I've Done It Again!

It seems as though each time I buy a stock, it immediately goes down in price. However, most often it has recovered before very long. Yesterday, I bought DROOY at $1.78 which was a low for a couple of weeks. Today, it has traded as low as $1.66. It seems that the drop is due to some uncertainty over the new restructuring which is due to be completed by April 1st. The restructuring should give DRDGold some cash and a more streamlined operation, so I believe it is still a good mining company which will continue to react to the price of gold.

While gold has been above $560 for over 24 hours, the mining stocks have been a little slow to catch up, but are beginning to shows signs of more rapid increase in price. This is normal since many people will not climb on board until the last minute, if ever. That is, most will wait until gold has very obviously become a bull market. However, gold set a new record of $571.20 at 7:24 NY time this morning and a 24-hour low of $563.60 early this morning at 12:53 NY time. Note: Silver Hi $9.91 and Lo $9.70 for the same period. Gold is now at $569.30. Wow, what does it take to bring the masses on board? Do you think they are waiting for $600 gold? Well, it should be here soon! Then what will they use as an excuse for not climbing on board.

The increase in prices of the precious metals has been against all currencies. Thus, the prices are not so overly tied to the dollar. This change has taken place in the last two to three months. This is further indication that more is to come. Of course, we must expect some drop from time to time, but the trend is higher prices for precious metals and other natural resources.

By the way, I am very likely to buy more DROOY at the present level. Depending upon your portfolio, it could be wise for you. But as always, BUYER BEWARE. Make your own decisions.

Crystal Balls just cannot accurately forecast the future. The future is in the hands of a Sovereign God who loves and cares for His people.

Best to each, Doug

Happy Monday Morning!

We had a wonderful time of worship and fellowship yesterday. What a blessing it is to be among the people of God. It is now a bright and beautiful Monday in San Antonio. What a winter this has been! In fact, it has been more like spring and fall, than winter. We did finally get some rain on Friday. Now to business.

For most of Thursday, Friday, Sunday night, and today, Gold has been at or above $560. The 24-hour high of $564.60 was reached at 10.15 a.m. NY time today and the low of $557.60 at 7:07 p.m. last night. This has been the pattern for about a week. It is currently $563.80.

For some strange reason, the dollar was higher during week end trading and this morning against almost all other currencies. This is despite of the fact that the economy showed some slowing in the last quarter of 2005 and the pressure downward on real estate from the higher interest rates for mortgages. I believe this to be temporary, and the dollar will resume it's decline.

Anticipation of the new silver ETF has spawned more interest in silver. Many are concerned that the high demand for silver in industry coupled with this new demand will make silver out perform gold on the upside. Silver is currently at $9.73. Perhaps, it is wise to begin to follow silver more closely. Of course, I own Silver Standard (SSRI) and follow Pan American Silver (PAAS), both of which are up considerably over the last several months. I also, hold PCU which is a copper play.

Many are holding off their purchases of precious metals and mining stocks for the correction. There could be a correction. However, it is important for each of you to look over your portfolio of investments to see which are at risk as the dollar falls in value. It is likely wise for each of us to reorder our investments to reduce those dependent upon a strong dollar. I have moved quite heavily into precious metal and oil stocks, and away from the general market stocks for preservation of capital. The metals, I see as the more conservative, while the stocks will provide more leverage for speculation.

The precious metals and oil will also jump in price with any escalation of the war of terrorism or in event of another terrorist attack. We pray that neither will occur. However, is it not rational to prepare our investments to weather such storms?

It does appear that we are on the way to new highs in gold. As always, BUYER BEWARE. Arm yourself with data and information, but above all gain wisdom. Godly wisdom obtained through a diligent study of God's Word is true wisdom. Arm yourself with it and apply it in every area of your life. This yield true success!

Best to each, Doug

Gold Locked in $10 Range

Yesterday, Gold hit a high of $566.10 and a low of $544.80. These are the high and low for the last 24 hours. It is now at $563.50. From appearances, Gold seems to be in a trading range between a support of $550 and a resistance of $560. Both have been breached a bit, but seem to be holding.

