Silver & Gold on the Move - Batten Down the Hatches

Both silver and gold sprinted much higher in early trading, but were smacked off their highs on trading in New York. Accident or simple market forces? I don't believe so! The cartel jumped in again to depress prices, but look how the upward movement started again. Silver is now 17.43 and gold 927.70. Both are on an up tick.

Remember how the friends and neighbors of Noah and his family laughed and made fun of them for building an ark far away from enough water for it to float. However, Noah was faithful to God's command and saved his family while the world around perished. Or how about John crying in the wilderness while many did not come to be baptized into the church of God.

It seems to me that God's word is again crying out to His people and warning us of real financial disaster on the horizon. We must heed His warning, just as did the Christians heeded the Matt. 24 warning of Jesus Christ to flee from to the hills away from Jerusalem when the Roman Army approached in 70 A.D. They were saved from the destruction of Jerusalem. This was a terrible disaster for those remaining in Jerusalem. It had never been seen before, nor since.

Let us now prepare to preserve our families by reducing debt ("Owe no man anything, except to love one another"), build a reserve of cash for emergencies, and even begin to store up non-perishable consumables when you can find them at bargain prices. Stagflation is here and seems to be getting worse.

Carefully, prayerfully make your plans, commit them to the Lord, move out to implement the plans, and depend upon the Lord for success.

Best to each, Doug

Precious Metals are Holding Strong

Silver is faring better than gold in the early trading in Sidney and Hong Kong. Both are holding well and both are up against all major currencies. The dollar is down to 1.5799 Euros. This is early trading in Asia. It could continue into New York unless the cartel jumps in again. It seems as though a major upward move is in the cards for the precious metals.

Please, do not see me as a normal doom and gloomer. I know who is in control and I am certain that His will be done. Our Covenantal God loves His people and has a great plan for each of them. We may suffer along with the unbelievers for a time, but all things work together for those who love and serve the Lord.

All of our patriarchs suffered for a time and received blessings on earth. However, their greatest reward came as eternal life when the Lord took them home. That will be ours, too. He did not promise us a life of roses, but did promise to be with us always. That is true comfort.

My goal in writing this blog is to help all see the wisdom of investing and living life in concert with the Sovereign God of all. His is your God whether you believe it or not. Your belief cannot change this fact. However, your belief or lack thereof has everything to do with both your temporal life on earth and eternal life. I pray that you will get into the bible daily and check everything I write to see that it follows the word of God.

Best to each, Doug

Gold Ramping Up - Dollar Sliding

Silver on the move attempting to catch up with gold. Silver is now 17.62.

Gold is romping upward above both the 50 and 200 day moving averages. It is now 929.30.

With the miners moving up in response to the precious metals, the GDX has broken out above the moving averages, as has gold. DROOY is 7.46 and HMY is 12.17. I wish I had bought more during the last correction. However, that is typical after a large upward move. By the way, I now have in place 10% Trailing Stops on a portion of my holdings in both DROOY and HMY. If there is another correction soon, perhaps, I will be stopped out and then able to buy back in at a lower cost to increase my overall holdings.

This upward thrust seems to have a lot of steam in the boiler, so gold may burst through 930 and keep going for a while. Wow, now that would be great if my 10% stops held for weeks. Excuse the enthusiasm. That will be revealed to us by the Sovereign God over time. We cannot accurately see short term future, and timing. I am content to leave this in His hands. He does much better than I and He knows everything.

This is a short posting to update all on the big move in precious metals.

Check out the link My Life in a Shoe to see the 9th. Coghlan girl born today! Praise the Lord for another Covenant child.

Best to each, Doug

Warnings About Markets & Parental Responsibility

Chart, below from Moore Research Center, Inc. Check them out here http://www.mrci.com/guestbook/sctest.cfm?MRCITRIAL=1&LEADSRC=SPECTRUM.

The above is interesting and clearly reveals that there is some seasonal impact upon the price of precious metals. We are in the summer which is the doldrums time for silver and gold.

Both gold and silver has started the day very well. Both graphs are similar, so I have only included the 24 Hour Gold Graph. Gold is now at 911.10 and silver at 17.23. Almost every miner is doing well, too. Both DRD Gold (DROOY @ 6.70) and Harmony Gold (HMY @ 11.38) are up. Also, the Gold Miners Spdr (GDX) is up to 45.63.

Not so for the general market, as the DJI are down about 221 at 11589. That does not bode well for the broader markets which seem to be in deep trouble. I have been unloading general market involvement for some time and down to very little exposure there. I urge the greatest of caution in every market. In fact, it might be a good safe guard to use trailing stops on a portion of the mining stock portfolio.

When the Fed left the interest rates unchanged yesterday, no one was caught by surprise. What did surprise to an extent was the dovish comment which followed the pre-FOMC meeting hawkish rhetoric on fighting inflation. Talk about a smoke screen. We were really treated with it last week. There seems to be no intention in raising rates for the time being. The central concern is the weak economy which would deeply wounded with any increase in interest rates.

A bit more on Christian Economics:

Pr. 29:18 - "Where there is no vision, the people perish: but He that keepeth the law, happy is he." Vision is often translated as "law." That is not a bad translation. Both seem to present the fact that the Christian needs a future orientation. With the law, law keepers have the proper vision of the goal which is set before them.

We are to have confidence in the Covenantal God of all. It is He Who has the future firmly in His hands. As the spiritual song says, "He has the whole world in His hands." That, to the Christian is a wonderful comfort even when we see the going as "rough." The Sovereign God, also, tells us in Romans 8:28, "And we know that all things work together for good to them that love God, to them who are called according to His purpose." Thus, even the "bad" things work together for our eventual good.

Our Father provides us the courage to face the future with confidence and great assurance that He will see us through. We should earnestly pray that He will use us to His glory in preparing our children and grandchildren to carry on the kingdom work we have started. This is our calling as parents.

