Thoughts on Markets

Wednesday, December 17, 2008

Dollar Depreciation is Set in Concrete Now

Dr. Walter William on the spending binge:
Wednesday, December 17
Counterfeiting Versus Monetary Policy

I have great respect for Walter Williams. He is definitely for the free market and holding to the Constitution.
Read the article HERE.

From Mineweb this morning:


Gold leaps $20 after U.S. Fed cuts interest rates to near zero

The gold price rises above $850 after Fed cuts rates to zero to 0.25 percent while Euro jumps to $1.41 against dollar, boosting bullion and U.S. stocks jump.

Author: By Frank Tang
Posted: Tuesday , 16 Dec 2008

NEW YORK (Reuters) -

Read it HERE.


Long term/short term investment conflict builds certainty of metals price surge

It seems inevitable that we are in for a surge in metal prices as current financial strictures will lead to severe supply shortages medium to long term – but the question is when.

Author: Lawrence Williams
Posted: Monday , 15 Dec 2008

Read it HERE.

The latest from James Turk of Goldmoney:
Whatever It Takes

The Federal Reserve today made clear its intention to continue flooding the system with newly created dollars. It says in effect that it will do whatever it takes.

Find the article HERE.

Save a CEO - Check out this You Tube for fun HERE.
We have to lighten up from time to time!

From Casey's Daily Resource Plus:

In news from around the world yesterday, I offer the following...The Telegraph (London): The headline reads..."Ecuador bond default: Fears grow that others will follow"..."There are fears that Venezuela, Bolivia and Argentina may be tempted to follow suit, setting off the sort of stampede seen across the region in the early 1930s." Bloomberg (Beijing): "China to increase money supply 17% in 2009 and boost lending." The Guardian (London): The headline reads "Supermarkets' emergency plans to keep shelves full"..."Fears that scores of supermarket suppliers will go bust next year have led the country's major chains to draw up emergency plans to replace them...Supermarket chain Asda, led by Andy Bond, is working on 'worst-case scenarios' across the board - combing its supplier base and examining alternatives to them. 'Suppliers are under a lot of pressure and there will be casualties,' said a senior executive at another store chain, which has already stepped in to pay troubled suppliers ahead of schedule. ‘We need each other, it is not a zero-sum game’." (This is a problem that will not confine itself to I expect similar problems to surface almost immediately in 2009 in the USA and Canada. - Ed) BloombergReuters (Washington): "New housing starts and permits plunged to record lows in November." And lastly...The Times (London): The head of the IMF said on Monday that "Violent unrest may be sparked around the world by a prolonged global slump unless governments act with greater urgency to jump-start stalled economies." (Madrid): "Spanish building materials producers spanning cement to steel may cut twice as many jobs this year as forecast earlier and face ‘catastrophe’ if cash flow doesn't improve, an industry group said."

That is a neat round up of world news!

The latest from Ted Butler:



Article is HERE.

Butler is right on when he says that these are perilous financial times. The spending binge by "our" government is a hemorrhage of gigantic proportions. When added to the Federal Reserve's policy of bringing on inflation and depreciating the dollar at any cost, we will have hyper-inflation in the not too distant future. The flight to safety first is definitely in full swing. The precious metals are revealing that now.

I was only able to pick up a small portion of the stocks for which orders were placed yesterday. The metals have continued their upward sprint.

Note that gold remains above the price of platinum. The preference is for the monetary metal over the usually more expensive platinum.
Silver has really begun to flex its muscle. It has sprinted above $11 and is holding very well at present. We should expect much more action of this metal. The percentage gain may well surpass that of gold in the final run.
Gold is very strong and looks to be running upward. According to GATA, there are hints that the Federal Government is the last player in the precious metals markets. Thus, it may well be that the "private" cappers have ceased their manipulation. It may be that the risk is too great for them. However, with the Federal Reserve's and Government's "unlimited" deep pockets, nothing is beyond their manipulation.

Nevertheless, the metals are very strong again today with gold at $869.30 and silver $11.30. Both are presently on up ticks. The mining stocks have really started to move, as well. Here are a few: CDY 1.10; CDE 0.84; DROOY 5.88; GDX 33.01; GFI 9.72; GG 32.31; GSS 1.27; HMY 10.42; IAG 5.86; KGC 18.37; KRY 0.14; NEM 41.05; PAAS 17.55; SLW 6.42; SSRI 15.32; VGZ 1.50, and XRA 1.79.

Meanwhile the DJI are off about 90 to 8834.

Folks, it seems that physical gold bullion coins are what we need now. However, they are in very short supply and there are waits between cash for purchase and delivery. It may even be worth the high premiums required to buy now. A lot will depend upon the cash you have on hand, the composition of your present portfolio, and your risk tolerance. The trend of depreciating the value of the dollar is well set in concrete.

This presents the very real danger of the world turning its back on lending to America. Further than that, Richard Russell fears the lost of the world reserve status of the dollar. This would be a financial disaster for us. Hyper-inflation would be in full swing and out dollars would buy very little. Then recognized gold and silver coins would be the safe house for all of us.

All of this is in the very capable hands of the Sovereign God of all. King Jesus is reigning supreme and working His will in every individual and the whole world. He uses His people and others to work out His will. His people can rest in the assurance that He is working all things for the eventual good of His people. We can be still and rest in these wonderful promises. That is how we can remain calm and peaceful when the world around us seems to be falling apart. Praise God for His promises and many blessings.

Best to each, Doug


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