Governments Mask the Messages of Markets

Both of our precious metals are showing signs of life today. Silver is the brightest today, but gold is looking up, too. The dollar is dropping again. However, it is early in the trading day, so be careful. Silver is at 17.65 and gold 917.

Yesterday's action showed some technical selling, but not a runaway sell off. Long term, the fundamentals remain the same. The Options expire late in August and then there is a longer time until the following options expire. Thus, it seems that there will be less opportunity or reason for the boyz and all to intervene. So, we should look for higher prices going into the fall and winter seasons.

Ludwig von Mises warned us that governments will destroy free markets long before they ever understand how they work. I would like to add that governments will destroy free-markets if they do not like the message of the market. Government intervention after all is nothing but a blatant attempt to thwart the will of market participants in a bald manipulation to change the market’s message about the price of some good or service. - James Turk Check out Turk's Founder's Commentaries @ www.goldmoney.com.

Here is more evidence of governmental intervention into our markets. Little wonder that we are confused about what the markets will do.

"§ Fed Extends Emergency Loan Program for Wall Street
§ Bush Signs Housing Bill to Provide Mortgage Relief
§ Government Announces Plans to Borrow $27 Billion
§ SEC Extends Restrictions on Short-Selling"
(The above is from Yahoo's Homepage today)

Additionally, the Federal Reserve stands ready to do whatever is necessary to back Wall Street Brokers and bankers. The available loans to back them up have been extended into January.

Folks, this hiding of the real markets by intervention is what is making accurate prediction of market direction and timing virtually impossible. Were we allowed to see naked market in action, we could more accurately predict and make successful plans for our future.

In many ways, God's Word warns us. "Go to now, ye that say, 'To day or tomorrow we will go into such and such a city, and continue there a year, and buy and sell, and get gain.' Whereas ye know not what shall be on the morrow. . . . For that ye ought to say, 'If the Lord will, we shall live and do this and, or that.'" (James 4:13, 14)

In in the best of times, we cannot perfectly foresee the future. The future, even our future, is in the hands of the living God of all. Nevertheless, Christians are to have confidence from God that we are to plan generations ahead. We are instructed to teach, prepare, and equip our children to carry on the Kingdom work through their children to all generations under the Covenantal God.

This takes Godly wisdom and grace. James recorded in Chapter 1:5-7, "If any of you lack wisdom, let him ask of God, that giveth to all men liberally, and upbraideth not; and it shall be given him. But let him ask in faith, nothing wavering. For he that wavereth is like a wave of the sea driven with the wind and tossed. For let not that man think that he shall receive any thing of the Lord."

God freely gives wisdom to His people who ask in accordance with His word. Thus, we are future oriented, but must be content with the wisdom and knowledge He provides. We will never know the details of the future completely, because that is the realm which belongs to God alone. We can only make wise decisions which affect our future. The results are always up to Him.

Best to each, Doug

We Have No Markets, Only Intervention

As has been said, "We no longer have markets, only intervention." That is a major reason that it is so difficult to understand the direction of so-called, "markets." Never in history have people been "treated" to such intervention.

The intervention is coming from many sources; such as the autonomous Federal Reserve, the out of control Federal Government, bullion banks, hedge funds, and the Sovereign Wealth Funds of the governments around the world.

The ability to create unbacked FIAT currencies at the click of a computer mouse and the dollar holdings of foreigners has generated a flood of dollars which is seeking places to go. The debasing and depreciation of the dollar has made property in These United States of America cheap for the dollar sloshing about the world. It is no wonder that many of our assets are being bought by foreign government Sovereign Wealth Funds.

While the dollar value of gold should be in the range of $1500 to $2000 in relation to the long term depreciation of dollar purchasing power, gold languishes below $900 as this is written. That is absolutely ridiculous and is solely due to the distortion of the market by continuous intervention.

Gold could be manipulated as low as $850 if the boyz and their friends wanted it. We are the victims of their pleasure. The price today ($897.20) tells me that there are still a great number of shorts by the big boyz overhanging the market. Likely, they did not buy back all of the shorts last week and on Monday at the expiration of options. They still are holding future short options which must be covered, so they push the prices down.

Long term, it is obvious that the central banks, and in particular, our Federal Reserve will create as many dollars as necessary to bail out the failing banks. This will continue to lower the purchasing power of the dollar for the foreseeable future. We are in for inflation of the paper dollar which will give us more price inflation in everything we purchase.

It may well be that we are to continue to "muddle through" with higher prices and with stable and/or lower wages. This is the "stagflation" which is currently prevalent. We are experiencing a slight bit of relief as the price of filling the gas guzzlers has decreased a bit. As you fill the tanks, it is no great task to remember when gasoline was just around $1. Isn't it a shame that the dollar has depreciated so much as to give us cause to rejoice when we can find gasoline at less the $4.00? Wow, such a deal! That is one of the great benefits of living with a government and central bank that manipulate markets at will.

