FIAT Economics Builds The City of Man for Chaos

For today, I hope you will take time to glance over the articles which I have referenced. There is a lot of good information there which should help you in your understanding of economics and investing. The Guide to Mises' Human Action is important for all. You can download it from the referenced site FREE. There is great lack of insight into economics throughout America, since all are deeply into Keynesian Economics which is the FIAT economics of St. Augustine's City of Man.

Men, always feel that they can do better than God, so early on the built the Tower of Babel. Since that time, man has sought, as did Adam and Eve, to be as God - determining what is good and evil. We see this graphically in America as the Federal Government has expanded in size, cost, and power since the War for Southern Independence failed to protect state's rights. Successive administrations, congresses, and supreme courts have substituted man's law for God's Law. Thus, the American City of God has been built and is not in full bloom.

FIAT "money" is at the root of much of our financial woes, but the real problem is a turning from the God by Whose providence our nation was founded. As we look around each Lord's Day, we see more shoppers than corporate worshippers. This is a tradgedy. The Lord requires so little of us and rewards our obedience so greatly through His grace and mercy toward His people, that we willingly respond to Him and attempt to follow His law. His law provides life and peace, but man's law results in choas and death.

Let us all join in corporate worship at a church which preaches the whole word of God, administers the two Christ ordained sacraments, and exercises discipline over its members. Through these churches, the people of God are prepared to present the gospel to the world to bring all under the Kingship of the Lord Jesus Christ. It is up to us to spread the good news of the gospel and to warn against building the City of Man. Let's put an end to the new Towers of Babel.

The 3-Year graph of gold, below, shows that gold remains in an upward trend, but that it seems to be taking a break which could last through the summer. This, of course, depends upon the whims of the bullion banks as they play in the paper futures markets.

Spot gold has been recovering a bit from the overnight lows, but is still a long way from where it was last week. It is struggling upward at 912.40 presently.
Silver has really been hammered and is now at 12.60. That is a real buy, but remember it could go lower as the summer doldrums continue.
The dollar is above its opening in relation to other currencies, but remains week. There is nothing backing it, but the full faith and credit of the bankrupt United States. Since it has been and is the reserve currency of the world, people have become accustomed and comfortable with it. The treasury sales went quite well as central banks bought in an effort to save the world financial system.
Our miners are at price levels which are very attractive. I bought some HL yesterday under 2.50. Here are the current prices for some miners and ETFs >> AUY 8.54; CEF 11.12; DROOY 7.51; GLD 89.63; HL 2.40; HMY 8.57; IAG 9.22; SLW 7.47; SSRI 17.36, and VGZ 1.57. If you decide to buy, buy in smaller than normal chunks. Whether you buy or not, should be based upon your present holdings, cash available, and your risk tolerance. I know that in the future, we will regret that we did not buy more, but that happens very often in investing. Use extreme caution.

For the general market, the DOW is off 28 to abour 8156. Not too happy a situation there, either.

From TownHall.com:

Cap-and-Tax: Government vs. America
By David Limbaugh

There is still time to stop the legislative monstrosity known as the Waxman-Markey cap-and-trade bill before the Senate approves it. But for that to happen, Americans must learn how bad it is.

Let's briefly review the basics: The bill is ostensibly designed to curb man-caused carbon emissions (presumably without outlawing breathing) to retard global warming.

Even if we accept, for purposes of argument, the assumptions of radical, hysterical leftist environmentalists that man-caused global warming will destroy the planet if evil, rich capitalists don't radically curtail their own contributions to the catastrophe, Waxman-Markey would not prevent this Armageddon. Read it HERE.

This is bad legislation which will not accomplish any of the alleged "goal." Once again, we see the truth in Rusas J Rushdooney's statement in a presentation on economics and the family in 1982 which was that our government was, in fact, at war with us, not with the USSR. The war continues and is now escalating greatly. By the way, it is impossible to separate economics from politics. I hope you understand this fact.

In Gary North's Reality Check today, he pointed the way to an excellent study guide on Mises' Human Action. The study guide is 360 pages long, but worth the effort for anyone who wants to really understand true economics which is not taught in many universities today. You can download it in pdf from HERE.

