MARKET ALERT
Excerpts from GLOBAL WATCH:
THE GOLD FORECASTER
by Julian D.W. Phillips
December 17, 2008

Gold has now entered the next and major leg of the long-term gold bull market after correcting down from $1,035. We believe it is now targeting $1,000, initially. This will be achieved with pullbacks and periods of consolidation.

We believe, too, that gold shares will benefit to a greater extent than gold itself, in the next moves up. In particular, we feel that soundly based gold “Junior” mining companies will benefit strongly.

Please refer to our latest issues for our preferred shares.

The move has been triggered by the clear signal from the Fed that the deflationary spiral gripping the global economy is far more serious than realized until now. The initial impact has already been seen in the precipitous fall of the U.S.$ to over $1.41 so far. As repeated attempts to re-invigorate the flow of liquidity have failed, the U.S. Federal Reserve had to do more, much more.

• The Fed’s interest rate cuts and ‘Quantative Easing” will soon be followed by central banks across the world.
• The swamping of the global economy with liquidity will stem deflation, but will also badly damage confidence in the world’s monetary system and give rise to explosive inflation.
• The time it takes to reflate the global economy will be far shorter than most commentators expect.
• The strains that the world will now feel, particularly in the different world economies, will become in many instances, unbearable, so we expect to see restrictive local action in those economies to manage the huge capital flows that will be experienced.

All of these prospects are very positive for gold.

We last issued a similar Alert early in September in 2007. History shows how correct we were!

This alert is to prompt you to act now before the market really takes off.

© 2008 Julian D. W. Phillips
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