Silver is now 17.08 and gold 898.60. The precious metals are the only way that we can preserve purchasing power for ourselves in the inflationary environment we are facing.

Let us continually rest in the grace and mercy of King Jesus as He works His will upon all the world. Nothing can separate us from the love of the Father which is guaranteed to us by His Only Begotten Son: Jesus Christ, our Lord. Be still and know that He is the King of kings and Lord of lords. Praise Him daily.

Best to each, Doug

Familiar Pattern of Manipulation - Let's Cool It for Now!

The graphs could not be added to the posting this morning due to "internal problem." What ever that means. You can check on them at www.Kitco.com. The pattern is very familiar with both silver and gold being manipulated lower early this morning as NY COMEX opened.

Gold is now at 914.10 and silver at 17.10. Both in good buying range.

Mining stocks are trading at enticing prices again today. DROOY is at 6.31; HMY 10.58; KGC 18.39; {AAS 30.55; SLW 14.14; SSRI 27.97, and VGZ 3.62. All are well within buying range in my opinion. However, in view of the summer doldrums which are now upon us, I believe it is time to wait until near the end of August.

As explained yesterday, this could be an even greater buying opportunity. So, I recommend keeping your powder dry (hold your cash) until then. After August, we will be in the historical time for the precious metals to rise in price, so let's be prepared.

Keep your main focus upon the word of God and his kingdom. As you do this, you will have peace and security in knowing the Sovereign Ruler of all until He comes again.

Best to each, Doug

Precious Metals in Holding Mode

Folks, the precious metals are in a consolidation or holding mode in which I believe they will be until the fall. Once again this morning, both gold and silver were beaten down as the NY markets opened. The boyz are at it again, or rather still. It is absolutely amazing how much control they exercise over these markets. Historically, the pressure eases some in the fall and winter.

After August, gold will enjoy a four months until the December contract expires and silver will enjoy a three month span for its contracts. That will be the reason for the fall and winter rise in prices. The boyz will not have to roll over their contracts monthly during the period.

In view of this, one can add to his holdings until the end of August. It might be a "sell the farm" time to go all in on both gold and silver. After today, it could be well to ease into metals and mining stocks cautiously, while waiting until the end of August.

The graphs, above, show the action of the boyz roll overs as the options expire today for gold. Both gold and silver are being hit. However, checking the 1-Year Gold Graph, it is easy to see that gold has moved ahead for the last year (660 to 927.20 is no slouch).

Silver is at 17.34 and gold is at 927.20 now on the spot prices.

Remember, we are always to educate ourselves and make the best possible decisions for ourselves, move out in accordance with our prayerful, careful plans, and depend upon the Sovereign God of all for results.

Best to each, Doug

We Are the Problem When We are Dependent Upon Government!

Both silver and gold are being manipulated again. The boyz want to close out their shorts before expiration on Monday. They also want to let the calls they sold expire on Monday without being exercised.

Silver is currently17.15 and gold 922.60. Both are down for the day and are extending the bargain shopping days. DRD Gold (DROOY) is trading at 6.31; Harmony (HMY) at 10.37; Pan American Silver (PAAS) at 30.98; and Silver Standard (SSRI) at 28.50. All appear to me to be good buys. However, you must make your own decisions based upon your present portfolio, available cash, and comfort zone.

The ETFs and Trusts for precious metals are as follows: CEF 12.90 and GLD 91.10.

"In this present crisis, government is not the solution to our problem: government is the problem… It is no coincidence that our present troubles parallel and are proportionate to the intervention and intrusion in our lives that result from unnecessary and excessive growth of government." -- Ronald Reagan, Inaugural Address, January 20, 1981 (Quoted in Casey's Daily Resource Plus today)

The Vice President Bush at the time was not in agreement with this, and his son, as President must not agree either as the Federal Government grew greatly under both of them. Nevertheless, Reagan's statement remains 100% true. One just does not send the fox to cure the troubles of the chickens. But we do, because we want to continue feeding at the government trough. Some day Americans will have to wake up! I pray that it is before the window of opportunity closes for These United States of America.

I am so thankful to the Sovereign God of all peoples and governments for the blessings He has given us. I am thankful for His wonderful care and His word which He has preserved for us through the centuries. Would that all of us would study the Bible more diligently and apply it to every area of life. It requires that "What ever we do, it must be done to the glory of God." Each of us must ask ourselves if we are heeding this rule. If not, we must pray for the guidance and wisdom of the Holy Spirit to enable us to be "doers and not just hearers of His law."

Best to each, Doug

Free Market, We Do Not Have!

