Escalation of Saber Rattling

Both silver and gold are trading in patterns similar to yesterday's. They are both a good bit lower than they were yesterday at the same time, but they are a bit higher than the day before. Today is the last trading day in August and we are facing the 3-Day weekend. That means that trading should be rather light today. With light trading, it is easy for those interested parties to have considerable impact upon prices if they so desire.

From what we have been seeing the last few days, it seems that the gold spot price of about $837 is being defended rather heavily. If true, it will be difficult for gold to exceed that price until the intervention is ceased. Note, too, from the Daily Pfennig it was reported that Pam and Mary Ann Aden (the Aden Sisters) said that their charts were showing that if the price of gold moves above and stays above $845, it will be in for a rise from there.

A UBS analyst issued a strong buy on gold. He cited that GLD (Gold Trust) assets had declined only 7.7% while gold declined 13%. This indicates strong interest in gold. Also, we are seeing unprecedented buying of gold by India.

The following reports of more unrest in the world should also cause more people to seek the security of the precious metals.

More saber rattling between Russia and the West. See the following from www.Telegraph.co.uk:

Russia may cut off oil flow to the West

By Ambrose Evans-Pritchard

Last Updated: 10:39am BST 29/08/2008

Fears are mounting that Russia may restrict oil deliveries to Western Europe over coming days, in response to the threat of EU sanctions and Nato naval actions in the Black Sea.

Any such move would be a dramatic escalation of the Georgia crisis and play havoc with the oil markets.

Reports have begun to circulate in Moscow that Russian oil companies are under orders from the Kremlin to prepare for a supply cut to Germany and Poland through the Druzhba (Friendship) pipeline. It is believed that executives from lead-producer LUKoil have been put on weekend alert.

"They have been told to be ready to cut off supplies as soon as Monday," claimed a high-level business source, speaking to The Daily Telegraph. Any move would be timed to coincide with an emergency EU summit in Brussels, where possible sanctions against Russia are on the agenda.

You can view the whole article here: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/29/cnrussia129.xml

Then there is this from www.timesonline.co.uk:

Cold War tension rises as Putin talks of Black Sea confrontation

Russia has criticised the US for using naval ships to deliver aid to Georgia

Michael Evans, Defence Editor

A new Cold War between Russia and the West grew steadily closer yesterday after the Kremlin gave a warning about “direct confrontation” between American and Russian warships in the Black Sea.

You can view the whole article here: http://www.timesonline.co.uk/tol/news/world/europe/article4622422.ece

The second quarter Gross Domestic Product (GDP) was up to 3.3%. This is encouraging, but analyst reported that it was largely due to an increase in exports of about 3%. That is good news, but could be the highest of the year with the remaining two quarters showing much less.

The dollar has been higher for a time now, but has fallen back a bit. Noteworthy is the fact that gold is down against all major currencies at present.

Europe is showing some signs of slowing, albeit, not as much as America. Executive and Consumer sentiment there was down from 89.5 to 88.8 for July. Inflation was down to 3.8% from 4.1% and unemployment remains high at 7.3%.

Japanese consumer spending was up to -0.5% in July from -1.8% in June. That's looking up a bit, too.

Don't expect too much out of today's trading, because of the long weekend and the month's end. The London traders will be headed to the local taverns early today and ours will be going into "pre-quit" early, as well.

Gold is currently at 830.40 and silver 13.59. Both are on down ticks.

We should all look forward to corporate worship of the Sovereign God of all on Sunday (the Lord's Day). This is a vital part of our lives and essential to spiritual health. When Paul wrote to tell us to "Work out our own salvation with fear and trembling. For it is God which worketh in you both to will and to do of his good pleasure." (Phil. 2:12b,13) The church is a blessing to the people of God and is of great help in growing us in the likeness of Jesus Christ. This is particularly true as we participate in the sacraments and fellowship with other believers for encouragement and challenge for further growth.

Best to each, Doug

Dow Problems - China Supports Dollar - GLD Up

The above graph and the following were taken from the Agora Financial's Rude Awakening, but were originally from Casey Research:

"Q2 2008 – for the first time ever – the Dow Jones Industrial Average posted quarterly losses instead of earnings. The Dow's price-to-earnings ratio is now listed as 'Nil,' leaving Wall Street without its favorite valuation metric for blue chip companies.

"Citigroup and JP Morgan were pummeled for their subprime investments," continues David, "but the contagion of the credit crisis affected every balance sheet within The Dow. A couple of standouts amongst the wreckage were AT&T and Verizon, whose net incomes of $4B and $2B, respectively, were offset by huge losses in 'Investing Activities.' AT&T reported a loss of $11.3B, and Verizon lost $17.5B.

"These investment write-downs send huge amounts of capital to 'money heaven,' tempting some that have pitched a tent in the inflationist camp to wonder if we might be in for a major bout of deflation. But as Doug Casey so compellingly points out, today's fractional reserve banking system forces the government to pursue an aggressive inflationary agenda. They must continue to push more and more money into the system to maintain the appearance of economic growth, and to cover up the losses of these blundering blue chips."

That was not good news.

I wrote a few days ago that central bank intervention was the source of dollar strength. However, there are at least two reasons for the recent temporary strength of the dollar. The first was a concerted effort on the part of the U.S. Treasury, the Japanese Finance Minister, and the European Common Bank to support the dollar. The second reason is presented in the Telegraph article which follows:

From Telegraph.co.uk a stealth means of supporting the dollar by the Chinese:

"Rule changes for commercial banks are acting as cover for exchange rate intervention, writes Ambrose Evans-Pritchard

China has resorted to stealth intervention in the currency markets to amass US dollars, using indirect means to hold down the yuan and ease the pain for its struggling exporters as the global slowdown engulfs the economy.

A study by HSBC's currency team in Asia has concluded that China's central bank is in effect forcing commercial banks to build up large dollar reserves, using them as arms-length proxies in a renewed campaign of exchange rate intervention.

Beijing has raised the reserve requirement for banks five times since March, quickening the pace with two half-point rises in late June.

This is having major spill-over effects into the currency markets because banks in China have been required over the last year to hold extra reserves in dollars rather than yuan. The latest moves have lifted the mandatory deposit from 15pc to 17.5pc of total lending since March.

"China has used the pretext of reserve requirement hikes to help slow yuan appreciation. We estimate that the PBOC [central bank] intervened by about $49.6bn in June," said Daniel Hui, the bank's Asia strategist."

This from Taipan Daily: "I am speaking of the Federal Deposit Insurance Corporation’s list of 117 “problem banks.” According to its latest press release, the number of banks that may have squandered away their depositors’ cash is up 30%, quarter over quarter, the highest it’s been in more than five years."

