Above is the miners ETF which shows that the prices of the mining stocks is following the pattern of the Gold Trust Shares, but the swings are not a great. Thus, the prices of the mining stocks is more stable than the price of gold, itself. We have moved onto a higher plateau of stock prices. The range has been narrow, and it is prudent to wait and see what range will be established.
The Gold Trust Shares are showing either a bearish double top or a bullish "W" formation. Which is it? I would opt for the W, but then I am not in control. We must wait and see.
Gold was pushed down at the London opening again early this morning. It appears to be moving upward at present, but too early to tell for certain. Gold is 847.30 and silver 11.13 with both on down ticks.I am still holding off on further purchases of mining stocks as the prices are a bit higher than I would like to pay. If the have, in fact, moved to a higher plateau, my thinking will have to be revised. The stocks for my recent trading are DROOY 5.73; HMY 10.30, and VGZ 1.25. VGZ has been quite strong lately and is up 0.01 again today. The silver stocks CDE up 0.03; PAAS up 0.58; SLW up 0.04, and SSRI up .078 are all showing more strength as silver is struggling to stay above 11.00.
From the UK Telegraph last night:
Italian bond scandal could ensnare banks
Several high-profile banks, including Deutsche Bank and UBS, could be caught up in lawsuits over lending agreements with Italian local governments.
According to some estimates, Italian authorities could be sitting on €35bn (£33bn) of liabilities relating to bonds they took out in the 1990s, which could turn into Italy's biggest financial scandal since the Parmalat fraud.
Milan has said it is considering legal action against a group of lenders – Deutsche Bank, JP Morgan Chase, UBS and Dublin-based Depfa, part of Germany's Hypo Real Estate. The group struck a deal to help Milan manage repayments on €1.7bn of bonds it bought to finance public spending.
You can read the article HERE.
From Market Watch:
Gold glitters, but some bugs are cautious
Commentary: More radical bugs suspicious of the reasons behind price rise
Moreover, for gold bugs focused on the traditional view of the metal as an inflation hedge, the macroeconomic outlook can only be described as absurdly favorable.
GoldMoney's James Turk says in his Jan. 2 commentary: "The outlook for the U.S. dollar continues to worsen as ... the Fed's zero-interest-rate policy removes any incentive to hold dollars in an environment where ... rapid money growth portends a surge in inflation.
Read it HERE.
From Casey's Daily Resource Plus:
"In January 1980, just before the Federal Reserve avoided an inflationary catastrophe, the gold price peaked at $875. That is $2,430 in today’s dollars. But the pools of speculative capital are much larger now than in 1980. A true gold bubble could well leave this benchmark far behind. - Martin Hutchinson, N.Y. Times, January 1, 2009"
From MineWeb today:
Gold will win the battle of the safe havens
Ultimately, as the realisation worldwide materialises that the U.S economy is hugely overstretched, gold will come to the fore as the true safe haven - but it may take some time to do so.
Author: Lawrence WilliamsPosted: Tuesday , 06 Jan 2009
LONDON -
The gold price is already showing signs of volatility in the New Year with the price rising strongly at the close of 2008 and the first couple of days of 2009 and then falling back fairly sharply. We seem to be looking at gold as usual as a play on the strength of the US dollar against other currencies and to predict the gold price movement this year and beyond will probably be, in reality, largely an exercise in predicting how the dollar will fare. However, the gold price may also be stimulated by other factors from time to time, which could cause sudden sharp upwards or downwards movements.
The article is HERE.
From Monday Morning today:
Tuesday, January 6th, 2009
U.S. Banks Refuse to Detail How They're Spending Federal Bailout Money
[This is the fifth installment of an investigative series in which Money Morning examines how U.S. banks are using federal bailout funds.]
By William Patalon III
Executive Editor
Money Morning/The Money Map Report
After receiving hundreds of billions of dollars in taxpayer-funded federal bailout money, the biggest U.S. banks say they can’t track how that money is being spent. Some of the banks are outright refusing to discuss the matter, a new study has found.
The complete article is HERE.
Even Toyota is having trouble moving vehicles off the sales lots. They are planning a shut down of production for several weeks over the next two months or so. Guess all will be offering real, not fake discounts in the near future. Will that move the inventory? Perhaps, but the discounts must be much better than "our workers prices."
Other retailers are struggling, as well. The consumer is just not out there shopping 'til they drop and the retailers are crying in their beer every night. China's exports have dropped a good bit, too. The problem is world wide.
Of course, Keynesian Economics believes that consumer spending is the key to economic growth. NOT! It is savings and investment which provides the capital for banks and businesses and economic growth of true wealth. Most of what consumers purchase is consumed. It does not add to the wealth of nations. Regardless of fact, the Keynesians rule the day in virtually all governments.
All of the present and proposed bail outs, stimulation packages, and other give always of taxpayer dollars will simply add to our debt. The Federal Reserve has dedicated itself to do what ever is necessary to curtail the recession and avoid depression. We have yet to see success in this, but those in power are hopeful.
Most, if not all of this is seen as the folly of man by the Sovereign God of all. He is letting us have our own way. We are in a state of the blind leading the blind. Perhaps, our leaders have been blinded by the power of God to demonstrate their folly. Nothing short of returning to God by our nation will truly bless America with the glory which once was.
Let us humble ourselves before King Jesus, prayerfully seek His forgiveness, turn to His ways in all areas of life, and work for the further of His kingdom. Then He will heal our land. Blessed is the nation who God is the Lord.
How little time we spend studying the Bible. May the Holy Spirit move each of us to get more deeply into the word. We must so fill our lives with the word of God that we will not sin against Him.
Best to each, Doug
posted by Doug @ 8:21 AM
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