Gold and Silver Are Off in Hong Kong Tonight

Both silver and gold seem to be on the road for a plunge tonight. The downward move began about the time that the Hong Kong market opened. An amazing thing last week was that gold was relatively strong compared with the last few weeks, but the mining stocks (most of them) took off like scared rabbits running from the hounds.

My DROOY is up well over $4 pushing strongly toward $5. It may not make it, but it has been strong throughout the week. My trailing stop is likely to get hit if the downward move of gold persists into the New York trading in the morning. I am prepared to buy back in very soon in event of such a sale.

Gold is now at 811.50 and silver 10.18. Both are on down ticks.

From the London Telegraph under the title "Is Britain Going Bankrupt?":

"The bond vigilantes are restive.

We are not yet facing a replay of the 1970s 'Gilts Strike', but we are not that far off either.

There is now a palpable fear that global investors may start to shun British debt as the budget deficit rockets to £118bn - 8 per cent of GDP - or charge a much higher price to cover default risk.

The cost of insuring against the bankruptcy of the British state has broken out - upwards - over the last month. Yes, credit default swaps (CDS) are dodgy instruments, but they are the best stress barometer that we have."

Read the article HERE.

More from the Telegraph:

China slashes interest rates as panic spreads

The People's Bank of China cut interest rates by more than 1pc point as the economy crumbles and millions of jobs are predicted to go ahead of Christmas.

By Malcolm Moore in Shanghai
Last Updated: 12:48PM GMT 26 Nov 2008

Read the article HERE.

More from the Citigroup in the Telegraph:

Citigroup says gold could rise above $2,000 next year as world unravels

Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup.

By Ambrose Evans-Pritchard

Last Updated: 7:29AM GMT 27 Nov 2008

Read the complete report in pdf HERE.

Bill Buckler of The Privateer has an article on "The Great Deflation posted HERE.

The greatest threat to our national well being is for the dollar to lose its status as the reserve currency of the world. If we continue to fight wars, spend to excess, increase our debt, increase the deficit of balance of trade, increase regulation of business, bailout every failing business, and increase taxation, the dollar will be so depreciated that it will lose the preferential status. Then it will be virtually worthless. How soon will this happen? Only our God knows!

Folks, I certainly hope that each of you and your families enjoyed the corporate worship of our Sovereign God on this Lord's Day. It was great to share with other Christians in this worship and praise of our God.

America is in serious need of a revival by dedicated Christians seeking God's will and serving Him in every aspect of our lives. We must be on our knees before Him seeking the power of the Holy Spirit to repent of our sin, turn to King Jesus, and pray that He will honor His promise to heal our land when we honestly do this. This is the only way our nation will be saved from going the way of other pagan nations which have gone after other gods, primarily after the state as the messiah who will solve all problems. There is only one God who can do this and He is the God of Scripture.

Best to each, Doug

Be Thankful to God for Preserving America

The, above, two graphs give us a better picture of the price movement of gold (proxy GLD) and silver (proxy SLV). Both have moved up some, but silver is lagging behind the movement of gold. Notice that this week's run up has been rather sharp. The trading yesterday was thin, but still fairly strong for both of our precious metals. The coiled springs seem to be pressured ever tighter, so it is just a matter of time before both are released for a greater upward swish. When is always our asked, but unanswered question. Having experienced the gold rush of 1979-1980, I can assure you that it is something to see. The rush of the late 1790's was nothing to compare with it.
The price of gold is not moving upward in comparison with the first two days of this week. We are likely due for a healthy rest before the upward move continues. That would be a blessing which would allow us to reposition ourselves into more of the mining stocks. DROOY is still holding strong at 4.10 and VGZ is up to 1.23. In both cases our trailing stops were hit a bit early in the rally. I am thankful for a profit on both trades. I am watching to add more to my stock of DROOY, but hopefully at a lower price perhaps, in the area of 3.50 or less.

Gold is at 816.70 on a down tick, and silver is at 10.38 on an up tick. Is silver trying to catch up with gold? Only our Sovereign God knows, but it may be.

By the way, this is likely to be a day of thin trading, as many folks are already on their Thanksgiving Day holiday. The rest are working their way into the pre-quit for the holiday. Net will be a day of light trading. Could become very volatile, because the trades which exist could have a magnified impact on prices.

On gold from Casey's Daily Resource Plus:

"“With the flood of liquidity, that’s going to float the boats and sink the dollar,” said Ron Goodis, of Equidex Brokerage Group in Closter, New Jersey. “Commodities look set to stage a comeback on the dollar weakness. The real strength is likely to be in gold.”

Legendary investment biker Jim Rogers concurs, saying yesterday what now appears to be baked into the cake. The buck is “going to lose its status as the world’s reserve currency,” Rogers said. “It will be devalued and it will go down a lot. These guys in Washington, they want to debase the currency.”

But the bears remain unconvinced. “We are short of gold,” said Dennis Gartman, editor of the Gartman Letter and a usually-reliable indicator of how not to bet. “We shall always sell rallies such as these that retrace as classically as this market has.” This is “nothing more than a rally in a bear market.”"

General comments from Casey's Daily Resource Plus:

"Were it not for the chance of a government bailout, in lieu of an imminent Chapter 11 bankruptcy filing, (General Motors) bonds would trade for much less. And there lies the truth about what America's capital markets have become: a rigged game. - Jonathan Weil, Bloomberg, 20 November 2008

As you already know, what Jonathan Weil said in the quote above is absolutely true. Everything is rigged. And as GATA's secretary treasurer, Chris Powell, puts it..."there are no markets anymore, only interventions." So that leaves us with only one truth left, and that's the precious metals...physical gold and silver in particular. Buy them with both hands while they're still on sale, as I doubt they'll be that way for much longer."