The range is rather tight and does not give much room for trading. As mentioned before, I am in an accumulation mode and have not begun to trade in and out again.

My preferences for the markets now are bullion silver and gold coins, mining stocks or mutual funds, and energy stocks or mutual funds. I also prefer the EURO, Swiss Franc, New Zealand Dollar, and the Renminbi. My currency investments are with everbank.com (world currency accounts). Remember, though, all currencies are unbacked paper and have only value relative to other paper currencies. All are subject to the whims of governments and central banks. My thinking is that the dollar has much more downside potential and the slide will increase during 2006.

Some last trade prices of my stocks are DROOY $1.94; CEF (Canadian bullion fund) $7.30;RNO $1.75; NEM $57.60;PHO (Water ETF) $16.56; PXE (Energy ETF)$18.55.

Those who a pushing for China to revalue the Renminbi are, in reality, seeking a lower valued dollar. Many of the same folks are professing to want a high valued dollar, but this is simply Washington Speak. Do not be deceived by the rhetoric. And remember, a lower valued dollar means higher prices for us.

Speaking of higher prices, I believe the time in not very far away when we will be longingly looking back on gasoline at $2.50. Then we will be paying $3.00 or more at the pumps.

Notice that China is seeking energy companies in Canada, Central/South America, Africa, and in the old USSR. They are wise to be using their dollars in this way. By the way, it is reported that China has made a deal with Iran for energy. This is practical wisdom in action. Do you believe they are going to be willing to share this energy with other countries of the world? Their people are buying cars in ever increasing numbers and their demand for energy is increasing rapidly.

All times of life are very interesting. Some are more exciting than others. Can you imagine gold at $800, $1000, or $1500? That may sound real exciting to those holding gold, but recognize that it will be a time when the purchasing power of the dollar is at an all time low. That means that all consumables which we need will cost more dollars than any other time in our lives. I can easily remember the time when a cup of coffee cost only a nickel with all the re-fills one could drink. Very often the coffee was free with the $0.75 - $1.00 lunch. Compare that with dollar prices today. Now think what the prices will be when the dollar has half, one-third, or one-fourth the present day purchasing power. Then you can realize that our standard of living will be much lower than today.

Let's examine our individual and family debts today while continuing to make the monthly payments. Consumer debts for daily living expenses, toys for young and old, fancy cars, and expensive vacations on credit cards are best paid off as rapidly as possible. Remember, if you only pay the minimum amount due, it will be years, if ever, until the balances are paid in full.

Longer term debts; such as, mortgages give options. (1) Continue as you are now, but that may not be the best. (2) If your note is relatively new, and advance payments are allowed without penalty, make extra payments of any amount you can scrape up each month to pay extra on the principal. This will save substantial dollars of interest and will pay the note off earlier. (3) If you are very wise and frugal, you could use fund you can force yourself to put aside and invest them in gold and energy assets. Then as the value of these assets increase as the dollar goes lower, you could cash in these assets and pay your notes off with the "cheap" dollars. Think over these, evaluate the potential and your own wisdom to make wise decisions.

The Bible tells us, "Owe no man anything, but to love one another: for he that loveth another hath fulfilled the law." (Romans 13:8) Thus, debt free living is the best course.

January Fading Along with the Newness of 2006

Gold is struggling in the $550 - $560 per ounce range. For the last twenty-four hours, it has been as high as $560.03, as low as $552.90, and is now at $558.20. That is a range of almost $10.

Thus far, the $550 low is holding up pretty well. We may still have a further correction. Uncertainty over Iran, the drain on the U.S. in Iraq and Afghanistan, and the potential of higher oil prices are causing market troubles. At the same time the Fed is pumping up the dollar supply. The price of gold is revealing potential trouble. Add to that the fact that housing prices are leveling off and even getting lower in many areas. All is putting pressure for the dollar to drop even further in the near future.

The mining stocks are holding up well and have not been as volatile of the metal. DROOY traded today $1.84 - $1.95 and last at $1.88. RNO $1.62 -$1.73 and last at $1.73.