Beware, that children of today often face tremendous peer pressure. We, as parents are warned, "Do not be deceived: 'Bad company corrupts good morals.'". (1 Cor. 15:33) Always, know your children's acquaintances. Steer them away from "bad company." Are your children in the government schools? Are your children in so-called Christian schools? With whom do your children play? What do they watch on television? What movies do the see? Who are their earthly heroes and examples? By what kind of electronic games are they mesmerized and amused? What kind of books do they read? All of these have a great impact upon their world and life view.

This is an important economic consideration. God has given us children for us to prepare for discipling the world to the glory of God. If "bad company or communications" are giving our children and grandchildren corrupted morals, what kind of kingdom work will they be doing. Remember, there are only two types of kingdom work: that of our Sovereign Covenantal God or that of His enemy - Satan. There is no other work on earth.

When God told Adam and Eve in the Garden, to multiply and subdue the earth and repeated it to Noah after the flood, it became our mandate. We are to subdue the earth to the glory of God. Our life times are much too short for such a monumental task; therefore, God expects us to prepare and equip our off spring to carry on His work. This is extremely important.

Ask yourself when you send your children into the world, "Am I sending out a missionary to the world or a mission field?" It is one or the other.

I am reminded of the old saying, "Too soon old, and too late smart." That was my case, I am ashamed to admit. With the help of the Holy Spirit, I have repented, was forgiven, and I have been working to change this and recover what I missed early on. I pray that you will do your part NOW!

Best to each, Doug

Gold and Silver Better Today - America is Not

Gold and silver got hammered at the opening in NY yesterday. Today seems to be a different story. Gold is 891.90 and silver is 16.82. The options expire this week and action by the cartel is always more active just before expiration. As reported yesterday, this cannot be the normal operation of a free market and provides consistent proof of manipulation by the cartel. They are buying now so as to be able to sell into the next leg upward for the precious metals. Would that we had the capital to play in their game, but the stakes are well beyond most of us.

The mining stocks appear to be breaking upward off the double bottom formation mentioned yesterday. It is likely that they will languish for a time. With DROOY at 6.22 and HMY at 10.77, we are presented with buying opportunities given we have the free capital for purchase. These prices will be exceeded; perhaps, even today.

I am seriously considering trading in these two stocks, but never selling all. Both are core holdings for me. I plan to sell some at a profit and then buy back in as the price drops in the future. The big sell time will arrive as the third wave of late buyers jump on board at some time in the future. When? That is the big question!

Siddique Islam - AHN South Asia Correspondent

Dhaka, Bangladesh (AHN) - Central bank chiefs of the Asian Clearing Union (ACU) have agreed to introduce the Euro alongside the U.S. dollar for settlement of payments among the member countries beginning January, 2009.

The decision was made at the 37th ACU board of directors meeting held in Nay Pyi Taw, administrative capital of Myanmar, on June 17-18, officials said in Dhaka on Sunday.

The above from allheadlinenews.com is more testimony to the growing mistrust of the dollar. We are seeing more of the move away from the dollar every week or so. The moves have, for the time being been rather small with minimal impact. However, it does not take very many small bites by baby rattlers to make us sick. The same is true about these moves. Collectively, there will be an impact even ahead of the avalanche of larger moves on the horizon.

We are reminded that the U.S. did not invade Iraq until after they had threatened to price oil in Euros and moved much of their banked reserves into gold and Euros. Iran has done the same. Pray to the Sovereign God that He will not allow an invasion of Iran. The rumors are flying everywhere. Perhaps, they are just rumors. Think about it! Were there to be an attack upon Iran, would not that be a positive for the Republican election campaign?

I call your attention to II Chronicles 7:14, "If my people, which are called by My name, shall humble themselves, and pray, and seek My face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sin, and will heal their land."

Notice that the call is not for all the people, but for God's people: those of the faith of Abraham. So it is up to us who bear the name of Christian to follow these instructions to save our nation which has turned from the living God and is receiving His wrath. We are not doing our part, so God has virtually deserted America. He has, in concert with Romans Chapter 1, "given us over to our own desires." We must wake up and do our part ("remove the bolder in our eyes"), before we can even speak to others about about the speck in their eyes.

Let us from this day forward purpose to follow the instructions of Chronicles, above, and rebuild our nation from the ruins which now surround us.

Give praise to King Jesus!

Best to each, Doug

Continued Intervention into Precious Metals

Wow! Look at both graphs. Does that look like normal market activity? How obvious can intervention be! The cartel is at it again. That means that we of the persuasion of staying away from the depreciating dollar have been shot at again by the earthly powers that have a great interest in discouraging investments in precious metal or the greedy insiders who are using unfair derivatives to profit at our expense.

I continually ask, as did David, "How long, O Lord?" How long will the wicked be allowed to trample God's Law and manipulate markets that should be free to respond to normal buyers and sellers.

DROOY is at 6.36; HMY 10.74; PAAS 13.42; SSRI 28.13. The miners' ETF GDX is at 43.99. Not a good day for mining stocks. The DJI os 11862 down about 20.

Always interesting, isn't the market place. By the way, gasoline at the pumps is hanging about 3.90 here.

Best to each, Doug

Well, this is only a short post to reveal the intervention in our markets. Gold is 883.10 and silver 16.75.

Very Dangerous Times in Financial Markets

Above is a two year graph of the DJI. Think of the potential losses over the two year period. Of course, if one had great timing and bought low and sold high over the period, the result would be different. However, I doubt that many folks have been gifted to the extent that they could consistently buy low and sell high. At times, we may have been able to buy near the low and sell near the high. If so, we could have profited.

Perhaps, in place of stocks, we held on to the dollar. The dollar, like other currencies in the world today is unbacked paper "money." The U. S. Mint has already replaced the gold and silver coins of yesteryear. There is now discussion about replacing the penny as the metal content of the penny is worth more than the penny. Therefore, the losses in holding the dollar are likely greater than the losses in stocks. This is the way of FIAT (government created and controlled) currency. It always depreciates over time.