Both silver and gold had a rough day yesterday. However, as you examine the graphs, above, you can see that neither has broken through its 200 day moving average. Also, it is easily seen that both remain in an upward trend. The rough waters are brought on by intervention which is discussed in the following from Casey's Daily Resource Plus:

"I talk about the boyz, the PPT, the bullion banks as if they are one. In some ways they are...because they are all interfering with a free market...each in their own area of influence. The '8 or less' and '4 or less' traders in gold and silver in the Commercial category of the Commitment of Traders are pretty much guaranteed to be made up mostly of the 'market makers' on the LBMA. Right now these traders have a short-side corner on gold and silver, as they are currently short between 75-80% of the entire Comex market in both metals."

We are far from a free market in precious metals. With the President's Plunge Protection Team (PPT), we are far from a free market in the general market, as well. Talk about a controlled economy. We have one!

The root problem is the counterfeit currency (FIAT, paper currency) monopoly of governments and central banks. Monopolistic Federal Reserve Notes are threatened by gold and silver. The precious metals give citizens freedom and the powers that be want to control the citizens rather than perform their normal functions. Remember, a good government uses all of its power and resources to protect the life, liberty, and property of citizens. Would that God would return our government to that limited goal. Until that happens, we are slaves to the governments.

Nevertheless, we can still protect much of our wealth by holding true money: gold and silver. Even the mining stocks will provide leverage for profit when there is less control of the precious metals markets. When? That is the big unknown.

One of the greatest threats to the little remaining freedom we enjoy is the North American Union. When implemented, it will mean the loss of any ties which we have with the Constitution of These United States of America. It will mean that we are subject to international law without the intervention of either our state or federal authorities. It is a further step toward the new world order spoken of so much by both Bushes and the Clintons. These globalists have virtually locked us into the Union.

Now HR3289, as reported by www.WorldNetDaily.com, will greatly expand the authority of the corrupt and arrogant Child Protective Services to include examination of homes to check on the parenting of families. Though the many failures and inappropriate actions of CPS in the past testify to the misguided actions, the power is now to be expanded by the Federal Government. We must oppose this legislation to cut it off before it passes.

Nevertheless, we remain confident that the Sovereign God of all is in control. However, it is incumbent upon each of us to humble ourselves before Him, repent and turn from our individual and collective sins, study His word diligently, apply it to our lives, and pray that He will heal our land before it is too late. As Christians, we know the love of God and that all things are working in accordance with His plans laid before He created the foundations of the universe. We love and serve Him, because He first loved us and works all things for our eventual good. Praise Him daily for His care and blessings.

Best to each, Doug

Bargain Days are Here Again!

Silver and gold are both at what I believe to be bargain levels which will not be seen again. Of course, they may remain at this level for a time. I doubt that they will stay this low and I look for a big rise into the fall and winter.

In Asia, silver is at 17.35 on a down tick and gold at 920.30 on an up tick. This is a surprise to me, as thought that gold would not break below about 950 and here it is almost 30 below that.

Wow, this has got to be a buying level! I will be adding to my mining stocks and metal accounts tomorrow if prices remain at this level.

If you have funds available, this is a good time to add to your holdings in precious metals and mining stocks. Of course, this depends upon what your portfolio looks like.

Best to each, Doug

This is flagrant intervention, not Free Market action!

Folks, we are facing the greatest period of intervention into the precious metals markets that I can remember. The boyz and the Plunge Protection Team are busy manipulating these markets in ways we have never seen nor even expected to see.

Gold has been depressed to $925.20 and silver to $17.51. The free market does not exist! This is blatant manipulation by deep pocket funds, banks, and the government. The war on gold is in full swing.

While the price of the precious metals has been hit severely, the price of mining stocks, while down, has not been as severe in most cases. DRD Gold (DROOY) at 6.44 and Harmony (HMY) at 11.04 are screaming buys at present. Even the preferred silver miners: Pan American Silver (PAAS) @ 31.95 and Silver Standard (SSRI) @ 28.35 are good buys. I also like Jan 09 Calls on The Miners (GDX). You investigate and make your own decisions depending upon the present assets in your portfolio and available cash on hand.

We are still in the summer months which usually give us doldrums in precious metal prices. The fourth quarter is very likely to be better for the precious metals. It historically is!

The big question each of us must face is, "Will there be more bank failures?" I do not believe the banking industry is out of the woods yet. There are likely to be more write offs of bad debt and consolidation of banks to hide the real financial situation.

The general market is looking much better, as a result of manipulation. However, the jury is still out deciding whether it is a new bull market or simply a bear bounce. The question here is, "Where is the bottom or have we seen it already?" Richard Russell says watch the Dow July 15 low of 10962.54. It may have been the bottom. The market will tell us over time. We can only guess at this point.

As goes the dollar, so goes These United States. The current tenuous health of America is based upon the dollar as the reserve currency for the world. Currently, we are seeing Sovereign Wealth Funds and Central Banks moving away from dollars. If this continues, our financial woes will increase exponentially. Since the Federal Reserve is the creator of the dollar reserve currency, we enjoy the benefit of international trade in dollars. Other nations must convert their currency to dollars to trade in most of the international markets. The Euro and other currencies are being used more and more in some international markets. This erodes the advantage of the dollar as the reserve currency.