We are near the point when the leverage available in mining stocks gives them favor over silver and gold metals. However, each must judge his own portfolio in light of the financial situation and make his decisions. In my opinion, those without metals or mining stocks are flirting with a major loss of capital. Those loaded with debt are in great trouble, as well.

I trust that you attended corporate worship service at the church of your choice yesterday. We are worshiping with Christ Covenant Church (Pastor L. David Givler)
at 5810 Blanco Road, San Antonio, Texas. For more information: snail mail - 107 Sheffield Place, San Antonio, Texas 78213 or email - lgivler@satx.rr.com. All are welcome.

Best to each, Doug

Gold Flirting Above $550

For the last twenty-four hours, Gold hit a low of $552.90 yesterday at 11:41 a.m. NY time and a high today of $567.60. As this is written, it is at $562.50. Will it go below $550 again? Possibly; however, it is bouncing within a higher range than before. The run up has been fairly rapid, so we may experience another correction in the future.

DROOY is trading between $1.91 and $1.94. That is a nice range fore those who climbed on board. RNO, which I added recently at about $1.63 is trading around $1.70.

There is much news on the Iran situation. Iran has announced a transfer of their banking reserves out of European banks. There is also on the table the possibility of opening a market for oil in EUROs in March. Also, there is the rattling sabers about their persistence in producing nuclear weapons and the threat of taking them out from the West. Bad stuff. This is the kind of rhetoric which could explore into wider war in the Mid-East. Pray that a peaceful solution will be reached.

The dollar is down again today against most currencies. "Sound as a Dollar" is taking on an ominous meaning these days.

Keep looking to Jesus and rest in the fact that He is in control. Do not neglect corporate worship on the Lord's Day.

Best to each, Doug

Hello Easy Money!

I was reminded this morning by the Daily Reckoning of the impact upon individuals of easy money. You may say, "What easy money?" However, one should be aware of the many sources of easy money: (1) Inheritance, (2) Lottery Winnings, (3) Welfare, (4) Low Cost Debt, and (5) Over Abundance of unbacked Paper Currency. You may think of others, but the fundamental concept is that there is little or no cost to the recipient. People tend to value anything, even the dollar, by what it cost them in time and effort. Little cost makes one assign little value. Let's consider the result.

Have you ever looked at a bright shiny new development of subsidized housing? It sparkles and is inviting. Some beneficiaries of such low cost housing are diligent workers who have fallen on hard times. These are hard working individuals who work their way into better jobs and move themselves upward into better housing. However, many are families who are professional subsidy and welfare recipients. These then to occupy more and more of the housing. The cost to them is little to nothing; therefore, they assign no value to the property. Over time, it turns into the slums and ghettos which dot our country.

Many beneficaries of inheritance and lottery winners go on a spending spree which ends only as the funds are exhausted. Others are more frugal, but the temptation is there.

Exactly the same is true with those who have access to minimal cost loans. Since the dollars cost so little, they have little value to the individual and he/she spends on everything available. Even businesses fall into the spending mode. Thus, we have seen that the artificially low interest rates and excessive creation of dollars by the Federal Reserve have given rise to a population of consumers. We buy ever larger homes, the latest technology in electronics, new cars, fancy labeled clothing and accessories, fad toys, vacations, and anything else which suits our fancy.

The attitude is "Live for today and tomorrow will care for itself!" In my opinion, this is a dangerous practice. What about the debt which is now carried by individuals, businesses, and governments? Of course, all of us are counting on paying off the debts with dollars of lesser value than those of today. Governments, with the aid of bankers, are highly skilled in this practice.

Governments ask the bankers to create more unbacked currencies by increasing lending and printing paper currencies. The politicians believe that the governments at all levels can beat the economic realities through this inflation. However, governments eventually have to pay the bankers. The bible warns, "The rich ruleth over the poor, and the borrower is servant to the lender." (Pr. 22:7) Thus, we are warned that the lender rules over the borrower. How true that is? What happens if the debt is not paid? How much flexibility does the borrower have over his actions until the debt is paid? Governments can be found to be greatly influenced by the banks which lend the paper currencies to finance spending.