Did you get that? One Hundred Seventeen problem banks now and we have had nine failures this year already, and we are still counting. Is your bank on the list? Better check it out!

Before we leave the shaky banking industry, it seems that the FDIC may have to dip into the U.S. Treasury for funds to cover further bank failures. This was reported in the Wall Street Journal.

All three of our automobile manufacturers are almost on the ropes. News of this is wide spread and the discounts and low financing enticements lend credibility to this as fact. Are they "too big to be allowed to fail?" I bet they are considered as such and will be bailed out shortly as was Chrysler in the "distant" past. Folks, that will mean more dollars printed or generated by computer blips.

Back to China, we find that China has some $1,800 Billion (Yes, with a "B.") in reserves. Think of that! Any change in this amount of reserve will have a world wide impact upon currencies. What about the threat that is to world. Talk about having a big bat to swing!

U.S. Industrial Production came in at +1.3%, duplicating the figure for June. This appears to be mostly from non-defense spending. However, it is likely due to the stimulus package of "gifts" to citizens. Remember, though, these "gifts" have been spent and will not be available for spending in the 3rd and 4th quarters. Will the Christmas season spending make up the difference? Possibly, but the world economy is slowing and central banks have expressed a greater concern about this than inflation.

Using GLD as a proxy for gold, we can see in this weekly graph that gold is above the 200 Day Moving Average and seems to be headed for the 50 Day Moving Average. A break through of the 50 day would indicate more strength. Probably, this will happen next week after the 3 day weekend.

Gustav is still on the way and having an impact upon the price of oil. Gold is at 837.40 and silver at 13.87 now. Both are up for the day, but it is early in trading. The options have closed and now for the fall, both are likely to be traded a bit more freely. We are looking forward to that time.

Continue to rest in the promises of our Sovereign God. We must always pray for His wisdom and praise Him continually for His gracious care.

Best to each, Doug

Bad Economic News - Precious Metals are Looking Up a Bit

Both GLD (Gold Trust) and Gold have moved to higher ground over the last 24 hours. We still have the closing of options to face tomorrow, but gold is looking a good bit better now. I would suspect that we will see this higher trading range for the rest of this week. With the Labor Day weekend looming ahead, traders will want to make their adjustments earlier than usual.

There is considerable demand for gold in India in spite of the extra high premiums that are being charged. So even with the premium gold is still a bargain. What will happen to prices after the Labor Day?

The mining stocks have responded nicely to the higher trading range of gold. Virtually all of them are up. Here are a few: CDY 1.99; CDE 1.77; DROOY 5.75; GFI 9.35; GSS 1.58; HMY 8.65; IAG 6.37; KGC 16.81; Kry 0.96; NEM 45.07; PAAS 26.95; SLW 11.80; SSRI 25.54; VGZ 3.70; XRA 2.91. The trusts, follow: CEF 10.70; GLD 81.54.

Silver is lagging a bit behind. With the severe shortage of physical gold and silver, we would expect prices to be much higher. Perhaps, the jump will come after tomorrow. However, don't forget about the long weekend ahead. By the way, there seems to be little shortage of the 1000 Troy Ounce bars, but there are long waits of up to 14 weeks for any of the small silver items. Also, the mint is rationing minted silver coins.

Consumer Confidence rose from 51.9 to 56.1 for July. Likely caused by those with their head in the sand, but rejoicing over the welcomed lower prices at the gas pumps. Still does not give any recognition to the widening recession the world is experiencing today.

It is rumored that Alabama County is in a debt crisis. Could it be a bankruptcy? Time will reveal the severity of the problem there.

Hurricane Gustav may be the cause of the higher oil prices. Weakness in the German economy is having a softening effect on the Euro in relation to the dollar. The dollar is showing some signs of temporary strength. Also, impacting the dollar is the FOMC August report showing concern over our economy weakness rather than the "hawkish" fighting of inflation.

On the US Housing Market, many were thrilled to see that July sales were up by 2.4%. Of course, the big reason was that the June sales had been revised downward from 530K to 503K. More examples of how statistics can be shaped to report whatever outcome is desired. Note that the 503K is the lowest since 1991. Big Deal!

Home prices fell 1.4% in 2nd Quarter after falling 1.7% in the 1st Quarter. That is down some 4.8% year on year. S&P price index based on the 2nd quarter shows an annualized drop of 15.4% in home prices.

We seem to be headed into a world wide recession. Never before in the history of man had the debt mountain been as high as it is today. Just think of the cost of bailing out some $5.2 Trillion of the mortgages of Freddie Mac and Fannie Mae. Notice, that is dollars with a "T." If allowed to fail, it would destroy the dollar. It will have a devastating impact upon the dollar with a bail out. How can the government do it? Only with more dollars and greater debt. Talk about a whirlpool sucking us farther down! Maybe, it is a cesspool. The situation stinks at any rate.

The good news is that our Sovereign Lord is still in control and working all things for the eventual good of His people. His people will suffer in the mean time along with the other inhabitants of the world. But there will be a light at the end of the tunnel, so we must keep the faith and hold firmly to His promises.

Best to each, Doug

Options Expire This Week

This graph gives a bit of hope for the mining stocks. It was included in Casey's Daily Resource Plus. We can take some confidence (maybe hope) from the past performance of the HUI.

Many of our questions about the precious metals prices should be answered after the closings of options reported, as follows:

The August options expire this week (Comex options on Tuesday and most over-the-counter options on Thursday). So do not be surprised if the gold cartel tries to pound the metals some more to get the lowest possible price on option expiry. In that way its members can earn the highest possible amount of premiums on the options they have shorted, repeating the same pattern we have seen so many times in the past. - James Turk, goldmoney.com - 24 August 2008

Both gold and silver have been on wild rides of late. Gold is now at 820.80 and silver at 13.58. The rest of this week on into next week should give us an indication of the fall action of our precious metals.

All is in the hands of King Jesus, so we will wait and see what He reveals to us in the next few days.

Best to each, Doug

Both Silver and Gold are on Down Ticks in Hong Kong

Neither the silver or gold graphs look very encouraging as the Hong Kong markets open. We see that both are on down ticks with gold at 819.10 and silver at 13.17. Both are in buying ranges, but it is wise to see what happens between now and the expiration of futures contracts on August 26. That is only two days away.

Will another buying opportunity be offered to us or will it be an off and running time toward another upward sprint. We will have to wait and see.

