Thoughts on Markets

Thursday, August 07, 2008

Summer Slump Should Soon End!

This graph is from Resource Investor (www.resourceinvestor.com) today. I found it very interesting and reinforcing what I have been saying about the precious metals slump in summer and the price increases in the fall. In the graph covering two years, we are presented with the end of summer lows and the rises commencing in late September and October. Perhaps, we are in for the same treat again this year. You may review the whole article at the following web site:
http://www.resourceinvestor.com/pebble.asp?relid=45097

The charts also reveals the choppiness of price fluctuation. In holding the gold and silver metals, a long term view is critical for success. At times we will experience gut wrenching corrections. These are made much worse by the intervention into the market place by those with a vested interest as has been presented here from time to time. We are not out of the woods on this yet.

The bursting housing bubble has, as you likely know, has spread to the UK which is in much the same situation as we find ourselves here. Now there is news that Spain and more of the European nations are getting into a similar situation. Thus, this is beginning to have world wide consequences.

This could be a precursor to a world wide recession. Certainly, it will be a downturn at the very least. In recent times, the U. S. has been the single driver of the world economy. However, China and India have become more involved in international trade. We are seeing a sea change in international trade. Asia is an important player in the world market now. The U. S. remains a key player, but it is no longer the only game in town.

By the way, the Olympics in China begin this week. China has made it more difficult for many to get visas after assuring all that China would be more open. We must remember that China is ruled by a communist party which is totalitarian to the core. Even with the advances toward more freedom for businesses, there remains control beyond what we would like. Let us pray that all goes well and safely with the Olympic games this year.

As this is written, the DJI is off about 85 (it was triple digits down a few minutes ago), gold is at 870.50, and silver 16.24. Both precious metals are on down ticks. The mining stocks are mostly down at present, but were mostly up minutes ago. We are only into the first hour of trading, so there is much more time left in the day.

A major element or fundamental of the Christian world and life view is that Christians are confident of the future. It is in the hands of the God who works all things for His glory and for the growth and security of His people. We bask in His love on a hour by hour basis and know that He is worthy of complete and lasting trust, because He cannot lie and will fulfill all of His promises to us. Praise Him daily for His abundant blessings.

Best to each, Doug

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