From MineWeb.com:

Gold is bad in a deflationary environment - another gold myth

This is Myth #5 in Ronald Stoeferle's Special Report on Gold for Austria's Erste Bank

Author: Ronald Stoeferle
Posted: Friday , 10 Jul 2009

VIENNA -

The fact that gold is an excellent hedge against inflation should have established itself more or less as common knowledge. Investors use it to protect themselves against the erosion of their purchase power. However, the development of gold in a deeply deflationary environment has not been subjected to much analysis. The only relevant period that would lend itself to comparison is the Great Depression of the 1930s. However, those were the times of the gold standard, i.e. the gold price was fixed. Read it HERE.

There is a great deal of truth in this article. We must understand these facts. The precious metals never go to zero value, while at some time in the future, the unbacked paper currencies will be worth virtually nothing.

From News.MoneyCentral.msn.com:

US dollar mostly higher, gold down in Europe

LONDON (AP) - The U.S. dollar was mostly higher against other major currencies in European trading Friday morning. Gold fell. Read it HERE.

The dollar and gold have been delinked by the intervention of the bullion banks. Go figure this >> During the last five weeks the US Dollar has moved upward just over 1%, and over the same period, gold has lost 7.8%. Nothing but the paper manipulation by the boyz can account for this strange action. They hold a monstrous short position in the paper futures markets which they will be unloading at some time. In the mean time, they are just sitting there and laughing among themselves as they move the markets at will. Were the dollar to drop precipitously, as it may in the future, they could get their comeuppance. That would be a great day of retribution for their immoral activities.

From Reuters yesterday:

China demands currency reform, France backs debate

By Simon Rabinovitch and Matt Falloon

L'AQUILA, Italy, July 9 (Reuters) - China called on Thursday for reform of the reserve currency system at a meeting of world leaders in one of its most direct attacks on the dollar's global dominance.

Chinese State Councillor Dai Bingguo did not specifically name the dollar at talks between the Group of Eight rich nations and G5 emerging powers, but he was unequivocal in calling for the world to diversify the reserve currency system and aim at relatively stable exchange rates. Read it HERE.

The tempo of this music to replace the dollar is rising. I believe, Chuck Butler has pointed out, the push by China for IMF SDRs is a subterfuge to hide their real goal of replacing the dollar with the Renminbi. Could happen, you know, but not today or tomorrow. Maybe we should all be learning Chinese.

From Bloomberg yesterday:

AIG May Have Zero Value After Rescue, Citigroup Says

July 9 (Bloomberg) -- American International Group Inc., the insurer bailed out four times by the government, fell the most in nine months after Citigroup Inc. said the firm may have no value left for shareholders after repaying the U.S.

AIG plunged $3.62, or 28 percent, to $9.48 at 4:15 p.m. in New York Stock Exchange composite trading, the biggest drop since September 2008. The insurer has lost more than half its value after implementing a 1-for-20 reverse stock split when trading closed June 30.Read it HERE.

The bailouts have really saved the recipients of the largess, haven't they? NOT!

From Kitco.com yesterday:

G-8: Not Much Ado About What To Do
By Jon Nadler

Precious metals values recovered some of the ground they lost in previous sessions, following a retreat to near 80 on the index by the US dollar, and on the heels of an initial $1.30 bounce in crude oil prices. This morning's initial jobless claims data did little to bring the greenback up from its 0.64 point loss on the trade-weighted index, albeit gold gave up some of its initial gains after the nine o'clock hour saw a decline in oil values back towards the $60.50 level. At last check, oil was on the negative side on the day, trading a nickel under the $60 mark.

Spot gold prices added $5.20 on the open, climbing to $914.30 per ounce. Participants remain aware (and wary) of this week's breach on first-line support in and around this value zone, but opinion remains somewhat divided as to whether or not significant bargain hunting will emerge in this price neighborhood.Read it HERE.

Good news from MoneyNews.com:

Swiss: We Will Seize UBS Client Data

ZURICH -- Switzerland has vowed to prevent UBS from handing over client information to U.S. authorities, in an attempt to defend bank secrecy, saying a tax case targeting its main bank is souring diplomatic ties.

Wealth management giant UBS is facing a court hearing in Miami next week after refusing to disclose data on 52,000 Americans holders of secret Swiss bank accounts to U.S. tax authorities.

The Swiss Justice Ministry said on Wednesday that Swiss law prevents UBS from handing over client information and the government would seize UBS client data, if necessary, to stop that happening.Read it HERE.