Now look at the last graph for two years of gold prices. Silver, gold, and platinum have proven to be holding steady value in comparison to both the DJI and the dollar. Historically, silver and gold have been money for centuries. They were recognized as real money during biblical times. Land and other property were sold for specific weights of gold and silver. Thus, they were the preferred money. In the time of Christ's incarnation and life on earth, there were coins of "shekel" and other weights of gold and silver used as money. In the American Colonies the Spanish Doubloon (either silver or gold) was widely recognized and treasured a real money.

Those of you who have been reading these posts for some time know these facts. I did not want to be repetitious, but thought it important to present them once again with the benefit of graphs. What I see in these is a time of great danger in the general market.

Under DOW Theory, the Dow Jones Transportations must confirm the drop in the Dow Jones Industrials (DJI) for there to be a vicious rout of the market. The Transportations have stayed above their low and have yet to confirm the downward move of the DJI. However, the DJI closed at 1182.60 on Friday and does not look to do much better tomorrow.

This is a time for great caution in the general market! Should the DJI continue to drop precipitously again tomorrow, it could go much, much lower. Of course, there would be more intervention into the market by the Fed and the President's Plunge Protection Team. That, too, would be a disaster only postponing a significant correction.

There is a possibility that a major correction in the DJI could spill over into even the natural resource stocks, including those in our mining stocks. With a serious downward move, investors would be bailing out and/or responding to margin calls. Thus, they would be selling all stocks to salvage some cash or answer margin calls.

By this time, we should be in precious metals and mining stocks with some cash on hand to take advantage of buying opportunities.

I urge you to carefully sell losing positions in the general market and use close stop losses to preserve profits on winners. I feel that it is not a time to be a buyer until we see what the market is really telling us. In other words, I believe we must batten down the hatches for a real hard blow.

It is important to realize that we are likely to take some losses on mining stocks should the storm be severe.

In the background is the terrible state of the financial industry, including banks. All the fixes of the system have been only band aids on severe wounds. None have solved the problems and more will be surfacing as time marches onward. One can assess the financial industry by following the action of these ETFs >> IAI (Bankers' Dealers), PIB (Banking), XLF (Financials), and others. The solvency of financial institutions is critically low and is having a profound impact upon the industry.

Looming over all of this is the possibility of an attack on Iran. That could come from Israel or America. Iran has challenged both by removing their dollar deposits in Europe and exchanging most of them for gold and Euros and the threat of pricing their oil in Euros. When Iraq did that, we got bogged down in Mid-East War. The rumors are out there now, but we should pray they are only rumors and not actual plans for attack.

We must always remember that our God is Sovereign in all the affairs of man. Nothing happens which is not in concert with His will and the wonderful plan for His people. All things work together for the good of those who fear Him! Let us get on our knees before Him and ask for His mercy in this delicate situation.

Best to each of you and yours, Doug

Precious Metals Attempted Another Run for the Moon

From The Daily Pfennig today,

"Here's story I doubt you saw on your news station yesterday... China said it will raise domestic gasoline and diesel prices by 17%-18%, as it responds to near-record crude-oil futures and criticism of its fuel subsidies. The surprise move is the largest increase in over four years, although local prices will still be below the international market. In case you weren't aware... The Chinese Gov't subsidizes fuel prices for their people... You see a country that has over $1 Trillion in currency reserves can afford to do that! However, with the price of Oil continuing to rise, even the Chinese had to say "no mas!""

The gold price lost about eight bucks (silver was down about 20 cents)from the open in Sydney on Thursday morning until about fifteen minutes before the Comex opened in New York yesterday morning. A rally commenced which quickly turned into a vertical line that looked like it was heading for the outer edges of the known universe. Ditto for silver. Then, around 9:15 a.m. NY time..and as expected, the bullion banks showed up and hammered both rallies as flat as a pancake. Silver actually closed down on the day, and down 42 cents from it's high peak of $17.74. Gold was driven back below $900...down more than $10 from it's peak...which was $908.60.

Backing the above clamp on gold prices is the following is from Casey's Daily Resource Plus. It is in reference to the capping of strong upward moves in the price of precious metals, particularly affecting gold and silver.

"You have to be brain dead not to see what's happening here. This is the third time this week that vertical price spikes in both metals were clobbered shortly after the Comex open. As I've said in the past...no profit-maximizing seller ever sells like this...ever! Only those trying to control the price do this sort of thing. And, as always, the CFTC, SEC and your mining company's executives are nowhere to be found."

Thus, it is obvious that the War on Gold is still in full swing.Governments fear gold as a monetary unit, because it gives the citizens too much freedom.Both governments and banks want to maintain their monopoly on "counterfeit" FIAT paper currencies.

There will come a time when the coiled spring under the prices of precious metals is released and that will spike prices much higher. After all, gold based upon the last high of 1980 based on the depreciated value of the dollar should be in the $2,500 range now.

Gold is not at 902.30 and silver at 17.40. It would positive for precious metals were gold to continue above 900 and silver above 17. 

I have included the gold miners EFT, above. This is to show what appears to be a double bottom about the 1st. of May and the middle of June for the EFT. If this holds true to form, it is a strong bullish indication. Of course, the GDX will have to continue above 45 and break through both the 50 and 200 day moving averages for this to be completely affirmed. The GDX is up 0.20 to 44.25 today and most of the mining stocks are up. I am interested in adding to my DROOY holding at a price < 6.35. By the way, I plan to start some limited trading in this particular stock. That is, I will buy near lows and sell some as the price moves upward.

The South African miners are still limited in production by the lack of electrical power. As the price of gold rises, they will remain profitable. The bolstering of the electrical infrastructure will take months and years before it is completely completed. However, I believe the miners there are still viable.

Let's look at more of the Christian fundamentals of family finances.

Pr. 31 gives us a look at the attributes of the excellent wife, about whom in verses 28 & 29, we read, "Her children rise up and bless her; her husband also, and he praises her, saying: 'Many daughters have done nobly, but you excel them all.'" What a wonderful thing it is to have children and husband so praise the excellent wife so grandly!

