Look Out Below, The Dollar Will Fall More

Silver currently at 11.18 has moved up again this morning at the opening in New York.
Gold at 857.40 has moved upward. One always wonders if the metals will be allowed to continue to be priced at market levels rather than the manipulated prices.
Platinum is returning to its historic place among the precious metals. It has historically been more pricey than gold except for some days in the immediate past.

Confirming what I reported yesterday on the capping of the precious metals is the following from Casey's Daily Resource Plus: "What we saw yesterday was pure market management by the Fed through their agent JPMorgan. As I've said many times before...no profit-maximizing seller ever sells like this...ever! With the dollar down a full cent...and the financial news over the previous few hours beyond horrific...the equity markets were toast, and there was no way that the boyz were going to let gold, silver, platinum and palladium prices go vertical...which they were all in the process of doing about 8:30 Eastern time yesterday morning. And if you'll pardon my French...every other reason given by the media as to why gold did poorly was pure crap."

Check this out from China's Peoples' Daily:
U.S. blame game cannot change facts of financial crisis
21:20, January 07, 2009
Plagued by the financial crisis that originated in the United States, the world economy has been thrown into chaos. While countries are battling the crisis, outgoing U.S. Treasury Secretary Henry Paulson has been playing a blame game.

Paulson said a failure to address the rise of emerging markets and resulting imbalances was partly to blame for the global financial crisis. The current U.S. Federal Reserve Chairman Ben Bernanke is also part of the game. He sees savings from countries like China as a cause of the property bubble in the United States. Read the article HERE.

From Bloomberg on hoarding of crude:
Oil Traders Seek Another 10 Supertankers for Storage By Alaric Nightingale

Jan. 7 (Bloomberg) -- Oil traders are seeking as many as 10 supertankers to store crude, potentially taking the amount hoarded at sea to almost five days of European Union demand, according to Frontline Ltd., the largest owner of the vessels.

Read it HERE.

Bloomberg on jobless claims:
U.S. Jobless Benefits Program Swells to 4.6 Million By Bob Willis

Jan. 8 (Bloomberg) -- The number of Americans collecting unemployment benefits surged to a 26-year high as the labor market worsened in a yearlong recession.

Initial jobless claims unexpectedly fell by 24,000 to 467,000 in the week that ended Jan. 3, the lowest level in almost three months, the Labor Department said today in Washington. The total number of people getting benefits rose a week earlier to 4.6 million, the most since 1982.

Find the article HERE.

From Mine Web:

BOTH SHOULD DO WELL

Platinum or gold - which will be the better performer in 2009?

The platinum's price's brief dip to a discount to gold between the 12th and 17th December, for the first time since December 1996, did not last long and a premium has rapidly been re-established, reaching $130 just three weeks later. This is small beer by comparison with the $1,288 chasm that was reached on 3rd March 2008. Is there further to go or will gold keep tabs on its white competitor?

Author: Rhona O'Connell
Posted: Wednesday , 07 Jan 2009

LONDON -

The fundamentals behind gold and platinum are totally different, the two only being classed as "precious" metals because of their common link through the jewellery sector and investor interest in coins and small bars (and, in principle, ETFs, although they cover such a wide range of asset classes that this does not really count). Platinum should perhaps more accurately be termed "strategic" rather than precious since it has no real history as a currency and it is not really a store of value; however since it enjoys private investor and jewellery interest this sector is probably a sensible place to start when making the comparison with gold. Read it HERE.

Mid-East could be settling down some according to Yahoo News:

Israelis arrive in Egypt for cease-fire talks

By OMAR SINAN, Associated Press Writer Omar Sinan, Associated Press Writer – Thu Jan 8, 5:19 am ET

CAIRO, Egypt – Israeli representatives arrived in Cairo Thursday for Egyptian-brokered talks on a cease-fire proposal after the U.N. Security Council failed to agree on action to end the escalating crisis in Gaza.

Egypt's top diplomats said Wednesday that talks would be held separately with representatives of Israel, the Palestinian Authority and Hamas on the Egyptian-French cease-fire initiative.

Amos Gilad, a senior Israeli Defense Ministry official, and Shalom Turjeman, a top aide to Israel's prime minister, arrived Thursday morning. The official Egyptian news agency MENA said the delegates will discuss "the basic details on how to implement" the initiative. Read it HERE.

From NASDAQ this morning:

Gold Turns Higher, Rises Above $850

(RTTNews) - Gold prices headed higher on Thursday morning, recovering some of the sharp losses seen the day before. The precious metal's hedge appeal was boosted by a slumping U.S. dollar.

December gold rose to $856.90, up $15.20 for the session. The metal hit as high as $865.30 after earlier falling as low as $836.70.

The greenback fell to a three-day low near 1.3800 against the euro and fell to a three-week low of 1.5373 against the pound. Gold usually moves opposite the dollar as traders tend to turn to the precious metal as a safety option.

On the economic front, a report released by the Labor Department showed first-time claims for unemployment benefits fell unexpectedly declined in the week ended Jan. 3. Jobless claims fell to 467,000 from the previous week's revised figure of 471,000. Economists had been expecting a increase in claims to 550,000 from the originally reported figure of 472,000 for the previous week.

The Labor Department also said that the less volatile four-week moving average fell to 525,750 from the previous week's unrevised average of 552,750.

The U.S. Federal Reserve is expected to release its monthly consumer credit report at 3 p.m. ET on Thursday. Consumer credit for November is likely to show an increase of $0.5 billion.

In October, consumer credit fell by $3.6 billion or 1.6% to $2.58 trillion, with revolving and non-revolving credit declining by $0.2 billion and $3.4 billion, respectively." There site is HERE.

The economic news continues on its run of bad to worse. The dollar will continue to receive torpedoes into its mid-section with the economic reports, the bubble in Treasuries, the trade deficit and the gigantic debt which will never be repaid with anything of value. Our international sources of loans are becoming more concerned over the diminishing value of the dollar. It is likely that we will see a cashing in of the Treasuries as that bubble begins to let out air.

China continues its experiment with the Renminbi as the currency for trade among several Asian nations. They no longer will need the dollar to trade with China. This was reported yesterday, but it will add more to the woes of the dollar.

Precious metals appear to me the safest asset to retain wealth. All of the bail outs and stimulus packages will be a great foundation for inflation. Perhaps, the next bubble will be the precious metals.

Yesterday, the DJI took a big hit increasing the difficulty of accurately determining the direction of the general market. The DJI is down only 46.35 at 8725+ now. It is early, so we will have to give it more time to access it for today.

Mining stocks are holding at the plateau above the last few weeks. My trading stocks are as follows:DROOY 5.59; HMY 10.46; and VGZ 1.35. I did buy some HMY as low as 10.45 yesterday.

Caution is the watch word for all trading in the markets these days. We should be more interested in preserving purchasing power than making what seems to be profit. Let's be quick to sell on increases and slow to buy. As always, I hold onto a core portfolio of mining stocks for the third wave in the precious metals prices.

Thanks be to God for His mercies and grace toward us, a wayward nation. He is always long suffering (patient) with His people. However, He does not hold His anger forever. We must turn back to Him, seek His forgiveness as a nation, and follow His ways in every aspect of our lives 24-7. He will heal our nation when this happens among His people. Let us work constantly for the glory of King Jesus and the spread of His kingdom.

By the way, if you live in the San Antonio area, the annual Christian Film Festival is being held at the Convention Center today, Friday, and Saturday. Independent film producers from all over come to show their movies. Awards are based upon Christian principles contained in the pictures. It is an opportunity for all to see what good movies are in contrast to the normal offerings.

Best to each, Doug