At least, for the time being, there is one nation which respects the rights of secrecy for investors. Of course, we have a great protection of personal matters in the U.S., don't we? If things go the way here they seem to be headed, we will have the cameras in every room in our homes. Just like in the book 1984. By the way, if you have not read it, you should. It shows the problems of totalitarian governments for which America is headed. 1984 describes a total totalitarian government.

From Telegraph.co.uk:

Shipping flashes early warning signals again

Port statistics are revealing. They were a leading indicator before the production collapse in the Japan, Europe, and the US over the winter, and they may be telling us something again.

Amrita Sen at Barclays Capital says the number of Baltic Dry ships waiting to berth — mostly in China and Australia — has begun to fall after peaking at 154 in mid-June. Read it HERE.

Once again, we see that everything is not beautiful and rosy as we are being told. The proof is here, as it is in other places. The green shoots are simply more dried weeds.

Best to each, Doug

Both Gold & Silver Seem Oversold - Boyz Active

The boyz are loaded with shorts on the precious metals and may be taking them down to much lower prices. Would that this would be the last time. They certainly have the deep pockets to be able to do what they want and covering these shorts would be of great benefit to them. It could well be that silver will be the impressive performer for the near future even surpassing that of gold.


Our miners are rebounding a bit this morning as the price of the metals has stopped falling for the time being. Here are some >>AUY 8.59;CEF 11.21; DROOY 7.74; HL 2.33; HMY 8.60; SLW 7.63; SSRI 17.48, and VGZ 1.57. All are in reasonable buying range, but we do not know the immediate future for gold and silver. It is up to the boyz. Silver is oversold and gold is nearing that level, too.

Ron Paul on YouTube.com:

He is defending and explaining the purpose of his bill to audit the Federal Reserve for the first time ever. This non-government agency which has so much power has never been audited nor investigated. Listen to his comments HERE.

From MineWeb.com:

Commodity price manipulation breeding tougher regulation approach

UK (and European) regulators may well support possible measures being taken by the CFTC in the U.S. to reduce commodity and metal market speculation.

Author: Simon Hunt
Posted: Thursday , 09 Jul 2009

WEYBRIDGE,UK (SHSS) -

The statement that the U.S. Commodity Futures Trading Commission (CFTC) was considering further measures to reduce speculation in commodity and metal markets is in keeping with events which go back as far April last year.

This statement follows comments made after last month's G8 meeting and from minutes of a more recent Federal Reserve Board meeting. Both statements referred to the unwanted return of speculation in commodities which might impair the global recovery. Read it HERE.

There are two sides to this report. (1) We of Austrian (Biblical) Economics do want a minimum of government control. Of course, government should punish fraud and theft, but it does not seem to be of that mind in this case. (2) The manipulation should be stopped.

Therefore, I have mixed feelings on this subject.

From TownHall.com:

Government Care a Health Hazard

by Cal Thomas

Most of us are familiar with the old expressions: Look before you leap; a stitch in time saves nine; if it sounds too good to be true, it probably is. These phrases remind us to think before accepting anything as fact. And never have they been more applicable then now, as the Obama administration attempts to re-fashion the healing arts. Read it HERE.

Ask yourself, "What does government do well at reasonable costs?" I can find nothing that our government is currently doing that would meet these two criterion. Therefore, ask yourself, "Do I want government to manage my health care?"

From the WSJ:

Catching The Gold Bug
LARRY LIGHT

Worried about a harrowing, inflation-ridden future, Scott Van Steyn has found the answer in a batch of glittering one-ounce gold coins. In fact, they make up a large chunk of the physician’s assets.

“There’s 2,000 years of history to show that gold is the best thing to own during bad inflation,” says Dr. Van Steyn, a 45-year-old orthopedic surgeon in Columbus, Ohio. “People used to laugh at me for buying gold. They don’t anymore.” Read it HERE.

Wow! From one of the mainline media!

From Fox News:

Silver Set To Outperform Gold, Citi Argues

Short comment. Read it HERE.

A real possibility in the near term.

More on housing from Bloomberg.com:

Delinquencies on U.S. Home-Equity Loans Reach Record

By Margaret Chadbourn

July 7 (Bloomberg) -- Late payments on home-equity loans rose to a record in the first quarter as 18 straight months of job losses and a slumping economy left more borrowers unable to pay their debts, the American Bankers Association reported. Read it HERE.

From Reuters.com:

U.S. mortgage fraud 'rampant' and growing-FBI

SAN FRANCISCO, July 7 (Reuters) - U.S. mortgage fraud reports jumped 36 percent last year as desperate homeowners and industry professionals tried to maintain their standard of living from the boom years, the FBI said on Tuesday. Read it HERE.

