 'Iran will definitely act to impose control on the Persian Gulf and Strait of Hormuz,' through which 17 million barrels of oil pass each day," reports SMH.

"Israel has 12 months in which to destroy Iran's nuclear program or risk coming under nuclear attack itself," a former head of Mossad has warned. He also hinted that Israel might have to act sooner if Barack Obama wins the presidential election," reports Telegraph.

"The US dollar is now standing on the edge of the precipice. In fact, it is already peering over the edge as we can see in the US Dollar Index chart. Get ready for whatever the central banks throw at us by their mismanagement of national currencies. Own gold and silver," writes James Turk.

"Avoid the dollar at all costs. The best investments in 2008 are commodities and natural resources. Agricultural prices have much higher to go over the next decade. We have a shortage of everything, including seeds," said Jim Rogers, chairman of Rogers Holdings to Bloomberg.

"In his latest book, "The New Paradigm for Financial Markets: The Credit Crash of 2008 and What It Means," George Soros makes the case that we are witnessing the end of a 25-year superbubble. I certainly agree with his observation and would note that the time frame of this superbubble roughly approximates the career of Alan Greenspan, who in my opinion was responsible for its creation -- and the enormous pain caused by its collapse," reports MSN.

Long-term commodity bull market

"Commodities have achieved their best first-half performance in more than 50 years, while equities and fixed-rate bonds had a miserable six months," reports FT.

"We believe that gold is capable of doubling or tripling from current levels over the long term. Secular and seasonal factors favor gold during the second half of this year," says Citigroup metals analysts John H. Hill and Graham Wark reports IBH.

"The specter of inflation and a bear market in equities is a powerful formula to rekindle investor interest in gold, which looks to be staging a catch-up rally after lagging other commodities in 2008," reports Reuters.

"Financial flows were leaving the equity markets breaking below their support levels," said analysts at Petromatrix in Switzerland. "When money has nowhere to go, it is parked in commodities as it is one of the few investment instruments that actually rises the more money you pour into it."

"Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall 'below zero'," reports Telegraph.

"The Federal Reserve should let the big investment banks go bust if they made unwise investment decisions while investors should take refuge into gold as the central bank has been 'misleading' the markets, Marc Faber, editor and publisher of "The Gloom, Boom & Doom Report," told "Worldwide Exchange."

"The key to keeping your money safe is to discern the changing seasons in life and in the economy before it's too late. By swallowing the popular, but misguided 'debt-based' worldview we fuel the pernicious credit cycle which leads to both booms and busts!" (special report).

"Gold is telling the world inflation is back. In recent years investors relied on real estate to serve as their primary inflation hedge, but now that housing is in decline, they're turning instead to precious metals," said Swiss America CEO Craig R. Smith

"Oil has become the 'anti-dollar' of modern times. Oil is now serving as the source of global monetary discipline that gold used to perform. $137 oil means that the reign of the dollar is coming to a close," reports W&G.

"The Dow Jones Industrial Average to its worst June since the Great Depression, as record oil prices, credit-market writedowns and a slowing economy threatened to extend a yearlong profit slump," reports Bloomberg.

"General Motors, the largest U.S. automaker, was cut to 'sell' at Goldman, Sachs & Co., saying the shares will continue to slide on a worsening sales outlook. GM fell as much as 11 percent," reports Bloomberg.

"Citigroup shares fell 5.5%, their lowest level in nearly a decade after a Goldman Sachs analyst said investors should sell the largest U.S. bank's stock short as losses mount from troubled debt," reports Reuters.

"Be prepared for another 15% correction in stocks taking the Dow below 10,000," warns Swiss America CEO Craig R. Smith.

In July 2007 Mr. Smith warned investors "Dow 14,000 was not a milestone, but rather a mirage concocted of smoke and mirrors."

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