Folks, we are in unchartered waters. Perhaps, this is the wrath of God being poured out on the nation which has turned its back on Him. The current moral decay in America is testimony to a people who no longer honor and respect the Sovereign God Who has so abundantly blessed our nation. At the very least, His blessings have been removed. It is up to us, as Christians, to humble ourselves before Him, confess our sins, seek His face and His way in scriptures and turn back to Him. Without this, our nation is doomed. I still rest in His promise that nothing can separate us from His love for us in Jesus Christ our Lord.

Best to each, Doug

The Boyz Are Attacking Gold Again - Still

Look at those graphs. Isn't it amazing how obvious the intervention is. It is flagrant! With the New York Opening, both gold and silver have been whacked again, or maybe I should say still.

Both were up rather nicely in the European and Asian markets overnight. Silver is now $18.10 and gold $957. DRD Gold (DROOY) remains below $7 and I like it at those prices. Now $6.79, while it was as low as $6.70 earlier.

The Dow is up 6.11 now. Remember it was down about 50 or so yesterday.

The general market remains a dangerous place to play. Keep your children (dollars, that is) off the streets and wait for better times. The economic news says danger ahead. The market is sending mixed signals. We will have to batten down the hatches and keep our powder dry. We are in a recession whether or not the government will admit this fact. More and more commentators, away from the national media, are giving this warning. How long, O' Lord is the question.

The time for payment for our excess of debt seems to be approaching very rapidly. It seems that the economic storm is on the near horizon. We are approaching the time when America will drastically change. It seems that Obama will be the next president, but I doubt very seriously that he is interested in changing America for the better. It will be much worse with him in the White House. He apparently, from the reports on the internet, has too many ties with our Muslem enemies. Regardless of who occupies the White House, we are facing economic turmoil.

We should be thankful that our Sovereign God is in control. Perhaps, He will use this to bring Americans to their knees in prayer to Him. His discipline never seems good at the time, but in the long run, we are reminded that nothing can separate us from His love. That is why, we, in faith, can "Be still and know that He is God." We can look forward toward the future with the eyes of faith which comes from Him.

Best to each, Doug

SEC Moves to Save Financial Companies

Today, I am a bit later in examining the precious metals. Gold looks to be moving a bit higher than during the last two trading days. Gold is currently$962.50 and silver $18.32. When we remember that this is summer time, as the temperature is reminding me, the time when precious metals are a bit dormant. That is, it is a down or coasting time for real money.

The SEC has moved to "save" the financial industry by disallowing naked shorts of some 17 banks and both Freddie Mac and Fannie Mae. Of course, the hedge funds and many investors had gone short (sold borrowed shares) in this industry. Why, because it was and still remains under pressure from bad loans, rising foreclosures, and escalating credit card debt defaults.

This type of intervention is new and punishes many who had already borrowed the shares which were sold. They had to buy the shares back whether they wanted to or not. The action was similar to retroactive legislation which though forbidden by our Constitution is often done by our Congress (Witness the annual tax and other legislation.)

The media, and, therefore, the public always blames the "speculators." This ignores the work of speculators in the market place. Speculators step in and buy when the majority of the traders in the market want to sell. Conversely, when most of the traders in the market want to buy, the speculators accommodate them by selling. Thus, the speculators perform a great service to the market by providing what the traders and investors want.

DRD Gold (DROOY) remains under $7, but is back up to about $6.83. This, to me, is a good buying range. However, last week I purchased for a low as $6.66. The companion Harmony Gold (HMY) is less than $12 at $11.93. Both look good to me and are a major part of my core holding in the mining stocks.

God in His heaven must be laughing at the folly of man these days. Men are looking for rational decisions to better their investments, save the environment, cure wars, prevent wars, save economies, and solve a vast number of other perceived problems. However, how often does an elected or appointed official remind the people that "Blessed is the nation whose God is the Lord: King Jesus."

That is the root problem. God has greatly blessed These United States of America in our past and we have enjoyed the result of these blessings for decades. However, as we, the people, have left the God of our blessings, the blessings have dwindled and even become curses.

Is this not what happened to the Old Testament nation of Israel? If you will study their history, God would give them great blessings. Then they would forget the God Who blessed them and began to claim that they, themselves, had created the blessings. Then they would fall under the punishment of God and be captured and taken into captivity. This happened over and over again. I would suggest, that we are facing the results of the same depravity of the old nation Israel.

Unless we return to the Sovereign God of all as individuals, families, churches, communities, states, and finally our nation, we are in for greatly increased problems. Beware, God is not mocked. His word does not return void, but accomplishes the purpose for which He sends it.

Best to each, Doug

Gold a Repeat of Yesterday

In the graph, above, the green curve is today and the red yesterday. Notice how closely today's curve is following yesterday's. Let us hope it is not to be another peak and drop as yesterday's results reveal. Gold is due to go much higher, if not now, later.

