Gold is Resuming a Climb

For the last 24, gold hit a high of $639 yesterday at 6:08 pm and a low today of $628.40 this morning at 10:34. It is now at $363.40. It has seen a number of peaks and valleys through out today's trading. By the way, one year ago on August 1, 2005, gold was a bit under $440. That is encouraging, is it not?

Governments, particularly the USG, must be putting the pressure on to keep the price under "control." They dare not lose control, else the cat would be out of the bag and more folks would realize the smoke and mirrors of unbacked paper currencies.

Without the intervention where would gold be today? I would suggest that it should be about $900 to $1000 per ounce. That seems very reasonable with the loss of dollar purchasing power.

By the way, unless you are blind, it is obvious that the consumers are spending less and the lenders are in deep trouble as their business dries up from the frenzy of the last few years. We likely have seen the last gasp of the ARMs. As the Agora Wealth Seminar speakers said, "It is farewell to ARMs." Unless you are blessed with a fixed rate mortgage, look out.

The housing bubble is beginning to lose steam. One can hear the hissing as the for sale inventories rise in most parts of the country. Some are much higher percentage wise than others. If you are trying to sell now, you will likely have to take a lower than anticipated price, but the prices are bound to go lower without a drastic increase in demand which I do not see on the horizon.

If you are in the general stock market, I believe you should be in natural resource, mining, and defense stocks. Were the War on Terrorists wind down, the defense stocks could take a beating. There seems to be no end to this war. Certainly, there is no defined end.

Best to each, Doug

The Fragile Dollar

Mr. Bush and the administration, possibly even Congress, know the following fact, a quote from The Privateer Issue Number 579:

"The US government stands or falls on the viability and acceptability of the US dollar."

Thus, there was intervention in the gold market last and this week to depress the price of gold. Gold is the alternative to the FIAT currencies of the world. To preserve the dollar, the action was taken and was temporarily effective. With all of the unrest and warring in this world of ours, it is impossible, without governmental intervention, for the price of gold to be so depressed.

The fact that the US dollar remains as the primary reserve currency of the world gives it great advantage. Most international transactions are made in the reserve currency, so other currencies must be exchanged for US dollars to make international payments. However, we are seeing more trading taking place in EUROs and now the Russian ruble can be redeemed world wide. Thus, there is a continuing erosion of the demand for the dollar. At some time, the drop will become significant.

The US debt, public and private - funded and unfunded, is at level in relation to the Gross National Product or any other measurement which has never in history been seen. For all practical purposes, the US government is bankrupt.

As more people begin to see and understand the financial situation we are in, there will be an exodus from the dollar. In such situations, as Gary North has often said in words to this effect, "It is better to be months early, than a day late."

Fellow Christians, it is time to make plans to get out of debt, begin non-dollar savings and investments, commit these plans to the Sovereign Lord, take the action, and depend upon Him for the success (Pr 21:31). I believe this to be critically important.

Further, we must humble ourselves before the Lord our God, turn from our sin, pray to Him, and ask Him to heal our nation. A great part of humbling ourselves before Him is participation in corporate worship. Tomorrow is the Lord's Day and it is our responsibility to join with other Christians in corporate worship. It is the responsibility of the spiritual leader of each family to insure that the family joins in this worship on a regular basis.

Pray for our nation.

Best to each, Doug

Back in the Saddle Again

Well, gold did not go to the sky as I had thought it would with all of the Middle East unrest and wars. Neither did San Antonio get any rain. The rain was all along the gulf from about New Orleans, LA, to Corpus Christi, TX. I believe I drove through most of it on the 25th. and 27th.

Gold is still on a rocky road and the dollar on the precipice of a slippery slope. For the last 24, gold hit $638 as high last evening at 8:08 and low of $625.80 this morning at 8:26. It is currently $634.50. Silver is back to about $11.30.

DROOY is back in buying range around $1.33. I bought some this morning at $1.34, but it may be available at a lower price, even $1.30.

My friend, Ken Coleman (Investment Tracker), is recommending BGO which is trading at $5.53 now. I own some of Bema Gold, and am not now a buyer, because of my holding. It is a good mining company.

I have a lot of catching up to do, so I'll sign off for now. May have another post this afternoon.

