Metals Still Below Recent Highs - Cautious Buying!
Gold is still dropping, but from a higher level than yesterday. 
The miners are holding fairly well with the metals at these lower levels for the time being. Perhaps, we have reached the summer blahs early this year. It seems that there is weakness in the near term, so we should be very cautious in purchases of miners. The prices today are >> DROOY 9.24; HL 3.00; HMY 10.87; SLW 10.42, and VGZ 2.18. Up a bit from yesterday's lows. From Bloomberg.com:
Medvedev Questions Dollar as World Currency, Open to Yuan Swaps
June 5 (Bloomberg) -- Russian President Dmitry Medvedev questioned the U.S. dollar’s future as a global reserve currency and said using a mix of regional currencies would make the world economy more stable. Russia may consider ruble-yuan swaps. Read it HERE.
This is another nail in the coffin of the dollar reserve. China and several South American countries are already deep into Renminbi swaps. Now Russia is likely to join in. How many more will join with China. These first few small steps may snow ball rapidly. Remember that Brazil replaced the U.S. as China's primary trading partner, that trading is without the dollar.
From Reuters.com:
Top China banker calls for U.S. sales of yuan bonds
Sun Jun 7, 2009
NEW YORK (Reuters) - A top Chinese banker on Sunday called on the U.S. government and the World Bank to sell yuan-denominated bonds in Hong Kong and Shanghai to encourage the development of debt markets in those centers and to promote the yuan as a major international currency.
"I think the U.S. government and the World Bank can consider the possibility of issuing renminbi bonds in the Hong Kong market and the Shanghai market," said Guo Shuqing, the chairman of state-controlled China Construction Bank (CCB), the world's second-biggest bank by market value.
Read it HERE.Is this a challenge or what? The renminbi bonds are likely more sound than the U.S. bonds. Of course, all bonds are suspicious when interest rates are rising, as with the U.S. bonds.
From MineWeb.com:
Why the time could be right for gold mining stocks
There is a correlation between U.S. deficit spending and gold outperforming the S&P 500. This coupled with the Chinese appetite for gold should keep gold and gold stocks attractive to the broader market.
Author: Frank HolmesPosted: Tuesday , 09 Jun 2009
SAN ANTONIO (US Global Investors) -
Conditions have improved for gold equities, and economic policy decisions being made in Washington could further increase the investment appeal of these mining stocks.
The charts below clearly illustrate the relationship between gold-mining stocks and the federal budget. This interesting article may be read HERE.
I have been buying on dips, but am doing it cautiously and incrementally (small bites).
The depression quietly deepens
It is lonely in the diminishing camp of bears, says Ambrose Evans-Pritchard.
Those of us who still question whether the world has purged its toxins are reduced to the same tiny band of moaning Druids from early 2007, when we shook our heads in disbelief as the carry trade swept Iceland to fresh madness and bankers laughed off sub-prime rot at Bear Stearns.We learned then to thicken our skins with walnut juice, lie down in dark rooms, and dissent from Goldman Sachs. Such seclusion is called for once again as Goldman replays its BRIC anthem and raises its oil forecast to $85 a barrel this year, betting that the world will roar back on a tidal wave of liquidity. Read it HERE.
All is not rosy as some would want us to think. Unemployment is still rising, our deficit spending continues, all is not finished in the housing bust, and the sale of Treasuries to support our spending is slowing. The Fed is being forced to buy the Treasuries which do not sell.
From MineWeb.com:
Massey's political contributions prompt landmark U.S. Supreme Court decision
Massey CEO Don Blankenship's political activism generated a landmark Supreme Court decision, which will force U.S. judges to recuse themselves in cases involving legal parties who have financially contributed to their judicial campaigns.
Author: Dorothy KosichPosted: Tuesday , 09 Jun 2009
RENO, NV -
Massey Energy CEO Don Blankenship's political activism might not have only cost his company a $50 million judgment, it gave the U.S. Supreme Court the opportunity to bestow on federal judges unprecedented oversight of judges who must now recuse themselves from a case, "if there is a probability of bias.
Blankenship spent $3 million to elect Brent Benjamin to the West Virginia State Supreme Court of Appeals. At the time, Massey Coal was appealing a $50 million jury verdict for having driven a competitor, Harman Mining, into bankruptcy.
A jury had concluded that Massey drove Harman Mining out of business by acquiring the sole buyer of Harman's coal and then sharply reducing coal purchases. In 2002 the jury awarded $50 million to Harman and its owner Hugh Caperton.
Finally what appears to be a good ruling can be read HERE.
Wow! This on the surface appears to be a great ruling. I pray that all is on the up and up. Apparently, the judges must excuse themselves when a campaign supporter is involved in a case. It would be particularly interesting if a influence free replacement could not be found. What if both parties to the case before the judge are supporters?
From MondayMorning.com:
By Martin Hutchinson
Contributing Editor
Money Morning
The European election result has been met with little interest in the United States; for one thing, the plethora of parties from 27 different countries makes it almost incomprehensible. Yet it continued a long-term, very important trend, which should be hugely interesting to international investors. Read it HERE.
A steady shift to the Free Market in Europe? Can this really be true? Perhaps, small steps in that direction have been taken while we are moving farther and farther from any semblance of a Free Market.
From TownHall.com:
Unfortunately, too many of our public representatives have been corrupted by power and greed or have been pleasing the masses instead of upholding the Constitution and our Founders' vision for America. That is why Gore Vidal once quipped, "Politics is made up of two words: 'poli,' which is Greek for 'many,' and 'tics,' which are bloodsucking insects."
Nevertheless, some politicians have commendably dodged and escaped the perversions that permeate civic offices. As I've mentioned many times before, Rep. Ron Paul of Texas stands as a shining example of one who stands for truth, justice and the American way. His patriot blood is the type we must continue to encourage, elect and infuse back into the system to revive the America our Founders knew.
Three more amigos who fight for America and have proved their commitment to the red, white and blue are John Kasich, Bob Vander Plaats and Judge Roy Moore, all of whom presently are running in gubernatorial races in different states. Read it HERE.
Maybe Ron Paul is receiving a few reinforcements. If elected that would help a good bit. We could even look for more 10th Amendment Resolutions and maybe some with teeth. That would be great!
As we grow to know the Sovereign Lord of all, we learn to trust in Him for the future. We can depend upon His word and realize that He is working all things for our eventual good. We know that He balances the books in the end. Thus, we know that history is moving the way He has ordained and than nothing can change His plans. His Father has placed all under the feet of His Son, Jesus Christ. His people are brothers and sisters of Christ. Therefore, we are joint heirs with Christ and will participate in all the benefits of His inheritance. What a blessing that is! It gives us a great sense of peace in spite of set backs, challenges, and threats of the present time. We are to be still and know that He is God.
Best to each, Doug
posted by Doug @ 8:45 AM
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