Folks, it is a very good thing that the Chili Queens of Alamo Plaza in San Antonio are no longer offering their bowls of delicious hot delight. Else, they would likely be partitioning Washington for bail outs and receiving billions of dollars. It does seem that Paulson and Bernanke are passing out dollars to the tune of almost trillions (that's with a "T") a week to any and everybody who has run a sloppy business. Looks like a nationalization of many financial and possibly industrial businesses. Welcome to the land of comrades.

This pumping of countless trillions of dollars is bound to result in the mother of all inflations. Perhaps, we will go through a prolonging of our present recession/depression, but there can be no result other than inflation. That is why it is so important to emphasis gold and silver in your portfolios.

The cure being applied is the cause of the present situation. How can it be expected to solve our problem. One cannot put out a fire by pouring gasoline on it. It seems that folks would examine the history of Japan's recession which continues even now. They attempted to solve it using the same methods. Even Roosevelt's solutions to the "Great Depression" did not work. It took WWII to bring us out of the depression. All of this is simply more of man's folly for the God to laugh over as He observes.

Let us be certain to praise and thank our God that He has preserved our nation for so many years of our folly. Let us, also, pray that He will raise up true godly statesmen who will return this nation to the spirit of the its founders and George Washington who was our greatest president. King Jesus provided America's Joshua, Washington, at a time of great need. He can do it again in this time of great need.

We as individuals, families, and churches must repent, turn from our sin, seek our Savior's forgiveness, follow His way for Him to ever heal our nation from its apostasy. We must be a nation whose God is the Lord.

Best to each, Doug

Founding Fathers Warned Against & Prohibited FIAT Currency

Both of our precious metals are in a strong upward move. Thus far, it has been a series of stair steps with two up and one or one and a half back, etc. Both metals are very strong with silver showing some signs of attempting to catch up with gold's move. Currently, gold is at 818.60 on a down tick and silver at 10.34 on a down tick. It is current rush over? We will see as the day moves on. For the time being, it looks to be another up day. However, we must remember that both have made huge gains in the last three days. A rest may be needed and we have a short trading week with the Thanksgiving Celebration.

Mining stocks are mostly much higher now and there is much more interest in them during the last two days. The DJI is up about 31 to 8478.

From BBC News:

11:37 GMT, Saturday, 22 November 2008

UBS loses favour with angry Swiss

It has been a hard year for the biggest Swiss bank, UBS. After losing millions in the US sub-prime mortgage market, it has had to beg the Swiss government for help. As Imogen Foulkes reports, its reputation in Switzerland may never recover.

Read the article HERE.

From The Wall Street Journal:

The Fed Is Out of Ammunition

A discredited dollar is a likely outcome of the current crisis.

By CHRISTOPHER WOOD

Read the article HERE.

From Financial Times:

Bring back the link between gold and the dollar

By Richard Duncan

Published: November 23 2008 19:07 | Last updated: November 23 2008 19:07

Read the article HERE.

From Casey's Daily Resource Plus on Dr. Copper:

"The base metals were all solidly in the green on Monday. Copper went skyward late in the pre-dawn hours, peaked just shy of $1.70 in the late morning, then eased slightly into the afternoon hours, finishing at $1.6614/lb., up 8 2/3 cents from Friday."

Copper is an indicator of manufacturing activity and a general gauge of commodities in general.

This on the dollar and currencies from The Daily Pfennig today:

"The currencies continued their assault on the dollar today as investors felt more comfortable returning to the higher yielding currencies. Brazil was the biggest mover, advancing over 6 percent vs. the US$. Sweden also advanced for a second day, moving up over 5% against the greenback. The only currency which gave ground vs. the dollar was the Japanese Yen which was sold as investors moved back into the carry trades.

There really wasn't a single event which sent the dollar down, but instead the currencies steadily increased throughout the day. Bad housing data in the morning confirmed that house prices are continuing to fall and while sales have tumbled. The median price of homes in the US fell 11.3 percent from a year earlier, the largest drop on record.

But equity investors weren't frightened by the data, and were actually encouraged by President elect Obama's call for a large stimulus package. With the stock market rallying, currency investors felt comfortable enough to pick up some bargains in the Brazilian real and other higher yielding currencies. This is the pattern which we have been seeing over the past few weeks, and one which looks to continue through the end of the year. I don't personally think this is the turning point for the dollar, as we will likely see some more safe haven buying before the end of the year. But longer term investors can still take advantage of the prices on some of the beaten down currencies which still have good fundamentals. I would include the Nordic currencies of Sweden and Norway along with the commodity currencies of Australia and Brazil."

This from Mine Web:

CAPITAL MARKETS MAY BE THAWING

The gold bull market starts here . . .

Gold bullion jumped nearly USD 60/oz on Friday, spurring wide, and heavy, buying of gold stocks; Barrick, the world’s biggest, rose 31% on the day.

Author: Barry Sergeant
Posted: Monday , 24 Nov 2008

JOHANNESBURG -

Gold bullion jumped nearly USD 60/oz on Friday, recording intraday lows and highs of USD 742.93 and USD 801.92, respectively, and spurring heavy buying of listed gold stocks, from the majors to the juniors. "We had size buying", observed a London-based sales-trader, "in the majors - Barrick, Kinross, Goldcorp, the mid tier Yamana, and as far down the list as the Congo juniors - Moto Goldmines."

Read the article HERE.

The designers of our Constitution were well aware of the dangers of unbacked FIAT currency and wrote in a prohibition for the use thereof. "Congress shall have Power. . . To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; . . ." The colonies had used FIAT currency after they had run out of Spanish Doubloons to pay for the English goods brought over by ship.Of course, King George would respond with a order cease use of paper currency. However, that would take months for the demand to get to the colonies. Then they would issue a new FIAT currency. This went on for some time, so they were fully aware of the problems of paper currency.

Gold and silver have been money of preference for centuries. In the early biblical times, payment was made in gold and silver by weight. God recognized the sinful nature of man and explicitly prohibited a person to even own differing weights: a large and a small. He knew the temptation would be to great to use the weights to defraud the other party to a transaction.