The fundamentals for the dollar are not any better after the rhetoric from the talking heads. In fact, they are worse as it seems that our foreign sources of loans are drying up. Further, more folks are bailing out of the dollar. After all, it is costing them value as the dollar depreciates.

That leaves the Federal Reserve firmly nestled on the horns of the dilemma. Raise interest rates to strengthen the dollar and crash the economy or leave interest rates the same or lower them to kick start the economy and risk run away inflation. Either is not a decision Bernanke wants to rush into. He currently seems more concerned about recession or depression than inflation.

While inflation is much higher than the government massaged statistics show, it is not in a run away mode yet. It could be, but we will have to wait and see.

Meanwhile gold is at 961.00 and on an up tick. Silver is 18.40 on a down tick. Mixed prices which are somewhat confusing to our mortal minds.

I am a buyer of DRD Gold (DROOY) under $7. The last trade was at 6.62 which is the current bid and the asked is 6.67.

If you make purchases in this market, use small incremental purchases. This is not the "sell the farm" time, so proceed slowly and carefully.

Study Scriptures consistently, and seek the Holy Spirit's instruction for the fullness of temporal life and eternal life with King Jesus.

Best to each, Doug

Gold Down Temporarily & General Market Up a Bit

The gold correction came in yesterday's trading. It appeared to be another example of intervention rather than clear market action. Gold is currently on an up tick at 970.20 and silver at 19.07. Both are looking good for the time being. It is early in the NY trading day, but the recovery is moving well.
The DJI gained yesterday after several down days. The gain was not significant, but, nevertheless, a respite from the latest trend. Again, we are early in the day and one day does not necessarily mean a lot. Tomorrow will be the last day before the weekend and will probably reveal much more to us about the direction of the markets.

From the Daily Pfennig today:

I got a big kick out of Senator Jim Bunning, you know the ex-Phillies pitcher (from the 60's!), who sent a hard high one inside to Big Ben Bernanke after Big Ben had asked for more Fed powers the other day... I don't have the space to give you all of Bunning's comments, but here are some of the highlights... Oh, by the way, sure sounds like the good Senator is a Pfennig reader too!

"Thank you, Mr. Chairman. I know we have a lot of ground to cover today, but I want to say a few things on the topic of this hearing and of the next.

First, on monetary policy, I am deeply concerned about what the Fed has done in the last year and in the last decade. Chairman Greenspan's easy money the late nineties and then following the tech bust inflated the housing bubble and created the mess we are in today. Chairman Bernanke's easy money in the last year has undermined the dollar and sent oil to new record highs every few days, and almost doubling since the rate cuts started. Inflation is here and it is hurting average Americans.

Second, the Fed is asking for more power. But the Fed has proven they can not be trusted with the power they have. They get it wrong, do not use it, or stretch it further than it was ever supposed to go. As I said a moment ago, their monetary policy is a leading cause of the mess we are in. As regulators, it took them until yesterday to use power we gave them in 1994 to regulate all mortgage lenders. And they stretched their authority to buy 29 billion dollars of Bear Stearns assets so J.P. Morgan could buy Bear at a steep discount.

Now the Fed wants to be the systemic risk regulator. But the Fed is the systemic risk. Giving the Fed more power is like giving the neighborhood kid who broke your window playing baseball in the street a bigger bat and thinking that will fix the problem. I am not going to go along with that and will use all my powers as a Senator to stop any new powers going to the Fed. Instead, we should give them less to do so they can do it right, either by taking away their monetary policy responsibility or by requiring them to focus only on inflation."

It is really about time that the Federal Reserve was blasted for the record. More power to the Senator. This backs up what Congressman Ron Paul has been saying for decades. We must pray that others in position to act will join in to put the blame where it belongs and to begin to hold the Federal Reserve to some type of oversight. It is virtually autonomous now and has been since inception (Maybe we should say the deception with which it was created).

The dollar is enjoying a bit of power after the rhetoric of Bernanke and Secretary Paulson. The dollar bulls cry is "Ignore the facts, full speed ahead."

Foreign Investment in the U. S. has dropped as has the sale of treasury issuances. We are not getting sufficient foreign investment to cover our currency needs. Several Sovereign Wealth Funds are beginning to shed their dollars. This is a growing trend which will adversely affect our dollar and make everything more expensive in dollar terms for us.

Remember there is no painless way for America to get back on a sound financial footing. Every action of the Federal Reserve and the spending by governments at all levels has compounded our problems and only delayed the inevitable cataclysmic event. Our standard of living is and will continue to decrease. That is why, I continue to say batten down your financial hatches.
Beware of pending bank failures. Keep some cash in hand to cover emergencies.
The general market is still a dangerous place. Be very cautious and carefully consider every decision.