On the individual and family level, the burden of debt is obvious. We have one of the, perhaps, the lowest ratio of saving to income that exists among the developed nations of the world. Bankruptcies increased to about two million last year alone. This was a year, during which, the economy was reported to be doing quite well. All the while many in government were encouraging the people to spend to keep the economy booming.

This is written to encourage each of you to examine your debt level. Be certain that you can continue to service your debt. Consumer debt (that we incur for non-essentials and consumption) on credit cards and misuse of funds from refinanced homes is the most dangerous type of debt. It tends to grow over time, because many of us make only the minimum payments.

Each of us, regardless of our dreams, advertising, and encouragement from governments
must get off the spending binge. Else, we will find ourselves increasing the ranks of those filing bankruptcy.

Beware of debt!


Best to each, Doug

Gold Continues on Roller Coaster

The price of gold is offering additional opportunity for those of you who have yet to take the plunge. If you have neither gold nor mining stocks, why not? I do not anticipate a total collapse of the dollar any time soon, but am convinced that it will go much lower. If it does fall, gold is a sound way to preserve your capital.

As I reported on the $564 high over the weekend and holiday, it was also noted that there were not many traders available during that period of time. The traders are back, so we see that gold over the last twenty-four hours has topped at $557.30 and bottomed at $542.50. It is now $543.60.

I bought a few shares of Rio Narcea Gold Mines Ltd (RNO) today. Have been looking to add something to the portfolio, so with gold down a bit, I jumped in at $1.63. It is still trading about the same price. This is what I did, you make your own decision. Buyer Beware.

DROOY is off a bit today, but still well in the black for me. The high today was $1.92, the low $1.75, and the last trade was $1.79. I look for it to ratchet upward over time. In fact, in the near future!

By the way, if you use stops on gold stocks at this time, leave plenty of room for price movement. I recommend at least 15% trailing stops. It is often wise to put stops on a portion of your holdings to lock in profit.

Dollar was down a bit over night and the competing currencies were up. The developments in Iran may impact very heavily upon the dollar, gold, and oil in the very near future. Oil has already moved up some, but has fallen off a bit. The ETF Powershares Dynamic Energy PXE and PRO last trade was $18.19. Still holding well.

Best to each, Doug

Hang on for a Wild Ride

For the last twenty-four hours, gold has been on a roller coaster. By the way, I do enjoy the roller coasters; however, I like the ones that are smoother. Those that roughly rock from side to side are, to me, not the best. But I digress.

On January 16, gold stretched to another 25 year high of $564 at 7:54 p.m. and on January 17, gold hit the 24-hour low of $551.80 at 10:15 a.m. That is a ride! It is now $556.70 as it moved off the low. Realize the high was established when many in the market were on holiday here in America, so there was likely less volume.

I believe we are seeing a consolidation period which should give us a new support at a higher level. Perhaps, the new support will be $550. It is a bit early to tell, but gold remains in a bull market.

DROOY has traded from a low of $1.89 to a high of $1.92 and the last trade was at $1.93. My guess is that we will not see it in the $1.60s any time soon. The natural resource ETF on water (PHO) is at $16.18, just a bit off from my entry price and the one (PXE) on oil is at $18.54 a little above my entry price. I expect long term profit from both.

The job market does not seem to be improving, even though unemployment seems to be coming down. Of course, one must realize that the unemployed who are no longer receiving unemployment payments are dropped from the count. Another significant fact is that most jobs offered are the lower paying jobs. Even when an individual gets a job, it is most likely for lower pay.

The politicians in China are still denying that they are changing the composition of the their reserves. It seems to me that they do protest too loudly. Maybe they are like politicians everywhere and simply do not want all to know what is going on. We will have to watch this play out.

I am very glad that the world is managed by a Sovereign Lord of all. We would make a worse mess of things were we in control. Let us submit to Him, serve Him, and bask in His love even when things seem to be going wrong in our sight. Everything works together for the eventual good of His people. Be certain that you are one of His.