I am so glad to see that the housing bubble is finally going away. By the way, the U.S. mortgage fraud, if true, is another example of what happens with most government plans. It feeds the greed and larceny of people's hearts.

Have a great Thursday! If I were buying, it would be in small increments. And I would likely use some trailing stops at this point in time. Our success is up to the Lord, Who controls all.

Gold is 913.20 on an up tick and silver is 12.81 on a down tick. By the way, HL2.44 up a bit from what was reported, above.

Best to each, Doug

Manipulation - No Free Markets

Casey's Daily Resource Plus pointed out another indication that there are no free markets, only intervention. Notice the similarity of the following three graph patterns. The precious metals are normally priced in dollars (for the time being). However, as the precious metals are capped and hammered downward by intervention, the same thing is happening to the dollar at almost exactly the same time. That is not free or normal market action. There is no doubt that it is strictly intervention. This is what is creating havoc in the market place today.

Much of the same action is taking place in the general market as the PPT (Plunge Protection Team) attempts to stop the free fall of the DOW, etc.

It is no wonder that we are confused about the market. It is a market place in which the buy and hold philosophy of investing is doomed to fail. Of course, I believe that long term the precious metals will retain value. In fact, there will be an eventual gold rush as the masses at last move to the last stronghold of value. When? That is known by God alone.

It is amazing that the bullion bank boyz are holding on to their shorts on the precious metals so long. They are unloading bit by bit as they manipulate the prices downward. It would be nice, if they would take ALL of their profit and leave the markets alone. Greed and larceny are never satisfied. Perhaps, the Lord is preparing a comeuppance for them at some time in the future. They could lose control and be stuck holding the empty bag.


This is the ino.com graph of the dollar for yesterday. The action of the dollar mimics that of the precious metals almost to the minute.
From MineWeb.com:

SAFE HAVEN REPLACEMENT FOR DISCREDITED DOLLAR

Gold price poised for spectacular and prolonged rally - Peter Schiff

Gold bullion and gold-related investments, especially gold mining stocks, will be the best bets in the protracted and severe inflationary environment likely to result from current global monetary policies.

Author: By Marc Davis
Posted: Wednesday , 08 Jul 2009

Vancouver, BC (BNW Business News Wire) -

Gold prices are poised for a "spectacular" and prolonged rally as the recession deepens and investors finally become disillusioned with the U.S. dollar.

So says renowned Wall Street financial forecaster and economist Peter Schiff, who loudly warned of the October 2008 stock market crash and accompanying recession as far back as 2006. Read it HERE.

More from MinWeb.com:

Yesterday's top story: Deutsche Bank mildly bullish on gold into 2H09, silver to outperform

As Deutsche Bank forecast the Central Bank Gold Agreement soon will be extended another five years, bank strategists advised the influence of gold ETFs on gold prices is starting to wane.

Author: Dorothy Kosich
Posted: Tuesday , 07 Jul 2009

RENO, NV -

In an analysis published Monday, Deutsche Bank predicted the IMF will become an associate signatory to the Central Bank Gold Agreement, which the bank's research team forecast will be extended another five years over the next few weeks.

Meanwhile, Deutsche Bank is maintaining "our mildly bullish outlook for gold into the second half of the year." Read it HERE.

The, above, seemingly contrary views on gold are interesting. Short term, I believe we are seeing a manipulated correction in gold. It is now at 916.90 down 7.20 and silver is 12.91 down 0.18. I did sell a substantial amount of my holdings in CEF yesterday to gain cash and to lock in profit. From the look of prices today, I am thankful that I did sell.

Here are the current last prices on our miners and ETFs: AUY 8.64; CEF 11.17 (I sold at 11.34-11.36); DROOY 7.75; GLD 90.10; HL 2.46; HMY 8.94; SLW 7.68; SSRI 17.51, and VGZ 1.65. While the miners are in very good buying range, I am not adding to my portfolio at this time since I believe the prices will languish for the immediate future, maybe all summer. Thus, depending upon your portfolio, available cash, and risk tolerance, make your decision. I am still holding a good number of shares in most of those, above, so I do not worry about the demise of the dollar as these will jump in value as the dollar continues downward.

