Time for the Alpha Strategy? - You can do it!
Both metals are turning upward today and that will have a positive impact upon the price of the miners. Gold is 926.50 up 9.10 and silver is 41.06 up 0.30.
The miners are responding. Here are a few >> DROOY 8.56; HL 3.00; HMY 10.48; SLW 8.97, and VGZ 2.19. The DOW is currently 8472.58 off 32+.From Money.ninemsn.com:
PRECIOUS-Gold firmer after U.S. housing data
* Holdings of SPDR gold ETF
* Higher oil reflecting potential inflationary pressures
* U.S. housing starts fall to record lows in April
By Veronica Brown and Jan Harvey
LONDON, May 19 (Reuters) - Gold was firmer in Europe on Tuesday as an unexpected fall in U.S. housing starts to record lows in April sharpened risk aversion, but gains were limited as the dollar trimmed losses against the euro. Read it HERE.
The precious metals are still suffering some from the hammering of yesterday. The boyz have very deep pockets and move in concert with the desires of other banks and the governments, so they have a great deal of power over the price of metals and can virtually act at will. Else, the price of the metals would be staggering.The bank stress test comment reported in The Daily Pfennig today: "But just for kicks... Here's a sample of the stories I'm talking about... Put away the sharp objects before reading, we don't want any injuries.... This is... Howard Davidowitz, Chairman of Davidowitz & Associates, talking... (NOT ME!) "The stress tests were a sham and part of a "con game to get private money to finance these institutions because [Treasury] can't get more money from Congress. It's the 'greater fool' theory. We're now in Barack Obama's world where money goes to those that should never receive a penny....we're bailing everyone out. The bailout money is in the sewer and gone."
Was there ever a doubt about the government's stress test? They simply did not want to trash all the markets with the truth. But our government would never lie, would it?
From Reuters:
UPDATE 2-Mexico Penoles lifts force majeure at MetMex plant
Mon May 18, 2009
MEXICO CITY, May 18 (Reuters) - Mexican miner Penoles, which operates Latin America's largest metals refinery, said on Monday it was lifting a declaration of force majeure following a strike that shut down its precious metals unit.
Some 300 striking workers in the gold and silver refinery section of the sprawling MetMex metals complex in northern Mexico laid down tools on Feb. 8, demanding a salary increase of up to 9 percent. Read it HERE.
From TimesOnLine.com:
Leon Panetta's mission to stop Israel bombing Iranian nuclear plant
We should praise the Lord for one congressman who speaks the truth on money. He has consistently been a hard money man pushing for the "coined" money of gold and silver as required by our Constitution.
From The Business Insider:
Rick Santelli Says: Watch This Video Of A Clueless Fed Inspector General!
No fan of the Federal Reserve, CNBC's Rick Santelli is eager to highlight anything that shows just how corrupt and counter-productive the organization is. In one of his classic rants, the Chicago bond guy said to search YouTube for "Elizabeth Coleman Inspector General" to see just how clueless the person tasked with monitoring the Fed actually is. Here you go. It is pretty much a train wreck. See it HERE.
This is really worth a listen. It is right on!
From Ted Butler:
TED BUTLER COMMENTARY
May 18, 2009
Silver Surplus?
(This essay was written by silver analyst Theodore Butler, an independent consultant. Investment Rarities does not necessarily endorse these views, which may or may not prove to be correct.)
First, a quick word on the current market structure, according to an analysis of the most recent Commitment of Traders Report (COT). The $2+ rally in silver prices off the recent lows was as a result of paper trading on the COMEX between the commercials and speculators, and not due to any notable developments in the real world of supply and demand. Read the article HERE.Ted gives insight into the manipulation of the precious metals markets. We know that the graphs clearly indicate not for profit intervention. He has the knowledge and shares it with us.
From other reports I am reading the Chinese continue to buy our debt, but they are using the dollars and dollar instruments to buy commodities and property throughout the world. They are the growing power in the world today. God seems to be taking the baton from us as we have turned our back on Him as a nation and is giving it to the pagan Chinese. They are also spending heavily in a military build up with emphasis upon submarines.
As it appears now, China will continue to grow to higher standard of living while we will decline. Currently, we are in a race between depression and price inflation. With the multiple trillions of dollars being spent and use for bailouts, there is bound to be an inflationary bias.
Foreclosures and bankruptcies decrease the money supply through the contraction of debts. The severe unemployment which must be in the actual range of 15-18%, though reported much lower by the manipulated statistics of government, will certainly slow price inflation. People who are unemployed cannot spend very much. I expect that we will have a combination which will result in an economy of stagflation. Prices will be rising, but the consumer ability to spend will be decreasing.
In view of this situation, prudent following of God's Law-Word would cause us to study the situation of Israel and the famine. It should cause us to study Joseph's wise instruction to Pharaoh to store up food for the coming famine. It is in this way that God provided for his people and for a reunion with Joseph.
John Pugsley wrote the Alpha Strategy in the mid 1970s. The concept was to store up durable necessary consumables during the early phases of inflation (stagflation) and then use them as needed. This was done by stocking up with items that were on sale by buying more than was actually needed for the immediate future. Then later as the prices increased, you could avoid paying the increased price and use from your stash.
This was a wise strategy for the time, and I believe it is wise to do so today. When you save dollars for future expenses, you are building a reserve of cash to spend on future consumables. However, if these dollars are earning for you, there is an income tax liability which reduces the dollars available to you. So why not just purchase the consumables at lower prices and use them as the prices rise. Thus, you have a return on your investment without the negative result from taxation.
We could, also, face a time of shortage which would prove a great advantage to stashed resources. Think about these aspects and act upon them to the extent that you comfortably are able. As always, plan carefully, commit your plans to the Lord, and depend upon Him for security and success.
Best to each, Doug
posted by Doug @ 7:50 AM
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