2006 is fading away rapidly!

According to the Resource Investor, the UAE announced that it was shifting from dollars to Euros. The UAE central bank is to increase their 2% holding of Euros by 8% by September. This does not sound like much, but it is a move with an announced target of quantity and time. Thus, the UAE join s the ranks of other Mid-East and Asian central banks which are doing the same. Therefore, the dollar is back on a slope which is getting more slippery with each such move. Is this the beginning of the big move out of the dollar reserves? We will know in time. However, this trend will not be good for the dollar. The dollar bulls will have to search more diligently to fuel their false hopes.

Gold has responded nicely and is up for the last 24 hours. The high was $635 yesterday and the low was $623.90. It is now $633.20. All mining stocks are experiencing renewed vigor. DROOY was as low as 0.85 last week, but is up to 0.91 now. I still believe it is a buy at this level. The Dow is off a mere 16.18 to 12494.47.

Bonds, general stocks, precious metals, defense stocks, and most commodities are up. It seems that investors in every market believe that this bullish trend will last forever. Over time, it is impossible for every one of them to succeed. This is a euphoria which cannot last. Some segments will be winners and others losers.

Remember that this is a low volume season with many brokers, traders, fund managers, and investors on vacation.

The Lord knew what He was doing when He gave us seasons, weeks, months, and years. One the first of each week, we are renewed by corporate worship through hearing the word, participating in the sacraments, and worshipping the living God. This should be seen as a new beginning. The first of each month similarity gives us another new beginning. Then the New Year gives us another new beginning. These should be times at which we give particular praise to God for the newness of our lives and the opportunity to move forward with greater enthusiasm. Praise the Lord for new beginnings.

Best to each, Doug

Crazy, Low Volume Markets

The Christmas-New Years vacations have started and are having a significant affect upon the markets. Many brokers, traders, money managers, and investors are "cooling it" until after the holidays. Thus, we generally have very low volumes in all markets.

Many have lost interest in the precious metals markets. Wow, I have been a buyer of DROOY below $1. I have added to my holdings while other are selling out at these low prices. To me, it seems to be an opportunity to load up again before the next leg up for gold and silver.

Gold is off its recent low and currently at $618.30 with DROOY trading at $0.90. That, to me is a bargain not to be passed.

Though not in the main press, there is much about Iran demanding Euros for their oil and Asian banks beginning to replace their dollar reserves with other currencies. This is not good news for the dollar.

Monday is the day we celebrate the incarnation of the Only Beloved Son of God: our Lord and Savior Jesus Christ. It should be a celebration, but let us concentrate upon Him and not just the tinsel, lights, and gifts. Think and meditate upon the fact that here was God coming to earth without the pomp and circumstance due to Him, but as a helpless baby. He left His glory in heaven to take on the humble form of man. He lived a sinless life, that He, the Perfect Lamb of God, could take our place and die on a horrible cross to satisfy God's justice for all the sins of His people. In this one act, He justified us before His Father. We are reconciled with our Creator, not through anything we have or could have done, but by having the righteousness of Christ imputed to us. Praise Him often and continually for this, the greatest gift. Honor Him by corporate worship on a weekly basis.

Best to each, Doug

WOW! Look at Gold.

While I was gone, gold did a reverse last week. It went down $11+. That is a another real drop! For the last 24 hours, it has hit a low of $612.20 and a high of $619 on overseas trading.

More importantly, the mining stocks have been hit even harder. I am a buyer of DROOY at less than $1. This is a price I never expected to see this year. However, the markets reflect the perception of a vast number of people and are also subject to manipulation which seems to be increasingly against gold presently.

Look at the 1-Year graph on gold from kitco.com, below. Visualize a short term trend line from the low about October 6, extend it to the low about October 25, and then on over to the right of
the graph. It is clear that the recent correction has not broken even this short term upward movement of price. Longer term upward trend is well intact.


We are being treated to more drastic corrections or detours in the long term bull market for gold. Of course, we must continue to realize that it is more a depreciation of the dollar than an appreciation of the price of gold. There is almost nothing on the horizon which should encourage us to believe in other than a short term rise in the value of dollars.

There is a rumor about that more banks are to exchange dollars for Euros about January 1st. There could be some truth in this, but we will have to wait and see if it is true or just another false rumor.

We must always remember that while we have perfect hind sight, we lack perfect foresight. However, we must go with clear long term trends while they remain intact.

We must study to prepare ourselves to make decisions and then make plans, prayerfully commit them to the Lord, move out in concert with the plans, and look to the Lord for success. The success He grants comes in His timing. We are often too impatient and put too much hope in our own timing. He is the ONLY ONE who can grant success.

Best to each, Doug

Back Again!

I have had trouble accessing my blog for a week, but am back again.

Gold took a big hit this week while I was off. Not to worry though, because there is nothing supporting the dollar except the governments, banks, brokers, and people who have a vested interest in keeping it going. As a reserve currency the dollar has enjoyed privilege which it does not deserve. Most transactions worldwide have been in dollars. Thus, purchases made across borders have required the buyers to convert their national currency to dollars for the transactions. However, that is changing.

The Tehran Times reported that Iran has started requiring Euros rather than dollars for oil. This has been in the planning stage for months now and has likely become fact. That will mean that this major supplier of oil is moving away from dollars. Its customers must now use Euros to purchase oil from Iran. Thus, many countries will have less use for dollars and more use for Euros. Result, there will be sales of dollars. This will strike another blow at the purchasing power of the dollar and will give more reason for us to own gold and mining stocks.

The big question on the horizon is when will central banks continue or begin their mass exchange of dollar reserves for other currencies? Like the EURO which has gained 15% or more this year against the dollar, most other currencies have had similar gains.

I am struggling to catch up with much of the financial news and will be reporting more next week.

Get to your corporate worship service tomorrow and continue to praise the Sovereign God of All for His continued blessings. Remember to ask for a revival in the United States that we will turn to Him by following His Law-Word.

Best to each, Doug