Thoughts on Markets

Monday, December 01, 2008

Precious Metals Continue to Decline Again

Well, I wrote last night that both gold and silver were dropping again. As I thought would happen, I was stopped out of DROOY this morning at 4.25. DROOY is now testing the 4.08-4.09 level. I will likely try to buy more at less than 4.00, as I believe we are likely to be in a higher trading range than the one just completed. Will be watching in rather closely and may send out some alerts on what I am doing with both DROOY and VGZ.

Both gold and silver have continued their "correction" from the recent highs of last week. What a week it was for the precious metals! Today gold is 777 and silver 9.37. Both are presently on down ticks. They are very likely to go much lower.

At this time the DJI is down 362.08 to about 8469. It bounces around a good deal, so it is difficult to pin the exact level. The general market is proving, once again, a dangerous place for investments. The amount that many folks have lost in their "secure" retirement plans is staggering. I believe there is more of the same to come before we are out of the woods on this recession/depression, deflation, or whatever term you would like to apply to the dire economic situation.

It is my firm belief that with the massive amount of paper currencies the world is throwing into the markets, there will be a resulting inflation when the precious metals will be recognized as a true asset for preservation of wealth.

It is also true that the nation which once again backs its currency with precious metals will have the most desirable currency in the world. We are often told that there is not enough gold in the world for such to happen. That is short sighted! The real question is at what price will gold back the currency. If the price is correct, the amount available will be able to cover the currency. Can you imagine the prestige of such a backed currency in a world where worthless currencies abound? Guess that I am just dreaming of a time when God's way would once again replace the folly of man. I pray that it will be so.

From James Turk of, "A Successful Test of Support"

Check out the article HERE.

From Resource Investor today (Another example of failure of our non-biblical education system):

The Financial Meltdown Is An Academic Crisis Too

By Richard Dale
29 Nov 2008 at 10:37 AM GMT-05:00

Recent events have not been kind to the modern financial market structure. This article blames the prevailing consensus amongst finance academics for underestimating the irrationality and instability involved. Has the discipline failed to understand global financial markets?

Read the article HERE.

More from the same source:

Iceland Faces The Music

By Gylfi Zoega
29 Nov 2008 at 10:41 AM GMT-05:00

Iceland’s meltdown was caused by the rapid emergence of an oversized banking sector and accompanying domestic credit creation, asset bubbles and excessive indebtedness that all this encouraged. This article draws lessons from this crisis and suggests Iceland should join the E.U. if it wants to stand a chance at keeping its well-educated young people from emigrating.

Read this article HERE.

From Mine Web this morning:

J.P. Morgan urges investors to buy gold for the holidays

Monday , 01 Dec 2008
J.P. Morgan analysts John Bridges and Steve Shepard recently advised, “We’d be buying some gold for our Christmas stocking and Hanukkah gifts.”

Read the article HERE.

More from the same source:

South African gold production continues to plunge

Friday , 28 Nov 2008
South Africa’s 3Q gold output fell 16.2 percent in the third quarter compared with 3Q 2007 as the world’s former top gold producer begins to move down the production ladder.

Read the article HERE.

An interesting paragraph from The Daily Pfennig reveals the stupidity of allowing government to take over our banks and financial institutions was quoted from "an Investment Advisor."

"Does anybody out there have any memory of the reason given for the establishment of the DEPARTMENT OF ENERGY during the Carter Administration? Anybody? Anything? No? Didn't think so. Bottom line .. . we've spent several hundred billion dollars in support of an agency the reason for which not one person who reads this can remember. Ready? It was very simple, and at the time everybody thought it very appropriate. The Department of Energy was instituted 8-04-1977 TO LESSEN OUR DEPENDENCE ON FOREIGN OIL. HEY, PRETTY EFFICIENT, HUH? AND NOW IT'S 2008, 31 YEARS LATER, AND THE BUDGET FOR THIS NECESSARY DEPARTMENT IS AT $24.2 BILLION A YEAR, THEY HAVE 16,000 FEDERAL EMPLOYEES, AND APPROXIMATELY 100,000 CONTRACT EMPLOYEES AND LOOK AT THE JOB THEY HAVE DONE! THIS IS WHERE YOU SLAP YOUR FOREHEAD AND SAY 'WHAT WAS I THINKING?' Ah yes, good ole bureaucracy. And now we are going to turn the Banking system over to them?"
Really makes sense. NOT! Inefficiency reigns supreme in governments of all types, because man believes he is wiser than God. No wonder God sits in Heaven and laughs at the folly of man.

As long as the citizens look to the false messiah of government for solution to all of life's challenges, folly will be the outcome. We must look to the true Messiah: Jesus Christ. He is the King of kings, Lord of lords, and Light of lights. He is the alpha and omega. The beginning and the end. He is everything to His people. Without Him, there is nothing but death. With Him, there is glorious life, even during physical death.

Search the Scriptures to find Him. If you have yet to find Him consider that if what I have written is within the realm of possibility, where do you stand before this Sovereign Ruler of everybody and everything? Who do you say that Jesus is?

Best to each, Doug


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