Gold Touched $500 - US National Debt $8.084 Trillion

Gold has been a wild and exciting ride for this week. It was bid as high as $500.10 on November 11th. Since then it has been down, but bouncing around between $495 and $499. At this time, it is $495.60

My stop was hit on DROOY, so I sold some, but bought back twice as many shares as the price dropped. Looking to buy more if there is a further drop.

Our National Debt hit an all time reported high of $8.084 Trillion this week. Of course, considering all of our debt national, personal, and business; it is much higher. Certainly, we are carrying a level of debt never seen before. This is casting a shadow over any "favorable" statistics the government produces to encourage us to view all with rose colored glasses. Folks, the economy is not rosey. At best, we are in John Mauldin's muddle through economy and will be for some time.

Think gold and consider investing in it to preserve wealth. The dollar will resume its fall while gold will preserve value for the foreseeable future.

I daily praise the Lord, that He continues to sustain us. After all, He is in control.

Best to each, Doug

Gold at $500 >> Christmas Present?

I hope and pray that each of your had as great a Thanksgiving as I did visiting grand and great-grandchildren. It was a time of sharing what the Lord has and is doing in our lives and giving Him the praise and thanks for them. Let's always give Him the glory by having a continual attitude of thankfulness toward Him.

Wow, I go out of town for a few days and gold takes off. It has been bouncing from $498+ to $494.20 as this is written. Will it go to $500? Yes, I believe there is no doubt. Will it break $500 by Christmas? This seems very likely.

When gold moves up a notch or so, many folks wonder if it is too late to get on board. Whether you now hold investments in gold is at the root of this question.

If you are into such investments, the question is somewhat more difficult to answer. The decision must be made as to the portion of the investment portfolio in any particular sector of the market. More simply, how much of the portfolio should be in physical gold, gold mining stocks, or even gold mutual funds.

One must always be comfortable with his investment portfolio. That is, one must be able to sleep comfortably at night and not spend the day worrying about investments. Each must weigh his investment risk level. Every investment has a risk, and even not investing carries a risk. Not investing has the risk of opportunity loss. In other words, one can not profit from an investment gain without investing. He will lose the opportunity for profit.

On the other hand, if one is without any investments in these areas, one must decide for himself if he should invest in gold at all. For me, this is a no-brainer. Gold is a hedge against the devaluation of paper currencies, such as the dollar. Ask yourself, "What is the value of the full faith and credit of the government which backs the dollar?" To determine this, one must look at the how the purchasing power of the dollar has held up since 1971, when a cup of coffee was widely available for five to ten cents. The full faith and credit of the government backing the dollar has given up greatly less purchasing power compared to the past. And remember that our government is head over heals in debt to the world. Any business so indebted would have long ago declared bankruptcy. How much do you trust the dollar? That is a question you must answer for yourself.

Looking at DROOY, since Nov. 14th, it has traded in a range of a low of 1.41 and a high of 1.53. Currently it is 1.43. A week is a bit shy of the time to establish a trading range. However, it seems the range will be higher this time around. Later we will be able to define the new range.

It was great to get away, but always great to get back home. The future remains in the hands of our Sovereign Lord. Let us always rest in this great assurance. He loves and cares for His people.

Best to each, Doug

Gold Up -- For How Long & How High?

The news is that gold hit an 18 year high for last week. It finished up about $16 at $485.20. Many are predicting gold to at least $500 by years end. Once again, I have no accurate crystal ball, but it does appear likely since gold is up against virtually all major currencies. For a time, it appeared that gold would only follow the dollar, so this is a welcomed change.

For about ten weeks now, DROOY (DRD Gold Ltd Adr) has been trading in a range of about $1.24 to $1.45. This has provided an opportunity to purchase below $1.30 and sell above $1.40 for nice profit since one can easily deal in thousands of shares. My last sell order was put in at a trailing stop of 10% and the actual selling price has moved up accordingly. I have only put a sell on a portion of my holdings. We will have to follow the market price for a time to define a new higher trading range and purchase price.