Perhaps, the bullion banks and hedge funds have yet to unload all of their shorts in the metals. Thus, they will do so in the next couple of days. They have yet to reveal if they are finished with the games they are playing against us.

I trust that you joined in corporate worship and exercise of the sacrament of the Lord's Supper today. It was a wonderful Lord's Day in San Antonio and the Lord provided a great rain which was badly needed. His blessings continually pour out upon us, the undeserving. We must praise Him for His grace toward us. We deserve none, but He loves us through His Only Begotten Son, Our Lord and Savior Jesus Christ.

Best to each, Doug

Volatility is the Watch Word for These Markets

Both silver and gold have settled down in early trading possibly setting the course for this Friday. Traders are making adjustments due to the weekend ahead. The shortage in supply of precious metals at these low prices continues. It is evident in the statement of the U. S. Mint quoted in Mineweb.com newsletter today, as follows:

"Because our vendors are not able to supply enough one-ounce gold bullion blanks to meet the unprecedented demand we are experiencing, the United States Mint notified our authorized purchasers on August 14, 2008, that we must temporarily suspend sales of the 2008 American Eagle One-Ounce Coin.

"However, one-half ounce, one-quarter ounce, and one-tenth ounce 22-Karat American Eagle Gold Bullion coins are still available to authorized purchasers and are in stock at the United States Mint. In addition, one-ounce American Buffalo 24-karat gold bullion coins are still available to authorized purchasers and are in stock at the United States Mint."

Price controls whether from government or imposed by paper metal prices, still result in shortages. The prices producers can obtain in the market are too low and discourage them from offering their products for sale.

Apparently, the following joke is traveling around Russia these days:

A wry Russian joke captures the one-sided relationship between prime minister and president:

Putin and Medvedev sit down for lunch at a Moscow restaurant.

The waiter asks,“And what will you two gentlemen be having today?”

Putin replies, “I’ll have the steak.”

“Very good, sir. And what about the vegetable?”

“He’ll have the steak, too.”

Guess who is in charge. Putin asserted Russia's growing power in the Georgia incident. Russia has shown that it controls the flow of energy products to Europe. There is no doubt that Putin is in charge.

There is much unrest in the world and it has begun to flare up in the mid-east and in Pakistan. What is next?

All of this should be very positive for precious metals. Also, the dollar took some severe hits yesterday as the leading indicators were down 0.7% against a forecast of -0.1% as reported by the Conference Board. It reported also that there would be slow growth for the rest of the year and a possibility of a halt in growth. They forecast a possible recovery in the second half of 2009.

The play of the dollar and commodities is very volatile. Adding to the play was the Philadelphia Fed's manufacturing index which came in at -12.7 the ninth consecutive month of worsening activity in the area.

Both silver and gold are on a down tick with silver at 13.37 and gold at 825.60. More volatility ahead. It is early in the day. Mining stocks are mixed today. Yesterday was definitely an up day for the mining stocks. The DJI is up some 177 at present - Up, Down, Up, Down, Up. Always keeps is guessing.

Remember to join in corporate worship of our Lord on the coming Lord's Day. It is important to participate in the worship and sacraments of the church. The grace and fellowship with other believers is valuable for Christian growth.

Best, Doug

Precious Metals Out of the Grave - Dollar Down

Both gold and silver are showing more life today. The dollar must be under pressure. Gold is 835.80 and silver 13.80. Both are on an up tick. It is a bit early for the fall rally, but both were greatly over sold during the last two weeks. The mining stocks are responding, as well. All on my charts are up. Here are some that I follow: CDY 1.82; CDE 1.93; DROOY 5.73; GFI 9.09; GSS 1.67; HMY 8.25; IAG 6.06; KGC 17.38; KRY .91; NEM 15; PAAS 27.24; SLW 11.87; SSRI 25.86; VGZ 3.34; XRA 3.02. The ETFs CEF 10.94 and GLD 82.40.
The, above, GLD graph reflects the strong upward move in the price of gold this morning. Though early, this looks to be a strong move for which I am thankful. It has been a gut wrenching week for the precious metals. I pray that is behind us and this is the fall rally. It might not be, as this is a bit early.

From the Daily Reckoning Australia today:

"--Yes. It's clear now that Mr. Market has called Henry Paulson's bluff. Fannie Mae (NYSE:FNM) fell 26% yesterday while cousin Freddie Mac (NYSE:FRE) was off 22%. The death/intervention watch is now round the clock. But what does it mean? And what happens next?

--As the Barron's story pointed out this weekend, both companies are effectively insolvent. But the charade continues. One reality check may come very soon. Fannie has nearly US$120 billion in debt that matures by the end of September. Freddie has US$103 billion in debt.

--Can the GSE's roll it over? Who's going to buy it? The Russians? Central banks? Private equity? Anyone. If the GSE's can't fund their operations or roll over there debt, what point is there in having a government sponsored mortgage lender that cannot provide liquidity in the secondary mortgage market? (Shudder at what this means for the U.S. housing market...but the phrase 'lower prices' comes to mind.)"

With this news, the recent strong surge of the dollar should be at an end. How can the dollar bulls ignore such devastating news? Maybe they are playing the Ostrich. Whatever, it does not seem rational. Of course, with the power of intervention by the banks and deep pocket players almost any thing is possible.

Well, once again, I am led to praise the Lord for the way He watches over His people. The really great news is that the Father God sent His Only Begotten Son to die on the cross in His people's place, that they might be reconciled to Him. What a blessing it is to have the Holy Spirit awaken the unbeliever who is lost in trespasses and sins, teach Him through the bible that he is lost, and lead him to the only Savior. We are certainly humbled by this knowledge, but then are led to rejoice in our unearned salvation through the unmerited grace of our Heavenly Father. Praise the Lord! There is always reason to rejoice!

Best to each, Doug

Talk About Violent Markets - We Have Them!

Both silver and gold have moved higher. Silver has lagged gold thus far. Both precious metals are oversold to the extreme. Can they go lower? Yes, but I suspect we are at or very near a bottom for this contrived "correction." Gold must go above 819 and stay there before it can move steadily higher. Gold has been as high as about 819, but has dropped again to about 802. Silver is at 12.90. This is not encouraging.
The, above, graph by Gene Arensberg from gives a picture of the silver holdings by the silver ETF SLV. Their holdings have continued to grow. We have read over time that there is a delay between receiving new investment cash and purchases of silver to cover the new cash. It would seem that the current low price of silver, though causing a shortage of available silver, would be a great time for SLV to complete the buy. They are very likely using this time to fill to the maximum. The shortage has not yet extended to the large bars of silver.