In verses 13 & 14, we find that "She looks for flax and wool, and works with her hand in delight. She is like the merchant ships; she bring food from afar. "Further, in verse 16, "She considers a field and buys it; from her earnings she plants a vineyard." From these verses, it is important to see that she uses wisdom in shopping.

Pr. 20:14 - "'Bad, bad,' says the buyer; but when he goes his way, then he boasts." This speaks of negotiation between a seller and a prospective buyer. God wants His people to be good negotiators, but pouring all of Scripture through such transactions, it seems that buyers and sellers should be free to complete the transaction or refuse to do so. Of course, the buyer may point out defects while the seller points out benefits. In the free market, when a transaction is completed, the buyer values the purchased item more than what he paid for it and the sellers values the price received more highly that the item sold. Both leave the transaction satisfied. Neither should take an unfair advantage of the other, and there should be no misrepresentation by either party. Misrepresentation is a form of fraud and should be punished by a sound government interested in protecting the life, liberty, and property of its citizens.

Using wisdom in shopping is simply being a good steward of what God has entrusted to us of the property He owns. In the case of "money" or any other medium for exchange, we should make the best use of it possible. There are necessary consumable items which must take a high priority in our spending. It is wise to study the newspaper ads to find the least expensive items we consume week to week.

Many times, we are offered coupons for items we buy. These can be a substantial savings if we use the items for which the coupons are offered. However, it is wise to shop for equivalent items and compare prices. Many times the coupons are for similar, but more expensive items even when the coupon discount is considered. So, we should use wisdom and discernment in choice of coupons for use. Don't automatically buy, because you have a coupon!

For major purchases, I believe it is wise to get the family together and make a list of proposed purchases in order of priority. The list should be reviewed at least once a month. An item should never be purchased unless it has been top priority to two months in succession. When a family uses this, particularly in the case of discretionary major purchases, they will be surprised how priorities will change month to month.

Comparison shopping can be done easily and efficiently on the internet. With the higher prices of gasoline and diesel fuel it behooves us to consolidate shopping trips. When shopping for food, it is best not to shop when hungry. It is also wise to have a well thought out shopping list. Shopping for targets of opportunity are OK if they are real bargains, but stick the list.

This is all what we consider as common sense, but how often do we get carried away and violate these guidelines. After Adam's sin in the Garden of Eden, the curse of God upon the ground amplified the concept of scarcity. One aspect of scarcity, which I will speak about in the next posting, is that once a dollar is spent, it is no longer available for use again. Thus, we must be good stewards of the dollars the Lord has given us and use each one very wisely.

Best to each, Doug

The War on Gold Continues - Cracks in the Power are coming

Both silver and gold are moving upward over the last 24 hours.Silver is at 17.23 and gold 885.90 as this is written. We have had some good buying opportunities in mining stocks with the correction earlier this week.DRD Gold (DROOY) is languishing at 6.60 today, Harmony (HMY) 10.96, and Vista(VGZ) 3.60.These are in a buying range for many of us.

Since March, each time the price of gold has exceeded the 20 and/or 50 day moving average, the cartel fighting the price of precious metals has swung the ax on the price pushing it back down. At some time in the future, they will lose their power. This will occur when more and more of the late lemmings rush to get on the precious metals band wagon.

By the way, please, heed my warning about the time lag between purchases of GLD and SLV shares and the resulting purchase of the metals in concert with the shares. The article by Ted Butler, sent out yesterday, had the facts on this subject. I prefer www.everbank.com Metals Select and www.goldmoney.com gram accounts as safer.

Ever Bank was formally the Mark Twain Bank and offers a number of good services. Investigate and make your own decisions on every type of places for emergency funds, investments, and ready cash.

From The Daily Pfennig:

"OK, some of you might not know what I'm referring to there... But basically, the Fed has opened Pandora's Box of bad bonds for collateral. That's right... All that debt that the lenders banks and brokerages had on their books and causing the write-downs has been given to the Fed as collateral, thus making the Fed a "junk bond" house...

Government watchdog, John Williams of Shadow Stats tells us that... "Illiquid collateralized debt obligations - including mortgage-backed securities now total in excess of 20% of the collateral backing the Federal Reserve Notes.""

From Casey's Resource Plus:

"“Gold,” Phillips wrote, “is reacting to the disappointment of the G-8 conference at the weekend where some sort of agreement was hoped for to ensure a strong $, but none came. Instead more words left the market in the air. Now the $ is slipping, while still in its trading range of $1.53 to $1.59 against the Euro. But with no action impending where to now?” he asks.      His answer: “With Joseph Lieberman about to reveal what regulations he proposes this week we are entering an environment where 'stability' is to come from regulation. That shows for sure we have entered crisis days. This can only be positive for gold and silver.”     We don’t know if Phillips has nailed it, but for certain we are equally skeptical whenever government proposes to stabilize volatile markets through regulation. That it has never worked well in the past seems a lesson lost on those with their itchy hands on the levers of power.    Brien Lundin, editor of Gold Newsletter commented that, “It's true that some of the recent economic data are pointing toward a slowing economy, and some are predicting that the resulting lower consumption will act as a drag on the price of gold and other commodities.”    However, he added, “inflation is first and foremost a monetary phenomenon, and the market is now recognizing that the Federal Reserve will be unable to fully launch a tight-money campaign while the economy remains so weak -- and during an election year,” he wrote."

We see the fact that the strong dollar rhetoric is just that: hot air! The recent news on the economy is not encouraging at all; therefore, the Federal Reserve remains firmly nestled on the horns of the same dilemma upon which it has rested since it created the paper money it was designed to produce. While it was begun to bring stability to the dollar, it has consistently devalued the dollar.

Remember un-backed paper currencies have value only through the power of governments to force their use for all debts public and private and the acquiescence of citizens to accept it.

Back to Christian Economics:

What is savings? Most would answer that it is a pass book account at a local bank, cash in a money market account, a checking account, an IRA, or a 401 retirement account. However, in economic terms it is foregone consumption.