New information on the housing bubble from The Daily Pfennig: "Do you know what "shadow inventory" is? Well, it's the new buzz-word that's getting quite a bit of attention... Shadow inventory comes in several forms. It includes homes in or close to foreclosure but not yet put up for sale - a number that's increasing. It also includes homes that owners want to sell but are waiting to put on the market until it improves.

Well... I told you a year ago that the housing problem was being made worse by all the inventory of houses that needed to be sold... And even our Mr. Magoo, former Fed Chairman, Big Al Greenspan, noticed the inventory as being a problem... Well, this shadow inventory could be adding to the already too big inventory... It's like this "inventory" is hanging over the housing market like the Sword of Damocles!

So according to the data I saw... 3.5 million homes are now for sale... This Shadow Inventory is larger than that! The result, as this inventory comes into the market? Well... It will continue to put pressure on home prices downward... Oh boy! Just what house prices need, more downward pressure!

As this housing meltdown drags on... (and I might add, for those that were drinking the kool-aid, and wouldn't listen to me when I kept harping about the housing bubble bursting, this has got to be very painful) you can see why there are those (and I'm one) that believe the housing recovery won't come for some time... Maybe not until 2012! But probably 2011..."

And the rosy reports have shown over the last few weeks that the housing bubble fiasco has ended. It has NOT! There is much more to come. Too bad we do not have free markets. Were our markets free, the fiasco would have ended painfully, but quickly. Instead, we are being treated to more of the actions which created it in the first place. That continues is spades!

I'm looking forward to see what God has in store for us in the immediate future. I know that He loves and cares for His people in the long run. He always balances the books in the end. That is why "Vengeance is mine says the Lord." We do not always have to take revenge or balance the books on our own, because He will and it will done 100% correctly. We would goof it up. Thus, we can be still and at peace and know that He is God. We are not. And, mostly certainly, the government is a false messiah.

Best to each, Doug

I am sellling some CEF - Gold & $ Moving Down

Gold in its proxy GLD looks to be headed lower for now. It has broken below the 50 day moving average, again. This could be a longer, hotter, dryer summer in both weather and the price of gold.

The Central Fund of Canada, one of my favorites, has a double top (purple line) followed by a series of testing of the 50 day moving average and then a break through. Therefore, I am selling a portion of my CEF for two reasons: (1) I want to have more ready cash, and (2) I am going to preserve some profit by the sale. If I held GLD, I would do the same. That is what I am doing. You make your own decisions.
The US Dollar is still on a downward trend. Its 50 day moving average broke below the 200 day early June. The relative value has not broken above the 50 day moving average since well back in May. The price has been in a narrow trading range for just over a month. Not a good looking graph.
Once again, we are treated to the intervention in a way typical of recent times. Toward the middle of London trading, the precious metals are capped and slammed down. Gold has returned to 925.20 since NY opened.
Silver at virtually precisely the same time was slammed, but it is still down 0.08 to 13.17. Remember there are no free markets, only intervention. This forces us to be traders and to leave the buy and hold philosophy. We must discover buying ranges and trade in and out within the ranges. This is extremely difficult, so one must be very cautious about buying and quick to sell as the top of the range is approached. Then get ready to buy again. However, I never want to sell all of a holding under these circumstances. How long O Lord? This, as timing always is, the big question. Of course, David asked the question in regard to his struggle with enemies all about him. Of course, we should see the bullion bank boyz as our enemy.


From Chuck Butler of Daily Pfennig this morning: "Could the nascent bias to sell dollars be a result of the fact that the U.S. will once again depend on the ignorance of strangers (foreigners) and issue $35 Billion in 3-year notes today... But then, with the "new" way the Treasury allocates "who buys" the Treasuries, the Fed could step in, buy up a HUGE Chunk, and make it look like "outsiders" bought them, which would make the "deficits don't matter" flag wavers run into the streets shouting to the tune of Jimmy Crack Corn... We issue Debt, and the foreigners don't care, we issue lots of debt, and the foreigners don't care..."

Why do you think the measurement was changed? Obviously, the Fed does not want the general public to see the fall off of foreigner buying of our debt. The rosier the picture presented to the gullible of our citizens, the better they feel. Emotion drives much of the markets and the economy. Therefore, the White House and the Fed want "everything to be beautiful" or at least seen that way. We know better. Things are not always as they appear, particularly where governments are concerned.

