General Market is Bearish - Precious Metals Bullish

Both silver and gold are serging higher. Gold set a new all time high. The interest in the precious metals is growing as more of the media picks up the news. This must be worrying governments and central banks around the world. Even the Financial Times published a story about the new money >> GOLD. As this is written gold is at 877.90 and silver 15.64. Silver continues to lag, but is likely to catch up before long.

The following from Casey's Daily Resource is a small concern, "As Zachary Oxman, of Wisdom Financial, wrote: “Large funds and specs continue to buy and hold into this gold rally, and I believe that you will continue to see the trend of long gold, long crude continue throughout 2008.”

About the only cautionary note to be sounded was last Friday’s convening of the President's Working Group on Financial Markets (a/k/a the Plunge Protection Team, or PPT) in the Oval Office, the first time it has met in that hallowed space.

Reportedly, economic stimulus packages (such as dropping cash from helicopters) were considered. Of, as one Bush aide candidly put it, “What everyone's looking at is what is the fastest way to get money out there.”

The PPT, ominously, has the power to intervene in markets, whether equities or metals, and the motive can be either to shore up or tamp down.

So, on the one hand the government could pump dollars into the system to try to stave off recession, or worse, which would mean a very gold-positive inflation. But on the other it could work to keep a lid on the gold price, either through sales agreements with European central banks, or other means. Confiscation a la 1933 is not entirely out of the question.

How it will all play out is anyone’s guess, but for now the gold bugs are having their day, and then some."

It is a shame that the Federal government feels the need to upset the remaining remnants of a free market in our nation. Governments always believe that they can do better than buyers and sellers interacting in a market free of intervention. When governments intervene, there are always inequity in every trade. For example: Price controls cause sellers to shift to those products which normally produce greater profit to the neglect of those which have too low a regulated price. Thus, it always results in shortages of the under priced goods and services.

Let's enjoy the run while we can. It is always up to the Sovereign God whether or not men take the proper action. He sits in Heaven and laughs at the folly of men centered governments. However, He continually blesses the nations Who God is the Lord Jesus Christ.

Best to each, Doug











"As Zachary Oxman, of Wisdom Financial, wrote: “Large funds and specs continue to buy and hold into this gold rally, and I believe that you will continue to see the trend of long gold, long crude continue throughout 2008.”

About the only cautionary note to be sounded was last Friday’s convening of the President's Working Group on Financial Markets (a/k/a the Plunge Protection Team, or PPT) in the Oval Office, the first time it has met in that hallowed space.

Reportedly, economic stimulus packages (such as dropping cash from helicopters) were considered. Of, as one Bush aide candidly put it, “What everyone's looking at is what is the fastest way to get money out there.”

The PPT, ominously, has the power to intervene in markets, whether equities or metals, and the motive can be either to shore up or tamp down.

So, on the one hand the government could pump dollars into the system to try to stave off recession, or worse, which would mean a very gold-positive inflation. But on the other it could work to keep a lid on the gold price, either through sales agreements with European central banks, or other means. Confiscation a la 1933 is not entirely out of the question.

How it will all play out is anyone’s guess, but for now the gold bugs are having their day, and then some."