The London Telegraph had an article "Sharp US money supply contraction points to Wall Street crunch ahead." This could be part of the reason for the recent strong dollar. Check it out here: http://www.telegraph.co.uk/money/main.jhtml?xml=
/money/2008/08/19/cnusecon119.xml
If true, then we could be headed for a severe contraction of the economy.

The Euro seems to be oversold and ready for a rebound against the dollar. Gold is down against all paper currencies unlike yesterday when it was up.

I still do not believe that the U. S. has any way out of debt without inflation - a vast expansion of the number of dollars in circulation. Banks are refusing to lend to each other and seem to be hoarding the liquidity that is sloshing about. Inflation (PPI) was 1.6% for July down slightly from the 1.8% of June.

We have had the crash of at least eight smaller banks in America. Rumors are abounding now that a major bank is on the ropes and will be discovered very soon. Thus, the financial industry is still under a great deal of stress from the bursting housing balloon and the resulting default of mortgages. Housing starts were 965K, but down about 30% in the Northeast.

The Lord is showing us the danger of big government with its associated big spending. Of course, He has given us the government we have sought as we turned to government to solve all our problems and expected something for nothing. We, as a people, demanded free health care, high paying jobs, bail outs for all failing businesses, welfare for all, free housing, and all the other socialistic benefits. Little did we realize that governments can provide these services only by robbing (taxes) from the productive haves to support the non-productive have nots. This is legal plunder, but it is a violation of God's law against theft. There is no such thing as a free lunch. We must pay the piper at some time for the service provided. Our Sovereign God sits in Heaven and laughs at the folly of man. He also judges nations for seeking a messiah in place of His Only Begotten Son: Jesus Christ. He does promise to work all things together for the eventual good of His people. I rest in His promises and rejoice in the midst of today's challenges. Praise the Lord!

Best to each, Doug

Prices of Precious Metals Caped by Paper Metal Prices

This graph for GLD, the proxy for gold often used by Richard Russell, gives us some interesting technical formations. There seems to be a "W" formation over the period February to July. This is a bullish formation, but one can also observe at double top over the same period which is a bearish formation. After about the middle of July to the middle of August we see a drastic drop which confirmed the double top and canceled out the "W." I suspect that we have witnessed sheer manipulation of the precious metals.

The paper metal prices have driven the physical metal prices down. Lower prices have acted in the market as governmental price controls have in the past. Price controls from any source will result in shortages of under priced good, or in our case precious metals. Business Line (www.the hindubusinessline.com) confirms the shortages in an article entitled "Price fall leads to gold rush, short supply."

The article reports that Mumbai's average daily sales have been 500 kg which has expanded to 4000 kg over the last two weeks. Premiums on precious metals have increased to all time highs. There are about three times as many buyers as is normal. Thus, the supplies are very short, because sellers do not want to bring their products to market at these low prices. The Indians are rushing to the market with cash, but are not being able to buy as much as they would like.

Gold is under-priced and oversold. How long can that situation last? Were we in a free market, it would not happen. However, our markets are not free at all.


Both silver and gold are oversold and trading in a narrow range. At some time, there will be a break out which I suspect will be upward. When? That is the unknown. An election year yields weird market situations as the powers that be want to give the citizens a pretty picture so that they will vote for the perceived correct person. As I say, "Vote early and vote often." That way maybe we can outnumber the dead voters.

The dollar remains stronger boosted by the good news coming out of the economy. For example, auto sales are at multi year low, foreclosures are rapidly increasing (Up 55% in July), National Association of Home Builders Index at 16 down from 70 about 3 years ago, the Freddie Mae & Freddie Mac government bailout is likely to wipe out the common stock in both entities (Barron's), increasing unemployment, gigantic government and consumer debt, and all the other good news on the economy. I believe that intervention by central banks is the only reason for the strong dollar.

Pricey gasoline has encouraged us to park some of our SUVs and ride mass transit. By the same token, truckers are used for shorter hauls while trains are the preferred long haulers. This is the direct result of the economic concept of selection of alternatives as prices rise in the primary good. For example, we might switch from citrus fruit to apples when oranges get too pricey. In this case, more economical means of transportation is selected rather than the preferred.

Throughout the history of gold bull markets we have experienced huge "corrections" before. In the 1971 - 1980 there was a 40% correction along the way and from May to June, 2006, we saw a 35% drop from 730 to 542. This stuff happens in a market wrought with intervention.

By the way, German consumer confidence came in higher than expected. This flies in the face of those worried about the European market. I mentioned this, not to say all is rosy there, but to let you know the truth and to encourage us to hope that Germany is able to pull the rest of Europe ahead.

There is no way for These United States of America to pay off the debt without a massive expansion of paper dollar supply. There are only two other alternatives: (1) Unilaterally, cancel our debt. (2) Conquer the countries to which we owe debt. Neither of these are acceptable, so the currency will be inflated causing price inflation making all things more costly for us. We should expect to have a lower standard of living as we lose the opulence enjoyed through the debt escalation.

I rejoice and am so thankful to King Jesus for the continual blessing of His people. However, it is incumbent upon us to exercise wise justice, show great mercy, and walk humbly in obedience to Him. When we fail to do this, the result is His discipline upon us and the nations in which we live. It is His people who are called to turn pray, repent of our wicked ways, and turn back to Him in obedient humility. Then, and only then will He heal our land.

Gold is currently 791.20 and silver 12.94. Casey's Resource Daily Plus suggests that we all go out and take delivery on one ounce of silver at a price of 12.94 (It said 12.80) and that would really upset the intervention apple cart is a day's time. The Hunt's impact in 1979 - 1980 would seem very small in comparison to this impact.

Best to each, Doug

Dollar Has Slowed, Precious Metals Are Up A Bit

Precious metals are doing a bit better this morning thanks to the slowing dollar. Gold high 804.50 low 789.60 now 792.50. Silver 13.11 Up 0.41. Gold is up against all major currencies.

Chuck Butler of the Daily Pfennig reminded me of the up coming election again. As he stated, the "lower" gasoline prices may be manipulated to make citizens feel more like voting in the election. Voting the "correct" way, that is. As the saying goes, "Vote early and vote often!" By the way, do you think the stronger dollar could be for the same reason? Shame on you, our government would never do anything like that!

The fact is that the election may well have an impact on the price of commodities, including the precious metals. It could be that the fall rise in the prices of precious metals could be delayed until after the election. This promises to be an interesting election.

The DJI in down by 40+ to 11617.23. One would think that the general stock market would be moving up as a prelude to the election. Maybe that move is a bit early. Most citizens have very short memories.