Consistently, read and study your bible with the prayer for the Holy Spirit to give you understanding and wisdom. As James tells us, "You have not, because you ask not."

Best to each, Doug

Both Gold and Silver Fall Back Again

Both silver and gold about mid day yesterday and again today took great tumbles after the opening of the NY Markets. This is not natural. I believe it is contrived. Some may come from profit taking by short term investors, but the moves are larger than that. Yesterday there was a rebound immediately after the drops. Today is showing similar action. Thus, the drama continues. "How long, O' Lord" as David asked in the psalms. That is our question, too. However, the Lord does not always act in our timing. His is much better, so we must be content to watch and wait.

Some correction may be necessary, due to the sharp run up of the last few days. The upward trend is unbroken and is likely to continue shortly. The dollar rebounded a bit for the time being, but the Japanese Yen and Swiss Franc moved sharply upward against the failing dollar.

In spite of all the bad news issued daily, even the DJI are up some 133+ at this moment. This, too, seems to be a temporary bounce.

Silver is currently18.83 and gold 952.40. I have been adding to my January Calls on Pan American Silver (PAAS).

Keep your focus on King Jesus and His will for us as found in the bible. Be a reader and daily student of the bible for success in spiritual life. It provides a guide for a Christian world and life view not available from any other source.

Best to each, Doug

Dangerous Market - A Slow Meltdown??

I do not believe I have ever seen a more dangerous market than the general market we face today. The broad Wilshire 5000 stock index looks like a free fall. The only thing which might be seen as positive is that the volume is not at extreme levels. Were the volume to increase and the prices still go down, there would be very serious trouble.

The fate of the U.S. is based upon the reserve status of the U.S. Dollar. We must face the fact that the dollar reserve status is teetering on a narrow precipice now. Many countries are bailing out of the dollar using the recently created Sovereign Wealth Funds. Will we go to war to protect the dollar? That is a potential which I pray will never happen, but it is not out of the realm of possibility with the government we now have. Pray to the God of all through His only begotten Son, Jesus Christ, that Iran will not be attacked in spite of the planning which has been done here and in Israel.

Gold remains on an upward run. I am keeping an open mind and watching the price of gold and mining stocks in an attempt to recognize whether this is the beginning of the third wave or not. I would suggest that you cautiously, slowly move more available cash into physical silver and gold, precious metals ETFs (CEF, GLD, and SLV), www.everbank.com World Markets Select Metals Funds, www.goldmoney.com grams of silver and gold, mining stocks, and mining mutual funds.

When gold reaches $1,000, it will attract more interest and the late comers may begin to jump on board the train for the last ride available. I believe that will be the "sell the farm" time to get all available cash into the precious metals arena. Remember that gold should be above $2,500 an ounce before the third waves ends this time around.

Gold is down slightly to $971 in overnight trading just as it was last night. However, it remains above $970 and seems very strong. Could there be a correction? Sure, but is it certain? No! If you moved out of gold on the last run up, you likely realized some profit. If you did, I warned you in the past not to ever get completely out until the big upward bang of the third wave. Even then, I would use only mining stocks to take advantage of the sky high prices of the precious metals.

Just don't get locked out by selling too early. When I was trading in and out of mining stocks in the past, I often felt that the prices were too high to buy back in. In those cases, I often missed the big run ups that followed. Now, I always hold on to some of my mining stocks.

I notice that both DROOY and HMY hung tough during the fall off from the high prices today. Both were holding very well while many other miners suffered some from the settling of prices the second half of today's trading.

We are given only the ability to observe and learn from what has happened in the past. We must study this data, carefully analyse it, and make our decisions. King Jesus knows what the future holds, because He causes all things to happen. And He works all things for the eventual good of His people. We cannot know the future. In fact, we are clearly told that the events of each day we are given are sufficient for our actions. But we are a future oriented people resting the promises of our Covenantal God from Whose love, we can never be separated. Praise Him daily for this fact.

Best to each, Doug

There is a Run to Gold Away From Banks

Above is the latest graph of the DJI. It is a nasty graph and indicates further deterioration as time marches on. As always, trends continue until they end. The DJI is in very dangerous territory. Breaking below 10275 would be extremely critical. It is time to be out of the general market. Stay in gold and cash and precious metal stocks.

Dollar continues to be weak. It seems destined to lose more in the coming days.



Quoted in Casey's Daily Resource Plus.
“The news of Fannie and Freddie is just confirmation that the Federal government is willing to effectively nationalize and print money to bailout these monstrous (ticking) financial time bombs. With the news of the second largest bank failure on Friday afternoon also adding to the financial jitters, one must now question the integrity of the FDIC with some $50 billion to work with. Once the FDIC reserve is extinguished, where will further billions come from when more and more banks continue to crumble? Confidence is deteriorating and that will only foster this secular gold bull market!"