What is Christian about this definition? Certainly, it is not explicitly in the Bible, but that does not make it invalid. What in the Bible supports this definition?

Looking back on Genesis, we are told that God created all that we are and see about us. As Creator, He is the owner. Ps. 24:1 re-enforces this, as follows: "The earth is the Lord's and all it contains, the world, and those who dwell in it." Check Ps. 100:3, "Know that the Lord Himself is God. It is He who has made us, and not we ourselves; we are His people and the sheep of His pasture." Then there is Ps. 50:10-12, "For every beast of the forest is Mine,  the cattle on a thousand hills. I know every bird of the mountains, and everything that moves in the field is Mine."

Even the earthly makers or creators of things are the owners, thereof. This is true of the owners of businesses who employ workers to produce products for them. Even more so, the ownership of all He created is property of the Sovereign God of all. Every single thing, every animal, every plant, and every person belongs to God.

In Genesis, we are told that man was His highest creation was given a soul and a mission to multiply and subdue the earth (Gen.1:28). Under God, man was to bring godly order to the entire earth, but he was to recognize God as the owner of all, even himself and his offspring.

In Matt. 25:14-30, we find the Parable of the Talents. You will recall that a master (a picture of God, Himself) gave 5 talents to one servant, 2 talents to another servant, and 1 talent to another servant. Each of the servants with the 5 and 2 talents were good stewards and earned a profit for their master which they gave him as he returned home. The servant with the 1 talent was a slothful steward and simply returned the 1 talent which had been entrusted to him. The other two servants were rewarded with "Well done, good and faithful slave." words from the master, but the unprofitable steward was cast out "into the outer darkness; in that place there shall be weeping and gnashing of teeth."

We, as these servants or slaves are to be faithful stewards of what God has entrusted to each of us. He gives us life, ability, and tasks to enable us to care for our families. Ultimately, it is He who owns and we are his stewards.

I hope you fully understand this, every time you drive "your" automobile, thank Him for allowing you to use it as a steward, not the true owner. That will give you a totally different perspective on the vehicle. You are to care for it as His property which He graciously allows you to use. This goes for everything we hold. Each is a stewardship for which we will be required to give an account to the Master. This applies to the dollars He provides for us through our labors.

To be a good steward of earnings, it is wise to live beneath our means. This is particularly critical during the stagflation of today. Remember, 1 Tim. 5:8, "But if any one does not provide for his own, and especially for those of his household, he has denied the faith, and is worse than an unbeliever." Scary words!

Were we to live simply from pay day to pay day with nothing left over, what would be the result if we lost our job? Thus, we must forgo consumption to build a reserve funds to cover contingencies in the unknown future. I believe this to be imperative as good stewards of God!

Best to each, Doug

Talk is a cheap way to lower the dollar, but will it work?

The, above, graph is from www.GoldMoney.com, which offers a good way to own without personally holding precious metals. James Turk writes some interesting commentaries on the web site. It is a good source of information. You might profit by reading the articles. The graph clearly reveals the plight of the dollar over a longer period of time. I anticipate the purchasing power of the dollar to go a good bit lower. However, there is a feeble attempt to talk the dollar up now.

All the "money" manipulators know that raising interest rates is the method of raising the "value" of paper currencies. This is also seen as the way to curtail price inflation. In the economic theory of the day, lower interest rates and increased supply of paper currency are the methods of fighting slow downs, recessions, and depressions. Then to curtail inflation, the method is to raise interest rates, decrease the supply of paper currency, and raise taxes. This comes from Keynesian Economics, the theory used by all who would intervene in the paper currencies of today's world.

In spite of this well known theory, spokesmen for the government and the central bank are attempting to use rhetoric to talk the dollar up. One does wonder at this! It is not difficult to understand. Both the government and the Federal Reserve are uncomfortably nestled on the horns of a dilemma. Were the supply of dollars to decrease or the interest rates to increase to slow the price inflation, the stagflation economy would slow down further. On the other hand, were the supply of dollars or interest rates to decrease to end stagflation and further bolster the the economy, we would be facing more stagflation or recession than already exists. Thus, there is an effort to talk the dollar up some.

All of the above is, of course, opposed to Biblical Economics which always uses true money: gold and silver. Many Biblical precepts are reflected in what is know as the Austrian School of Economics. This supports markets and currencies which are freed of governmental and bank intervention. We are beginning to lose the great benefits that our nation has enjoyed under a pseudo free market economy which was abundantly blessed by God for over 200 years.


Last week was another horrendous time in the precious metals markets. The "War on Gold" grew in intensity over the period. However, both gold and silver picked up a bit on Friday. Today, we are being treated to a significant increase in the spot price of both. The stronger dollar, without a doubt, had an impact upon these prices.

The mining stocks were hit hard last week, as well. However, almost all are substantially up today. Last week DRD Gold (DROOY) was well down below 7.00. I would have added to my holding, but was out of pocket for the week. It is now at 7.03 which, for me, is still a good opportunity to buy.

The Select Sector SPDR Financial Trust XLF is trading in the 23.43 area which is down from about 25-26 of just a few weeks ago. The financial industry is still suffering from great losses from bad mortgages and other financial instruments. However, the Federal Reserve has thrown out all the stops in an effort to "save" the banking and other components of this industry. We could see a temporary postponement of the inevitable. One great detractor is the extremely large over hanging batch of derivatives. A collapse of this would kill many in the financial sector.

Looking at the over all economy, we are seeing a decrease in retail sales, similar pressure on the domestic automobile industry, more lay off workers, and cuts in salaries or work hours for many workers. The inventory of both resale and new houses is increasing in most areas of the country. This does not bode well for the economy. The University of Michigan Consumer Confidence averaged 85.6 for 2007, and for the first two weeks in June it was down to 56.7. This is certainly in concert with the condition of our economy.

