Thoughts on Markets

Tuesday, October 14, 2008

Beginning to Look Like a Dead Cat Bounce

What a gigantic move was made by the DJI yesterday. It was a pseudo holiday for many. The banks were closed and many brokers desks were vacant, so we should have expected slower trading and great volatility. Today the DJI have been up well over 200, but are now trading at 9499 up 122. We will have to wait and observe to determine if this is a dead cat bounce or the real turn around. These are strong moves, but I am uncertain at this point and do not want to jump the gun.

Both silver and gold are taking the usual hits at the opening of NY trading. Something remains rotten in Denmark, rather, New York. Both are now on an up tick with gold at 833.10 up 0.90 and silver 10.83 up 0.13. The rottenness must leave before the precious metals will really begin to shine and achieve their proper level of pricing.

Gold, particularly, and silver, to some extent are enemies of central banks and governmental counterfeit FIAT money. They are real assets recognized for over 20 centuries and provide citizens with freedom from excessive government meddling. Both threaten to reveal the fallacy of un-backed paper currencies and the threat thereof to the wealth of citizens.

By the way, what has been revealed of one of the candidates tax increases would be devastating to our wealth and burden us with even more incentive to find a more tax friendly place to live. The other has not revealed much of his tax plans. I would not want to become president with the economic chaos of today. It is a direct result of leaving God's Law-Word and struggling to find a better solution. Seldom do people realize that we either do things God's way or live in the resulting chaos of ever changing laws. No one can completely follow laws subject to proliferation and constant change. God's way is not only the best, but the only way to live free.

From Baron's

Golden Opportunity


Nothing looks as good as gold in this financial-market mess. Some believe the yellow metal is heading toward $2,500, after hitting $859 an ounce last week. But buy the metal, not the miners. (Note: Owing to a production error, this article wasn't included in the Oct. 13 issue of Barron's print edition. It had been scheduled to appear on page 28.)

Read whole article HERE.

Ted Butler of Investment Rarities on Silver:


October 13, 2008

The Masters Of Destruction

(This essay was written by silver analyst Theodore Butler, an independent consultant. Investment Rarities does not necessarily endorse these views, which may or may not prove to be correct.)

On Friday, October 10, the price of silver crashed, falling almost 25% from its price level 24 hours earlier. It is down roughly 50% from where it traded a few months ago. While a broad array of markets fell sharply in price that day and over the past few months, from oil to gold to grain to just about every commodity, none fell as sharply as silver. As regular market observers know, this is usually the case. I intend to explore why this is usually the case and what I think readers should do about it.

Does the sharp price decline mean that conditions have changed and that silver is no longer a great investment? I know it is human nature to assume that when the price of a commodity drops sharply in price, that there must be more of that commodity coming to market, or less demand. This is what we have all learned. But the facts in silver suggest something else entirely.

Read whole article HERE.

From Casey's Daily Resource Plus - And Then There's This Section:

"Infinite money...for as long as necessary! Why the world-wide bond market isn't a smouldering ruin by now is a complete mystery to me. As you know...even if the prices don't show it on the Comex...the run to physical gold and silver is on in earnest. I wouldn't own a financial stock if you gave me one, no matter what the government...any government...promised. Only physical metal in hand (gold or silver)...or if you have equity that you really really know has precious metals backing it."

Folks, to me this "infinite money" means inflation in spades. However, we will go through the rest of the recession before the inflation in the "money" supply translates into price inflation. There is no way out of this that I can see, because every governmental/central bank solution has opened the printing presses and computer blips to add more paper currency world wide.

The DJI just moved to down 21. Another volatile day ahead!

Praise the Lord, because He is in total control whether governments, central banks, and citizens realize it or not. All must follow His ways or suffer the consequences. I believe that we will get the candidate of His choice for further judgment for our forgetting the God of our forefathers back to the patriarchs of old.

We, like Israel of all have gone over to the idol of the messiah state. They went into captivity several times as a result of the same sin. What will be the punishment for us that God will mete out if we continue to see the state as messiah in place of the true Messiah - King Jesus Christ? We must learn to glorify and live in response to His love for His people, else we are lost as a nation, churches, families, and individuals. Praise Him for His long suffering in the face of the people turning their backs on Him. He is full of mercy and grace to those institutions and individuals who repent and turn back to Him.

Best to each, Doug


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