Major Trends in the Slumping U.S. Economy

Larry Edelson takes a closer look at the ups and downs in the U.S. economy. In this issue of Money and Markets, Mr. Edelson examines the economy and advises on what could potentially happen throughout the course of 2008.

Jupiter, Fla. (PRWEB) March 22, 2008 -- Larry Edelson takes a closer look at the ups and downs in the U.S. economy. Mr. Edelson examines the economy and advises on what could potentially happen throughout the course of 2008.

The onslaught of nightmarish news about the U.S. economy has hit financial markets around the world like a Category 5 hurricane. Wild, short-term swings in the markets can often be confusing. But through it all, the major trends remain firmly intact:

- The Federal Reserve will continue to do everything in its power to prevent a financial meltdown: pumping in fiat money like there's no tomorrow; accepting more and more forms of weak collateral to lend even more money to the system; slashing interest rates; and more.

- The dollar will continue to decline in value against every major, and almost every minor, currency on the planet.

- China and India's economic growth - despite what is heard and read to the contrary - continues to barrel ahead. This is inflationary.

- Global demand for natural resources remains at record highs in virtually every commodity.

- Meanwhile, supplies of most major natural resources remain tight as a drum, including oil, gold, wheat, platinum, and more.

On January 17 in Money & Markets, Edelson stated:

"... 2008 is going to be a doozy. We're going to see wild swings in virtually all markets ... lots of fake out moves ... new trends emerge ... and old trends become reinvigorated.

-- The sinking dollar, which has much more to fall …

-- The crumbling empire of debt in the U.S. of which the subprime crisis is just the opening act …

-- The surprising inflation that is going to soon shock almost everyone …

-- And soaring prices for natural resources, which are now entering their next phase, an accelerated up-move that will take most investors by surprise, but be the most profitable phase yet."

In January, Edelson said about gold:

"Major support is way down at the $854 level.

"On the upside, gold is in uncharted territory, record highs. The key points to watch are the $1,000 level, which should pose some psychological resistance, followed by $1,250."

Gold has traded as high as $1,034, decisively breaking through the $1,000 level. Next target: $1,250. Gold could retreat before heading higher. If so, it would be a normal, healthy pullback.

Regarding oil Edelson said:

"Oil is still very much in a very strong long-term uptrend, with higher prices yet to come."

Oil hit $100 on Feb 26, and reached as high as $111.80 earlier this week. That's up 21.5% in just two months. There will probably be some consolidation, possibly a decline back to the $98 level, which should provide strong support. If oil breaks the $98 level on any decline, look for it to find solid support at the $88 level.

Either way, oil is clearly in a long-term uptrend. Edelson expects to see black gold hit $125 as its next main target. From there, it could go even higher.

Also back in January Edelson said:

"If (copper) closes above $3.67, the metal is off to the races ... to new record highs."

Copper closed above $3.67 on Feb. 20, and then it zoomed to a new record high at $4.02 a pound on March 6, before retreating a tad. This is amazing, especially considering the real estate disaster in the U.S. and the supposed slowdown in Asia.

The U.S. economic problems are hurting copper demand. But it's more than offset by soaring demand coming from China, India and other emerging economies. In fact, right now there are only three days of global copper supplies on the shelves.

But copper is heading higher after some consolidation, like we've seen with other metals. There's solid support at the $3.66 level, followed by $3.45 -- $3.50. As long as those support levels hold, then new record highs remain ahead for copper.

Agricultural commodities have also soared. Edelson states:

"Back in January, I told you, "Foods are now in a major bull market ... Corn, wheat, soybeans, sugar, and coffee -- are all taking off to the upside. This sector will be one of the stars in 2008, with much

higher prices to come."

Since the first of the year wheat is up 26%; corn is up 17%; soybean prices have risen 6%.

Edelson's models continue to point to 11,000 on the Dow, possibly much lower. The Dow has bounced off the 11,800 level three times. The next time it tests that area, it should pierce it and swoon to 11,000. 11,000 is a critical level of support on the Dow. If it gives way, look out below.

"The most important message from this is: The major trends - rising commodity prices and rising inflation - are not only very much intact, they're accelerating to the upside. After some more wild gyrations and pullbacks, I expect new highs in all of the above, except for the Dow!" states Edelson.

To read this issue online, please visit:

http://www.moneyandmarkets.com/Issues.aspx?Inflation-and-Falling-Dollar-Good-for-Commodities-Investors-1568

About Larry Edelson and Money and Markets

With nearly three decades of experience in precious metals and natural resources markets, Larry Edelson has played a pivotal role in training Weiss Research staff and in guiding Weiss Research's customers to prudent investments in the sector. His Real Wealth Report, Gold Trader Hotline and Energy Options Alert provide a continuing education on natural resource investments, with recommendations aiming for both profit and risk management. His team of technical analysts helps enhance the timing of investment recommendations with the aim of continually improving the performance results for investors.

Mr. Edelson is also a regular contributor to the daily e-letter, Money and Markets. Recognized as an expert in precious metals and natural resources, he is often called upon by the media for his investing views. Mr. Edelson has been featured on Bloomberg, Reuters, and CNBC as well as The New York Times, New York Sun, and Marketwatch.com

Mr. Edelson holds a B.A. degree from Columbia University.

Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin 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. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.

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