Best to each, Doug

Dollar Stronger over Weekend

The tensions in the mid east have caused dollar bulls to bid the dollar higher. After all, it is the preferred currency (major reserve currency of the world). Of course, this is smoke and mirrors, but many folks and banks continue to run to the dollar for safety. They have done it for so long, most do not know any better. It always amazes me that this habit is so ingrained in the world in spite of the fact that the dollar is the currency of the nation with a debt level that is astronomical in comparison with history and that of the current other nations of the world.

Thus, gold has yet to go as far as I thought it might this week. For the last 24 hour, gold hit a high of $676 this morning at 3:17 and a low of $650.40 at 9:18. It is currently $653.60.

From the morning reports, it seems that Iraq is requesting the U. S. Forces to remain to keep order. That is a switch in reported thinking. I thought that everything was settled down in Iraq and Afghanistan. Not!

I will be out of pocket for over a week, so have a great time resting in the Lord.

Best to each, Doug

Winds of War in the mid-east

Hezbollah has attacked an Israel ship and now they have launched some 50 rockets into Israel territory. These are acts of war. We knew that Israel would not stand idly by and take it. They have taken out via air strikes a bridge in Lebanon. That this is war can not be doubted.

The impact upon the price of oil and gold will be for greatly increased prices in terms of the weak dollar and most other currencies. In San Antonio, we are likely to join with the rest of the nation in seeing gasoline at the pumps exceed $3.00. An obvious thought, KEEP YOUR TANKS FULL! I would expect gold to rush rapidly to $700-$800 unless the situation cools greatly over the week end.

The fundamentalist will push for us to take the side of Israel. How will we react?

Other looming questions will come through the meeting between President Bush and Putin and the G8 meeting. Bush will be in a rather hostile environment in both meetings as most of Asia and Europe is opposed to our mid-east actions. Add to that the fact that President Bush is a "lame duck" president on his last term in that office. Not a great bargaining position.

Our nation needs great prayer over this heated situation. We, His people, must humble ourselves before the living God, repent of sin, turn from our evil ways, pray for His grace to see us through this situation. We should be encouraged, because God works all things together for our eventual good.

I urge you to join in corporate worship of our King tomorrow. This is a vital part of spiritual life and is urgently needed.

Best to each, Doug

Mid East Impact on Oil & Precious Metals

The DJI is off 117+ to 10725. Oil is above $78 a barrel. Gold is up to $667.10 from a low of $646.10 yesterday morning at 11:33. Silver is hanging on at $11.47, but not yet galloping.

The mid east situation with Afghanistan, Iraq, and Iran was aggravated by the capture of Israel soldiers and the retaliation of Israel against Lebanon. What a week it has been! When we aren't stirring the pot with our debt, deficits, and wanton spending, the rest of the world adds some vinegar.

The meeting between our President and Putin of Russia will be a challenge. President Bush will be meeting with the leader of a powerful nations who is well situated with the rest of Asia and Europe. In fact, most of the Asia and Europe is in opposition to the USG stand in the mid east. Thus, Mr. Bush will be up against it at the meeting and will have an uphill battle to win any concessions.

By the way, did you notice that China has entered into an agreement with Australia to buy uranium to supply the vast demands for more electrical power. It is reported to be a major purchase which will help the Australian economy. That economy is one of the major natural resource economies of the world.

Japan raised interest rates by 0.25 moving off the zero rate which has been in place for several years. More raises will follow as the economy is strengthening.

As I have often said, "These are certainly interesting times!" I am glad that I am not in control, because I would likely make more of a mess than there already is. The sovereign God of all is certainly the only one equipped to go the job, and I rest in the fact that He is at the helm.

We are once again at the week end. Be sure to join in corporate worship of King Jesus. Only He is the worthy Lamb of God.

Best to each, Doug

Gold and Oil Again Moving Upward!

Oil futures hit an all time high of $75+ yesterday. Gold over the last 24 hours hit a high of $654.60 yesterday morning at 11:52 and a low of $641.70 early afternoon at 12:39. Even silver hit 24 hour high and lows at almost exactly the same times $11.73 and $11.31.

Therefore, the commodities, particularly the precious metals and energy, are back on the upward track. Be assured that we will see flutuations, but the longer term trend it upward and onward.

The mining stocks responded nicely with DROOY above 1.51 and QEE back above 0.37. The real run has yet to get started, but the interest in mining stocks has again increased.