Throughout history nations have grown and fallen when they drift away from the Sovereign God of all. Many lost empires and some never lasted very long. A major symptom of most has been a debasing of the currency in violation of God's law. Nations debase currency and run to paper currency, because there is no limit to the amount which can be very cheaply printed or created by simple blips on computers. As the nations currency loses international respect, the nation also loses respect. As goes the currency, so goes the nation. We are now facing that today in the world as America has turned from the God of many of our founding fathers.

While many of our founding fathers sought to create a nation set on a hill which would shine forth with God's light to the rest of the world, we are in a period during which that light has been shut down. We must pray that the new president will see his responsibility as a minister of the Triune God of all and exercise his office in accordance with God's Law-Word.

We, as individual citizens, families, and churches must renew our commitment to King Jesus and be the lights to the world and salt of the earth within our own spheres of influence. Without this, our nation will never return to the founders vision.

Best to each, Doug

Look for Higher Opening for Precious Metals Today

Friday was a blast for gold. Trading in DROOY was really good. Mining stocks almost without exception were up for the day and most for the week. Gold blasted above 800 and closed at 801.60. It has been a high as 825 over the week end trading and is now at 815.30. Silver is at 10.18. Looks to be opening in those ranges in New York. Should be another exciting day in the precious metals.



The graph of gold, above clearly show what James Turk of www.goldmoney.com told us in his latest commentary that an upward move of 50+ in a day has occurred only two times in the last 20 years: Last Friday, and as I recall it was on September about the 17th. Both are this year and in very recent days. He attributes this to short covering and upward pressure of the bull market in gold. The demand for smaller bars and coins is much greater than the supply. Were gold to spring well above $1,000 in the near future, the supply might return, but will be bought up very quickly.

Of course, were gold to go above $1,000 and stay there, it should go much higher. The central banks and governments do not want this as it would reveal to one and all the fraud of the unbacked paper (counterfeit) money we are forced to use on a day to day basis.

By the way, Citicorp was handed a bail out of some $20 Billion over the week end with a promise of some more to cover their faulty business practices. Isn't it amazing that we continue to bail out failed companies? Perhaps, even our lousy automobile manufacturers will be bailed out and patted on the back for their failure to compete in the international market place. Of course, we must always remind ourselves that government regulation, taxation, and high demands of labor unions are some of the causes for the failures.

In a free market, failures would be solved by the unprofitable companies changing to profitable practice, improvement of products or services to better meet consumer demands, or bankruptcy. The free market by culling the inefficient businesses would provide the consumer satisfying products and ever decreasing prices, more efficient use of the scarce resources of raw materials and labor, steady increases in Gross National Product (GNP), and higher standard of living.

We have been living on a debt caused a falsely growing GNP giving a false sense of growth. The manipulation of and depreciation of our currency while it remains the reserve currency of the world has allowed us to plunder the world by paying for products with dollars of ever decreasing value. I believe this is coming to an end, because we can already see signs that the world is no longer willing to support our debt binge.

Yes, President Elect Obama, we do need a change. We need to return to the Constitution of These United States which includes sound money fully backed with gold. I sincerely pray that you will see this fact and move us in that direction. You will also have to acknowledge that the Sovereign God is putting you in office and requiring you to exercise your office in accordance with His word. In this way, These United States can be a breath of fresh air to the world as it once was.

Folks, the opening appears to be exciting. Check it out! Keep your mind focused upon the God of all and live in obedience to His word, else your life will be a failure. With Him there is life, without Him is death. Thank Him daily for His many blessings.

Best to each, Doug

Gold Springs Forward to 787 Pushing toward 790

Here is an example of what can happen as the spring under the price of gold is released. Gold is pushing through 780. Where will it be capped now? That is the next plateau that is likely to be established by those who intervene. Who is it? Well, those with the greatest vested interest are the central banks (Federal Reserve) and governments. Neither would like to reveal to the general public the fraud of FIAT unbacked paper currency. The hedge funds might have an interest is profiting by selling options and manipulating the price to have them expire worthless.

Regardless of who, the fact is that gold is only held back by intervention. The strong upward move today reveals that the price of gold should be much higher NOW. As this is written gold is at 782.60, so it has broken through 780. Were it to hold for a time at this level, the market price of the mining stocks would bounce upward. Most investors would prefer gold and mining stocks above the "safety" of Treasury Bills and Bonds which are paying a negative interest rate when the inflation and taxation is considered.

My two trading stocks are responding nicely: DROOY is now up 0.35 to 3.30 and VGZ is up only 0.03 to 0.87. I would expect a much greater move with the price of gold at this level.
On the other hand, the DJI and the Transportations have dropped precipitously for the last two days and have; therefore, twice reaffirmed the bear market. I believe were are not at the bottom and that the debacle has much farther to go. Presently, the DJI is up 100+, but it is early in the trading day. Normally, one would expect a rebound after the last two terrible down days. That should be expected. By the way, I would consider this an opportunity to unload a few more of the tax losses in your portfolio.

A recap of the bad economic reports from Casey's Daily Resource Plus today:

"The bad news yesterday? Here's a list of headlines...

1) U.S. weekly jobless claims surge to 16-year high (Reuters)
2) Philadelphia Federal Reserve Bank says business activity hit a new 18-year low (Reuters)
3) U.S. Conference Board's index of leading economic indicators falls 0.8% in October (Reuters)
4) Loan Investors accuse Goldman Sachs of naked shorting (Bloomberg)
5) Federal Reserve blows out balance sheet again. . . . . . .
6) Citigroup Weighs Its Options, Including Firm's Sale (WSJ) - (They forgot bankruptcy! - Ed)
7) Fed to Cut Rates to Zero on Deflation Risk, JPMorgan Predicts (Bloomberg)
8) Switzerland slashes interest rates a full percentage point to 1% - (telegraph.co.uk)
9) Alt-A Losses Outstripping Expectations, Moody's Says (housingwire.com)
10) JPMorgan May Fire 10% of Investment Bank Staff (Bloomberg)
11) GMAC Applies for Status as Bank, Begins Debt Swap (Bloomberg)
12) (Corporate) Bond Risk Soars to Record as Markets Return to 'Crisis Mode' (Bloomberg)
13) Buffett's Berkshire Falls Most in at Least 23 Years (Bloomberg)
14) American Express had highest monthly increase in credit card delinquencies on record in October (Bloomberg)
15) CMBS (Commercial Mortgage Backed Securities) Market Begins to Show Fissures (WSJ)
16) Junk Bond Yields Reach Record 20% as Economy Declines (Bloomberg)"

One would expect nothing but bad news during our recession/depression. This one is turning into a real doozy - it will be very deep and very long.