Best to each, Doug

Gold Setting New Records

Gold closed on Friday at $556.50. That is a high for about 25 years. It is at $561.40 now according to www.Kitco.com. By the way, you can easily keep up with the price of gold by downloading Kitco's automatic update for you task bar. Really a neat facility.

DROOY, one of my favorite mining stocks closed at 1.89 on Friday which represents a nice unrealized profit for my portfolio. I want to add to the holding, but am waiting for a possible correction.

Also in my portfolio are the ETF primarily on oil (PXE) and the ETF on water (PHO). (PXE closed at 18.23 and PHO at 16.31 on Friday.) These are in concert with my concentration on natural resources. As mentioned in the past, I also have grandchildren who are invested in the World Precious Metal and Global Resources Funds of US Global Investors (www.usfunds.com). Both of the mutual funds are doing very well as precious metal and natural resources move up in price.

Once again, I would like to remind you that I have no ties with any companies mentioned. Never do I receive a commission or any other profit from mentioning specific companies. These are simply some of the companies with which I deal on a personal basis for my own investments. Therefore, I have no direct vested interest in any recommendations.

Remember, it is up to you to make your own investment decisions. You are the one most vitally interested in your investment success. As always, BUYER BEWARE!

The stock markets here in America are closed today, but I wanted to catch up on last week.

Best to each, Doug

Another Bump Along the Way

One must expect the upward movement similar to stair steps. Up, then back, but up higher the next time. How low will the dollar and other paper currencies go? That is the real question. The phenomenon can easily be observed in the price of gold and other natural resources.

Gold hit a low of $539.40 yesterday and a high today of $546.90 today. However, it is now at $544.80. DROOY dropped a bit to $1.68 yesterday and is at $1.72 today. It is interesting to follow the daily changes in market prices, but we must keep our eyes upon the long term trend in precious metals.

Also, it is well to examine the upward trend in other natural resources. Yesterday, I bought into PXE which is an investment in, primarily, oil stocks. My entry price was $18.08. Now, true to most of my buys, it is at $17.86 today. Am I concerned? No! The increased demand on oil and other natural resources is real and the supply is somewhat constant. Of course, there is always the possibility of interruption of delivery. Thus, it seems that the price of oil will continue to rise over time. I observed another upward trend in pump prices as I filled up yesterday.

As the dollar continues to lose purchasing power, one must find ways to preserve capital. I believe the way is precious metals, oil, and other natural resources. These assets tend to retain value over time.

The markets in 2006 will likely be more challenging than those of 2005. Let us continue to observe and see what happens. We must go with the trend or as many say, "Don't fight the trend."

Study to educate yourself, observe, analyze and make intelligent plans. Commit your plans to the Lord and ALWAYS give Him the glory for the results.

Best to each, Doug

Gold Continues on a Rocky Course

From a high of 544.30 early this morning, gold has dropped as low as 535.40 and is now trading above 543.60. How is that for volatility?

DROOY has been up to 1.93 and down to 1.82, and last trade was at 1.88. By the way, those who got in last week are in the black in less than a week. I am not using stops on the mining stocks at present. But I have considered a 15-20% trailing stop. None yet!

Congress has to increase the allowable debt ceiling for the USG to continue to operate some time in March according to the Secretary of the Treasury. It boggles the mind to think that a debt ceiling has any meaning at all. Likely, this is for the benefit of Congress as they show their constituents that they are being fiscally conservative. What a farce! Don't be deceived. It would be better for them to be honest (An oxymoron - congressmen and honesty?) and remove the illusion of a ceiling on debt. In practice where is the limit when it is easily and often raised to meet the "needs" of government?

By the way, gold's recent rise has been against all paper currencies. More to come with many set backs along the way.

It is important to understand that one purchases gold and gold related investments to maintain his wealth. As gold goes up, it is likely wise to convert some to cash to pay off debt and to acquire other assets. However, in my opinion, one should never be devoid of gold and related investments. This goes for silver, as well, which may actually outperform gold for the time being. Study the facts and define the percentage of your portfolio which is appropriate for the precious metals.

