Thoughts on Markets

Friday, September 26, 2008

How Long Will God Tolerate our Tower of Babel?

Silver and gold have rebounded from yesterday's drops. By the way, silver closed yesterday almost even while gold was down big time. Currently, gold is at $900.90 and silver at $13.46. There seems to be further attempts to cap gold at $900. It will take greater demand (possibly just more aversion to risk) for it to break upward through this resistance line in the sand. Both of the curves (green) look similar to the beginning of yesterday's curves (red). I was hoping that we were over the manipulation, but it seems to be appearing again/still.

The mining stocks are showing a good bit of life today with DROOY back up to 5.22. Yesterday I bought it barely over $5. Hope you were able to get on board, too. It is still in a good buying range. It closed yesterday at 4.94. The trusts are up some today, as well. CEF is 11.29; GLD 88.88; SLV 13.36.

Bad news was all over the net yesterday. Examples, follow: New home sales down 11.5% in August; Durable Goods Orders down 4.5% in August; Core Capital Equipment Goods down 7.5% in August, and Labor Department weekly jobless claims moved to the highest in seven years (Some of this may be due to Hurricane Ike).

Folks, the bailout which is now being sold as a rescue package will not solve the problems. It is simply a larger size band aid. Below are some news items which speak more about the the world's view of the U. S.

U.S. will lose financial superpower status: Germany

Thu Sep 25, 2008 6:08am EDT

By Noah Barkin

BERLIN (Reuters) - Germany blamed the United States on Thursday for spawning the global financial crisis with a blind drive for higher profits and said it would now have to accept greater market regulation and a loss of its financial superpower status.

In some of the toughest language since the crisis worsened earlier this month, German Finance Minister Peer Steinbrueck told parliament the financial turmoil would leave "deep marks" but was primarily an American problem.

"The world will never be as it was before the crisis," Steinbrueck, a deputy leader of the center-left Social Democrats, told the Bundestag lower house.

"The United States will lose its superpower status in the world financial system. The world financial system will become more multi-polar."

For the complete article go here:

Chris Powell

Bailout can't hide it; the country is busted

By Chris Powell
Published: Friday, September 26, 2008 12:23 AM EDT
"Even leading Republicans in Congress, including presidential nominee John McCain, recoiled from Treasury Secretary Henry M. Paulson's proposal to take absolute power over $700 billion to be borrowed by the federal government and used to purchase every sort of bad debt without ever having to answer for it -- not to the courts, not to regulatory agencies, and only occasionally and incidentally to Congress itself.

The bad-debt bailout would be the biggest government patronage program in history and would amount to declaring martial law over the U.S. financial system and economy. Even if such martial law is necessary, its implementation should be put in democratic hands -- a non-partisan agency with full transparency, statutory standards for its purchases, and close accountability to Congress.

All the same, even if it can work -- that is, prop up insolvent financial institutions -- the Treasury's proposal is still a proclamation of the collapse of the whole U.S. financial system. Even if some financial institutions are saved, the collapse will manifest itself in other ways, probably ways more damaging to the public. For who cares if Goldman Sachs and Morgan Stanley endure if the issuance of $700 billion more in government bonds drives interest rates way up, diverts credit from the private economy, devalues the already sinking dollar, and sends commodity prices soaring again?

In that case the financial class will have won another battle in its long war against the producing class. It will be again as was said about the maneuvers of the Second Bank of the United States two centuries ago: "The bank was saved; only the people were ruined.""

You can read the whole article here:

The following article is from Truth Out (

Government Seizes WaMu and Sells Some Assets

by: Eric Dash and Andrew Ross Sorkin, The New York Times

"Washington Mutual was seized by federal regulators Thursday night in the largest bank failure in American history. It was immediately sold by the federal government to JPMorgan Chase, the nation's largest savings and loan. (Photo: Elaine Thompson / AP)

Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night, in what is by far the largest bank failure in American history.

Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual, the nation's largest savings and loan, to JPMorgan Chase for $1.9 billion, averting another potentially huge taxpayer bill for the rescue of a failing institution.

The move came as lawmakers reached a stalemate over the passage of a $700 billion bailout fund designed to help ailing banks, and removed one of America's most troubled banks from the financial landscape."

When the temporal situation looks the worst, we can always rest peacefully in the assurance that all is under the control of the Sovereign God of all. He is working His will and has all planned to proceed to the end He has decreed.

The Tower of Babel was an example of how man continued after his father Adam in an attempt to replace God's Law with man as the law giver. God does not long tolerate such activity of His creations. Man in Adam was given the mission of taking dominion over all the earth and its creatures under the Sovereign God. Man was to be God's steward over all of creation. However, he was always to act in total obedience to God.

We, as a nation, have turned from our Creator and look to the government as our messiah with cradle to the grave security and welfare. This is the present day Tower of Babel. God will not long allow us to continue our disloyalty to Him and will tear down our tower and scatter us, as well.

God's basic unit of society is the family. Today, the family is under attack by virtually all media, the government schools, and government, itself. The laws not respecting God's definition of marriage and supporting the taking of children from families by Child Protective Services are only two of the ways governments are attempting to disrupt the families of America.

We and our churches must wake up to this attack upon Christians and speak out as prophets of old who confronted the earthly kings. Churches and Christians must recognize the danger of government schools and step up to God's requirement for parents to instruct their children using God's word.

Let us pray for a return the God of our fathers and pray for forgiveness of our sins, individual and collective.

Best to each, Doug


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