From Reuters on November 14th, 2008:

Quantitative easing has begun

By: John Kemp

– John Kemp is a Reuters columnist. The views expressed are his own –

Quietly, without fanfare, the Federal Reserve has turned on the printing presses. The central bank is flooding the market with enough excess liquidity to refloat the banking system — and hopes to generate an upturn in both economic activity and inflation in the next 12-18 months to prevent the economy falling into a prolonged slump.

Read the article HERE.

Markets are never very dull. They are always exciting. We must hang tough during the bad times and take profits often. We must be very cautious and slow to buy during these times.

Keep yourself informed on the way of God and the Economics of His way. The Austrian School of Economics is most closely aligned with His way. It is definitely not the Keynesian School which is followed closely by governments and central banks which are seeking control of citizens through control of the fraudulent currencies.

God continues to laugh at the folly of man and his ways. We must seek Him and follow His way for an abundant life here and now and the eternal life which follows.

Best to each, Doug

Both silver and gold got slammed again this morning. This from Casey's Daily Resource Plus: "Today is options expiry on the Comex in both metals. It sure seems like someone is trying to keep the gold price under $740 until that happens. The vast majority of call options will expire out of the money (and worthless) at this price. The longs get screwed again...and the bullion banks "ring the cash register"...again. And your mining companies do nothing...again."

That is likely to have an impact upon the price of the precious metals which may show up as early as tomorrow. We will have to monitor the price rather closely, as it may be time to take some profit on our trades in DROOY (NOW 3.13)and VGZ (NOW 0.87). Both are in good buying range in my way of thinking. See what you think.

Gold is at 739.40 on an up tick and Silver at 9.04 on a down tick. Both were capped early this morning in anticipation of option expiration.

From Resource Investor this morning:

Gold In The Low $600s?

By David Galland, Editor, The Casey Report
19 Nov 2008 at 01:24 PM GMT-05:00

Of late, I have read a number of analysts, Jim Rogers even, who have expressed the view that gold could dip to the mid- to low-$600 level.

Read the article HERE.

From Mineweb this morning:

111 TONNE INFLOW IN 5 DAYS

Record dollar demand for gold from safe haven buying - WGC

Buying up by 45% over the previous dollar record as ‘identifiable investment demand’ which includes ETFs, bars and coins, showing a 56% gain year-on-year.

Author: Rhona O’Connell
Posted: Wednesday , 19 Nov 2008

Read the article HERE.

More from Mineweb:

PRECIOUS LITTLE VALUE

Where are the silver bulls?

Few listed resources subsectors are more reviled than that mining, developing and exploring for silver bullion.

Author: Barry Sergeant
Posted: Tuesday , 18 Nov 2008

Read the article HERE.

From the Daily Pfennig:

This is a fellow named Ted Cook, that Ty Keough sent my way...

"One hardly knows where to begin. America has currently embraced the monetary policies of a banana republic. The Argentine and Zimbabwe models cannot be far behind. For years (35 to be exact) we have warned about the consequences of unbridled credit expansion. We argued that artificially low interest rates would lead to catastrophe. Now the first installment of this crisis has been visited upon us. Our policymakers have greeted this dilemma with even more ruinous money and credit policies that compound the problem. We've had the earthquake. The Tsunami is yet to come.

The monetary authorities in Washington, who are supposedly the brightest among us, have adopted a short-term strategy resplendent with economic error. As usual, the politicians are clueless. Somehow the idea has gained ground that recklessly expanding money and credit (inflating) will cure our economic ills without repercussions. Nothing could be further from the truth. This is currency debasement on a grand scale."

From World Council Media Briefing:

PRESS RELEASE: Date 19 November, 2008

Strictly under embargo until 07.00 EST / 12.00 GMT 19 November, 2008

RECORD DOLLAR DEMAND FOR GOLD AS WORLD LOOKS FOR HAVEN FROM
TURMOIL

Dollar demand for gold reached an all time quarterly record of US$32bn in the third quarter of 2008 as investors around the world sought refuge from the global financial meltdown, and jewelry buyers returned to the market in droves on a lower gold price. This figure was 45% higher than the previous record in Q2 2008.Tonnage demand was also 18% higher than a year earlier.

Read the article HERE.

Both the DJI and Transportations dropped below their October lows yesterday re-confirming the drastic bear market of today. It is really bad, folks. The Lord is giving us what our leaders have asked for by their debasing of the dollar and vast borrowing from the rest of the world to support our consuming binge. Of course, we have enjoyed the easy credit and low prices of products as our manufacturing industry has been forced off shore by oppressive taxation, excessive regulation, and ever increasing demands by labor unions.

The Lord sits in Heaven and looks down at the folly of man. We are reaping what we have sown. We must now become extremely frugal, store up dollars for at minimum of one month of expenses, and maybe even begin an accumulation of food and other essentials (when on sale). This poor economy is not showing any realistic signs of turning around, so there is much more to endure.

We must carefully, prayerfully make our plans, commit them to the Lord, and ask for Him to give us success. King Jesus is THE Sovereign and is working all things according to His perfect plan even though we do not understand it all, we can rest in His love and care for His people. Praise Him daily!