Folks, it is time to batten down the hatches as rapidly as possible. That is, we should be reducing our debt, building emergency reserves of cash on hand for emergencies, and greatly reduce discretionary spending. Buy that which is necessary and stock up we find bargains on needed items. Retailers are hurting and will be cutting prices and presenting us we special opportunities. Search them out!

The section on Christian Economics and Personal Finance will continue at the next posting.

Until then, best to each of you and yours, Doug

Precious Metals Rebounding Today

Both of our favorite precious metals are moving up rather nicely today. Silver is the clear winner in the race, though. Presently, Gold is at 899.80 and silver at 17.51 with ticks on both upward. That is nice. Would that they would keep it up for a while. This rebound is a reminder that we are to buy on dips, such as the one we just had in the last few days. Buy on dips, but use caution. I believe we are not yet at the "sell the farm" place yet. The third phase lies ahead weeks, months, or years. It is up there somewhere. That will be a real blast!

Yesterday and today the mining stocks have been following the precious metals. they are posting gains with most showing in the green on my screen. DRD Gold (DROOY) is at 7.82 and Harmony Gold (HMY) at 12.00. Almost all are up!

The jawboning of Big Ben was trumped by the ECB hawkish remarks indicating a real effort to head off the inflation. The indication from Europe was that there were to be interest rate hikes in the future. Perhaps, not this month, but in the not too distant future unless price inflation corrects by itself. The result is a big drop in the dollar versus the other paper currencies today. The dollar has definitely resumed its downward spin.

The bursting housing bubble in England is reported as worse than here. That is a switch. The British pound was a strong currency until recently. Now the sub-prime and prime mortgages have come home to roost in England, too. This things seems to be circulating around the world as time goes on.

Back to Debt:

We examined yesterday the explicit requirement for the lender to cancel debts to brothers during the seventh year. We, also, looked at the implicit requirement for the borrower to limit his debt to one lender and to end debt during the seventh year. These requirements are to provide those of the household of faith with a Sabbath from debt.

Let's look at another biblical principle on a special type of debt: that of co-signing.

Pr. 6:1-5, "My son, if you have become surety for your neighbor, have given a pledge for a stranger, if you have been snared with the words of your mouth, do this then, my son, and deliver yourself; since your have come into the hand of your neighbor, go, humble yourself and importune your neighbor. Do not give sleep to your eyes, nor slumber to your eyelids; deliver yourself like a gazelle from the hunter's hand, and like a bird from the hand of the fowler."

Pr. 11:15, "He who is surety for a stranger will surely suffer for it, but he who hates going surety is safe."

Pr. 17:18, "A man lacking in sense pledges and becomes surety in the presence of his neighbor."

These seem to be a warning against co-signing for loans of any kind. From a very practical perspective, why does another person need to have a co-signer for a loan? Upon checking, you will find that the potential borrower does not possess a sound track record for prompt payment of past loans or a good name which would enable him to sign for the loan by himself.

In other words, in the eyes of the lender, he is not worthy of the risk involved in lending him the proceeds requested in the loan application. Therefore, a co-signer, who is qualified will have to sign with him for the loan to be approved.

Pr. 22:26, "Do not be among those who give pledges, among those who become sureties for debts. If you have nothing with which to pay, why should he take your bed from under you?"

Were you to in-advisably co-sign, you have taken on the loan for yourself. If the lender has any problem collecting from the unqualified first party to the loan, who do you think will have to pay.The co-signer upon whose record the loan was made, is on the hook to the lender to make good on the loan. The lender does not have to collect from the first party, but may go directly to the co-signer whose signature guaranteed the loan.

Thus, the warnings are to the unwise co-signer, get out from under the debt as soon as possible. Do not sleep or slumber, concentrate on having the loan contract fulfilled as rapidly as possible. You are to use haste as a gazelle from a hunter or a bird from a fowler. These wise animals get away instantly and you are to do the same. You must escape from the trap to which you have exposed yourself.

The principle is that you should never co-sign. Do not be misled by the warning against co-signing for a stranger, because the warning is also explicit for a neighbor or brother in the faith. We must always be ready to help a brother in need, but it is far better to give him or lend to him what he needs. Co-signing is out.

I sincerely, hope that these special messages on Christian Economics are helping all to learn of God's way of personal finances. Please, send comments and suggestions as they come to mind.

God's way is always best and those who follow it are blessed in many ways.

Best to each, Doug

Summer Doldrums - More on Debt

The graph of silver shows that silver is gaining a good bit of interest. The supply is low and the demand is high. Without the manipulation by the big money and derivatives, we would see much higher prices. I believe that in the longer range, silver may percentage wise out perform gold. Gold is at 873.60 with the last tick down, and silver is at 17.02 on an up tick. We are, without a doubt, bogged down in the summer doldrums. We should expect both to be in a trading range for 3-5 months.

Here is the graph on GDX (Gold Miners). It is up from the lows of late April and early May. The price has moved below both the 50 and 200 day moving averages. This is typical of summer months. We will have to see it push near 47 to have any real change. Patience is the name of the game, as difficult as that is for most of us.

The mining stocks are mixed today. About 50% of the ones I follow are up. Particularly, DRD Gold (DROOY) @ 7.67 and Harmony (HMY) @ 11.53 are attractive. However, most will remain in a narrow trading range until the fall. Use great caution in making any purchases.

Daily Pfennig reported that recent surveys of U. S. consumers indicated that 9/10 are lowing life style and 2/10 are considering moving closer to work. These results certainly track with what I know that each of us sees as we shop. With gasoline nearing $4, consumers have reduced their driving and moving closer to work may be one solution.

In San Antonio, we have seen recent improvements in apartments and condominiums near heavy business areas; such as, medical centers and central city. Makes sense if the price is right and one can leave the rural and other housing areas. However, I see the lack of a yard a draw back from such locations. Another draw back is the closeness of neighbors, many of whom one could do without very easily.

I believe we are all beginning to see the inflation and recognizing that it does have an impact on our life style. Shopping and paying utility bills is particularly challenging. Oil prices have backed off a bit which is a help, but it is still a shock to feed my Dodge Durango at the pumps.

