Gold and Rain
Wow, I leave town for almost a week and gold gallops to new highs and it rains in San Antonio. I must leave again, as soon as possible, because we need much more rain to break the drought.
Gold closed out the week at $632.50 on April 23rd. For the last 30 days, we saw a London am high of $644.50 and a low of $546.50 on March 23. That is quite a gallop and a foretaste of what seems to be in our future.
Silver, on the other hand, had a 30-day high of $14.31 on April 20 and a low of $10.50 on March 23. However, it closed out the week at for a disappointing $12.95.
I suggest you read Jim Turk's Commentary. Paste the following into your browser: http://goldmoney.com/en/commentary.php#current He is very optimistic on gold and silver, as well.
What's the deal on mining stocks? I have addressed this issue briefly from time to time. In the past, the mining stocks have almost always lagged behind the rapid run up of the metal prices. This gives us a great advantage! One can accumulate the mining stocks as metal increase in dollar value. Then when the time is ripe, the mining stocks during the runup begin to, literally, spring upward as is the case with a sudden release of a compressed coil spring.
Consider the following:
(1) As the price of metals rises, the mining companies become more profitable. The value of gold exceeds the cost of mining and refining.
(2) Most people are consuming to the maximum extent of their income and borrowing ability. Savings is not seen as a necessity. This is a logical attitude, because they believe that their homes, 401ks, IRAs, and the government will take care of them for life. Thus, there is no necessity for saving. In Economic terms savings is foregone consumption. The mood in America is to live, eat, and be merry for tomorrow will care for itself. Thus, they live for today and prepare not for the future. It is like the nursery rhyme about the frugal ant and devil may care grasshopper. These people are not preparing for the future. Savings in America is at a ZERO level.
(3)Many investors put off buying bullion coins and mining stocks, because the time is never "right." The current price is too high, too low, or it may go even lower. There are many excuses for not acting.
Finally, as the realization hits the greater population, they jump in by the thousands. This will be the "gold rush." The limings will finally realize that the dollar has become almost worthless and rush to buy anything that looks like, seems to be, has the name of, or simply professes to be precious metal based. That is the time for those who bought early to unload enough mining stocks to pay off debts and rejoice in the fact that they had the foresight to board the train early. We will be able to supply the needs of the limings at a profit.
If we had perfect the perfect foresight which belongs solely to the Sovereign God, we could wait until the last minute and jump in an hour or a day before the last minute rush. However, lacking such perfect foresight, we must be wise and accumulate as the price rises and accumulate more should it correct briefly. This way, and only in this way, can we be ahead of the masses.
Certainly, God will protect His people and provide for them. However, He gives us brains for study, making plans and taking appropriate action. In His word, He says, "The horse is prepared against the day of battle, but victory is of the Lord." (Proverbs 21:31) This means that we must prepare for the future battles or situations, but must always give the glory to God for His provision of victory over the battle or other challenge. He, alone, provides the results. Nevertheless, we must made rational preparations.
I urge you to consider these thoughts today. Tomorrow may be too late. Always, prayerfully ask Him for wisdom. Then find His answers in His word.
By the way, though I am not superstitious, I want to warn you that I plan to be away next week. What will happen to precious metals and rain then?
Best to each, Doug
Gold closed out the week at $632.50 on April 23rd. For the last 30 days, we saw a London am high of $644.50 and a low of $546.50 on March 23. That is quite a gallop and a foretaste of what seems to be in our future.
Silver, on the other hand, had a 30-day high of $14.31 on April 20 and a low of $10.50 on March 23. However, it closed out the week at for a disappointing $12.95.
I suggest you read Jim Turk's Commentary. Paste the following into your browser: http://goldmoney.com/en/commentary.php#current He is very optimistic on gold and silver, as well.
What's the deal on mining stocks? I have addressed this issue briefly from time to time. In the past, the mining stocks have almost always lagged behind the rapid run up of the metal prices. This gives us a great advantage! One can accumulate the mining stocks as metal increase in dollar value. Then when the time is ripe, the mining stocks during the runup begin to, literally, spring upward as is the case with a sudden release of a compressed coil spring.
Consider the following:
(1) As the price of metals rises, the mining companies become more profitable. The value of gold exceeds the cost of mining and refining.
(2) Most people are consuming to the maximum extent of their income and borrowing ability. Savings is not seen as a necessity. This is a logical attitude, because they believe that their homes, 401ks, IRAs, and the government will take care of them for life. Thus, there is no necessity for saving. In Economic terms savings is foregone consumption. The mood in America is to live, eat, and be merry for tomorrow will care for itself. Thus, they live for today and prepare not for the future. It is like the nursery rhyme about the frugal ant and devil may care grasshopper. These people are not preparing for the future. Savings in America is at a ZERO level.
(3)Many investors put off buying bullion coins and mining stocks, because the time is never "right." The current price is too high, too low, or it may go even lower. There are many excuses for not acting.
Finally, as the realization hits the greater population, they jump in by the thousands. This will be the "gold rush." The limings will finally realize that the dollar has become almost worthless and rush to buy anything that looks like, seems to be, has the name of, or simply professes to be precious metal based. That is the time for those who bought early to unload enough mining stocks to pay off debts and rejoice in the fact that they had the foresight to board the train early. We will be able to supply the needs of the limings at a profit.
If we had perfect the perfect foresight which belongs solely to the Sovereign God, we could wait until the last minute and jump in an hour or a day before the last minute rush. However, lacking such perfect foresight, we must be wise and accumulate as the price rises and accumulate more should it correct briefly. This way, and only in this way, can we be ahead of the masses.
Certainly, God will protect His people and provide for them. However, He gives us brains for study, making plans and taking appropriate action. In His word, He says, "The horse is prepared against the day of battle, but victory is of the Lord." (Proverbs 21:31) This means that we must prepare for the future battles or situations, but must always give the glory to God for His provision of victory over the battle or other challenge. He, alone, provides the results. Nevertheless, we must made rational preparations.
I urge you to consider these thoughts today. Tomorrow may be too late. Always, prayerfully ask Him for wisdom. Then find His answers in His word.
By the way, though I am not superstitious, I want to warn you that I plan to be away next week. What will happen to precious metals and rain then?
Best to each, Doug
posted by Doug @ 4:18 PM
0 Comments:
Post a Comment
<< Home