Best to each, Doug

Precious Metals are Showing Life - Will This Continue?

Both silver and gold have sprinted forward today in the early trading. Will these prices hold and more farther or will the Plunge Protection Team and the boyz go to work on the precious metals? I do not know, but it is nice to see both moving upward, since I have in place some trading shares in both DROOY and VGZ. ti may soon be time to put in the 5% trailing stops.
The mining stocks have yet to react realistically to the upward move in the precious metals. If metal prices hold steady and/or move upward the stocks are certain to follow. There may be an initial delay, but they will follow. We still need to be cautious about buying.

The general market as indicated by the DJI is off only about 20 to 8404.12 or so. Here is where the extra caution is required. Remember that yesterday the DJI rebounded about 300 points in the last one hour of trading. That is remarkable and clearly shows intervention. Be careful on any general market purchases. Sometimes it is best just to watch from the side lines.

Bernanke before Congress and confronted by Ron Paul. See it HERE on You Tube.

From Reuters:

Fed's Hoening: Fed has done "as much as it can"

Read the article HERE.

From Casey's Daily Resource Plus today:

Executive Order 12631--Working Group on Financial Markets

Source: The provisions of Executive Order 12631 of Mar. 18, 1988, appear at 53 FR 9421, 3 CFR, 1988 Comp., p. 559, unless otherwise noted.

By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:

Read the Executive Order HERE.

That should be very interesting to you who deny the fact that there is a Plunge Protection Team intervening in our markets. It seems that they are in action daily manipulating the general market and very likely active in precious metals, as well.

A thought, maybe speculation on the failing auto manufacturers here in America from the Daily Pfennig today:

"The thing to think about with these automakers is the fact that they have become such HUGE finance companies, which is where, I believe I read, they "really make the money"... Shutting them down because they haven't run their businesses correctly over the years isn't the issue... It's what to do with those financing companies... I could be totally wrong here, off base and picked off by a wily veteran lefty, but it's the way I see it..."

Could be and likely is true. They do a great amount of finance business. More on the business or lack of business news. Producer Prices suffered a 2.8% drop, the biggest in 50 years, but the greatest impact came from the 24.9% drop in gasoline prices. Without food and energy, prices were up 0.4% in October. Crude dropped $0.56 to $54.39/barrel.

Keep your focus on the God of Scripture: Jesus Christ. He is the answer for all of temporal and eternal life. He went to prepare a place in Heaven for His people. Are you one of His? If not, and what He says is true, can you afford not to check Him out in the Bible? The Bible is all about Him from Creation to the final judgment which is coming at some time in the future. We do not know when, but all shall appear before the Great White Throne of judgment. Each will answer for his life and only the people of God will have Jesus Christ as their advocate. Praise the Lord daily for this.

Best to each, Doug

DROOY & VGZ in Trading Range for Me.

Above is a one month graph on VGZ which I have begun trading. Last week, I bought in at 0.8866, and at opening today, I sold some at 1.03. That is only at 0.1434 differential less commission. However, at the price one can buy a 1000 or more shares with a small investment. The volume makes the trades profitable. Of course, we must watch the trading range closely. The last trade was at 0.98.

Above is the one month graph of DROOY which I have been trading most of this month. The range of about 3.2 to about 4.00 has been fairly well defined for the month. I am currently in at an average of 3.389 and currently have a buy in for more at 3.30. The last trade was at 3.34which is not a bad price, but I wanted to buy it a bit lower. The last trade remains at 3.34, but the bid is now my 3.30 and the asked is 3.33, so I may get my first buy for the day.
Above is the Kitco 24 Hour graph on gold. The typical opening in NY was met with selling, but the price seems to be moving mostly in an upward direction. Gold is now at 734.60 and is zig-zagging in predominantly an upward direction. That would be nice!

From Resource Investor this morning:

When Will The Chinese Economic Agenda Be Noticed In Washington? (Part II)

By Jack Lifton
15 Nov 2008 at 02:00 AM GMT-05:00

I was going to call this article either “The economic life of squirrels and the European Union Commission on Enterprise and Industry,” or “Why is the European Union’s Commissioner for Enterprise and Industry so much smarter than his non-existent counterpart in Washington?” My quandary was due to the fact that while the American establishment sleeps and dreams of globalism, not globalization,, the fledging European Union has made a very good step forward towards assuming one of the most important functions of a truly federal government; it has made the economic security of all of the European nations a first priority. It has just now officially recognized and moved to craft a solution to a problem of long term economic security for itself in a way that should bring shame to the hereditary and growingly nepotistic U.S. Congress, which clearly operates with only one long term security goal in mind: re-election in perpetuity for its members—without regard to the wants, the needs, or the opinions of the American people as a whole.

Read the article HERE.

More from the same source:

Got Gold Report – Gold, Silver Premiums Highest in Years

By Gene Arensberg
16 Nov 2008 at 12:00 AM GMT-05:00

A lack of physical bullion supply at the same time of extremely strong demand for popular small bullion items coupled with artificially low futures dominated spot prices for gold and silver resulted in extraordinarily high premiums for virtually all bullion products in October. The very high premiums continue and availability remains tight.

Read the article HERE.

Folks, It is very important to keep all of life concentrated upon glorifying God and enjoying Him forever. By the way, it is forever for the people of the faith of Abraham. King Jesus has paved the only way for us to be reconciled with the Father. As the bible tells us, "He is THE way!" Also, we are told, "No one comes to the Father except through Him." From the beginning of time, this has been fact. Israel, the people of God in Old Testament times, came to the Father in exactly the same way. Those of the New Israel, the Church, also come in the same way. However, we are entrusted with more of the word of God were the ancients.

We have the completed word of God in the Bible and we are forbidden to add to it or to subtract from it. It is not a smorgass board from which to pick and choose what we like and reject what is hard. We need the whole word of God, the teaching of the Holy Spirit, our families, and the corporate fellowship of other believers for great Christian growth. I trust that you joined in corporate worship of the Lord on His day yesterday.