This is the week of Thanksgiving. Since George Washington's proclamation, Thanksgiving has lost almost all of its true meaning to most people. At that time, it was meant as a time for giving thanks to Almighty God for His blessings on the new nation. Today, it is a time for family gatherings and over eating. However, we, as Christians can have the joyous time of Godly family gatherings with the purpose of showing gratitude to God for the blessings we have received during the year.

God's basic unit of society is the family. When God ordained marriage between a man and woman in the Garden of Eden, He established this unit. We should all be thankful to Him for this blessing. Families are very important in God's eye and must be in ours. Families were ordained by God for the man and the woman to enjoy one another and to build a family to the glory of God.

Rejoice as you meet together as families. Share the blessings each has received from God to give Him the glory. As Pr. 21:31 says, "The horse is prepared for the day of battle, but safety is of the Lord." This means that we must not be slack in doing our part, but must fully recognize that it is God Who gives the safety, the results, the victory, or defeat for our good. Always, give Him the thanks and glory!

I will be out of pocket for most of the week, but will be back in the saddle next week end.

Have a safe and worshipful Thanksgiving for rejoicing and giving the glory to god.

Best to each, Doug

Inflation Fears May Be Pushing Gold Up

Today we saw gold sprint up to 478.70 at 6:12 New York Time as reported on Kitco.com. It seems to be pushing toward a new high. The price was up against all currencies reported on by Kitco.

My trading stock DROOY was as high as 1.55 today. I put in a 10% trailing stop on some more. This order was not filled today. Actually, it is best if it is not filled for a long, long time. Hopefully, the price will continue upward as will the trailing stop which I explained yesterday.

None of my trailing stops have been hit. That means that the prices have not dropped sufficiently to force a sale. Most are higher with the stop moving beyond my purchase price. This is the advantage of the trailing stop -- it moves upward as the market price rises.

The popular media is reporting that the price of gold is rising, because of the fear that the dollar is to resume its decline. Of course, the following quote has caused some of the reaction:

"We face a demographic tsunami that will never recede, said David Walker, comptroller general of the U. S., who warns that promised benefits for the boomers will swamp the federal budget in coming decades."

This is not earth shattering news, because the problem has continued to grow for decades. However, it is significant that the comptroller general would state it openly.

President Bush goes to China soon to ask the Chinese to raise the value of the Renminbi again. Evidently, he is seeking a lower valued dollar despite what the open party line is.

Interesting times in which we live. I am just eternally thankful that the Lord is in absolute control and He certainly knows what is best for His people in the long run. At times, it may seem hopeless, but we must trust and rest in Him alone for success.

Best to each, Doug

A Bit of This & That

Good Day! I'm Scotch, not Australian, but it is after noon now.

Gold was up a good bit this morning and then moved down again. It is now at 468.40 where it closed Friday. DROOY reacted nicely to the up tick on gold, so I sold some, not all, at 1.42. That is a much smaller margin of profit than I usually seek, but positive is better than negative.

By the way, I am putting rather close stop sale orders on most of my non-mining stocks. Most are trailing stops @ 10%. That means that as the market price goes up, my sale price trails upward. When the market price moves down, the trailing stop does not. This is a conservative, rational way to protect profit or limit losses.

Gasoline prices at the pump have backed off even more. I filled @ 1.999 this morning at the post. I doubt the prices will remain low in the future, but it is wise to take advantage of it for the time being.

The question among writers on the market seems to be whether we have inflation or not. There are quite a few on either side of this question. All of us have noticed an increase in prices while we shop in the food markets. Some of this may be seasonal, but to me, there seems to be higher prices in most things. Electronics are an exception.

As technology has progressed, the prices have dropped for most items. The thin flat screen televisions are still much too high for me. Digital cameras and DVD recorders have dropped significantly. Of course, almost all of these items come from Asia.

That reminds me of an interesting truth. The low prices are due to low income levels. We always tend to think that the high demand on raw materials would run the prices up significantly. Though the raw materials are more costly now than a while back, these have very little influence on the price of the products coming out of Asia, primarily China. You who shop Wal Mart on a regular basis, I ask, "Have prices increased significantly there where most of their products come from China?" Please, let me know!

