Thoughts on Markets

Wednesday, March 26, 2008

Precious Metals Roaring Back

The graph for the last three days shows improvement. It seems, at least for the moment, all were oversold last week. Time will reveal for us if that is fact. The dollar has resumed is downward trend after the brief upward moment. Gold is 560.80 and silver 18.24. Glad that I was able to buy some options on silver miners: CDE, PAAS, and SLW. These are showing more signs of life.

The trailing stops on my mining stocks are moving up with the price of the stocks. That, also, is comforting. You should look into trailing stops on the ones for which they are available.

As I sent out in the morning email, there is unrest in South Africa and Congo is rattling sabers against the mining companies. All is not peaches and cream in Africa at present.

This in today's info@worldcurrencywatch.com:

"The Taj Mahal Refuses to Even Exchange Dollars At All

Recently, India policymakers decided that they would stop exchanging dollars at the Taj Mahal. Formerly, dollars were always welcomed. As a tourist, you could easily exchange your dollars for Indian rupees when you visited this wonder of the world. Today, that is no longer true according to India’s tourism minister.

This isn’t just an inconvenience for American tourists. It says something about the dollar’s standing worldwide. If Indian officials are officially snubbing the dollar, it shows that the dollar is losing its “safe currency” status.

By the way, India took in US$6.5 billion last year from more than four million tourists, so it’s a very big deal when they decide to take a stance against the dollar.

Think this is some sort of fluke? Think again. This “organized dollar shunning” is happening everywhere.

Most Money Changers in Amsterdam Won’t Take Dollars Either

Currency exchange outlets in Amsterdam recently stopped exchanging dollars for euros. They’re simply refusing to take dollars, even at an advantageous exchange rate for them. The dollar has been dropping so quickly lately that they are afraid that they’ll lose money while they’re making the exchange.

As one tourist was quoted as saying, “Our dollar is worth maybe zero over here.” She said, “It’s hard to find a place to exchange. We have to go downtown to the post office or central station.” It doesn’t end there."

Still think the dollar is a great store of wealth. Think again! It is loosing value everywhere. We will see more of this in the future. The dollar seems destined to lose its status as the Reserve Currency of the world. Then we will see further loss of purchasing power and greater price inflation here in America. That day seems to be well on the way.

However, we do have a Sovereign God Who loves and cares for His people. That does not mean that we will avoid all challenges, trials, and "disasters," but it does mean that He is working even these together for our eventual good. Praise Him daily for His gracious love and blessings. Then go out and share His love with all those with whom you come in contact. After all, we are His witnesses here on earth.

Best to each, Doug

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