Best to each, Doug

Excitement Reigns - Be at Peace In the Lord

Silver is at 9.46 on an up tick. The graph curve looks suspiciously like the one on Wednesday, but if it turns south strongly like on Thursday, look out! Hopefully, the boyz are beginning to back off in fear of being shut out.
The gold curve seems to be changing the course of the last two or so days. It looks a bit more interesting today. Gold is up 9.20 to 744.10 at this writing. I have sold some of the trading stock of DROOY purchased this week. The trading range seems to be holding fairly firm. The last trade on DROOY was at 3.61. Yesterday's close was 3.49, but it was as low as about 3.25 yesterday ( great time to buy, but my purchases were some higher than that).

elow we see the dead Merrill Lynch Bull which shows also that the bear has the general market firmly in its claws again. Even after the intervention into the market at the end of the day to push it up some 500, it is down 277+ to 8550+at this time. Not looking to good at this point. By the way, we are seeing a decoupling of gold from the general market and the mining stocks have come our cautiously bullish.
From Casey's Daily Resource Plus: A graphic picture of the demise of Merrill Lynch and the bull market, as well. Here is more >> "Lots of gold news today. In a mineweb.com story I noted that South Africa's September gold production fell 17.7% year over year. As I've said before, production could fall 100% and JPMorgan would not allow it to show up in the price...and any rally based on that news would be capped immediately. The usual NY gold commentator had three points of note yesterday: 1) Investment demand...plus gold sales to India...are still extremely high. 2) Last week the European Central Bank reported that there were NO gold sales at all, and inventories actually rose a hair. 3) After twelve consecutive days, GLD has finally shown some activity...down 8,000 ounces! And lastly, I note in commentary over at Bill Murphy's lemetropolecafe.com that at the current price for gold, 90+% of all December gold options would expire out of the money. So much for a squeeze in the December delivery month. I guess the boyz at JPMorgan/HSBC can read too."

From The Standard in Hong Kong: "The mainland is seriously considering a plan to diversify more of its massive foreign exchange reserves into gold, a person familiar with the situation told The Standard." This is a very important read as other central banks and nations may join the exodus from dollars to gold. That would be the beginning of a real GOLD RUSH. Get the article HERE.

From the Daily Pfennig today: "The dollar continued to strengthen yesterday after another round of bad weekly employment figures. Initial jobless claims increased to 516k during the first week of November, and last weeks numbers were revised up to 484k. The employment picture continues to darken here in the US, and it doesn't look like it will improve any time soon. This is just what the US consumers don't need right now. Not only are most consumers living paycheck to paycheck, but now many of those paychecks are being ripped out of their hands.

Personal bankruptcies are heading into record territory, and job losses will only make this worse. While the total size of the consumer credit market is dwarfed by the size of the mortgage market, with home loans there is an underlying asset providing some base from which banks can work. Credit card debt is different, the banks and investors who hold this debt have no underlying assets to fall back on. This fact has not been missed by the current administration, and Treasury Secretary Paulson is now looking to spend some of the bailout package to try and help out the consumer lenders. Unfortunately it looks like we will be taking another step into the deep dark area Chuck has continually talked about.

This morning we got the retail sales numbers here in the US which showed a further deterioration. Retail sales less autos were down 2.2% in October, almost double economist's expectations. This fall is the largest monthly drop ever, and is just one more sign the US economy is heading for a doozy of a recession!

In spite of all the bad news, we can still look up and praise the Lord for His historical blessings and promises to His people. Think back on the many times the Lord has been very faithful in many of your challenging and troublesome times. He was faithful then, even when the result was not exactly that you sought. We do not always seek the best answer or solution, but He knows what is best for us and we learn to rest in His solution and earnestly thank Him every time.

Study the word, make it the major part of you life, and live in obedience to and enjoyment in the Lord King Jesus. He is in control of everything and everybody. Be still and know that He is such a God.

Best to each, Doug

No Worries, Mate! As We Walk With God.

Gold seems to be following a slightly better curve than that of yesterday. It is too early to tell, but it is now at 712.50. However, it is approaching the time where it has been hitting the sandy spot. By the way, DROOY last trade was at 3.28. That for my purposes is a buy.
Silver has hit the sandy spot and looks to be following the familiar pattern with a cap of $10 maximum. It is trading at 9.06 now. That is a screaming buy if you can find some pre-1965 U. S. silver dimes and quarters. On to the general bear market, below.


The DJI still looks like the bear has it in its sharp claws. It is down some 24 to 8259 or so. Not a good start for the day. It would seem to be due for a bounce today or tomorrow. We have stock options expiration next week, so anything can happen as the options play out. That is always a volatile time. Perhaps, adjustments in options holdings will be made even this week. If you are still in the general market, consider lightening the load on each upward move, if we continue to have them. That is what I am doing, but it may not be correct for you. Study the market and make your own decisions.

From Casey's Daily Resource Plus:

"That gold continues to fall in an environment where it should be strong has more than a few scratching their heads while bowing to the dictates of the market.

“The big deflation is on,” says Ron Goodis, of Equidex Brokerage Group in Closter, New Jersey. “It's risk aversion. The trend is still in place: Long the dollar and short all commodities.”

“The overall mood remains fragile,” said Edward Meir, of MF Global, and he cited short covering as the only factor on the horizon to make the case for sustained move higher.

However, Meir added, “At this stage, the best we can hope for is for the various metals to enter a prolonged, sideways drift, an indication that participants are finally concluding that the worst of the declines are behind us.”"

More on the bailouts, I mean Rescue Plans, from Casey:

"Back on this side of the pond, all the buzz was about Hammerin’ Hank Paulson’s about-face. The Treasury Secretary said that in the next stage of the government's financial-market rescue package, the original plan to buy troubled mortgage assets (i.e. the toxic junk that got us into this mess) will be replaced by a focus on nonbank financial institutions and consumer finance.

