There’s an awful lot of written commentary available about what the latest moves by the United States government bailout and interference in publicly-traded markets means, so I’m going to be short and sweet. You all know that last October I urged you to sell all stocks except those related to precious metals and to short the S&P 500. As I explained in my October 14, 2007 and Janauary 9, 2008 posts, (especially read the section I entitled “Sub-Crime Fiasco”), the credit crunch was going to become a nightmare for the financial markets and the economy. We literally came close to a total financial meltdown last week.
I want you to totally appreciate that while they saved the stock market for now, I believe there are no more silver bullets and the world will soon realize exactly how costly these moves will be both in dollars and how we will be perceived as a nation. I’ve often said America is “robbing Peter to pay Paul and Peter is broke.” I have urged you to watch this 60 Minutes interview of former US Comptroller of the currency (and head bookkeeper), David Walker http://www.grandich.com/video/60min.162mb.wvx (for Internet Explorer users only, sorry.) I can only imagine what Mr. Walker would say about all these bailouts and how much worse his outlook would now be.
I’m lowering my original target for the DJIA from 10,000 (it still will be a support level for a while before it breaks) and believe sometime in the next 12-24 months the DJIA can fall to 7,500-8,000. I now believe we will have one of the worst recessions in U.S. history in this time frame as well. I see the U.S. Dollar Index hitting 60 and gold $1,300-$2,000 (depending how bad things get). You should remain short and if you’re not, short first thing Monday morning. Look for a super bull run in metal stocks sometime in this timeframe as well. Do all you can to get out of debt and lower your lifestyle as it’s going to be greatly lowered for most Americans, anyway.
Important Note – 
I’m delighted to be engaged again by Geologix Explorations (GIX-TSX-V $.96). I had a long and extremely fruitful update last week and believe the current share price doesn’t come close to representing not only what has been done so far, but what the company could have in the not-too-distant future. I know there’s some concern on how the company will pay what they owe to Silver Standard next year, but in every conceivable way the current share price does not reflect whatever they do. I rarely urge all readers to do this, but I do want to urge all of you to contact the company and get a complete update of where they are at and what they feel is coming down the road. I highly anticipate a major bump up in the resource in October.
http://www.geologix.ca/s/Home.asp
Toll Free # 1-888-694-1742