“It is not too difficult to see the path we are on and headed. Investors who now understand this are flocking into the metals."
I agree with this assessment. All must eventually realize that the banking crisis is not going away easily. Gold is currently trading at $982 and silver at $19.24. Both are off a bit from their respective highs of earlier. However, both are showing an up tick. Both are very strong at present!

One of these days we will see the third wave where the lemmings all jump on board. I always wonder if this is it. I doubt it, but only God truly knows and we gain the knowledge as He reveals it too us.

Plan well, commit your plans to the Lord, move out in accordance with the plans, and depend upon Him for the success or redirection.

Best to each, Doug

Precious Metals Remain in Sprint Mode

The dollar continues to show signs of further weakness which are intensifying. Freddie Mac and Fannie Mae remain in trouble. Apparently, Paulson is attempting to "solve" the problem without nationalization. I am against nationalization, because of the impact upon what ever amount of free market remains after all of the Federal Governmental meddling. There is already too much intervention into our markets and our daily lives. This has virtually trashed our Constitution which forbid such governmental action. Isn't it amazing how much the President and Congress have ignored their vow to uphold the Constitution of the United States. What does this say about their individual integrity?
Both gold and silver continue upward. Gold is at $970.90 and silver at $19.05. The last tick for each was upward. Many folks must be gaining insight into the risks of an expanded Middle East war as Bush has endorsed (Newsmax report) Israel's plan for attack of Iran. The situation seems to be once again heating up, possibly to the boiling temperature. I pray that it will not happen, but have to wait and trust in the Lord which ever path is revealed to us.

The mining stocks have begun to respond to the increased buying of precious metals. All are up today and look to be headed higher.

All of us and our situations are in the hands of the Sovereign King Jesus, who reigns until all nations are put under His feet. That is the glorious time for which we must continue to look. It will come. Of that, there is no rational doubt. It is not for us to know when, but simply to have the faith and courage to know it will be here.

Best to each, Doug

Iran Tests More Missiles & Precious Metals Respond

Both silver and gold are on an upward sprint. The upward spike is very strong and possibly triggered additional missile testing by Iran and the concern about Freddie Mac (FRE) and Fannie Mae (FNM). Ex St. Louis Federal Bank President William Poole said, "Freddie Mac and Fannie Mae are insolvent."

How will they be bailed out? Will the government take them over (nationalize them)? Or, will the Federal Reserve attempt another big bail out? Both are considered to big for them to be allowed to fail.

This is simply more testimony to the ill health of our finance industry. It seems that, in spite of the glowing comments by Paulson and Bernanke, the mortgage problems are far from over. We should expect much more bad news from this sector of the market.

Nevertheless, gold and silver are responding not only to the fall of the dollar, but to the questionable value of all major currencies. Remember none are backed with gold or silver and are simply pieces of paper called, "notes," and are really IOUs. However, these IOUs are without terms or conditions. They are created by central banks. You know the golden rule: "He who holds the gold makes the rules." The corollary is "He who controls the creation of paper money, exercises control over governments and encourages enslavement of the citizens."

The following graph from Casey Research questions the decoupling of China's major stocks from the U. S. Blue Chip Stocks.
Thus, it appears that China's economy is still tracking very closely with that of America. The Chinese are doing a great job of marketing to the rest of Asia, Russia, and Euroland. They are also courting governments in Central and South America, as well as, Africa. They are desperately attempting to lessen their dependence upon American consumers. Time will tell how expert they are in this matter.

Back to gold and silver, we see that virtually all mining stocks are up substantially today. Gold is currently at 964.10 and silver at 18.78. As mentioned the upward spike is great. Often, after such an upward thrust, there is some correction. Though it is early in the trading day, we have seen some bouncing of the prices, but the upward moves remains strong at this time.

The DJI are off 90+ to 11140 or so. The general market may be somewhat over sold, but it remains a dangerous place to be. There is also more room on the downward side. I would not be a buyer until a bottom has been clearly seen. Stay with precious metals, mining stocks, commodity stocks, and cash ( Keep your "powder dry" and ready for use.)

Rest securely in the firm knowledge that our Sovereign God has all under His control. He tells us, "Be still and know that I am God." We only get into trouble, worry, and deepest concern when we try to be as God knowing the temporal future. We are to take one day at a time, but live all to the glory of God. "Seek first the kingdom of God and His righteousness, and all will be added to us."

Best to each, Doug

Gold and Silver Strong Today

Both gold and silver are making a strong showing this morning. Gold is up against all major currencies. Gold is at 838.70 and silver at 18.22.


The DJI is at 11136.73 off about 6+. It is showing no signs at present of getting stronger. The tick is downward at present. However, it is early in the trading day, so we will have to wait and see what develops.

Keep your eyes, hopes, and prayers toward King Jesus for success in every area of life and eternity.