More on the biblical view of debt:

Yesterday, we looked at the Sabbath of debt demanded by scripture. It seems to be mandatory for lenders and implicitly obligatory for borrowers. Regardless, this is a conservative and important concept. We are to give up normal business and other activities to observe the weekly Sabbath, now the Lord's Day. Therefore, a Sabbath from debt is a great idea, as well.

Another important principle is found in De. 24:10-13, as follows: "When you make your neighbor (brother in the faith) a loan of any sort, you shall not enter his house to take his pledge, you shall remain outside, and the man to whom you make the loan shall bring the pledge out to you. And if he is a poor man, you shall not sleep with his pledge. When the sun goes down you shall surely return the pledge to him, that he may sleep in his cloak and bless you; and it will be righteousness for you before the Lord your God."

The pledge of the cloak is a given by the poor brother as a surety or collateral to guarantee the re-payment of the loan. This has implications for both the lender and the recipient of the loan.

The one who has borrowed the amount of the loan is seen as a poor brother to the lender. Since he is poor, he likely has only one cloak. It should be recognized that he has only one pledge to give as surety for a loan. Therefore, wisdom would tell us that he could borrow from only one source. That is a great rule for us to follow!

Multiple loans require multiple payments and as payments are missed, it leads to multiple demands for payment. Many times, I have attempted to help families who are deep in debt. Upon looking over their finances, I found that they had mortgage for a home, loans for a vehicle (often two), loans for furniture, and multiple credit card debts. The demands for payment come from many sources and the family is faced with ever increasing debt and engages in the process of robbing Peter to pay Paul, in an attempt to satisfy the loudest demands for payment. This is the plight of too many people in an inflationary environment and is simply the result of attempting to live beyond their means. Believe me, it is a long row to hoe to rectify this situation. The rule, "Borrow from only one source!"

On the lender's side, he is cautioned, once again in concert with the prior post, not to profit from the loan to a brother in the faith. He is not to profit from interest or, in this case, from use of the surety. He is not to deprive his brother of essential use of the cloak he has taken as surety. Were he to keep it over night for his own use, he would be profiting from his loan to the brother. This is forbidden.

Further, there is the manner of dealing with his poor brother. He is not to burst into his brother's house to demand the cloak. Rather, he is to wait outside for his brother to bring the cloak out to him. He must respect his brother in the faith, because he is within the covenant and deserves to be treated as a child of God. Of course, his brother could invite him in while he gets the cloak. That would be both parties to the transaction showing respect for one another which is appropriate.

The lack of respect is very often displayed today in the manner in which cars are forcibly removed from delinquent borrowers. This is often done without the borrowers knowledge. What kind of God honoring respect is being shown through such actions? God will balance the books in the end, and we must always be aware of His coming judgment. That will be totally, absolute righteous judgment, as is always the case with our God.

More on the next posting.

Best to each, Doug

Jawboning Improves the Dollar - More on Debt

The big news from yesterday was the deceptive words of "Big" Ben of the notorious Federal Reserve. (By the way, in case you do not know, the Federal Reserve System is owned by the member banks and has no oversight checking on its operation. It has never been audited. Thus, it operates with autonomy.) Big Ben blamed all the bubble creation of Greenspan and himself on inflation. Wow, what an excuse that is! Inflation, not the Federal Reserve which expanded credit and "money" supply which resulted in the price inflation, is totally responsible. He stated that a stronger dollar is needed to curb the inflation (meaning, price inflation). That is very true. However, there is a serious problem.

Our financial institutions, including banks are in deep trouble over, not only, sub-prime mortgages, but becoming more apparent now both prime loans and credit card debt with the resulting bankruptcies. Nevertheless, Ben's words encouraged the dollar bulls and the precious metals, oil, and base metals took hits as the dollar moved upward on the basis of the jawboning.

The Federal Reserve is nestled somewhat uncomfortably on the horns of a dilemma. On the one hand what is needed to curb inflation is, indeed as reduction in the supply of dollars. However, were interest rates to be raised and the supply reduced, the feeble economic recovery would end and we would have a much deeper and longer lasting recession. Yes, I do believe we are presently in a recession. It is only the master mathematicians of the federal government who have been able to hide this fact by manipulating the economic data to their benefit.

By the way, Ben's jumping on the dollar breached another frontier. That is normally the purview of the Secretary of the Treasury. But of course, it is no biggie for Big Ben who has expanded the power and authority of the Federal Reserve well beyond what it has been historically. Nothing new in governmental or pseudo governmental agencies and departments.

Gold is moving up a bit to 883.50 and silver is at 16.67 with its last tick downward. The rhetoric moved the dollar higher for the shorter term.

By the way, looking at currencies, the Euro has backed down from its recent highs and looks to be not as strong for some time. Perhaps, the next tick on the interest rate in Europe will be upward. We will know after the next meeting. Have you noticed that the Brazilian Real is racing upward against virtually all currencies. Its economy is booming, as well. Possibly, a good place to have investments.

Back to the study of debt:

We looked at some laws and principles of lending yesterday, and I want to tackle one more today. Let's examine De. 15:1-3, "At the end of every seven years you shall grant a remission of debts. And this is the manner of remission: every creditor shall release what he has loaned to his neighbor; he shall not exact it of his neighbor and his brother, because the Lord's remission has been proclaimed. From a foreigner you may exact it, but your hand shall release whatever of yours is with your brother."

This is an interesting and important law. Yes, I say, "Law." Every word of the Sovereign God of all is a law. I remember being on a military transport ship crossing the oceans. Every word coming over the public address system was to be given as an order. It was the Captain's communication with all personnel on the ship and every announcement was to be as if the Captain, himself were speaking. The bible is the Word of our King, thus, it is law to all people whether or not they accept it. Rushdoony almost always referred, correctly, to scripture as the "Law Word" of God. We must see it as such.

