We Must Trust in the Lord - Miners Still Strong

Here is a beautiful graph revealing the strength of the miners. This is the good news. Now for the bad.
This is one of the nastiest graphs I have seen in a while. That should give you all kinds of confidence in the "almighty" dollar. NOT!
Gold is still holding up very well. The bullion banks are holding off for the time being. They can turn this around at any time they desire. Why are they holding off? Who knows, not I. Of course, we know that our Sovereign God knows. I will wait as patiently as possible to see what He has in store for us.
Silver is still holding above 14 which is good. For how long? I don't know.
Here are our miners: DROOY 9.36; HL 3.09; HMY 10.59; SLW 9.03, and VGZ 2.32. They are still very strong though off slightly today. The Dow is off 141.22 to 8284+.

From Reuters.com:

Wary of U.S. debt, China shifts gears on investment
Tue May 19, 2009

By Simon Rabinovitch - Analysis

BEIJING (Reuters) - China has engineered a subtle yet significant shift in the investment of its foreign exchange reserves, a sign of how it is willing to act on concerns about financing an explosion of U.S. debt.

Beijing has been far and away the single biggest foreign buyer of Treasuries over the past year, but this apparent vote of confidence belies how it has turned its back on long-term U.S. debt in favor of shorter maturities.

China's move to the shorter end of the U.S. debt spectrum is a defensive tactic adopted by the wider market as well on the view that the United States will have to raise interest rates down the road to control inflationary pressures when the economy recovers from the financial crisis. Read it HERE.

This consistent with the Chinese moves to trade with Asian and South American trading partners in their own currencies rather than the dollar. China is moving away from the dollar. How long will they continue to buy our debt? It looks as though the time is getting shorter. Then who will support our spending binge? The day is coming. I believe it is probable this year or next.

From CNBC interview with Jim Rogers:

Another Bottom for Stocks Coming

The stock market may hit new lows this year or the next as the current rally has been largely caused by the money printed by central banks and fundamental problems remain unsolved, legendary investor Jim Rogers told CNBC Wednesday.

His views echo those of renowned bear Marc Faber, who told CNBC last week that the rises in share prices did not mean the world was embarking on a path of sustainable economic growth.

"I'm not buying shares if that's what you mean. Not at all," Rogers told "Squawk Box Asia."

"The bottom will probably come later this year, next year, who knows when," he added.

Governments have not solved the essential problems that caused the crisis but instead they "flooded the world with money," according to Rogers. Trying to solve the problem of too much consumption and too much debt with more consumption "defies belief" and will not work, he said. Read the article HERE.

While CNBC is not the best business news in town, when Jim Rogers speaks, we should listen.

From Bloomberg.com:

Saudi Arabia’s Dominance Challenged as U.A.E. Rebels

May 21 (Bloomberg) -- The United Arab Emirates is rebelling against Saudi Arabia’s dominant role in the Gulf, pulling out of a single-currency project after the Saudis won the right to host the central bank.

Unless a compromise is found, the U.A.E. withdrawal will effectively end the Gulf Arab dream of creating a monetary union for a group with a combined gross domestic product of $1.1 trillion.

The dispute threatens to set back integration among the six nations of the Gulf Cooperation Council and their desire to adopt a monetary policy independent of the U.S. as they face the global financial crisis and a perceived threat from Iran.

“Saudi Arabia will have to show it understands the concerns of its smaller neighbors to continue on the path of unity for the GCC,” said Jean-Francois Seznec, an expert on the Gulf oil monarchies at Georgetown University. “The U.A.E as well as other countries wants to be taken seriously now.” Read it HERE.

Talks broke down, but the trend is still there. Replace the dollar is the cry! It will come.

From MineWeb.com:

Metals and minerals commodities prices to experience summer doldrums, but rally again in Fall

In the latest Scotiabank Commodity Price Index, economist Patricia Mohr suggests recent uranium prices of US$40-45 were unsustainably low, given the high capex cost for uranium mine development.

Author: Dorothy Kosich
Posted: Thursday , 21 May 2009

RENO, NV -

While investor interest in commodities and China's demand may taper off in late summer, Scotiabank economist Patricia Mohr suggested Wednesday prices will likely rally again in the Fall.

Mohr advised three key developments will cause prices to rally:

1) The Asian tigers are likely to lead word economic recovery, with larger fiscal stimulus programs than in the G-7 and more potential for domestic spending (i.e. npn-export led expansion);

2) The reflation trade-investment managers and hedge funds positioning portfolios to take advantage of rising commodity prices and potential inflation as the world economy reflates over the next two years. Mohr noted that price targets for Canadian mining equities "are already being boosted to mid-cycle levels."

3) A growing interest in ‘hard assets' rather than ‘paper' currencies or U.S. treasury bonds by China and sovereign wealth funds, "as evidenced by China's huge direct investment in Australian mines and interest by Asian utilities (South Korea, Japan and possibly China) in locking up guaranteed supplies of uranium through equity investment in Canadian mines." Read it HERE.

From MineWeb.com:

Gold finding support at prices around $900

Over the past couple of weeks the gold price has been resilient at a time when weakness might hav been anticipated. Buying on any weakness is recommended.

Author: David Levenstein*
Posted: Wednesday , 20 May 2009

JOHANNESBURG (South African Gold Coin Exchange) -

Although many gold commentators including myself have been expecting to see the gold price soften in the short-term, the price of the precious metal has been extremely resilient over the last few weeks, and is showing signs of good support at prices around $900. Each time gold has dipped below $900 it has recovered very quickly, even though there are certain fundamental reasons which should, under normal circumstances, put pressure on the gold price.

Despite the fact that certain central bankers have indicated that there are some encouraging signs of a recovery and despite the fact that risk appetite for equities has made a comeback over the last several weeks, gold has remained steady. Often, investors tend to sell gold to raise cash when they expect higher returns in other markets, such as equities and currencies, there has not been any evidence of any major selling of gold. Read it HERE.

It is good to end on a cautious note. These markets are very risky. One is wise to be cautious and to use trailing stops on a portion of even the mining stocks. I used them this week and lost some shares I did not want to sell. However, I am happy to have the profit and the cash for repurchasing should the prices drop down again.

I know that I am learning more about trusting in the Lord for security and His blessings. He seems to only provide that for which we can be trusted for stewardship. He also provides the Holy Spirit to teach us as we study the scriptures and learn to apply it is our lives. What a blessing this is to each one who diligently studies and follows the word for all of life. We must continue building the City of God and move away from the City of man which is actually the domain of Satan. As we grow in the likeness of Jesus Christ, we learn to trust in Him and await His answers in HIS time.

Best to each, Doug