DOW-30 below 11,000 and Gold at record High

Dear PGM Capital, blog reader,
Stocks have treaded water today, all over the world as a reaction to the downgrade of the USA credit rating from AAA to AA+, by S & P, Friday August 5th 2011.

The sell-off gained steam after President Obama’s speech of this afternoon, as can be seen from below DOW Intraday chart, for the DOW to close at 10,808.85  -634.76 or 5.55%.

On the other hand Gold soared with US$ 55.90 or + 3.35% an ounce to close at an all time high of USD 1,719.30 an ounce at 4:30 pm EST.

During the last 3 years in numerous blog articles we’ve said that the days of the USA as an Economic Superpower, the status of US-Dollar as the world reserve currency and its AAA credit rating are numbered.
Unfortunately, this is likely to be the case.

Ladies and Gentlemen, in our opinion with the downgrade of the USA credit rating the fall of (the once so mighty) USA has begun. Obama speech makes us even more concerned, because by quoting Warren Buffett in his speech, that the USA credit rating should be AAAA, president Obama is missing every sense of reality.

With elections next year, politicians in Washington might continue to blame the other party for the problems instead of taking real measures to solve the problems of the country.
This will put Mr. Ben Bernanke in the driver’s seat and we’ll see QE-3 sooner than most people might realize.

Those QE-‘s will destroy the value of the US-Dollar and those of currencies pegged to the US-Dollar.

For the sake of humanity we hope that we’ll be wrong on our above mentioned predictions.

Gold will shine brighter by the day and the psychological important price of USD 2,000.00 an ounce of Gold might be reached sooner much sooner than most people can imagine.

Last but not least, please consider your risk tolerance and investment horizon before investing and keep in mind that the prices of Gold, Silver and other precious metals, as well as the stock of their producers can be very volatile and that sharp corrections might happen in the short time.

Yours sincerely,

Eric Panneflek

2 thoughts on “DOW-30 below 11,000 and Gold at record High

  • This statement of Obama is really a disgrace! Instead of shooting on the messenger (in this case S&P) and talking about political issues, he could have used this opportunity to calm down the markets and show that he and the government understood the message and they are willing to do everything to work on the fundamental issues.
    This could have been handled so much better, no wonder that the markets went down today by so much. As an investor I lost all trust and hope in that country…

    It is really a shame…

  • it is becoming increasingly harder to find anything positive to say about politicians. I’ve said this before and say it again: they’re shortsighted, visionless and genetically burdened with a 4-year drive to the next election. In America’s case the problem is made worse by two warring parties that don’t seem to realize that their political squabbles are helping the country over the cliff, which they, together with the bankers, have been doing their damnedest to do these past decades, by fooling the taxpayers into buying worthless junk, devaluing the dollar, running up debts, and when the shit hits the fan, they tax the common guy again, give the money to the banks, which in their turn hoard it for the rainy days, which they themselves orchestrate, instead of putting it to work for the common guy to make a go at climbing out of the hole they (politicos and bankers) have put him in. What saddens me the most it to see a president who had a broad world support become a victim of the Reps’ well-oiled blame machine and NO TAX Bush doctrine, because he just didn’t have the balls to tell the Reps to go….’whatever”. A pity, but it takes ‘cojones’ to do the job, and that is what Mr Obama has proved NOT to have. Too bad for America. And Europe is going the same way. Hey, you guys, welcome to a crazy, clueless and steerless world and happy investing.

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