Basically admitting that he screwed up, Paulson conceded that buying up mortgage assets “is not the most effective way” to use government funding.

Now, apparently, they’re just going to inject hundreds of billions of new cash right into the system, and many, including Alex Merk, of Merk Investments, say that market participants are frustrated with Paulson's communication skills and changing tactics.

“He's been flip-flopping on every plan and it doesn't look like he has a plan,” Merk said.

Merk added that the rescue plan is failing to get banks to lend money, and that holders of mortgage assets who had been hoping to sell to the government at a good price have now seen these hopes dashed."

From the Washington Times:

HUNTER: Obama's golden opportunity

Lawrence Hunter
Sunday, November 9, 2008

"The worldwide economic crisis presents President-elect Barack Obama with a golden opportunity to establish his leadership bone fides preemptively before the anticipated foreign challenge comes to test his mettle as a leader. As the world's leaders prepare a summit to discuss establishing a new "global financial architecture," the president-elect should forestall efforts by European leaders to give him a bum's rush down the path toward global governance and strip the United States of its economic sovereignty. He can do so by launching his presidency with a legacy-making initiative that would hit the reset button on the economy and restore the U.S. dollar to its preeminence as a resilient reserve currency.

Before the global economic summit occurs in late November, the president-elect should announce that his first act as president will be to send the United States Congress legislation making the dollar as good as gold once again."

Read the article HERE.

Now that would be a giant step forward for America. A return to gold backed currency would be a great one-up on the rest of the world. We should be the one. Just think of the value of our currency being restored to what the Constitution demanded. A return to sound money: one of the primary foundations for a free market.

Of major concern for the G-20's meeting this month is the discussion of various solutions for the coming Greater Depression. Among the alternatives, I am certain will be a discussion about three reserve currencies: Euro for Europe, Renmimbi for Asia, and Dollar for the Americas with a possible currency for Central/South America.

It is certainly possible for a discussion of backing the paper currencies with a gold standard. Of course, the value of gold would over night leap to great heights. Think in terms of gold at well above $3,000 per ounce or several times that! Consider about the impact upon current debt which is priced mostly in dollars today. The impact would be similar to inflation of the paper dollar, and the result would be that dollars with much lower purchasing power would be used to pay off the debt. Of course, there would be some adjustment of the old unbacked to the new backed currencies. What a bonanza that would be for These United States. Our debt would be paid with even more worthless dollars.

There is one great problem to this scenario, because it could be implemented by the International Monetary Fund. Then we would have a defacto international currency (possibly the three mentioned, above), but centrally monitored by the International Monetary Fund. That is one aspect that does not seem good to me. However, as we have lost our standing in the world, the rest of the world has begun to resent our dominance and is bound and determined to under mine it as soon as possible.

We live in exciting times. There are always threats in the world. We are not responsible for the challenges which the Lord brings to us. However, we are responsible for how we react to them. It is important to so steep ourselves in His word, that we can weather the storms of life in His way. We are totally dependent upon Him for even our next breath. Praise Him daily for His loving care.

We should be thankful that He gave us His written word that we might be convicted of our sin, confess it to Him daily, repent and turn from the sin, turn to Jesus Christ Christ as Lord and Savior. Then we will be equipped to follow Him with the wisdom, strength, and counsel of the Holy Spirit.

Best to each, Doug

Bear in Control of Markets

Here we see the temporary cause of the drop in gold and mining stocks. The US Dollar is flexing its muscle for the time being. It may be receiving some support from abroad as the central banks do not want to see the dollar drop to it real value in relation to other currencies. Only the Japanese Yen is standing tall with the dollar. The carry trade is having an impact upon both.
The mining stocks are taking the strong dollar on the chin. They are being whacked very hard. DROOY was down to the mid 3.20s today. I added to my trading stock. The trading range may have dropped some, but the drop in price was too steep, too rapidly. I believe the mining stocks are temporarily over sold. However, the bear is firmly in control of the general market. That impacts upon the mining stocks,as well. The rest of this week is a very critical time in the markets. Use great caution and exit as much as possible on any upward move.
Gold was really slammed again today. It is not doing well in Asian trading tonight. It is a bit higher to 713.80 on an up tick. Hopefully, it will have another upward bounce tomorrow, so I can take advantage of the move and sell some of my trading DROOY. We must learn to be very patient in these markets. Wild and bear woolly days are in the offing. Expect volatility and extreme moves.
The DJI had another awful day. It is really getting scary. Halloween has passed, but the fright continues. Perhaps, this is just a hang over of the trick or treating that many of you participated in this year. Actually, I celebrate Reformation Day rather that a day for the Devil. However, the DJI did fall farther into the tank today down some 411+ points. That is a another big bashing for the general stock market.
Here is the Wilshire 5000 which is a broader index for the general market, but it looks even more awful. Sorry that it is not as clear as I would have preferred. However, you can see that it is way below any moving average and is in terrible shape. The red move today was awesome. Expect more!

Well, it remains comforting to know that the one true God of all is in control. We take great comfort in His love for His people and His promises to them. The Bible is full of great blessings that God provides and has for the future in the lives of His people. Praise Him daily and be eternally grateful for His word.

Best to each, Doug

Thanks to God our true and only Savior

Does this graph look familiar? Too bad, but it seems the boyz are at it again. They may be, but with the DJI down 275.34 to 8415, other have had to sell to cover their margin calls. That means more downward pressure on precious metals. DROOY is trading around 3.40 now. I have order in to buy another 500 @ 3.39. Hope to get it for my trading stock. It has been trading in the 3.50+- to 4+-. A nice trading range for some profit on each buy at near low and sell at near high. That is what I am doing! You make your own decisions.

China exports rose 19.2% over those of October, 2007. However, this was down from 21.5% in September, 2008. Inflation has also dropped 4% October, 4.6% September, and 8.7% February. China continues to hang tough with a reasonably good economy. They are in the world with strength of dollar reserves and cash being spent to improve the infrastructure and help provide work for the citizens who are becoming consumers on a grand scale.