Best to each, Doug

Wicked Stock Markets

The markets turned in an awful Wednesday. The Transportations were down 115.61 to 4804.57 and the DJI were down 236.77 to 11147.44. The Transportations are still above the November low of 4355.78, but turned in an awful day while the DJI is below the November low of 12743.44 and seems to be headed much lower. We always wonder about the location of the bottom of these markets. It most certainly appears that the bottoms have yet to be reached. The general market seems is dire trouble and headed for much worse. Just imagine the impact of frantic margin calls from brokers to the dismay of investors.

Silver gave us a fairly decent day closing at 17.95 which is up 0.03, while gold was off 5.50 to 923.30. Both were up higher much of the day, but when the broad markets began their descent, both backed off from their highs. The mining stocks are still attempting to recover from the drops of the last two days.

The dollar strengthened a bit again, but the downward trend remains solidly in place. The increase in interest rates to 4.25% in Euroland has put more grease on the skids of the dollar. It is destined for much lower purchasing power. We can see this as we shop. We will have a lower standard of living, before the situation improves.

I cannot over emphasize that it is time to batten down the financial hatches for a real storm which is gathering wind and much strength. Internationally, we are losing influence. We are also in the midst of an election which has great storm clouds on the horizon. Neither candidate will be good for freedom for us. We can expect larger government and greater deficits from either. Perhaps, the more liberal one is the worst of the two, but neither will be good for America.

We must earnestly pray that God will raise up strong Christian men to rule over us. It may well be that God is giving America what most of the citizens seem to desire - a total welfare state. It is not known by many that such a state continually grabs more and more power until it becomes a dictator run state with martial law to rob and oppress the citizens beyond their wildest fears.

Every time, I hear the phrase, "God bless America," I wonder how the speaker believes that God will bless a nation which has turned its back on the Sovereign God. We must humble ourselves before Him, earnestly confess our sins, seek His face, and follow His law for God to ever bless America again. We, as a nation, deserve His wrath and much of what we are seeing about us may be His judgment upon the United States of America. Nowhere in the bible is there any guarantee that our nation will last forever.

Most empires of the past have collapsed from moral decay from within. This is the case even when they were too militarily powerful to be captured from without. We are witnessing the bankruptcy of America, both morally and financially. We should ask, as did David, "How long O' Lord?" He holds the answer in His hand.

BUT, He loves and cares for His people. Nothing can separate us from His love and His promises. We must thank Him daily for His care and provision. Remember, He is with us always, and we need no more than Him on a daily basis. All things are working together for our eventual good, and He always balances the books in the end. Depend upon this!

Best to each, Doug

Precious Metals Showing Upward Bias

After all of the bad and worsening economic reports of last week, precious metals are flexing muscle this week. Last night Gold hit a high of about $947, and silver hit about $18.50. However, as NY opened, both were slammed down: Gold to about $930 and Silver to about $18. The last trade on each were, as follows: Gold $937.10 and Silver $18.24. Both showed strength after being slammed early on today.

Looking at the un-backed paper currencies: Euro is at 1.5717, Cdn Dollar - 0.98, and Swiss Franc - 0.9747. No currencies are backed by real money: gold or silver. All are simply paper which has value only in comparison to other currencies.

The price inflation in ECM is about 4% which is above the target of 2%. This will not long be tolerated by the ECB, so we should expect a correction in the price inflation or there will be an increase in the interest rates in Europe. That would put more downward pressure on the dollar.

It seems that the Federal Government and Federal Reserve are pulling out all the stops to avoid recession and depression. Thus, we are experiencing stagflation with a good deal of price inflation which exceeds prevailing income. Look forward to lower standard of living.

It is certainly time for frugality in spending and building an emergency fund to cover unforeseen expenses without further expansion of family debt. It is a good time to begin to lower debt as much as possible and avoid all increase in debt. Pay cash or pay off all credit cards monthly to avoid paying the exorbitant interest rates, thereon.

When God in Genesis 1:28 told Adam and Eve to "Be fruitful, multiply, fill the earth, subdue it, rule over all living things," he gave them a tall order. Virtually the same marching order was given to Noah after the flood in Genesis 9:1, 2, 7, as well as to Jacob in Genesis 35:11.

This commandment is for us, as well, and we are bound to fulfill it to the best of our ability with the help of the Holy Spirit. I would suggest that the first task is to bring ourselves under this dominion. That is, we are to develop self discipline: to control ourselves completely in accordance with the Law Word of God. We are to discipline all areas of our lives. Proper stewardship of all which God has entrusted to us is totally a matter of self discipline. None of us, least of all myself, is a master of this task. It is too much for any person without the in working of the Holy Spirit by His guidance and strength. Pray that He will come and correct all parts of our lives to bring them into conformity with the Law Word of the Sovereign God.

It is easy to blame the government, the situation, and others. However, many times the problem is within our selves. These are the times, we must admit our failures and turn to the living God for His forgiveness and help in our quest to be more like Him. Praise to God for His pricking of our conscience in every on of these cases.

Best to each of you and yours, Doug.