Thoughts on Markets

Thursday, July 31, 2008

Governments Mask the Messages of Markets

Both of our precious metals are showing signs of life today. Silver is the brightest today, but gold is looking up, too. The dollar is dropping again. However, it is early in the trading day, so be careful. Silver is at 17.65 and gold 917.

Yesterday's action showed some technical selling, but not a runaway sell off. Long term, the fundamentals remain the same. The Options expire late in August and then there is a longer time until the following options expire. Thus, it seems that there will be less opportunity or reason for the boyz and all to intervene. So, we should look for higher prices going into the fall and winter seasons.

Ludwig von Mises warned us that governments will destroy free markets long before they ever understand how they work. I would like to add that governments will destroy free-markets if they do not like the message of the market. Government intervention after all is nothing but a blatant attempt to thwart the will of market participants in a bald manipulation to change the market’s message about the price of some good or service. - James Turk Check out Turk's Founder's Commentaries @

Here is more evidence of governmental intervention into our markets. Little wonder that we are confused about what the markets will do.

"§ Fed Extends Emergency Loan Program for Wall Street
§ Bush Signs Housing Bill to Provide Mortgage Relief
§ Government Announces Plans to Borrow $27 Billion
§ SEC Extends Restrictions on Short-Selling"

(The above is from Yahoo's Homepage today)

Additionally, the Federal Reserve stands ready to do whatever is necessary to back Wall Street Brokers and bankers. The available loans to back them up have been extended into January.

Folks, this hiding of the real markets by intervention is what is making accurate prediction of market direction and timing virtually impossible. Were we allowed to see naked market in action, we could more accurately predict and make successful plans for our future.

In many ways, God's Word warns us. "Go to now, ye that say, 'To day or tomorrow we will go into such and such a city, and continue there a year, and buy and sell, and get gain.' Whereas ye know not what shall be on the morrow. . . . For that ye ought to say, 'If the Lord will, we shall live and do this and, or that.'" (James 4:13, 14)

In in the best of times, we cannot perfectly foresee the future. The future, even our future, is in the hands of the living God of all. Nevertheless, Christians are to have confidence from God that we are to plan generations ahead. We are instructed to teach, prepare, and equip our children to carry on the Kingdom work through their children to all generations under the Covenantal God.

This takes Godly wisdom and grace. James recorded in Chapter 1:5-7, "If any of you lack wisdom, let him ask of God, that giveth to all men liberally, and upbraideth not; and it shall be given him. But let him ask in faith, nothing wavering. For he that wavereth is like a wave of the sea driven with the wind and tossed. For let not that man think that he shall receive any thing of the Lord."

God freely gives wisdom to His people who ask in accordance with His word. Thus, we are future oriented, but must be content with the wisdom and knowledge He provides. We will never know the details of the future completely, because that is the realm which belongs to God alone. We can only make wise decisions which affect our future. The results are always up to Him.

Best to each, Doug


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