Gold News

Gold in 2008

Gold in 2008 will see a gear shift in gold's evolution to higher prices still...

to cover the full picture of why we believe Gold Prices will continue to rise ever higher in 2008. This will be seen in the full issue of for subscribers – but we can give you one aspect of what's to come.

   This feature will be one of "moves to extremes" in a variety of financial markets. Dramatically "difficult days" will hit some investors and "couldn't be better days" hit others.

Gold is now commonly being spoken of at $1,000 as it goes above $850. As part of our forecasts for 2008, it is appropriate to continue to give you the next step in the evolution of the Gold Market that began at the end of the last century, after having been virtually discarded between 1980 and 2000.

With the crack in confidence in the global monetary system now becoming clearly visible in 2007, the stage is set for more confidence degeneration in 2008. The sub-prime crisis has evolved into an interbank credit crisis, and when globally respected banks become fearful of an established bank's ability to repay short-term loans, something fundamental has broken down.

Even when central banks opened the flood-gates of credit supply to banks – not once but several times – the problem did not go away, despite the reality that central banks are lenders of last resort. Add to this the fact that the initial precipitant of the current crisis has yet to reach full impact, and an economic recession seems to be on the way, unless the floodgates of new money can stem the dive down.

Either way, you know crisis management has moved from short-term to medium-term. These problems are systemic; there are not open to a quick fix nor even an obvious long-term solution. In short, they have to get worse.

A look at the impact of the tsunami of new money tells you that inflation is being fostered worldwide, as the target of such money isn't being hit, but instead it's held in the hands of those institutions that don't have a dire need for it, sending strong markets – such as gold – even higher.

To get investments right in 2008 we have to ignore the usual "overview" approach, as this is now completely inadequate. Instead we have to separate ailing markets from healthy ones, within all economies. And we are seeing bond markets roaring next to steeply declining other fixed-interest markets, manufacturing sectors suffering as emerging nation countries manufacturing flourish.

Complicate this with the steady, unstoppable flow of wealth to the healthy East from the over-indebted West – as well as to massive sovereign wealth funds, now looking for markets to invest in – and you are seeing a global move from poor markets to vibrant ones in emerging nations and commodities, including gold and silver.

In these markets the massive increases in liquidity we are seeing as a result of the credit crunches across the world (except, notably, in the East) will lead to a steady injection of inflation that will, we believe become self generating. The very nature of the liquidity demand is similar to that seen after the First World War in Europe across Germany and France. The key feature of this was that the demand for more liquidity could not be satisfied as prices rose in healthy markets where demand remained strong; many businesses crashed because the injections of liquidity just could not lift them out of danger. The important asset prices (relative to their survival) could not rise and went lower in the face of rampant inflation.

The underlying reason why this is now likely is that central banks right to the last one would rather inflate than see the dark hole of a recession, then depression, suck down the monetary system and – following hard on its heels – the government of the day. Whatever the success rate of the many global banks in combating the problems that arise, you can be sure that each one will target either inflation as the main danger facing them (if they have a healthy national economy) or drop interest rates and suffer inflation to protect what growth they have.

This alone will engender a global set of extreme market conditions, both good and bad. And as we are seeing now, the Gold Price will continue to be a prime beneficiary of investment, as investors realize that gold cannot suffer from these problems. It remains unprintable and so un-inflatable.

Please visit & subscribe to for the full report...

JULIAN PHILLIPS – one half of the highly respected team at – began his career in the financial markets back in 1970, when he left the British Army after serving as an Officer in the Light Infantry in Malaya, Mauritius, and Belfast.

First he worked in Timber Management and then joined the London Stock Exchange, qualifying as a member and specializing from the beginning in currencies, gold and the "Dollar Premium". On moving to South Africa, Julian was appointed a macro-economist for the Electricity Supply Commission – guiding currency decisions on the multi-billion foreign Loan Portfolio – before joining Chase Manhattan and the UK Merchant Bank, Hill Samuel, in Johannesburg.

There he specialized in gold, before moving to Capetown, where he established the Fund Management department of the Board of Executors. Julian returned to the "Gold World" over two years ago, contributing his exceptional experience and insights to Global Watch: The Gold Forecaster.

Legal Notice/Disclaimer: This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Gold Forecaster/Julian D.W. Phillips have based this document on information obtained from sources they believe to be reliable but which it has not independently verified; they make no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Gold Forecaster/Julian D.W. Phillips only and are subject to change without notice. They assume no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, they assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this report.

See full archive of Julian Phillips.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn



Market Fundamentals