I am still a bit undecided about the "sell the farm" issue. I do believe it is closer, and I pray the Lord will give us some warning. Of course, I rest in His wisdom which far exceeds any to which we might be tempted to lay claim. He knows, because He is in control. Praise Him for this!

Best to each, Doug

What Is Going On With Precious Metals?

I cannot overemphasize the importance of a long term view on the prices of precious metals. Here we have the 5-Year Graph of the price of gold. Though gold has dropped 200 or so from the all time high of 1000+ this year. Notice that the low for the last five years was 358.40. The appreciation is not quite 20% per year. It is about twice that now at 791.10.


Both silver and gold are showing a bit of life in Asia at present. Both are up against all major paper currencies of the world at this time.

Over the past two weeks, we have seen the most significant drop in the price of both precious metals. What is going on? The dollar has moved up rather strongly, as well. Nothing has changed fundamentally to cause the dollar to rise. We still have the vast growing debt owed to the world, the balance of trade has yet to improve significantly, China has passed us in manufacturing output, we remain dependent upon the world to buy some $2 Billion of our debt daily, we still have a spending binge at all levels of government, and we have yet to see the end of foreclosures in real estate and bank failures. But yet the dollar is stronger.

Governments normally do not go bankrupt and can only be sued when they let themselves be taken to court. There is no way for the U. S. to pay its debt without further devaluation of the dollar. That means that the dollar will be inflated over time.

There is another change as a result of the Georgia conflict. Remember this is an eastern country in which we have military advisers and which we have provided military equipment. We even sent "humanitarian" aid to them after the conflict. Georgia attacked its neighbor and was promptly militarily sent retreating by the Russian military. We stood by and did nothing. The world sees and has widely reported that we did nothing. Thus, we are seen as weak and impotent while Russia is seen as a great power actively protecting its interest. Russia is striving for closer relations with Europe and seeks to be recognized as a world power. Thus, we have lost some more international political clout.

As to the recent drop in the price of gold and silver: From all appearances, I agree with James Turk (www.goldmoney.com) that this is a loss in derivative or paper prices of the metals and not the price of the physical metals, themselves.

Have you tried to add to your stash of coins lately? There are almost none available or the time between locking in a price or making payment and receiving delivery is very great. There are almost none available. Why? No one is willing to market the physical precious metals at the lower paper price. The demand is certainly there, but the stock is very slim at best. James reported that the large bars are in good supply, at present, but the small items and coins are not. Even those that can be found carry a very high premium over the price of the metal. The price is too low to give refinery or wholesaler to desire to take their products to market without a very high premium. This has the same effect of governmental price controls. The supply dries up in either case.

Both silver and gold are greatly oversold. In fact, I am wondering if this is the "sell the farm" time for which we have been waiting. I am hesitant to go all out on purchases of mining stocks, but do plan to slowly add in more shares during the remainder of this "correction." It is very likely that we will see some $40 - $50 jumps in the price of gold as the oversold condition is balanced.

The futures contracts for silver expire on August 26th, as I recall. I know it is near the end of this month. That could be the turning point in the paper versus physical prices of the metals. It is very important to keep a careful watch on your portfolios and follow the price of the precious metals. We could see some significant upward moves going into the fall and winter season just ahead.

I pray that the Lord will give us wisdom to know how to be good stewards of that with which He has entrusted us and the courage to act in accordance with His wisdom. The results are up to Him, but at times we are too timid to act out the wisdom He gives us. We must continually praise Him for the care with which He treats His people through His unmerited grace.

Best to each, Doug

What's With Gold These Days?

Gold below $800 does not seem at all rational. However, it is fact! Justice Little of Taipan Daily believes that since gold did not sky rocket on the Russia - Georgia fiasco, that traders bailed out. One would certainly expect that gold would have taken a big move upward in price with any conflict in the mid east or within the old USSR, but gold just sat there. There was no reaction, so traders got worried and jumped ship. In the Gold Miners (GDX) graph above, check out the Volume on August 11th. The volume in shares went through the roof. It is significantly the largest volume on the graph and the price dropped drastically immediately.

There is no doubt that there is a great deal of manipulation of the prices of precious metals and commodities, but there was activity in addition to the standard intervention. The traders were bailing out in mass.

Additionally, we are being treated to all the "good" rhetoric coming from suspect sources. We are being told that inflation is under control, that the credit problems have been solved with the new legislation, that the wars are going well, that banks are back on solid footing, and the rest of the rosy pictures which are being painted for our benefit. Have the fundamentals really changed?

There is one indication of change. It seems that the Europeans are entering a period of slow down similar to ours. Thus, the Euro has lost part of its glamor in comparison to the dollar. This has given the dollar a boost. Also, the renminbi has lost ground for the last four weeks. That is a plus for the dollar, as well.

As we turn back to the fundamentals, we find that real price inflation "right here in River City" continues to plague consumers. While gasoline prices have abated some, we are still paying many dollars to fill our tanks. Food and utility prices continue to rise. Jobless claims for last week came in at 450,000 and the prior week's figure of 455,000 was revised to 460,000. That is far from good news. The national debt continues to rise into the stratosphere and will only be repaid, if it ever is, by new dollars added to the supply of unbacked currency in circulation. Even the "fixes" in subsidies for strapped home buyers and bailouts for failing banks are daily adding to this supply. This can only result in more price inflation while jobs, wages, and hours worked are shrinking.

A free market would cause an unwinding or balancing of the books from the depreciation of the dollar since 1971, the recent housing collapse, and the credit binge. This has not been allowed to happen, as central banks and the government have pulled out all the stops in an attempt to give us a recovery or, in the worst case, a "soft landing." In stead of the free market temporary pain and quick recovery, we have seen a huge increase in the supply of dollars and virtually every paper currency in the world. This is like pouring gasoline on a fire. It is using the fuel from which the fire started to put out the fire. The best that it does is to postpone the day of reckoning. It will come! And when it does, the pain will be much greater and last for a much longer time.

The fundamentals of our economy and our dollar have not changed. However, there seem to be many out in the markets who believe that there have been sea changes and that the dollar will be much stronger for a long period of time, maybe even eternity.

The mining stocks are in bargain price ranges now, but I am holding off further purchases until we can see a turn about in the price of gold and silver. I did add to DROOY holdings yesterday and it is 5.11 now. All the mining stocks are down today. This can be a result of the pinch on profit by the lower price of the metals. After the Olympics and the August expiration date, we may see a big change.

By the way, the morning news paper says that the U.S. is putting missiles in Poland. This is an escalation of the tension over the Russia - Georgia battle. Russia lashes back with threats. I wonder how gold will react to the greater straining of relationship between the U. S. and Russia. Will gold ignore this, too?

