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July 26, 2012

July 26, 2012

A massive program of QE will send many investment areas soaring…


Gold Continues to be Attractive & Will Move Higher 

Gold continues to confound the short sellers and the pessimists.  Contrary to the calls by many pundits for gold to fall in price, contrary to the fears of global deflation that occur whenever the European or U.S. banking systems looks vulnerable, contrary to the fact that gold has risen for many years and this may lead to profit taking, gold is holding up very well in 2012.

Gold’s stability and durability are due primarily to buying from central banks around the world that are awakening to the reality that their Euro and soon their U.S. dollar bonds will decline as the underlying currencies decline.  Further, since the yields onU.S.bonds are tiny, central bankers’ logic is, “Why not hold gold?”  It earns no income but it certainly protects you from the vagaries of currency declines.  Additionally, many informed Europeans are looking for ways to get their money out ofEuropeas it becomes more and more obvious that the Eurozone currency bloc may suffer defections and certain countries may exit.

Put yourself in the position of a citizen with assets in one of the peripheral countries with problems: includingIreland,Greece,Spain,Portugal, orItaly.  Would you want to keep all of your money at home or in a local bank when the prospect of currency controls looms?  Currency controls would keep you from taking your money out of the country and/or the home currency.  On the other hand, perhaps you are from the countries that will have to lend to the periphery and bail out their banking systems.  You suspect that paying these big bills will have a negative effect on for the value of the Euro.  In this case, you wish to diversify out of the Euro.

In our opinion, massive buying from central banks, from Europeans anxious to escape the Euro, and soon massive buying from U.S. dollar holders wishing to avoid the dollar, will work together to lead gold to much higher prices.

We have talked for years about QE-E (Quantitative Easing – Everywhere).  By this we mean from many countries.  QE-E means money printing and other behaviors designed to stimulate sluggish economic activity and to counteract the deflationary effects of a banking system which is shrinking and de-levering as the banking systems of Europe and the U.S.are doing.  As the monetary system of the planet is being debased, gold stands to benefit…along with other hard assets and assets that can grow.


Economic News is Currently Focused on Slowing of Global Economic Growth -Will this Become Reality?

It is indisputable that growth is moderating, but we continue to believe that global economic growth will average two to three percent through the end of 2013…

In order to combat slowing economic growth in their countries, China, India, UK, Philippines, Korea and others are currently taking steps to speed up their growth rate.  We anticipate more aggressive steps will be taken by many governments in the form of monetary or fiscal stimulus programs in coming weeks and months.

What makes us so sure that the more monetary and fiscal stimulus policies worldwide are coming?…


Profits Will be Easier to Grow than Revenues

Today, revenue growth is hard to come by for most companies–and only the better managed and more fortunate companies can grow revenues rapidly.  Profits on the other hand are easier to grow.  Why?..

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U.S. Stocks are Undervalued & Some Provide Excellent Income

An example of the undervaluation of U.S. stocks is the fact that the dividend yield of the Dow Jones Industrial Average exceeds the income one could earn on a 20-year U.S. Government Bond…

Prices of High-Yielding U.S. Stocks are Reasonable

Currently, the best opportunities to earn high income can be found in two categories of companies…


Among the Fastest-Growing Countries in 2012 & 2013 are China, India & Russia

We See Potential in Some U.S. Stocks & We are Getting Progressively More Positive on China.

China’s middle class is growing and prospering.  This trend has been in place for several years, especially in the last year or two…

Find out the four good signs…


See what Cotton Prices are doing…


Investment Summary

Dividend investing pays…

At Guild, when we invest for dividend income, we like to focus on higher-yielding investments that we know well…


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