Retailers will be looking for astronomical sales on the day after Thanksgiving and on into the Christmas season. The results will certainly show whether the consumer is maxed out on debt and has limited his shopping or thrown caution to the wind and increased his outlandish debt even farther. This will be interesting to watch.

The dollar has backed off a bit, but not substantially at this point. The resource currencies - Australian, New Zealand, and Canadian Dollars - have recovered a bit, too. The EURO at just above 1.17 seems to be hung up on the uncertainty in Germany and the rioting in France.

It is still being reported that Iran plans to open an oil market which will us the EURO next year. I believe the target is about March. That will be interesting to see. The impact on the dollar will have to be observed. It is doubtful that the impact will be great upon opening, but it should increase over time as this new market proves viable.

As we move into thanksgiving, recall the many blessing the Lord has given you and your families and openly express your thanks to Him. Rejoice and give Him the glory.

Best to each, Doug

Dollar Strong - Gold Weak

The U. S. Trade deficit for September set another record at $66.1 Billion. As the dollar strengthens, one has to wonder the basis for this confidence in the dollar. Eventually, we will find that such astronomical deficits do matter. However, for the time being, it seems that very few are concerned about this imbalance.

Richard Russell of www.dowtheoryletters.com, suggests that there are two reasons for the current strength of the dollar: (1) The higher interest rates make the dollar more attractive than some other currencies, and (2) Many people in the market are bearish on the dollar and this may have overloaded the investments on that side. The strength could be coming from these investors bailing out of the short side.

There also a deep rooted preference for the dollar by citizens around the world. After all, it has been for decades the reserve currency of the world. Nevertheless, there will come a time when the strength of the dollar is examined and found to be without sound basis. As always, the question is when? Your crystal ball is as good as mine. Only the Lord knows for sure.

In the meantime, gold and mining stocks are having a rough time. Gold has been pushing up to almost $470 and then falling back on almost a daily basis this month. It is currently at $466.20. We should be thankful that it has recovered from the mid $450s. DROOY, my trading gold stock, has been as low as $1.21 and almost to $2.38. Now it is trading at about $1.27. I tried to buy at the $1.21 low, but the order was not filled.

It seems that the rioting in France has lessened a bit this week. Thankfully, it appears to be disorganized and likely developing from the resentment of African and Islamic populations who feel they are not getting the breaks afforded other Frenchmen. Some have reported that it may come from deep rooted resentment from citizens from countries which were in the past part of the French empire. These have had a dampening impact upon the EURO which has been hammered by the strong dollar.

Have a great weekend! Do not neglect corporate worship on the Lord's Day. Take your thankful heart and mine to worship the Lord in the fellowship of His people.

Best to each of you and yours, Doug

The Dollar is Up

The dollar remained strong over night in spite of the the twin deficits and unemaginable level of debt. Governments at virtually all levels remain on a spending binge. Consummers have slowed their purchase of SUVs, trucks, and cars. The slowing is beginning to show up in the housing markets, too.

All of these factors are against a strong dollar. However, the rioting over France is putting a sell flag on the EURO. The EU may have goofed on not raising interest rates last week. The EURO is below 1.20 now and seems to be staying there for the time being. This is positive for the dollar against the EURO, but the dollar is up against almost every currency of the world. We must remember that this relative evaluation is just that.

No paper currency has any backing other than the full faith and credit of the central bank or government which controls it. Many have become worth less than the paper upon which they were printed. Many more will achieve the same end.

All governments and central banks abhore gold. Gold is not under their control in the same way the paper currencies are. Thus, gold provides freedom. Governments abhore freedom of citizens within their borders, and opt for ever more control of the masses.

In spite of the temporarily strong dollar, gold reached a high of just above 462 today, but is back down to 459.80 at this time.

My trading stock DROOY is was up to 1.27 and opened at 1.23. It is now trading at 1.26. For me it is still in buying range.

On this blog: If you are intersted in it, let me know and pass the word to others. Also, be sure to let me know how to improve it for your benefit.