I am holding fast to a long term perspective. In spite of the present disaster in prices of precious metals, I believe we will see a lower dollar and higher dollar prices for precious metals. When is in the hands of our Lord and Savior Jesus Christ. I rest in the love and care He exercises for His people.

Best to each, Doug

Precious Metals & Commodities Remain in Long Term Bull Trend

The Street Tracks Gold Trust GLD is presented here beginning in August of 2006. It broke below its 50-Day Moving Average during this last correction, but remains well above the 200-Day Moving Average. This shows that gold remains in an overall bull market trend.


Both silver and gold bounded some yesterday, but are being hammered again this morning. It is early, but the prices dropped for both as the NY trading began. Long term, the trend remains intact.

Is the manipulation over? Without a free market, it is always difficult to tell. Have the boyz played this "correction" to their limit? I doubt it, because they seem to have very deep pockets and can play much longer than we. Also, every time they play, the pockets are more likely to get deeper rather than depleted. I still believe there will be an end to their game. However, in the mean time, we are left guessing.

Presently, there is little doubt that the precious metals are oversold to a very great extent. It is also true that there will come a time when the panic run to the safety of precious metals will be center stage. Will it be this fall? I doubt that the final run will be this fall. However, I do believe we will see much higher prices in September and October.

The prices of the mining stocks are very attractive now. Here are some examples: CDY 1.66; CDE 1.88; DROOY 5.46; GDX 36.95; GFI 9.34; GSS 1.61; HMY 8.16; IAG 5.45; KGC 16.24; KRY 0.81; NEM 43.62; PAAS 27.17; SLW 10.91; SSRI 25.81; VGZ 3.10; XRA 3.20, and the EFTs and Trusts: CEF 10.99 and GLD 80.55. I am tempted to add to my portfolio, but am being very cautious about purchases until after the late August expiring date for futures options. The boyz are playing the game in futures contracts. That spells danger for us. Nevertheless, the mining stocks are at bargain levels now. We may not see such bargain levels again for some time, but they may remain in a narrow trading range for a few more days or even weeks.

America is presently moving deeper into recession. The housing/credit melt down continues with foreclosures up some 55% and bank seizures magnified about 3 times during July. Retail sales were off about 0.1% during last month. Consumers must now be maxed out on credit. Even American Express has reported a significant increase in late payments.

Nevertheless, the dollar is flexing whatever muscle it has left. Yes, the dollar remains on a downward trend, but it is showing some temporary strength. Why, because the dollar bulls are buying it? Or, do you think maybe it is because central banks of the world have intervened to make the dollar stronger for a short period of time? History has revealed that the banks do play their games with our dollar.

If you are looking toward the purchase of an automobile, realize that the manufacturers are really hurting now and into the fall. There will be more bargains will no interest loans and all the other incentives that can be conceived. I am not recommending that you do this, but there will be opportunities for those who feel they must have the latest.

There are several wild cards floating around the world today. Iran continues on its own course worrying the rest of the world. It is rumored that the U.S. and some allies are moving warships to the east. Is that for an attack on Iran, a blockade, or just saber rattling? Russia has warned Georgia that it will not tolerate more aggression. By the way, we are sending "humanitarian" aid to Georgia with military to distribute it. There are always interesting things going on it the world. These wild cards could flare up at any time and are simply samples of what could be on the horizon.

Gold is back down to 817.30 and silver to 14.38. Going lower? Likely for the time being.

We continue to rest in the infallible word and promises of King Jesus. These give us a peace that passes all human understanding during challenging time. Would that all men would heed God's word as found in Micah 6:8. "He hath shewed thee, O man, what is good; and what doth the Lord require of thee, but to do justly, and to love mercy, and to walk humble with thy God?" This is calling of all men, families, churches, and governments of the world. Remember, "Blessed is the nation whose God is the Lord." The reverse is also true - The nation which turns its back on the Lord will receive God's wrath. Check out Romans Chapter One to see how God's wrath is played out on ungodly nations. Even His covenantal people suffer, but they have a great peace during suffering and will receive wonderful rewards as God balances the books in the end.

Best to each, Doug

World Wide Recession??

The economies of the world are not in the best of shape these days. It is likely that we are moving into a world wide recession.

As I wrote earlier today, there are many signs of a recession here. Additionally, unemployment numbers are on the increase, hours are being reduced, companies are dumping jobs, and retail sales are showing signs of slowing. The same is being repeated in many countries of the world.

By the way, Russia has backed off a bit on its attack on Georgia. It may have ended, but we will have to wait and see how this cools, if it does. Russia has clearly shown that it will not tolerate surrounding nations to act totally independently. What's good for Russia is good for them or else is the word for the day.

I believe we are in a recession now. If that is so, it a a natural consequence for commodities and precious metals to languish. In addition to the substantial intervention, this will have an impact upon prices of our precious metals.

We are approaching the time of year when Indians buy gold very heavily. It will be good to see if we can detect whether this will be the case this year. If so, then the prices of gold should once again rise into the fall and early winter. If there is a lack of such buying, who will take up the slack and move the prices upward. We have seen more Chinese buying this year.

The distraction by the election sound bites and the Olympics have somewhat dried up a substantial portion of the news. Our election has a lack of real interest this year. It boils down to whether you will vote for or against Obama. That is, if you plan to vote at all. Often, it seems useless to vote, because there is no change regardless of the party in the White House or Congress. Both are pro big government, big spending, and less freedom. Both ignore the Constitution.

Recessions and depressions are negative for gold and silver, as well as for other commodities. A gauge of the health of the economy is the movement of the price of copper. It is currently mostly down.

I suggest, in spite of the wonderful low prices of the mining stocks and precious metals that it is likely wise to wait and see the direction of commodities before jumping in with both feet.

The Lord will reveal the direction through the movement of the markets. The DJI was down triple digits moments ago, but is now down 81+. Gold is 814.50 and silve 14.61. Mining stocks are mixed but mostly up a bit today.

Best to each, Doug

There Really is Blood in the Streets!

This "correction" in precious metals and commodities has us bleeding profusely day by day. Gold pushed toward 800 and barely missed going below yesterday. Silver threatened 14, as well. This has been a terrible time for us.

The question confronting us now is, "Is this the last gasp before the big run?" We who remember the almost 40% drop in gold prices before the mania run up from 1971 to 1980 are asking ourselves over and over again. Is this it! Frankly, I do not know.