Keep leaning on Jesus for the perfect support in all your activities.

Best to each, Doug

Gold Off a Bit This Morning

Once again the market has given us a break. Gold is off to 524.60 as I write. If you feel that gold should be in your portfolio, it seems that you have another opportunity to get in on the bull market in gold or to increase your holdings.

Looking toward the future, gold will continue to rise. However, it will be two or three steps up and one or two back down. That is the way markets go. It is doubtful that we will see gold under 500 in the foreseeable future. Is this certain? NO, but I believe the price of gold will stay above 500. Of course, I have been wrong in the past and will not be perfect in the future either.

My strategy is changing. For the time being and likely well into the future, I have decided not to trade in and out of stocks, such as, DROOY. For now, accumulation will be the name of the game. In the long run trading has not been as successful as desired. Trading is a good technique when any stock is trading within a narrow price range. However, it is not for a bull market without serious corrections along the way. As gold has moved up, it has been difficult to increase holdings using the funds from prior sales. Thus, this change is necessary.

There are mutual funds for mining, natural resource, and energy stocks which may appeal to some who do not want to invest in individual stocks. Some of my grandchildren are into mining and natural resource stocks of U. S. Global Investors (www.usfunds.com). There are many such funds, so it is wise to shop around and investigate several funds before making a decision. This is a viable alternative for the more conservative investor.

Gold Takes a Breather

Gold is off to 529.80 as this is written. DROOY is trading at 1.63. My 5% trailing stop of yesterday was hit at market open today for a profit of about 33% in less than three weeks. Guess it would have been prudent to use a 10% stop this time.

Of course, I am hanging on to my core holdings in all the mining stocks of interest to me. My favorites are NEM, BGO, DROOY, IAG, & NTO. I also like PAAS and SSRI for participation in the rise in the price of silver and CEF for bullion gold. All of these are up nicely for the 2005 and now with our entrance into 2006.

Remember the rise in the market value of gold and associated investments is due only partially to the loss of purchasing power of the dollar, but mostly as an escape from the devaluation of all unbacked paper currencies. People are starting a run from the worthless paper to precious metals.

Our Federal Reserve Notes carry the phrase "This note is legal tender for all debts public and private." On the other side, the Notes have the phrase, "In God we trust." However, to very many people in and out of government, the second quotation is meaningless. If it had meaning, we would not have violated the Constitutional requirement in Article 1, Section 8 on the powers of the Congress - "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;". Notice there is no authority to print money. Also, it should be noted further down in the same Article, Section 10, is stated, "No State shall . . . make Thing but gold and silver Coin a Tender in Payment of Debts."

Throughout biblical history, gold and silver by weight were the money used in transactions. Our founding fathers knew well the value of gold and silver for money. To them both were money. Federal Reserve Notes or any other paper currency offers governments and bankers too much control over the economy.

A free market in which sellers and buyers meet without interference from government can best determine the appropriate price of goods and services when exchanges are based upon a stable money: gold and silver.

The bible teaches sound economics and exhibits the foundations for free markets. Men tend to take the expedient or easy ways which have built for us the mountain of public and private debt could topple in the not too distant future or at least be "repaid" with ever increasing mountains of paper currency of ever decreasing value.

Remember that the people of God rest in His sovereignty and depend upon Him even during times when situations give worry and consternation to others.

Best to each, Doug

Gold Off and Running

Gold at 527.40 which is up 10.40 as of now. This is to be expected since the dollar is resuming its fall in face of the end of the corporate repatriation of foreign dollars to take advantage of lower tax rate and the size of our debt.

DROOY has been as high as 1.58 today. I had to put in a 5% trailing stop at that price for a small portion of my shares. The quick run up could be followed by a correction at which time, I plan to buy more if the stop is hit. Possibly, I will have opportunity to increase my holdings.

Almost all of the mining stocks are acting as they should when gold moves upward. The DJI is negative by $13-$16. The loss for 2005 was not quite $1. Of course, that was very bad news. Gold was up nicely, though.

This will be brief as I wanted to get the news out while it is hot.

A Blessed New Year to one and all.

Doug