The passage from Deuteronomy gives laws explicitly to the lender. First, loans to his brother or neighbor in the household of faith were to be forgiven, if not sooner paid, at the end of seven years. There was to be a Sabbath from debt to be enjoyed by all of the members of the covenant people. Second, to fully indicate the special and peculiar nature of loans to the professing believers, the passage considers loans to foreigners different. The lender was allowed to collect the loan to foreigners even beyond the seventh year. He was not told to exact it from the foreigner as a command, but was allowed to if he desired to do so.

I believe there is an implied command to all of God's people in the Sabbath from debt. That is, that no one should be in debt for longer than seven years. God's preferred way throughout scripture is debt free living for His people. This gives His people a freedom to change jobs or relocate in minimum time to answer His call more rapidly than a person tied down with debt. Debt free living is a blessing which is enjoyed almost as much as being freed from the law of sin unto death by the saving blood of Jesus Christ applied to believers by the Holy Spirit. The burden of debt hangs greatly on the back of a believer.

I would suggest that you meditate upon the subject of debt, search the scriptures for more insight and pray that King Jesus would show you the way to greatly reduce and eliminate any debt that you have. In this day of increasing price inflation, many of us use credit cards. However, credit card debt requires some of the highest interest rates. Use the cards, if you must, but be sure to pay the balance on time to avoid the interest. That is the only way credit cards should be used.

If you have a balance on your credit cards, remember that every purchase incurs interest until such time as the balance is reduced to zero. You no longer have the "grace period" available when balances are paid on time monthly.

More on the next posting. Please, post or send your comments and suggestions to me. I appreciate all criticism.

Best to each, Doug

A View of the Economy Through Clear Glasses

Look at the significant drop in the prices of silver and gold as the NY trading began. Isn't that interesting. Certainly, there is no collusion or manipulation in these markets, is there? Simply the simple market forces at work. Perhaps, even a few deep pocket investors are using derivatives to crush the prices. Whatever/whoever is at work is doing a job on the precious metals and this may well continue through the summer.

Fall and winter are the times when the demand for precious metals really begins to push prices upward. We are facing the difficult months immediately ahead. The mining stocks are being hit quite hard this morning. Though it is early to determine how the day will play out, we should look for the potential opportunity to pick up a few more shares very cautiously today. We should be patient, but look for the best opportunities.

DRD Gold is experiencing a strike at a major mine, and the price may get close to $7 which I would consider a time to add to my holding. You must evaluate your portfolios to see what you should do. DRD (DROOY) last trade was at 7.96. That is a bit high for me, because I have a substantial stake in DROOY already and would be looking for lower price before adding to it.

Silver is down to 16.71 and gold to 883.50. The last tick was down, so we could see lower prices today.



Here is the 10 year gold graph. The recent corrections are not significant in the long term. We must maintain the long term perspective.

The DJI were down triple digits yesterday and are off 13 at this time. The DJI are at about 12490 which is not good. Using the Dow Theory, we have yet to see a confirmation by the Transportations which are setting an upward example for the market. They remain strong! I would suggest, that much transportation of goods these days has switched from trucks to rail in face of the high cost of diesel fuel. Certainly, the long hauls are handled more efficiently by rail.

Looking at the thriving economy without the rose colored glasses, we see the airlines taking the high fuel prices on the chin. American Airlines is to take a cut of 12% in capacity and reduce the workforce accordingly. The bankrupt Delta and Northwest are to merge and cut costs. Turning to the banking industry, we see more of the same.

Wachovia's CEO was asked to resign and Washinton Mutual made a change at the top. There is a rumor that Lehman Brothers is about to report a loss, the first since going public.

The housing bubble is still losing air as prices continue downward. Consumers are in a double bind with prices at the pumps still rushing toward $4 and above, and with food prices escalating very rapidly.

By the way, I have been getting extra large eggs for $1.09 at the Commissary. About four or five weeks ago they were 1.69, then they dropped to 1.24, and last Saturday were still $1.09. If anyone knows why, I would like to know. My thoughts are that the producers are using White Leghorns which lay almost every day. Is there a way to "milk" more eggs from chickens these days?

God's Way of Debt:

Last time, I discussed some of the aspects of debt from the view of the borrower. Today, let's examine some of the laws and concepts for the lenders.

In Exodus 22:25-27 we find a passage that is almost identical to the following found in Leviticus 25:35-38: "Now in case a brother (countryman) of yours becomes poor and his means with regard to you falter, then you are to sustain him, like a stranger or a sojourner, that he may live with you. Do not take interest from him, but revere your God, that your brother may live with you. You shall not give him your silver at interest, nor your food for gain. 'I am the Lord your God, who brought you out of the land of Egypt to give you the land of Canaan and to be your God.'"

Thus, help for or loans to members of the Covenant are to be special. We are not to profit from such. We should willingly supply the necessities for a brother or sister in the faith. The early church, in the Book of Acts, did this as an example for us.

Acts 4:32-37: "And the congregation of those who believed were of one heart and soul; and not one of them claimed that anything belonging to him was his own; but all things were common property to them. And with great power the apostles were giving witness to the resurrection of the Lord Jesus, and abundant grace was upon them all. For there was not a needy person among them, for all who were owners of land or houses would sell them and bring the proceeds of the sales, and lay them at the apostles' feet as any had need. And Joseph, a Levite of Cyprian birth, who was also called Barnabas by the apostles (which translated means, Son of Encouragement), and who owned a tract of land, sold it and brought the money and laid it at the apostles' feet."

This passage has often been interpreted to mean that all property was commonly owned by all, but that is far from the truth. The wonderful fellowship and love that the church members had for each other was such that as a propertied individual saw an unfulfilled need of another, he would willingly provide available funds to meet the need. If he did not have the funds, he would sell property to meet the need. This was a totally voluntary, gracious act which many members sought opportunity to come to the aid of others.

Were this to be true in the churches of today, there would be no need for any believer to eat at the tough of the governmental welfare system. Welfare for members of the churches would be handled by the household of faith.

This was God's way of caring for the pour among us. More on this in the next posting.

Best to each, Doug