As we look at the fundamentals around us, we see no way for These United States to pay off our debt without massive increases in the supply of the unbacked paper dollar. Further, we see the government and the Federal Reserve willing to bail out the financial industry as any cost. We see price inflation all around us, except for the present "correction" in the price of petroleum which gives us a break as we fill our SUVs. As yet, there has been no relief in the prices of energy to light, heat, and cool our homes.

We see interest rates at well below market value which is causing our money market funds to be hit by a double whammy: loss of purchasing power and interest too low to even make up for the income tax cost. Thus, each dollar in such funds is a loser for us.

Because of our debt and the ever lower purchasing power of the dollar, our America is being sold at bargain prices to foreigners. What a change this is for us! When the dollar was strong, we shopped the world. Now, it is the rest of the world that is enjoying the bargains here.

What a quantum change this has been and continues to be. As we have borrowed from the world for decades now to enjoy cheap imports, the world has accumulated dollars in never before seen volumes. By the way, we now need about $2,000,000,000,000 per day to finance our spending in support of the War on Terrorism, the War on Drugs, rebuilding our military, and consumer spending binge. This does not cover the needed restoration of our run down infrastructure of roads and bridges. Debt of this magnitude will either be repudiated or paid with additional expansion of the amount of dollars in circulation (inflation).

We now have Sovereign Wealth Funds of governments around the world buying with dollars whatever they see of value. They must use the dollars collected from sale of products and services for something. Certainly, they see the depreciation of the dollar and that is a great incentive to convert it to things of value rather than hang onto the paper. Think of the vast amount of dollars sloshing about the world looking for places to go.

Yes, the economic situation today is vastly different from any we have seen. A major source of this change has been the growth of China and India over the last decade or so. Both have moved toward parity with These United States in international manufacturing and technical service. This they have virtually accomplished at the speed of light while it took us about a century and a half to dominate manufacturing and service to the world. They did it without having the advantage of owning the reserve currency of the world.

Currently, the dollar is enjoying a boost in relation at other world currencies. I believe, as James Turk (goldmoney.com) has suggested, that this temporary bullishness is a direct result of the central banks of the world buying dollars to support a higher value. Maybe they are doing this so that they can begin to slowly and in a stealth manner unload more of their dollar reserves and replace them with other currencies at a better price. Could be! After all, many have been quietly moving away from the dollar for some time. These United States are dependent upon the value of the dollar and its benefits from being the reserve currency of the world. Another way to state this is, "As goes the dollar, so go These United States."

Additionally, we have the significant intervention in the precious metals markets by central and bullion banks and a cartel which have been consistently manipulating the value of precious metals for their own gain or other reasons. Without doubt, this has impacted to our disadvantage on prices.

Without a doubt, there will be many more dollars added to international markets. Everything, above, points toward an inflation of our dollar. A detractor remains the foreclosures and bankruptcies which are growing rapidly in numbers year to date. When loans are written off, the supply of dollars is decreased. However, it does not seem that this reduction will be sufficient to off set the necessary increases.

In spite of the present situation, we see the price of precious metals threatening to be further stomped down. This is not free market action. It is intervention and manipulation by those in power by FIAT of government or for personal (cartel) gain at our expense.

Gold is currently at 818.10 and silver at 14.73. The mining stocks have moved upward slightly since yesterday, but are still in price ranges that are screaming buys. Each of us must make our own decisions. We may be at the "sell the farm" place, but I am doubtful as I continue to be amazed at how much manipulation there remains.

It does seem that the cartel will have less reason to intervene for the time being. That has been historically true as we move into the fall and early winter season of year.

I am thankful that my God is in control and I rest in His love for His people. However, each of us and collectively our churches must repent of our sins. We must give highest priority to justice and mercy. We must pray that our nation would once again make justice under God's Law the goal for every court decision. Also, that our elected officials would make this the highest priority in every act of government.

Best to each, Doug

Metals Down - Dollar Up - We Muddle Through!

Both silver and gold are following the recent pattern revealing the intervention which continues. I do not expect any change from these summer doldrums until the fall gets in full swing. Also, it seems that there will be no major panic movement by the general population into the precious metals until the public becomes aware of the metals.

The average European and Asian has a much greater appreciation for the long term value of gold and silver than most Americans. We have yet to experience the security and value as they have many times in the past. We, older Americans have seen the 1979-1980 hyperinflation and the resulting vast increase in the price of these metals since August 15, 1971 when all ties to the metals were removed from our currency under President Nixon.

We are in the midst of a stagnant economy reeling under the aftermath of the bursting housing market with the mortgage failures and escalating foreclosures. We remain in John Mauldin's "Muddle Through" economy. Price inflation is rampant in the economy and is abated to some extent by the current lull in the price of gasoline at our pumps. I was able to buy regular unleaded at $3.599 on Saturday. That's a break? Yes, given today's environment. Meanwhile, hours of work and pay have not kept up with the inflation and unemployment continues to increase.

The heating up of the Russian retaliation against Georgia, a nation we have supported, will have an impact upon people wanting precious metals. Fear and unrest drives folks to seek safer was to preserve wealth. Let's look at the dollar.

The dollar has been on an upsurge since early last week. The fundamentals supporting this unbacked paper currency have not changed. As James Turk of GoldMoney.com commentary shows, there has been significant intervention (buying of the dollar) by central banks of the world in an effort to prop it up. This action by central banks has given a temporary boost to the purchasing power of the dollar.

However, as we examine the graph, above, the relative value of the dollar has broken through the resistance of the 50 Day Moving Average . This is very positive for the dollar. But the detractor is that the 50 Day Moving Average is well below the 200 Day Moving Average. Were this to be a change in the downward trend of the dollar, the 50 Day should be well above the 200 Day. Clearly, that is not, yet, the case.

The dollar continues to trade above most of the major currencies of the world today as reported by Kitco on their website. Check it out from time to time for yourself.

The prices of the mining stocks remain in an inviting buying range. We may not see these prices again for many weeks and months. I am strongly considering trading in mining stocks again and plan to go into the fall with a full load of mining stocks which I have on hand and will acquire as prices remain low. While I prefer physical metals to other types of investments in precious metals, I do believe that we should prepare for trading in the mining stocks. That is, buying low and selling some as prices rise to lock in profit whenever possible. I still say, "Buy with caution and in smaller increments."

Though we are early in the trading day, the DJI has been down and is still down about 20 in the 11700 range. The general market is still being ambiguous and is not revealing whether the direction is up or down. It continues to bounce around and confuse the issue. I would call it a stealth operation designed to keep us guessing.

Silver is now at 15.34 on an up tick and gold at 853.70 on a down tick.