The advantages of owning the world reserve currency Gary North's Reality Check today:
"The United States possesses a unique series of advantages as a result of its reserve currency status. These include the following:

1. The government can rely on the Federal Reserve System to create money out of nothing to buy U.S. Treasury debt, and then repay foreign central banks with this newly created counterfeit money.

2. Americans can buy imported oil in newly created dollars.

3. There is a huge market for its Treasury debt (at about 0% per annum), corporate debt, and even stocks, which foreigners and foreign central banks buy, thereby funding the nation's gigantic trade
deficit.

4. The world's commodity futures markets are priced in dollars, making it more costly to trade in other currencies."
You can get a free subscription HERE.

From WSJ Online:

Dollar's Role Under Debate In Run Up To G8 Summit

AIX EN PROVENCE, France (Dow Jone)--France, Russia and India questioned the role of the dollar as the world's reserve currency during the weekend, indicating its status is likely to be a strong talking point in this week's Group of Eight leading nations' summit in Italy. Read the article HERE.

From TheDailyBell.com:

James Turk on how the elites always destroy the paper money they value - and why gold wins

Read the article HERE.

That reminds me of what Jack Kemp said back in about 1981-1982: "We will either monetize gold or gold will demonetize the dollar."

From EnglishDongA.com:

Bank of Korea Likely to Buy Gold for 1st Time in 11 Years

The Bank of Korea has not purchased gold for 11 years, but is expected to go on a gold buying spree, as the world’s central banks have bought the commodity since the global economic erupted in September last year.

A Bank of Korea official said yesterday, “The bank has begun to set up a plan to manage foreign exchange reserves for next year. It has also closely watched central banks in other nations and trends in the global gold market. Given the changing global financial environment, the bank`s management plan is critical.” Read the article HERE.

From China Economic Net:

China encouraged to further boost gold reserves

Last Updated(Beijing Time):2009-07-06

Read it HERE.

We are being tested again. Remember that the dollar is in a long term down trend and our politicians are not about to bite the bullet and do what is necessary. They have a greater fear of depression than inflation. Because of the larceny in people, all prefer inflation, because they can borrow currency and pay back over time with currency of lesser value. Thus, the do not return or pay back with value equal to that which was borrowed. The debtors win an the creditors lose. We violate the law of God which warns that "the wicked borrow and pay not again." Just as the governments and central banks do this to the citizens, the citizens become addicted to the same larceny. Thus, FIAT currencies encourage a violation of God's Law-Word and generate a citizenry devoted to moral decay. We either follow God's Law or have chaos. Where are we now?

Best to each, Doug

Another Buying Opportunity with Metals Pushed Down

Both of our metals have been capped again in thin over night trading in Hong Kong. Gold was dropped from about 931 to below 921.

Silver was capped about 13.40 and pushed down below 13. Both have now recovered slightly. Thus, we are being offered a buying opportunity in the mining stocks. I sent out an announcement of my purchases of Helca Mining. All my purchases were executed at 2.54 which, to me, is a great buying price. If the price rebounds quickly, I will be using trailing stops on some of my shares, but not all of them.

China has moved beyond Argentina, much of Asia, Brazil, and now Hong Kong to allow trading in Renminbi. The Hong Kong banks will now be able to have Renminbi as well as Hong Kong dollars. The G-9 meeting will include China. China has a big axe to swing as it grabs more international recognition. They hold a mass of dollar instruments which they are using to buy gold and other natural resources throughout the world. Very likely their gold is ultimately to replace the dollar reserve with the Renminbi. Can it be done? If the financial fiasco continues, they can in time, but not today.

More on California woes from George Will - TownHall.com:

Can California Be Sold On Ebay's Former Leader?

by George Will

California's cascading crises prefigure America's future unless Washington reverses the growth of government subservient to organized labor. The state cannot pay its bills, poorly educates its young, and its taxation punishes whatever success that its suffocating regulatory regime does not prevent.
Read the article HERE.

California is in dire financial condition and the outcome there will have a vast impact upon all state and municipal bonds. If California can go broke, others can and will. Is California too large to be allowed to fall? I don't know, but it would be better if all our governments would shrink in size and intervention into our lives. Perhaps, the financial fiasco will force a reduction in them. Likely, not, because governments can always cancel any debt they owe. At the federal level, they can simply print more FIAT currency to defraud the holders of their debt.

From MineWeb.com:

Trusting in gold - Austria's Erste Bank

Austria's Erste Bank's latest Special report on Gold still rates the yellow metal positively as an investment. A minimally edited version of the introduction to this report is published below.

