Thoughts on Markets

Sunday, November 30, 2008

Gold and Silver Are Off in Hong Kong Tonight

Both silver and gold seem to be on the road for a plunge tonight. The downward move began about the time that the Hong Kong market opened. An amazing thing last week was that gold was relatively strong compared with the last few weeks, but the mining stocks (most of them) took off like scared rabbits running from the hounds.

My DROOY is up well over $4 pushing strongly toward $5. It may not make it, but it has been strong throughout the week. My trailing stop is likely to get hit if the downward move of gold persists into the New York trading in the morning. I am prepared to buy back in very soon in event of such a sale.

Gold is now at 811.50 and silver 10.18. Both are on down ticks.

From the London Telegraph under the title "Is Britain Going Bankrupt?":

"The bond vigilantes are restive.

We are not yet facing a replay of the 1970s 'Gilts Strike', but we are not that far off either.

There is now a palpable fear that global investors may start to shun British debt as the budget deficit rockets to £118bn - 8 per cent of GDP - or charge a much higher price to cover default risk.

The cost of insuring against the bankruptcy of the British state has broken out - upwards - over the last month. Yes, credit default swaps (CDS) are dodgy instruments, but they are the best stress barometer that we have."

Read the article HERE.

More from the Telegraph:

China slashes interest rates as panic spreads

The People's Bank of China cut interest rates by more than 1pc point as the economy crumbles and millions of jobs are predicted to go ahead of Christmas.

By Malcolm Moore in Shanghai
Last Updated: 12:48PM GMT 26 Nov 2008

Read the article HERE.

More from the Citigroup in the Telegraph:

Citigroup says gold could rise above $2,000 next year as world unravels

Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup.

By Ambrose Evans-Pritchard
Read the complete report in pdf HERE.

Bill Buckler of The Privateer has an article on "The Great Deflation posted HERE.

The greatest threat to our national well being is for the dollar to lose its status as the reserve currency of the world. If we continue to fight wars, spend to excess, increase our debt, increase the deficit of balance of trade, increase regulation of business, bailout every failing business, and increase taxation, the dollar will be so depreciated that it will lose the preferential status. Then it will be virtually worthless. How soon will this happen? Only our God knows!

Folks, I certainly hope that each of you and your families enjoyed the corporate worship of our Sovereign God on this Lord's Day. It was great to share with other Christians in this worship and praise of our God.

America is in serious need of a revival by dedicated Christians seeking God's will and serving Him in every aspect of our lives. We must be on our knees before Him seeking the power of the Holy Spirit to repent of our sin, turn to King Jesus, and pray that He will honor His promise to heal our land when we honestly do this. This is the only way our nation will be saved from going the way of other pagan nations which have gone after other gods, primarily after the state as the messiah who will solve all problems. There is only one God who can do this and He is the God of Scripture.

Best to each, Doug


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