Shopping 'til we drop - Charge it!

The following is from the Daily Pfennig (www.everbank.com)

"US Treasury Secretary Henry Paulson is heading over to Africa to meet counterparts representing the world's biggest economies.  But according to what his counterparts have been saying, Hank shouldn't be looking for a warm greeting.  European finance ministers have been working overtime complaining about the weakness of both the US$ and the Chinese Renminbi.  Paulson, like his four predecessors, has stuck with former Treasury chief Robert E. Rubin's phrase that a 'strong' dollar is in the US interest.  Officials have repeated the phrase regardless of whether the dollar was rising or falling.  But talk is cheap, and officials have done nothing to try and stem the fall of the US$.  In fact, they have been piling on with the rest of the world complaining about the weak Renminbi.

But, you may ask yourself, what can we really do about the falling dollar.  For one, we could tighten the purse strings a little.  This administration has run up more deficits than the last two combined.  As announced by Paulson's US Treasury department, US debt topped $9 Trillion (yes that is a T not a B) for the first time ever.  And there doesn't seem to be any urgency by our congress to reduce these debts as Congress raised the statutory borrowing limit again about a month ago.  Deficit spending and promised benefits for federal entitlement programs have put every man, woman, and child in the United States on the hook for $175,000, says a new report by David Walker, comptroller general of the US.

And can we really complain about all of the deficit spending by the US Congress when we don't seem to be able to curb our own personal consumption?  Credit card debt owed by Americans in now a record $915 billion.  This is debt owed on credit cards, backed by nothing but disposable assets."

We are living for today and not planing for tomorrow. Remember savings is foregone consumption. It is not the time to be spending beyond our means of paying cash. As long as we and our governments at all levels remain on the current spending binge, there will be no change. The dollar will lose value resulting in higher prices for everything we need and want. This is the escalating whirlpool which has our nation completely under its power. Perhaps, this is simply another example of the judgment of King Jesus upon us for our manifold sins. His patience with sinners does not last forever. There comes a time when He balances the books!

Gold dropped down to about $794 over night. It is at $804 now and has spent most of the last 24 hours above $800. Perhaps, $800 will be established as a support level. The cartel is still in control of the prices of precious metals. It is a manipulated market which is far from free. There will come a time when it is too large for their control, but for the time being, we must endure with patience these set backs. It may be that gold will regroup for a successful run above $850 as the dust from the present correction subsides.

Silver has been hammered, as well. It hit a low of about $14.37 over night and is now at $14.74. Silver traded most of the last 24 hours above $14.50. The cartel is effective in manipulating silver prices to the extreme.

On the currency front: The Canadian Dollar (the Loonie) surpassed par with our dollar a couple of weeks ago and it, now, seems that the Swiss Franc is headed that direction, as well.

All of the mid-East is threatening to remove the remaining currency pegs to the dollar and to diversify more out of dollar reserves. This is coming as the dollar loses value. It is the only rational decision under the present circumstances. We will see much more of this world wide in the near future, perhaps even by the end of this year. Certainly, there will be more in 2008, because the financial situation will not see improvement.

With precious metals at these lower prices, we must see this as an opportune time to make additional purchases. However, we must be cautious. It does not seem to me to be the time to "sell the farm" for funds to buy now. On the other hand, we could be at that time and not know it. I am buying slowly at this time. Plan well, execute your plans after committing them to the Lord and praise Him for the results. There is NO OTHER WAY!

By the way, on the political front, it seems that the present administration is doing everything in its power to convince the us to vote against the Republicans. Perhaps, this is the insiders' plans to put their selected person into the national offices of our land. This has happened over and over again in our political history. Then we, the voters, are offered only a choice between their two picks.

Best to each, Doug