Metals UP, UP - Dollar Down, Down, Down
The South Korean Pension Fund is reducing exposure to Treasuries joining China, Russia, and others in a move away from the dollar.
Silver is up 25% this month. It is out shining gold. Likely due to its dual role as a monetary metal and a commercial commodity.
Euro is up to $1.412 and seems to be holding fairly well. Thus, the dollar is dropping again.
DOW is up 25+ to 84330+. Where will it go today? We must wait and see.
Wow! The miners are really shooting upward. Here are a few: DROOY 10.13; HL 3.65; HMY 11.92; SLW 10.48, and VGZ 2.66. Folks, the is getting scary, because we have not had another correction for consolidation prior to the upward surge. There could be a profit taking release in the near future. However, I always wonder if this is the 3rd Phase taking over. I did not believe that it would come this quickly. But our precious metals are also sprinting upward.
Look at gold. Up well above 975 early and now still 975.30 up 16.30.
Here is silver above 15.50 early and now 15.43 up 0.28. 
From Telegraph.co.uk:
Bond markets defy Fed as Treasury yields spike
The US Federal Reserve may soon be forced to launch fresh blitz of quantitative easing whatever the consequences for the US dollar, or risk seeing economic recovery snuffed out by the latest surge in long-term borrowing costs.
Yields on 10-year Treasury bonds have risen relentlessly since March when the Fed first announced its plan to buy $300bn (£188bn) of US government debt directly, a move that briefly forced rates down to nearly 2.5pc, a level thought to be the Fed's implicit target. Read it HERE.The Fed and our Federal Government care nothing about the trashing of the dollar. Here comes more putting the precious metals in ever better positions as inflation hedges. There is no doubt that we are headed for price inflation as a result of the increase in the supply of dollars. It is apparent in groceries today and spreading across the spectrum of consumer prices. Have you noticed that air fare specials are not as special as they were two months ago? Another downside is the fact that interest rates on Treasury issuances have been rising. That will put increased pressure on housing sales. Mortgage rates will move up again as the manipulation by the Fed fails, again.
From MondayMorning.com:
Obama Stimulus May End Up Hurting the Economy it Was Supposed to Have Helped
By Martin Hutchinson
Contributing Editor
Money Morning
Could the massive Obama stimulus plan end up hurting the U.S. economy?
It’s long been a worry, and now it’s beginning to seem possible.
The latest housing reports suggest that the recent rapid run-up in 10-year Treasury bond yields may be having an unhealthy effect on the U.S. housing market. That tells me that - although home prices are back to their long-term average in terms of earnings - we may not yet be close to the price bottom. Read it HERE.
This is most likely!
The other day I sought a respite from current events by re-reading some of the writings of 18th century British statesman Edmund Burke. But it was not nearly as big an escape as I had thought it would be.
When Burke wrote of his apprehension about "new power in new persons," I could not help think of the new powers that have been created by which a new President of the United States -- a man with zero experience in business -- can fire the head of General Motors and tell banks how to run their businesses. Read it HERE.
Remember, the difference between socialism and communism is that the government owns and controls more businesses.
From ChinaDaily.com:
Gold fever grips Chinese investors
By Wang Ying (China Daily)Bitten by the gold bug, Chinese investors are now rushing to hoard the yellow metal as fears over the global recession deepen.
The increased sales of gold bars and gold jewelry in Shanghai, Beijing, Guangzhou and other large cities are reflected in the precious metal's price surge on the Shanghai Gold Exchange (SGE), which trades in gold contracts for forward deliveries. Gold prices quoted on the SGE have increased by an average 6.74 percent in the past month to the current level of about 209 yuan a gram.
"Gold demand in China in the first quarter rose to 114 tons, up 2 percent over the same period last year, solely boosted by an increase in jewelry demand," according to the latest Gold Demand Trends report for the first quarter of 2009 published by the World Gold Council." Read it HERE.
First, the Chinese government and now the Chinese, themselves, have joined in the "gold rush." That will add a great deal to the demand side of the economic equation with more upward pressure on the price. That coupled with a weakening dollar should send the price of gold up a great deal from where it is now. However, lurking in the background is the potential of doldrums during the summer months.
Why are the Chinese Buying Gold?
Eric Fry, reporting from Laguna Beach, California…
"Hey Rude readers, can you see the chart below? The Chinese can see it to…and that may be a big part of the reason why the gold price keeps marching steadily higher.
The Chinese can see that U.S. dollars – like all the rest of the world’s paper currencies – tend to lose value over time…lots of value. The Chinese can also see that the current crop of American leaders is implementing policies that will likely accelerate the dollar’s decline.
American politicians, Federal Reserve appointees and Treasury officials are united in their efforts to counteract the forces of recession. Their weapon of choice: dollar debasement. From behind the ramparts of New Era acronyms like “TARP” and New Era euphemisms like “quantitative easing,” the Fed and its comrades-in-arms hurl trillions of dollars of currency and credit toward the enemy…hoping to scare it into retreat."We should be joining them in mining the precious metals and mining stocks. Both will benefit from the "gold rush."
From MineWeb.com:
S&P '09 gold, copper and nickel base price assumptions raised
S&P has revised its base-case metals price assumptions in response to changes in metals commodity prices, increasing price assumptions for nickel, copper and gold.
Author: Dorothy KosichPosted: Friday , 29 May 2009
RENO, NV -
Standard & Poor's Thursday increased its 2009 price assumptions for copper, nickel and gold, citing higher market prices year-to-date, and also futures prices.
However, S&P Credit Analysts Alex Herbert, Donald Marleau and Emmanuel Dubois-Pelerin lowered their 2009 price assumption for aluminum "due to ongoing weak demand and supply."
"Generally, we continue to expect near-term prices for base metals to be relatively weak, as demand in industrial end markets such as auto and construction remains depressed due to the global slowdown. Despite production cutbacks by companies in response to the difficult industry conditions, which are partly due to cash losses being generated by high-cost assets, we see that inventories are still high in certain segments," the analysts advised. Read it HERE.
From USA Today:
IRS tax revenue falls along with taxpayers' income
By John Waggoner, USA TODAYWhen the economy slumps, so does tax revenue, and this recession has been no different, says Kerry Lynch, senior fellow at the AIER and author of the study. "It illustrates how severe the recession has been." Read it HERE.
From Brasscheck.com:
Take a break from the markets and listen to this video which warns us about the bad effects of processed sugar HERE. Most of what I have heard of this video is good. Check it out and let me know what you think. It does advocate vegetarianism, but provides good reasons. Beyond that, it covers the dangers of current milk. I believe we would all be healthier if we would consume more raw veges. Think healthy and live a better life.
Folks, While I believe that a healthy diet is important for us, I know that the health we enjoy is totally up to our Sovereign God. But in Proverbs 21:31 He tells us, "The horse is prepared against the day of battle, but victory is of the Lord." Thus, He expects us to do the best we can in concert with His word. But we are to give Him the praise for the results of the effort, because it comes from Him. We must always work for the glory of God. Praise Him daily.
Gold up18.80 to 977.80 and silver 15.51 up 0.36.
Best to each, Doug
posted by Doug @ 7:53 AM
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