Blanchard says Fed’s liquidity infusion is another quick fix to an unquantifiable market crisis

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NEW ORLEANS (March 13, 2008) – While the Fed’s moves to provide $200 billion of liquidity to major Wall Street investment banks may provide a temporary boost to the stock market, analysts at Blanchard say the current global market crisis continues to unwind and gold will remain a strong investment safe-haven that will continue to increase in value.

“Even in light of the Fed providing safe, high-demand treasury securities in return for sub-prime mortgage-backed securities that have been key to creating the current global market crisis, we still haven’t seen the bottom yet,” says Donald W. Doyle, Jr., Chairman and CEO of Blanchard and Company. “The sub-prime mortgage mess continues to unwind, and the financial institutions and markets associated with them still face more bad news over the long term.”

The Dow saw the largest single-day pop in the last five years on Tuesday, but Doyle says that the Fed Funds Futures are still pricing in over a 50 percent chance of a 75-basis-point cut next week, and that further devaluation of the dollar continues to bode well for gold.

“On Wednesday, gold recouped all of its Tuesday sell-off losses and remains near record highs, while the dollar continues its descent to fresh record lows,” Doyle says. “Investors and analysts need to look at the economy from the big picture view and recognize the fundamentals in place.”

Doyle says the Fed swap of cash for mortgage-backed securities may help banks be more likely to lend money to businesses and individuals, and that should be positive for gold as the increased liquidity lessens the banks’ need to meet margin calls via gold sales, further boosting gold’s potential for price increases.

“The commodity super-cycle remains firmly in place,” Doyle says.

Blanchard and Company, Inc. is the largest and most respected retailer of American rare coins and precious metals in the United States, serving more than 380,000 people with expert consultation and assistance in the acquisition of American numismatic rarities and gold, silver and platinum bullion. The Blanchard Economic Research Unit is a key source of precious metals market analysis and continues to be an important resource for financial and consumer media throughout the United States. Blanchard and its predecessor companies have called the New Orleans area home for more than 30 years. For more information about the company, visit BlanchardGold.com or call the company toll free at 1-800-880-4653.

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