Thoughts on Markets

Thursday, November 13, 2008

No Worries, Mate! As We Walk With God.

Gold seems to be following a slightly better curve than that of yesterday. It is too early to tell, but it is now at 712.50. However, it is approaching the time where it has been hitting the sandy spot. By the way, DROOY last trade was at 3.28. That for my purposes is a buy.
Silver has hit the sandy spot and looks to be following the familiar pattern with a cap of $10 maximum. It is trading at 9.06 now. That is a screaming buy if you can find some pre-1965 U. S. silver dimes and quarters. On to the general bear market, below.


The DJI still looks like the bear has it in its sharp claws. It is down some 24 to 8259 or so. Not a good start for the day. It would seem to be due for a bounce today or tomorrow. We have stock options expiration next week, so anything can happen as the options play out. That is always a volatile time. Perhaps, adjustments in options holdings will be made even this week. If you are still in the general market, consider lightening the load on each upward move, if we continue to have them. That is what I am doing, but it may not be correct for you. Study the market and make your own decisions.

From Casey's Daily Resource Plus:

"That gold continues to fall in an environment where it should be strong has more than a few scratching their heads while bowing to the dictates of the market.

“The big deflation is on,” says Ron Goodis, of Equidex Brokerage Group in Closter, New Jersey. “It's risk aversion. The trend is still in place: Long the dollar and short all commodities.”

“The overall mood remains fragile,” said Edward Meir, of MF Global, and he cited short covering as the only factor on the horizon to make the case for sustained move higher.

However, Meir added, “At this stage, the best we can hope for is for the various metals to enter a prolonged, sideways drift, an indication that participants are finally concluding that the worst of the declines are behind us.”"

More on the bailouts, I mean Rescue Plans, from Casey:

"Back on this side of the pond, all the buzz was about Hammerin’ Hank Paulson’s about-face. The Treasury Secretary said that in the next stage of the government's financial-market rescue package, the original plan to buy troubled mortgage assets (i.e. the toxic junk that got us into this mess) will be replaced by a focus on nonbank financial institutions and consumer finance.

Basically admitting that he screwed up, Paulson conceded that buying up mortgage assets “is not the most effective way” to use government funding.

Now, apparently, they’re just going to inject hundreds of billions of new cash right into the system, and many, including Alex Merk, of Merk Investments, say that market participants are frustrated with Paulson's communication skills and changing tactics.

“He's been flip-flopping on every plan and it doesn't look like he has a plan,” Merk said.

Merk added that the rescue plan is failing to get banks to lend money, and that holders of mortgage assets who had been hoping to sell to the government at a good price have now seen these hopes dashed."

From the Washington Times:

HUNTER: Obama's golden opportunity

Lawrence Hunter
Sunday, November 9, 2008

"The worldwide economic crisis presents President-elect Barack Obama with a golden opportunity to establish his leadership bone fides preemptively before the anticipated foreign challenge comes to test his mettle as a leader. As the world's leaders prepare a summit to discuss establishing a new "global financial architecture," the president-elect should forestall efforts by European leaders to give him a bum's rush down the path toward global governance and strip the United States of its economic sovereignty. He can do so by launching his presidency with a legacy-making initiative that would hit the reset button on the economy and restore the U.S. dollar to its preeminence as a resilient reserve currency.

Before the global economic summit occurs in late November, the president-elect should announce that his first act as president will be to send the United States Congress legislation making the dollar as good as gold once again."

Read the article HERE.

Now that would be a giant step forward for America. A return to gold backed currency would be a great one-up on the rest of the world. We should be the one. Just think of the value of our currency being restored to what the Constitution demanded. A return to sound money: one of the primary foundations for a free market.

Of major concern for the G-20's meeting this month is the discussion of various solutions for the coming Greater Depression. Among the alternatives, I am certain will be a discussion about three reserve currencies: Euro for Europe, Renmimbi for Asia, and Dollar for the Americas with a possible currency for Central/South America.

It is certainly possible for a discussion of backing the paper currencies with a gold standard. Of course, the value of gold would over night leap to great heights. Think in terms of gold at well above $3,000 per ounce or several times that! Consider about the impact upon current debt which is priced mostly in dollars today. The impact would be similar to inflation of the paper dollar, and the result would be that dollars with much lower purchasing power would be used to pay off the debt. Of course, there would be some adjustment of the old unbacked to the new backed currencies. What a bonanza that would be for These United States. Our debt would be paid with even more worthless dollars.

There is one great problem to this scenario, because it could be implemented by the International Monetary Fund. Then we would have a defacto international currency (possibly the three mentioned, above), but centrally monitored by the International Monetary Fund. That is one aspect that does not seem good to me. However, as we have lost our standing in the world, the rest of the world has begun to resent our dominance and is bound and determined to under mine it as soon as possible.

We live in exciting times. There are always threats in the world. We are not responsible for the challenges which the Lord brings to us. However, we are responsible for how we react to them. It is important to so steep ourselves in His word, that we can weather the storms of life in His way. We are totally dependent upon Him for even our next breath. Praise Him daily for His loving care.

We should be thankful that He gave us His written word that we might be convicted of our sin, confess it to Him daily, repent and turn from the sin, turn to Jesus Christ Christ as Lord and Savior. Then we will be equipped to follow Him with the wisdom, strength, and counsel of the Holy Spirit.

Best to each, Doug

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