The trade deficit came in just over 63 Billion which is slightly below forecasts. The media jumped on the good news, but ignored the fact that the annual deficit will be higher this year than last and that the deficit continues to grow at an unsustainable rate. The question that should be asked is, "How long will our foreign 'friends' continue to support our import binge?" They will at some time drop us. We must pray that it is a slow dropping of support (through lending) over time.

Were the end to be sudden, there would be panic in the financial markets here as interest rates skyrocketed with all the drastic results therefrom. Pray that it is slow. It will come and that is certain! Do not believe otherwise.

Best to each, Doug

Disruptions Around the World

Bombs in India kill 135-145 people, Syria plans to sells reserve dollars and replace with gold and EUROS and to unpeg its currency from the dollar, Putin plans to sell Russian oil in rubles in about 3 days, and more Asian banks replacing dollars with gold and planning to have an Asian currency similar to the European EURO.

All of the above was bad news for the dollar, bonds, and general stocks. However, it was good for gold and mining stocks. Gold closed in the U.S. at $641 up a good bit from a couple of weeks ago. By the way, did you notice that the mining stocks did not dip as much as gold.

It is always true that these are exciting times. Some are just a little more exciting than others. I am so very glad that the Sovereign Ruler of all is the same yesterday, tomorrow, and forever. All about us, we see daily change, but our Rock is steady. What a wonderful peace and comfort that provides in the midst of chaos.

Best to each, Doug

Travel = Gold Up + Rain

Wow! I traveled to Port Aransas and gold went up again and SAT got rain. In fact, it rained again 15 minutes after my return. By the way, it is summer and time for most of my travels. Beware of my effect upon gold market and rainfall! Really, I know well who is in control of weather and markets and am thankful to Him for whatever He brings.

Gold has bounced between a high of $636.60 at 8:44 today from a low of $617.40 at 4:58 today. For the earlier part of the last 24 hours yesterday, gold stayed well above $628. It is currently at $632.10. Traders may have started leaving for the week end of this short trading week.

Take a look at the Kitco.com 5-Year Chart on gold to see how little the "correction", just experienced, showed on the graph. Check out the 10-Year chart to see the clear bowl appearance of the prices over this period. This is a clear indication of the long term bull trend of gold prices. Of course, we should expect downward upsets as the price climbs over the long haul. We must hang tough during each of these as long as the long term trend remains in tact.

As far as the general market goes for now, I see it as very dangerous. The pressures on the dollar remain strong enough to keep it on the downward path. The DJI is now at about 11152+, after regaining a lot of the loss during the last few sessions. Currently, it is down from yesterday about 73 points. Not very encouraging, is it?

I am hanging onto natural resource stocks, a few defense stocks, but am concentrating mostly on precious metal mining stocks and foreign currencies (EURO, Swiss Franc, Renmimbi, and other Asian). I still use EVERBANK.com. You make your own choices!

Remember not to forsake the gathering together of the saints this coming Lord's Day. Corporate worship is very important. We must encourage one another as we worship and fellowship together. This is a vital part of growing in grace (sanctification). Let us praise the Lord Jesus Christ in all that we do.

Best to each, Doug

Long Term Trend More Obvious

Keep your eyes on the long term trend for precious metals and the mining stocks. Check out the One Year Chart on Kitco.com. The "massive correction" we just experienced is but a blip on the chart. Longer term charts even make the amount of the correction more insignificant.

There are many pressures on the dollar which will continue to push it downward in the long term. It, of course, will have a few upward ticks from time to time. The deficit spending, export imbalance, and the massive liquidity created by the Federal Reserve and the fractional banking system will come home to roost. The foreigners will not continue to support our spending binge forever. There will come a time, and I believe it has started already, when they will begin to taper off financing our debt. We are also in the early stages of a reapportionment of dollar reserves in foreign banks. They are more interested in gold and the Euro now.

There is a push among Asian nations, China in particular, to have an Asian currency similar to the Euro. Wow, that will mean even less need for dollars in Asian banks.

The dollar can not stand up against all of these negative forces. Thus, it will fall in value or purchasing power.

Move to lower you own personal debt and build a reserve of cash for emergencies. This is critical at this point in time and will become even more critical in the near future.

I will be out of pocket again most of this week, but plan to post again on Thursday or Friday. Gold is trading a $617.90 as this is written on Sunday evening.

I trust that each of you joined in corporate worship of the Lord our God today. That must be very important in each of our lives.

Best to each, Doug