Thoughts on Markets

Monday, July 06, 2009

Another Buying Opportunity with Metals Pushed Down

Both of our metals have been capped again in thin over night trading in Hong Kong. Gold was dropped from about 931 to below 921.

Silver was capped about 13.40 and pushed down below 13. Both have now recovered slightly. Thus, we are being offered a buying opportunity in the mining stocks. I sent out an announcement of my purchases of Helca Mining. All my purchases were executed at 2.54 which, to me, is a great buying price. If the price rebounds quickly, I will be using trailing stops on some of my shares, but not all of them.

China has moved beyond Argentina, much of Asia, Brazil, and now Hong Kong to allow trading in Renminbi. The Hong Kong banks will now be able to have Renminbi as well as Hong Kong dollars. The G-9 meeting will include China. China has a big axe to swing as it grabs more international recognition. They hold a mass of dollar instruments which they are using to buy gold and other natural resources throughout the world. Very likely their gold is ultimately to replace the dollar reserve with the Renminbi. Can it be done? If the financial fiasco continues, they can in time, but not today.

More on California woes from George Will - TownHall.com:
Can California Be Sold On Ebay's Former Leader?
by George Will

California's cascading crises prefigure America's future unless Washington reverses the growth of government subservient to organized labor. The state cannot pay its bills, poorly educates its young, and its taxation punishes whatever success that its suffocating regulatory regime does not prevent.
Read the article HERE.

California is in dire financial condition and the outcome there will have a vast impact upon all state and municipal bonds. If California can go broke, others can and will. Is California too large to be allowed to fall? I don't know, but it would be better if all our governments would shrink in size and intervention into our lives. Perhaps, the financial fiasco will force a reduction in them. Likely, not, because governments can always cancel any debt they owe. At the federal level, they can simply print more FIAT currency to defraud the holders of their debt.

From MineWeb.com:

Trusting in gold - Austria's Erste Bank

Austria's Erste Bank's latest Special report on Gold still rates the yellow metal positively as an investment. A minimally edited version of the introduction to this report is published below.

Author: Ronald Stoeferle
Posted: Monday , 06 Jul 2009

VIENNA -

Since Erste Bank's first Special report on Gold in 2007 when the gold price was USD 650, gold has outperformed almost every other asset class. The gold bull market has been running with an annual performance of 16% since 2001. Gold closed the year 2008 with the eighth annual increase in a row. And in the year to date, the performance has been outstanding as well: the gold price has recorded an increase of 7% (in USD) and 8% (in EUR), respectively. The average price in 2008 was USD 872/ounce, i.e. 25% higher than in 2007 (USD 695). Read the article HERE.

More on gold from MineWeb.com:

PRESERVING PURCHASING POWER

Gold Myth No. 1: Gold is (too) expensive

The following note is abstracted from a Special Report on Gold published by Austria's Erste Bank and written by gold expert Ronald Stoeferle. Other abstracts and analysis from this report will also be published in due course

Author: Ronald Stoeferle
Posted: Friday , 03 Jul 2009

VIENNA (ERSTE BANK) -

One might as well say that it is not the price of gold that rises, but the value of the respective paper currency that falls. Gold preserves the purchase power and in fact even increases it gradually. Comparing how many real assets one ounce of gold would buy in a historical context, can substantiate this statement. Read it HERE.

The above two articles reveal that gold is still treasured by others. The Europeans know the value of precious metals, as they have suffered during two World Wars in the last Century. Gold and precious stones were all that saved many of them during the war years. We have yet to experience the realities of their experience. Thus, our masses have no idea of the value of such items. We must pray that we never suffer as they did.

I rest in the fact that God is causing all things to work together for the good of those He loves. We are likely to experience rougher financial times ahead, but know that He is in control. Praise Him daily for His care and His grace.

Best to each, Doug




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