Author: Ronald Stoeferle
Posted: Monday , 06 Jul 2009

VIENNA -

Since Erste Bank's first Special report on Gold in 2007 when the gold price was USD 650, gold has outperformed almost every other asset class. The gold bull market has been running with an annual performance of 16% since 2001. Gold closed the year 2008 with the eighth annual increase in a row. And in the year to date, the performance has been outstanding as well: the gold price has recorded an increase of 7% (in USD) and 8% (in EUR), respectively. The average price in 2008 was USD 872/ounce, i.e. 25% higher than in 2007 (USD 695). Read the article HERE.

More on gold from MineWeb.com:

PRESERVING PURCHASING POWER

Gold Myth No. 1: Gold is (too) expensive

The following note is abstracted from a Special Report on Gold published by Austria's Erste Bank and written by gold expert Ronald Stoeferle. Other abstracts and analysis from this report will also be published in due course

Author: Ronald Stoeferle
Posted: Friday , 03 Jul 2009

VIENNA (ERSTE BANK) -

One might as well say that it is not the price of gold that rises, but the value of the respective paper currency that falls. Gold preserves the purchase power and in fact even increases it gradually. Comparing how many real assets one ounce of gold would buy in a historical context, can substantiate this statement. Read it HERE.

The above two articles reveal that gold is still treasured by others. The Europeans know the value of precious metals, as they have suffered during two World Wars in the last Century. Gold and precious stones were all that saved many of them during the war years. We have yet to experience the realities of their experience. Thus, our masses have no idea of the value of such items. We must pray that we never suffer as they did.

I rest in the fact that God is causing all things to work together for the good of those He loves. We are likely to experience rougher financial times ahead, but know that He is in control. Praise Him daily for His care and His grace.

Best to each, Doug

:

No Free Markets - Only Manipulation

Remembering that we no longer have free markets, we now have intervention and manipulation of all markets. It seems that the bullion banks want gold capped at 940 for the time being. Therefore, we should watch the price of gold and as it approaches 940 or goes just over, we should think trailing stops on the miners. This is particularly true if we have paper profits in some of them. I never until the end sell all of my miners, so I put trailing stops on a portion. Often, I will sell at a limit price as the price of gold rises, to obtain cash for the next slam to buy back in when prices are forced down.

Here are some of our miners with the current price and (less than price where I would consider buying). AUY 9.06 (8.25); DROOY 8.19 (7.25); HL 2.75 (2.65); HMY 9.65 (8.00); SLW 8.40 (8.00), and VGZ 1.80 (1.60). The gold cap seems to be $940 and $14 seems to be the cap for silver. Gold is now 927.60 down 12.70 and silver is 13.31 down 0.39. Both are on down ticks. All the miners are off some today.

From CoinLegislation.com:

Fair Treatment for Precious Metals Investors Act

S.1367: Fair Treatment for Precious Metals Investors Act

Summary: Seeks to amend the Internal Revenue Code of 1986 to treat gold, silver, platinum, and palladium investments in the same manner as stock and mutual fund investments for the purposes of the capital gains tax rates imposed. Read the article HERE.

This would help the metals, but is a small concession in view of the flagrant manipulation of the metals markets.

From TimesOnLine.co.uk:

How the ECB’s fig leaf has completely withered away

Anatole Kaletsky: Economic view

Now that the global recession appears to have passed its low point, panicmongers in the media and financial markets are shifting their attention from deflation to inflation — and especially to the debasement of the dollar by the money-printing operations of the US Federal Reserve. Read it HERE.

It is a race between the ECB and Fed Reserve to see which one can pump the most FIAT currency into the economies. We are "winning" so far.

From Bloomberg.com:

CFTC Looking at All Options for Fair Markets, Gensler Says

Read the article HERE.

Interestingly, there is no mention of the precious metals in this article. Perhaps, the government is too interested in keeping gold and silver capped by any means.

From of all places Rolling Stone Magazine: "The world's most powerful investment bank [Goldman Sachs] is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." - Matt Taibbi, Rolling Stone magazine, June 2009 If you would like to have the article let me know at drewdeb@swbell.net and I'll send it to you.

Let us recall the strong Christian environment of the founding of this nation which would not exist except for the sacrifice of many and the grace and providence of Jesus Christ. This Fourth of July, let us rededicate ourselves to Jesus Christ and seek a great awakening within our nation. We have left our great God as a nation and have become a nation which worships the false messiah: the State. We must turn back before it is too late. The Lord is warning us with the judgment which is falling up us from His hands as a call to return to Him.

