Thoughts on Markets

Wednesday, November 05, 2008

WOW! I'm glad it is over!

Whew! We are so blessed that the election is over. The DJI does not seem too happy with the liberal outcome. However, the liberals seem to be scoring big this time around. After the Republicans have put so many bullets into their feet, it is no wonder. Remember that the Republicans have mimicked so much the views of the Democrats, they offered no true alternative.

God has chosen President Obama for us. He definitely was ordained by the Sovereign God to take that office for now. We are to pray for him and that he will recognize that God has given him the position and has placed him there. He must also recognize that it is his duty to follow the law of God in the exercise of his new office.

Politicians and many Americans have a very sort perspective of time. Politicians look as far as the next election and many of us look forward to the next pay check, 6-pack of beer, or the next subsidized sports event on TV. Few look even to the next month or year. This is reflected in the lack of savings by Americans. Most have depended upon the ever rising price of their home, their retirement accounts, or some even upon Social Security for the future. However, there has been a sea change in the world of today. Home prices are falling and the value of retirement accounts have been decimated to the extreme. Thus, we have been exposed to a lesson in economics.

That is, when market prices of virtually everything have been ballooned upward by vast inflation of paper currencies and credit, the balloons are due for explosion at some time. All of us have suffered to some extent, because of our dependence upon the easy "money." We have failed to be frugal and concentrated upon savings for the future. The orientals have traditionally been thrifty and dedicated to saving. Thus, even Japan was able to survive a prolonged recession.

Now that the world is facing more recession, it is critically important for each of us to become more frugal. We must reduce our spending and conserve as many dollars as possible to tide us over the next months and possibly years of hard times. We must indeed batten down the financial hatches for a big blow. Remember the "Great Depression" followed the stock market crash of 1929 until the advent of WWII. Will it take that long to recover this time? I do not know, but recovery does not seem to be anywhere near.

Christian are to have a long term view of time. We are to train the next generation for Kingdom work, so that they will be able to train the next generation, etc. We can do this, because we know King Jesus and know the eventual outcome of His plan. Of course, we are not privileged to the details of the timing; however, He told us to occupy (continue to do business) until He returns. Thus, He has given us our marching orders and we must obey. He has given us wonderful promises that He will never leave us on our own, that nothing can separate us from His love, and too many more to include here. Plus, He will balance the books in the end.

Both silver and gold have moved to a higher plateau of price as the dollar has returned to its downward trend. Presently, gold is 743.50 on a down tick and silver 10.29 on an up tick.

The miners have shown some life, as well. The prices are holding above recent levels, but most are down today. With the precious metals still under some pressure, it is no wonder. The recession is spreading and deleveraging by hedge funds still has a longer way to go.

The latest bad news from the economy has many running to the dollar in preparation for the dismal economic future on the horizon. The deficit balance of trade and the debt is taking its toll. We need to borrow some almost $600 Billion during this quarter to pay for our wars and spending binge. How long will others be willing to lend this amount to us? Time will tell, but there will come a time when our source of borrowing will dry up. Then watch out!

Ted Butler in his commentary provides more insight into the shortage of silver and the consequences of that fact. You can check out his latest in PDF HERE

Let us continually pray that the Lord will move our leaders to do what is best for our nation. We must repent of our sin and seek Him for Him to heal our land.

Best to each, Doug


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