God's Law or Chaos - We Now Are In Chaos

Gold is holding up better than commodities. I have advised that my grandchildren move their mutual funds from general natural resources to precious metal miners. Jim Rogers suggests commodities and precious metals. However, I believe the biggest move will be by the precious metals. Above it can be seen that gold is trading on a higher level for the time being.

The mining stocks are holding well, too. DROOY 5.87 +0.08; HMY 9.67 -0.19 (good buying range for me), and VGZ 1.47 +0.01.

Gold is presently 845.50 and silver 11.12 with both on a down tick.
With yesterday's upward move by gold even with the strong dollar, it looks to be moving higher as the year continues. Of course, we should expect corrections, but the upward trend is firmly in place. The precious metals seem to be the place to be with all of the pumping of paper currencies into the financial markets by most governments. Can inflation be far behind? I seriously doubt it. As you shop these days, you can see that some inflation is already in the markets. Though subdued at present, how long can it stay at that level?

From Casey's Daily Resource Plus today: "Despite the 'wonderful' day on Tuesday (to go along with Friday's), the gold price still isn't out of the woods yet. It should be obvious to you that there is a gargantuan 'gold war' going on out there with the Fed (acting through select bullion banks...primarily JPMorgan) going short against all longs. And it's been a success as far as the Fed is concerned. Back in 1981, the gold price hit $850. That's where it is at this writing...28 years later."

From the Economic Times:

US and UK on brink of debt disaster
20 Jan 2009, 0419 hrs

LONDON: The United States and the United Kingdom stand on the brink of the largest debt crisis in history.

While both governments experiment with quantitative easing, bad banks to absorb non-performing loans, and state guarantees to restart bank lending, the only real way out is some combination of widespread corporate default, debt write-downs and inflation to reduce the burden of debt to more manageable levels. Everything else is window-dressing.

To understand the scale of the problem, and why it leaves so few options for policymakers, which shows the growth in the real economy (measured by nominal GDP) and the financial sector (measured by total credit market instruments outstanding) since 1952.

In 1952, the United States was emerging from the Second World War and the conflict in Korea with a strong economy, and fairly low debt, split between a relatively large government debt (amounting to 68 percent of GDP) and a relatively small private sector one (just 60 percent of GDP).

Over the next 23 years, the volume of debt increased, but the rise was broadly in line with growth in the rest of the economy, so the overall ratio of total debts to GDP changed little, from 128 percent in 1952 to 155 percent in 1975. Read the article HERE:

They are telling it like it is. I can only say, "Amen!"

From the Telegraph UK:

Help Ireland or it will exit euro, economist warns

A leading Irish economist has called on Dublin to threaten withdrawal from the euro unless Europe's big powers do more to rescue Ireland's economy.

Read the article HERE.

Walter E Williams in Town Hall this morning:

A Minority View

by Walter E. Williams

President Obama was sworn into office placing his hand on Abraham Lincoln's Bible. That is the last Bible I would use to be sworn into office. You say, "Why? Didn't Lincoln's Emancipation Proclamation free your ancestors?" It all depends where they were living. Let's examine the document's text to see why.

President Abraham Lincoln issued the Emancipation Proclamation on January 1, 1863, which reads, "That on the first day of January, in the year of our Lord one thousand eight hundred and sixty-three, all persons held as slaves within any State or designated part of a State, the people whereof shall then be in rebellion against the United States, shall be then, thenceforward, and forever free …" The key phrase is "in rebellion against the United States" because slaves remained slaves in states not in rebellion. Read the article HERE.

I always appreciate Walter E Williams for sharing his insight. He goes to the heart of every subject upon which he writes.

Here is a portion of the Daily Pfennig: "Back to the markets... Well, the Obama bounce didn't come in the first day of his Presidency, as the Dow sold off by 332 points! UGH! OUCH! That's going to leave a mark! So far, one piece of the Obama bounce, the dollar, has rallied... But the other, stocks, have fallen on their face.... We'll have to see what stocks think about the $850 Billion stimulus package that the Obama team is working on...

Here's the skinny on the package, that could still grow... It certainly isn't going to narrow! The stimulus plan covers 5 areas of spending and tax breaks... Health, education, infrastructure, energy, and support for the unemployed and the poor. All worthy areas... Unfortunately, we (the U.S.) don't have the funds to pay for this... Now... If we weren't already in a huge deficit hole, then a stimulus package to get the economy going might be the answer... But, that's not the case! I told a radio station a week ago that the Roosevelt plan worked back in 1933, but it could have just as well failed, it was that touch and go, and if it weren't for the war it might not have... This time, we're starting in a deep, dark deficit hole... I sure hope it works... I just can't get my arms around how adding $2 Trillion to our national debt this year helps...

How did I get to the $2 Trillion? Well... The Congressional Budget Office (CBO) has already told us the deficit in 2009 would be $1.2 Trillion. Recall I had a cow over that announcement! Well, the CBO's budget forecast does NOT include the new stimulus plan of $850 Billion... I'll tell you what it also doesn't include... Any new military expenses... And the remaining TARP money that the Obama team just came into..."

God in His word tells us to Owe No Man Anything except love. He also told the nation Israel to be ready to lend to all nations, but not to be a borrower. These are very wise words. We, as individuals, our businesses, and our governments, have violated these laws and are now suffering the result of disobedience. There is no way that our national debts will be paid. We will renege on the debt or, at the very least, pay some of it back with less valuable currency.

Since the advent of the Federal Reserve, we have lived under a fractional banking system. The purpose of fractional banking is that every debt has increased the supply of dollars. Remember that the classical definition of INFLATION is and increase in the amount of unbacked currency in circulation. This always results in price inflation which is currently incorrectly called, "inflation." The new definition is a detractor which enables those in government to point toward citizen spending, expanding wages, and business passing high prices into the market place as the cause of the newly defined inflation. In fact, only the government and fractional banking system is capable of increasing the supply of unbacked currency in circulation, but elected officials and bureaucrats do not want to admit their blame.

Back in the 1970s, Vic Lockman produced several pamphlets showing God's word in very practical terms. I always remember this significant title: God's Law or Chaos. What an accurate presentation of God's Law. We either live under God's Law or experience the financial chaos of today. Thus, we are reaping our just rewards for ignoring the Sovereign God of all, including finances.

Let us fervently pray that we as individuals and governments will return to God's Law to pull us out of this chaos. Blessed is the nation whose god is THE GOD: Father, Son, and Holy Spirit.

Best to each, Doug