Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21
Is This the "Kiss of Death" for the Stocks Bull Market? - 14th Sep 21
Where Are the Stock Market Fireworks? - 14th Sep 21
Play-To-Earn Cryptocurrency Games Gain More and Is Set to Expand - 14th Sep 21
The CashFX TAP Platform - Catering to Bull Investors and Bear Investors Alike - 14th Sep 21
Why every serious investor should be focused on blockchain technology - 13th Sep 21
SPX Base Projection Reached – End of the Line? - 13th Sep 21
There are diverse ways to finance the purchase of a car - 13th Sep 21
6 Tips For Wise Investment - 13th Sep 21 - Mark_Adan
Gold Price Back Below $1,800! - 10th Sep 21
The Inflation/Deflation debate wears on… - 10th Sep 21
Silver Price seen tracking Copper prices higher - 10th Sep 21
The Pitfalls of Not Using a Solicitor for Your Divorce - 10th Sep 21
Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
This Boom-Bust Cycle in US Home Ownership Should Give Home Shoppers Pause - 9th Sep 21
Stock Market September Smackdown Coming Next? - 9th Sep 21 - Monica_Kingsley
Crazy Crypto Markets How to Buy Bitcoin, Litecoin for Half Market Price and Sell for TRIPLE! - 8th Sep 21
Sun Sea and Sand UK Holidays 2021, Scarborough in VR 180 3D! - 8th Sep 21
Bitcoin BTC Price Detailed Trend Forecast Into End 2021 - 8th Sep 21
Hyper Growth Stocks - This billionaire is now using one of our top strategies - 8th Sep 21
6 common trading mistakes to avoid at all costs - 8th Sep 21
US Dollar Upswing, S&P 500 and Nasdaq Outlook - 7th Sep 21
Dovish Assassins of the USD Index - 7th Sep 21
Weak August Payrolls: Why We Should Care - 7th Sep 21
A Mixed Stock Market - Still - 6th Sep 21
Energy Metals Build Momentum; Silver & Platinum May Follow - 6th Sep 21
What‘s Not to Love About Crypto Market Fireworks - 6th Sep 21
Surging US Home Prices and Gold – What’s the Link? - 6th Sep 21
S&P 500 Rallies To New All-Time Highs – Are The Markets About To Break Higher? - 5th Sep 21
Bond Conundrum - Boom or Bust for Gold? - 5th Sep 21
How the sale of a Sting CD sparked an Entire Online Industry - 5th Sep 21
Three Years of Fresh Thinking With Scott Dylan and Dave Antrobus - 5th Sep 21
Bitcoin Bear Market Trend Forecast 2021 and Model Crypto Portfolio Buying Levels - 4th Sep 21
The Most Actively Traded Companies on the Toronto Stock Exchange - 4th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Larry's take on the wild Stock Market and Gold action

Stock-Markets / Analysis & Strategy Mar 02, 2007 - 11:03 AM GMT

By: Money_and_Markets


For months, I've been warning you that U.S. stock markets looked overbought and were headed for a tumble.

And just last week, I said that a Dow close below the 12,242 level “will be your signal that the recent economic strength is rolling over, that investors think corporate earnings have peaked, and that the weakness in the housing sector is really hitting home.”

Larry's take on the wild Stock Market and Gold action

A few trading days later, we got that signal ...

I didn't know that China would be the trigger of the sell-off. But I will tell you right up front that I don't think China is where the real problem is.

Although a 9.2% drop in one day is disconcerting considering how far and fast the Chinese market rose, it's not entirely surprising. Nor is it surprising to me that the market jumped back yesterday, erasing about half of its losses.

What's next? Don't be surprised if you see more short-term weakness. That would be natural. But the fundamentals in China and Asia are still solid. One day — or even one month — of market action doesn't change that. Economic growth is still strongest across the Pacific. Three billion people are still awakening to the modern world and leaping into the 21st century.

Many Asian economies are like toddlers still learning to run. Sure, they will stumble from time to time, and sometimes stumble hard. But they are also growing and maturing very rapidly — offering abundantly rich investment opportunities.

How do you prepare for these rough patches? One method I like is stop losses. That's why I tell my Real Wealth Report subscribers to keep their stop losses in place on recommended positions. These orders help you lock in gains and protect your capital during sudden market corrections. They're made to order for days like Tuesday.

That's Asia and natural resource investments that are driven by Asia. But ...

The U.S. Economy Seems Headed for a Recession

Our economy has been floating on a magic carpet ride for the past three years. It's been artificially boosted by low interest rates, strong real estate prices, and sheer, blind optimism. But now the winds are shifting:

Look at the debts piled sky-high in this country, with personal, state, corporate, and federal debts at record highs!

Look at the economy's miserable performance, with GDP rising at little more than 3% per year!

Look at the housing market, already crumbling and with more downside ahead!

Then add a weakening dollar, a wimpy Federal Reserve, and a political torrent of Democrats and Republicans duking it out for nearly two years straight.

And remember that true U.S. inflation is likely running much higher than government's Consumer Price Index would have you believe.

Don't get me wrong. I love the United States. But I also recognize that it's not where the growth will be over the next few years.

Gold: The One Investment I MUST Talk About Today!

Last week, gold reached its highest price level since last May. And although gold has sold off in sympathy with stocks, you ain't seen nothing yet when it comes to the yellow metal's upside.

Any Wall Street analyst with half a brain should be starting to realize what I've been saying all along: There's not a central bank or politician in the world that will sacrifice growth in the name of tighter money.

If anything, this week's downdraft will just spur them to print more money. These guys don't want to see markets crash. Nor do they want to see the kind of weak economic conditions I just told you about above.

Ironically, these free-wheeling central bankers will continue printing money with reckless abandon at the worst possible time ...

  • When global demand for goods and services is already at all-time highs;
  • When the world's most essential natural resource — oil — is already facing severe supply limits;
  • When the U.S. dollar has already lost a great deal if its purchasing power;
  • And when the world is already dealing with massive issues like terrorism!

Always keep in mind: While central bankers and politicians can effectively create paper money at will, they cannot control the supply of gold in the world.

And there isn't much of it to go around: ALL the gold ever mined in the history of the world (about 151,000 metric tonnes) can fit into a 62.3-foot cube!

Right now, gold is trading at about $660 an ounce. If you don't own any, I would definitely consider buying some.

The most convenient way, in my opinion, is through the streetTRACKS Gold Trust (GLD). Each share represents 1/10 of an ounce of gold. When you buy this fund, it's kind of like buying a mutual fund, but one that holds only physical gold. The best part is you don't have to worry about storage and shipping because the gold is held in trust for you.

Or, if you want a diversified stake in gold companies, you can buy a good mutual fund such as the Tocqueville Gold Fund (TGLDX), the DWS Gold and Precious Metals Fund (SCGDX), or U.S. Global's Gold Shares Fund (USERX).

Best wishes,

By Larry Edelson

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in