Best to each, Doug

The Good Old Trading Time is Here Again!

The miners have broken above the 50 moving average again. That is good. Here are our miners: AUY 9.30; DROOY 8.30; HL 2.87; HMY 10.40; SLW 8.59, and VGZ 1.79. I will be using 3-5% trailing stops on some if the price goes into the profit range for me.

Below are the 24 hour spot gold and silver graphs. Look at yesterday's trading in red. That certainly is free market activity, is it not? NO! NO! See the first reference below. Even CNBC discusses government intervention. There are no free markets in America today. We have only intervention. And until the bullion banks stop controlling the precious metals, we will have only the trading range that these manipulators allow. Therefore, I am back into trading the miners for self defense.

Gold is 937.80 up 11.80 and silver is 13.67 up 0.12 as of now. The DOW is about 8552 up 105+.


Here is a discussion on government intervention in the markets on a continuing basis from CNBC: HERE.

WOW! Even the popular media is beginning to see the light.

If it quacks like a duck and walks like a duck, it is not always a duck in the case of government and pseudo government statistics. Here is an example from Chuck Butler in the DailyPfennig.com: "A story, by Min Zeng, titled, "Is Foreign Demand As Solid As It Looks?

These are the things that really TICK ME OFF folks, so stay with me on this... Basically, as we all know the U.S. Treasury Auctions have been getting "covered" easily recently... And foreign demand was listed as the reason... Which would have been the exact opposite of what I was saying about foreigners shying away from Treasuries...

Here's the skinny... But I'll let Min Zeng tell it, since he did the research and brought this to the public, even though it was tucked away so no one would notice!

"But in a little-noticed switch on June 1, the Treasury changed the way it accounts for indirect bids, putting more buyers under that umbrella and boosting the portion of recent Treasury sales that the market perceived were being bought by foreigners.

The new definitions are deep in the arcane world of Treasury auctions. The change involves buyers who place orders through primary dealers. Those had been counted as direct buyers, but as of June 1 they were classified as indirect buyers, making that group larger than before. Because investors view that group as being dominated by foreign buyers, they assumed foreign demand was higher.

>>>> OK, back to me... Ahhh, so that's what's going on... The Treasury "moved the goal posts on us"... As Sylvester would say... That's despicable! Why isn't someone in Washington D.C. shouting from the roof tops about this? Oh, that's right, they're all in cahoots!

This is HUGE folks... So... When the markets were thinking that foreign demand was increasing, it was actually, as I had said, shying away from Treasuries! Which, if the market participants are thinking that as long as foreigners are "buying into our deficit spending" then the dollar will be on terra firma, but instead are getting "duped" by the U.S. Treasury, you would think that someone would have some xplainin to do... Right Lucy?"

By the way, Chuck does a great job on currencies. You can visit the site to get a free subscription. He is never mealy mouthed about his comments. I appreciate his articles very much. In this case, we are being deceived as to the percent of foreign buying of U.S. debt. It is shrinking as reported from across the globe, though not here.

From Bloomberg.com:

Sterling Crisis Looms as U.K. Unraveling Points to Budget Cuts

Things are rotten in Denmark, oops, the UK. Read it HERE.

James Turk of GoldMoney.com has posted a new commentary comparing the price of precious metals in various currencies. It is of interest to all. Read it HERE.

We will have a rough time ahead in the markets, because they are not free and defy accurate prediction. The intervention is political at the core, but in precious metals the prices are manipulated by the bullion banks to their advantage. This is much more than insider trading, it is direct, immoral, and illegal action to control the prices of the metals by bullion banks backed by the Fed and Federal Government. It is designed to take advantage of investors and the technical traders. The bullion banks hold a great number of shorts which they cover from time to time as they sell into the market and force the price down. When it is down they buy long contracts and add shorts as the price increases. Then they do it again. How long O Lord? How long will they be allowed to defraud the public?

Until they stop, I will be buying in on the miners as they drop down and putting in trailing stops as they rise. This can be a profitable way to handle the manipulation, but there will come a time when the bullion banks lose their control. When is unknown to us.

It is known to our Sovereign God who is in absolute control. I rest in Him and am content that He is in control. He loves and cares for His people, thus we can be at peace.

Best to each, Doug