Oil is staying around $60 per barrel. Yesterday it was down 3.08 to 59.33. We welcome the relief at the pumps with gas below $2 here. Some stations are still around $2 to $2.09. These seem to be more the exception now.

There was a giant dollar rally on Veterans Day which knocked the Euro down to around 1.25 from 1.31 recently. The Yen held well as it joins the dollar as the center of carry trade based on lower interest rates. Entities borrow at the lower interest rates and invest in higher interest rate debt instruments and pocket the difference. Nice work if you can get it. It is almost as good a the central banks producing currencies out of thin air and lending them to collect real interest payments.

A bailout (rather rescue plan) is in the works for our failed automobile manufacturers. This is simply a method of perpetuating inefficient industries which fail to compete satisfactorily and waste scarce resources in doing so. A free market would let them fail or change their ways for success in the market place. Thus, inefficient industries and other forms of businesses would disappear yielding more efficient use of labor and other resources. But we have not had a free market in about a century. This is true, even when all our problems are said to be caused by capitalism which does not exist or at least only to a very minor degree. Of course, our benevolent government needs a scapegoat to blame for its failure.

Then the Consumer Confidence report is the lowest since 1982. Not really encouraging. However, we must recognize that the consumers no longer have the home ATM for ready cash and most are maxed out on credit.

Many are saying we have reached the bottom of the bear market, but I don't really believe we have. The market is still under a great deal of unwinding. We are also nearing the sell for loss period as folks attempt to save on income taxes and avoid Obama's increased capital gain taxation, if it passes as he has said. His tax package will be devastating in the market place.

Rest assured in the promises of our Sovereign God and Savior. Though the state would present itself as a savior, it is no true messiah. It only seeks to may us slaves which feed at the government trough like pigs. It wants us to be tied to it from the cradle to the grave. It is no fun to be ruled by on out of control liberal government. Turn to the only God of God, Light of Light, Very God of Very God, even Jesus Christ our Lord and Savior.

Best to each, Doug

The Wonderful and the Ugly

First the beautiful: Our God is Sovereign and exercising His Sovereign power in spite of the false gods throughout out world. He is in control and we should all be rejoicing that He is. His is God of gods, Light of lights, Truth of truths, King of kings, Lord of lords, Absolute of what people think is absolute, He is Jesus Christ. The good news of the gospel is that no one comes to the Father except through the Lord King Jesus Christ. Praise Him and rejoice that this is fact. There is no other!

Then the ugly: Lay offs are abounding and on the table for the immediate future. Check it out HERE. Of course, this is not the only bad news as it is all around us. For example, after the Chinese injection of many Renminbi into the market yesterday which gave it a boost, the DJI is now down some 194+ to 8677 (the DJI is now down only 28+). The general market remains in deep trouble. Gold and silver are languishing, as follows: 736.20 and 9.81. Both were up earlier, but have backed off some. Virtually all of the mining and ETF Trusts are off today. All markets remain very volatile, so beware and buy very cautiously, if at all.

I purchased DROOY at an average of 3.56 today for more trading. It remains in the trading range with a low of 3.41 to a high of just above 4.00. If one buys in volume of 500 shares with a low commission, such as $7 from Scottrade, there is room for profit on each swing. This is playing out as a good plan, but beware of being "locked out" should the precious metals sprint forward into the final wave when the lemmings climb on board. By the way, I believe we are some distance from the final wave. We must first face the worsening recession or depression and then begin to experience the price inflation as a result of the vast amount of unbacked paper currencies which are being spread across the world by Central banks and governments. However, even in this, there is a vast difference.

Both Europe and China are dealing from a reserve of strength, while the U. S. is dealing from weakness. This is due to a declining dollar here at home. In fact, if the U. S. were are true business, we would be bankrupt. However, we are dependent upon the world to finance our deficit and support the dollar as the reserve currency. This is subject to change over night. This is the critical danger facing our economy. Were the world discontinue the purchase of our debt instruments, we would be in trouble which is unbelievable. Were the world to refuse to use the dollar as the reserve currency of the world or to dilute it as is rumored by the Euro in Europe and the Renminbi in Asia, we would be in a deep depression.

A deepening recession or depression at this time would be a serious threat. Perhaps, Obama's plan for a security force inside the U. S. would be essential to keep some sibilance of order. By the way, God does not tolerate anarchy. He is a God of order. Remember, He left the pagan nations in the promised land to maintain order and allowed the Israelites to capture the land little by little as they were able. He left the pagan nations until the fullness of there sin and rebellion was achieved, then He used the Israelites to utterly destroy them in accordance with His plan from before the beginning of time as we know it.

We have a bank holiday and there is no mail delivery as far as I know. We are celebrating Veterans Day. It is a day in which we should honor all veterans, but particularly those who participated in W.W.II. That generation sacrificed for years. Those on the home front sacrificed greatly, and of course those on the many battle fields faced death for years.

Wars forever change nations. It is sad, but they tend to make the central governments more powerful and move the power away from the lower levels of government. The War for Southern Independence caused a quantum leap in the power of the Federal Government here in America. That power has grown significantly with each administration from that time forward. Thus, the states which at one time inter positioned themselves between the Federal Government and the citizens of the states were essential to protect the life, liberty, and property of their citizens from the foreign central power have now been reduced to the role of puppets of the Federal Government. The change has made us citizens of the U.S. and not citizens of the state. This has been devastating to our freedom and has moved us ever farther away from the Constitution of These United States ever closer to totalitarian government. The election was lost by the Republicans, because of the quantum leap in this move under George W. Bush.

We must pray that Obama will relinquish much of the unconstitutional power recently grabbed and return us to our Constitution. This would be a great and welcomed change. But we must beware of change only for the sake of change. Any change must be for the better and closely aligned with the Law of God. Else, it will result in more loss of freedom.

Best to each, Doug