Though we are left guessing, albeit, using educated guesses. I am thankful for the Sovereign God who is exercising absolute control over everyone and everything. It is such a joy to rest in His wisdom, love and care. He continually pours out blessings upon His people. Of course, we do not always miss the trouble that a nation suffers, but we have a peace during suffering. It is a joy to suffer in the name of King Jesus, but it is not a joy to suffer for our sin. As we sin, we should expect the discipline of our loving heavenly Father. In fact, if we do not suffer His discipline, we are not His children. Thus, even His discipline is a reason for rejoicing. Let us continually focus upon our Lord and Savior Jesus Christ amidst every storm of life.

Best to each, Doug

Drop in Precious Metals is Solely Due to Intervention

Today, I will give you two news items. These are important and quite accurate in my opinion. I have highlighted some important points in color.

From Bloomberg:


"Gold, Oil Ratio `Out of Whack' After Declines: Chart of the Day

By Claudia Carpenter

Aug. 8 (Bloomberg) -- Gold may outperform crude oil in the next six months as buyers in India, the world's biggest consumer of gold, stock up on the metal, according to Patrick Chidley, an analyst at Barnard Jacobs Mellet USA LLC.

Gold jewelry demand in India and Turkey was ``extremely strong'' in the past week, with sales to India the highest since this time last year as buyers took advantage of lower prices and rebuilt inventories, according to UBS AG. Gold has dropped 16 percent from a record in March as lower oil prices eroded demand for the metal as an inflation hedge and jewelry demand waned.

The CHART OF THE DAY highlights the ``black gold ratio,'' showing how much gold it would take to buy a barrel of oil. The ratio rose to 0.1538 of an ounce on June 12, the highest since at least 1950, and averaged 0.066 since 1970. Based on historical averages, if oil falls to $100, gold would go to $1,515 an ounce.

Gold traded at $862.65 an ounce as of 10:46 a.m. in London, while crude oil was at $118.05 a barrel in New York.

``This ratio is way out of whack,'' Chidley said from Stamford, Connecticut. ``As we've seen the oil price come off, that relationship could come back into focus and I see the relationship below 0.1 in the next six months with gold coming up. Indian jewelers have to come back to the market.''

The October-December period is the busiest season in India for jewelry sales, spurred by the wedding season and Diwali, the Festival of Light.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net"

Last Updated: August 8, 2008 06:08 EDT

From Casey's Daily Resource Plus:

"And then there's this... From Ed Steer:

In my commentary yesterday, I mentioned that I was less than thrilled with the sell-off in the early Friday morning markets in the Far East, as this sort of price action to the downside was virtually unheard of during those trading hours. As it turns out, it wasn't a good omen.

The selling started in earnest at 3:00 a.m. NY time on the Globex after Sydney closed and Hong Kong was the only market open. The bottom came at just over $850 in New York trading...which is a retest of the May/08 low. Will it hold? We'll find out next week.

Silver suffered a worse fate. The price broke through all support on Friday, as stops were tripped and margin calls went out and long positions liquidated. If you're a technician, the next level of support is around $13.75...however, technical analysis means squat in a managed market like silver and gold. Will the current price hold? Once again, we'll find out next week.

On Thursday, gold o.i fell a stunning 26,573 contracts as the liquidation continued. And silver, for the fourth day in a row, showed a rise in open interest of 1,592 contracts.

There are no shades of grey here. What's happening is that the '8 or less' traders...the bullion banks...are covering shorts, while the tech funds are pitching their longs...but they (the tech funds) are not going short. There were no signs of that whatsoever in the latest COT report...even though the o.i. in silver has risen the first four days of this past week. Something does not compute!

In gold, for positions held at the end of trading on August 5th, the tech funds in the Non-Commercial category decreased their long position by 19,757 and also covered 1,166 shorts, for a net decrease in long position of 18,591 contracts. On the other side of the ledger, the cartel closed out 12,008 long positions and a whopping 32,762 short positions for a net decrease of 20,756 contracts in their short position.

In silver, the tech funds sold 3,416 longs and 772 short positions for a net decrease in long position of 2,644 contracts...and the boyz went long an additional 2,006 contracts plus covered 2,390 short positions for a net decrease of 4,396 contracts in their short position. The latest COT report is linked here.

Ted Butler said that he was disappointed in this report. He was expecting much better. So was I, but as I've mentioned previously, it wouldn't surprise me in the slightest if the boyz didn't report everything that they should have...and I don't think they did. Silver is a case in point, as the COT shows nothing of the rapidly rising o.i. we've had this week against a back drop of precipitously falling prices.

Without question, there has been massive short covering by the Cartel since the Tuesday cut-off which won't be shown until the next COT report on August 15th. Along with the information that they withheld from this week's report, next Friday's offering should be quite something.

Ted Butler said that the only way that a sell-off like this can occur is if there is collusion amongst the largest traders in the Commercial category. He also said that you should never underestimate these crooks (especially when a bunch of crooks is this smart) when they're in the same room as you...and you should keep your hand on your wallet at all times. Everyone who has watched the precious metals markets for the last number of years, should have caught on to their tactics by now, but obviously some people have a learning disability. There is absolutely nothing free market about what we're witnessing right now...and there's absolutely nothing you can do about it, as the regulators and the mining companies just stand there with their hands in the their pockets while us shareholders get killed.

As I mentioned in my closing remarks yesterday...when the dollar 'rally' ends, then the next leg of the precious metals bull market will commence. I wasn't the only person that was deeply suspicious about this sudden resurgence in the fortunes of the US dollar. James Turk over at goldmoney.com was too. He discovered the reason why the dollar has a new lease on life. It's called 'intervention'. Needless to say, the precious metals were in a major rally at that time...and, of course, had their peak prices on exactly the same day the dollar bottomed...July 15th. The story is entitled "Mystery Solved" and the link is http://goldmoney.com/en/commentary.php#current."

By the way, if you like Marty Robbins as much as I do, go to this link and turn your volume up to hear some of his greatest hits. http://uk.youtube.com/watch?v=_zhHpsMezkA&feature=related

This is the last day of the week. Remember to prepare yourself by rest and prayer for the Lord's Day. "Do not neglect the gathering together of the saints as is the practice of some." We, as protestants tend to feel that a personal relationship with the Lord is all important. I do not say that it is not important, but we tend to neglect the importance of the church and corporate worship. There is a mystery about the grace that is dispensed through the church in corporate worship and through the sacraments. This grace is essential to the Christian life. I urge you never to neglect corporate worship and suggest that you make it an essential part of your Christian walk.

Best to each, Doug