Market Rebounds in Spite of Dismal News
From Casey's Daily Resource Plus, "The National Association of Realtors said sales of existing homes fell for the eighth straight month in October, even as more homes came on the market, driving the supply of homes to the highest level in 22 years. Sales dropped 1.2% to a 4.97 million annualized pace in October. That was weak, but slightly stronger than the 4.85 million pace expected by economists." www.caseyresearch.com.
In the face of dismal reports, as that above, the Dow is up over 500 in the last two days. Gold on the other hand is down a good bit during its "correction." This is a run from the security and safety of precious metals to take advantage of what is perceived as a profit from a raging bull market in general stocks. Is the recent gain of the Dow a return of the general bull or simply a bounce upward in a bear market? The market will give us the answer in the next few weeks.
There is another factor upon which investors appear to be depending. That is, the perception that the Fed will lower the interest rates again. This is a likely prospect as the Fed has been pumping liquidity into the financial arena recently. The Fed is interested in heading off a recession and has lost any concern over price inflation. Certainly, the FOMC realizes that increases in the supply of unbacked currencies by printing dollars or lowering interest rates results in price inflation.
The use of unbacked paper currencies is a violation of the Law of God against the use of unequal weights. The weight or value of the currencies is arbitrarily controlled by central banks and governments to deprive the markets of a stable currency. The control will cause businesses and citizens to make unsound economic decisions and deprive them of wealth. It is in reality a form of theft which against the Commandment, "Thou shalt not steal." Thus, banks and governments are in violation of God's Law and will suffer the consequences thereof.
There is a factor which is often ignored when assessing future price inflation. That is, the deflation of the currency due to bankruptcies, foreclosures and bank write-offs of loan balances. Remember that dollars were created out of thin air by computer blips as the original loans were made. When the mortgages, credit card debt, etc. disappear, those created dollars vanish back into the thin air from where they came.
However, increasing the money supply in the end is nothing more than pushing on a string. Banks and governments push all the harder as the economy slows and the fear of recession grows. That is, they put ever more unbacked paper currency into the financial markets in hopes of avoiding the "R" or "D" words. Price inflation is preferable to either of these "disasters."
The present depression of the price of gold is a result of intervention by cartels which have a vested interest in manipulation of prices to their advantage. By going long (buying in) the market on the way upwards, they can make considerable profit. By shorting (selling) when the price is high, they can profit by lowing the price. They do this using futures contracts, options, or other hedges and seem to have a perpetual ability to run this game over and over again. Their ability seems to be greater than the nine lives attributed to cats.
For the last 24 hours, gold has bounced between $807 and about $795. Silver has bounced between $14.50 and $14.15. Gold is now at $797.20 and silver $14.22. Both are giving us another opportunity to add cautiously, slowly add to our holdings of the metals and mining stocks. The prices will not forever be manipulated down. The time will come when control will no longer be possible. "When?" is the question! We are not privy to this information about the future, but we can define and ride the upward trend.
Our Sovereign God of All, King Jesus is a patient God, but will not forever withhold His wrath against the sins of people and nations. The nations which are blessed are those who God is the Sovereign King Jesus. Those people and nations are blessed while other fall under the curse of God.
Best to each, Doug
In the face of dismal reports, as that above, the Dow is up over 500 in the last two days. Gold on the other hand is down a good bit during its "correction." This is a run from the security and safety of precious metals to take advantage of what is perceived as a profit from a raging bull market in general stocks. Is the recent gain of the Dow a return of the general bull or simply a bounce upward in a bear market? The market will give us the answer in the next few weeks.
There is another factor upon which investors appear to be depending. That is, the perception that the Fed will lower the interest rates again. This is a likely prospect as the Fed has been pumping liquidity into the financial arena recently. The Fed is interested in heading off a recession and has lost any concern over price inflation. Certainly, the FOMC realizes that increases in the supply of unbacked currencies by printing dollars or lowering interest rates results in price inflation.
The use of unbacked paper currencies is a violation of the Law of God against the use of unequal weights. The weight or value of the currencies is arbitrarily controlled by central banks and governments to deprive the markets of a stable currency. The control will cause businesses and citizens to make unsound economic decisions and deprive them of wealth. It is in reality a form of theft which against the Commandment, "Thou shalt not steal." Thus, banks and governments are in violation of God's Law and will suffer the consequences thereof.
There is a factor which is often ignored when assessing future price inflation. That is, the deflation of the currency due to bankruptcies, foreclosures and bank write-offs of loan balances. Remember that dollars were created out of thin air by computer blips as the original loans were made. When the mortgages, credit card debt, etc. disappear, those created dollars vanish back into the thin air from where they came.
However, increasing the money supply in the end is nothing more than pushing on a string. Banks and governments push all the harder as the economy slows and the fear of recession grows. That is, they put ever more unbacked paper currency into the financial markets in hopes of avoiding the "R" or "D" words. Price inflation is preferable to either of these "disasters."
The present depression of the price of gold is a result of intervention by cartels which have a vested interest in manipulation of prices to their advantage. By going long (buying in) the market on the way upwards, they can make considerable profit. By shorting (selling) when the price is high, they can profit by lowing the price. They do this using futures contracts, options, or other hedges and seem to have a perpetual ability to run this game over and over again. Their ability seems to be greater than the nine lives attributed to cats.
For the last 24 hours, gold has bounced between $807 and about $795. Silver has bounced between $14.50 and $14.15. Gold is now at $797.20 and silver $14.22. Both are giving us another opportunity to add cautiously, slowly add to our holdings of the metals and mining stocks. The prices will not forever be manipulated down. The time will come when control will no longer be possible. "When?" is the question! We are not privy to this information about the future, but we can define and ride the upward trend.
Our Sovereign God of All, King Jesus is a patient God, but will not forever withhold His wrath against the sins of people and nations. The nations which are blessed are those who God is the Sovereign King Jesus. Those people and nations are blessed while other fall under the curse of God.
Best to each, Doug
posted by Doug @ 8:48 AM
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