In Texas, we were allowed to vote on a Constitutional ammendment today to define marriage as between a man and a woman. It is to our shame that this was necessary. God ordained and defined marriage at creation. When our Maker gives a definition (or for that matter, a law) it stands for every person past, present, and future. We dare not change His word, else, we suffer the consequences of His judgement which is sure. Their will be a day of reckoning.

Best to each, Doug

Gold Taking a Hit

Gold has fooled me again! From a minimum of 443.50 on 9/6/05, gold rose to a maximum of 478.50 on 10/12/05. Neither of these extremes have been exceeded during 2006.Gold was pushing and exceeded 470 during the summer - early fall. From there it was about 460 on 11/1; 463 on 11/2; just over 460 on 11/3; 457.20 on 11/4, and as I write it is up to 457.20 (up slightly) today.

The dollar bulls are having a hay day. The dollar rose against all currencies and is quite strong. How long the party will last, is everyone's question. Fundamentally, the dollar is in deep trouble from which it will not emerge without some serious consequences. The twin deficits and the tremendous level of debt can not continue forever.

The housing bubble is losing some steam as condos have been sold, but not yet built. It is beginning to look as if they will never be constructed. In many areas of the country, houses are not selling as they were. the increase in mortgage interest rates will not sustain the housing boom. Foreclosures are beginning to increase, too.

However, the dollar is going up! The time for the piper to be paid cannot be too far in the future. Therefore, gold is still the ultimate choice for preservation of capital by many. Inflation or stagflation is waiting in the wings. John Mauldin's "muddle through" economy continues.

I believe we are at or very near the bottom for gold. Some are predicting it could go as low as 425 or so. To me, that seems too pessimistic. It may well not see even 450 for a very long time.

Drooy is at 1.25 now. The low for the day is 1.23 and the high has been 1.28. I believe it is in a buying range for most people, particularly those who own neither gold nor mining stocks. Each individual must make his own investment decisions. After all, who is the person most interested in the success of your investments and savings? Think about it!

By the way, I have no vested interest in the items I discuss. I do not receive commissions or any other compensation for any of the items I discuss. Most of the time, I am simply showing others what I am doing in the markets. This may or may not be what you should be doing.

I study the markets, make my plans, commit them to the Lord, and depend upon Him for the results. This is the instruction we find in Ps. 37:5-7 and Pr. 16:3 written by the Sovereign Ruler of all. After all, He created us and everything. It is He Who provides the answers to the way we should live our lives.

Best to each, Doug

I goofed again!

I said that we Americans had yet to "leave" that savings is foregone consumption. It should have been "learn." Sorry about that. Best, Doug

DROOY is in my buying range!

Good morning to one & All,

DROOY, my trading and also core holding in mining stocks has traded as low as 1.26 today. That is below 1.30, so I have another order in for 1000 @ 1.26. Hopefully, it will get filled. Gold is currently at 456.20, so it has lost for the time being its battle to stay above 460.

Thus, we have another buying opportunity which I will not pass by. Can gold go lower? Yes! Will it? I don't know. However, I see it as a buying opportunity for me.

How about the housing bubble? Are prices beginning to level or get a little lower in your area? Reports are comming in from around the country that houses are getting more difficult to sell. The higher mortgage rates are being felt. The financial disaster from this is yet to come.

Many folks who have refinanced to take out "equity" from their homes have spent the dollars. These went a bit to pay off other bills, but it seems that the majority of these funds were spent on cars, food, clothing, vacations, etc. In other words, they are gone -- forever. The reality of this has yet to come home to the naive. Look out when it does!

While the "poor, oppressed" people in other nations have amassed savings and investments, we Americans have spent, spent, spent. We have yet to leave that saving is in economic terms "foregone consumption." In other words to save, one must live beneath his means -- he must not spend all of his net income. Some must be put into an emergency fund to cover unforeseen expenses and then as this is built up, some must go into investments to grow over time. When will we learn?

Your comments and suggestions are appreciated. What would you like to see here. I want to make it profitable for you.

I pray that you are planning and will fulfill your plan to join in corporate worship of the Sovereign God of all this Lord's Day. We must not be as some >> "Not forsaking the assembling of ourselves together, as the manner of some is; but exhorting one another . . ." Herews 10:25

Best to each, Doug