Thoughts on Markets

Tuesday, November 24, 2009

China - World & Life View - Gold & Silver

China seems to be intent upon becoming, not only a major player in international markets, but the major player. Thus, they continue to purchase gold, natural resources, and to build their military might. The world is facing what we would have called a "Sea Change" not long ago. The temporal world as we know it will be different for our succeeding generations. Thus, we have a very important task which is to prepare them for what is coming.

God, in His wisdom, deals with all people convenantly. He has made a covenant with all people. He says, that if we keep His covenant in obedience to His law, He will bless us. On the other hand, if we fail to obey, He will curse us. In America, today, we are seeing the discipline of King Jesus as a good father would discipline His children to teach them to be obedient.

We, as a nation have turned away from the God who providentially gave us a nation founded, primarily, upon His written word. His word was the foundation for the Godly American Revolution. It was the foundation for the Declaration of Independence and the Constitution.

How many Americans attended corporate worship of God on Sunday? How many of you fathers are raising your children in the nurture and admonition of the Lord? How many are having daily bible study in your home? All of this is essential for our succeeding generations to be spiritually prepare to carry on the Kingdom work for King Jesus. This is also essential in response to the discipline of the Lord for the current healing of our nation.

Further, in preparation of our offspring, it is essential that we equip them financially for the Kingdom work. We must prepare our daughters for marriage and seek to find strong reformed Christian men for them. We must prepare young men to be prepared to be spiritual leaders for there families and the communities. This is an impossible task with our own renewal by the in working of the Holy Spirit and our devotion to the study of God's word and applying it to every aspect of our lives. Without a Godly life and practice, we are lost.

I rest securely in the Sovereignty of the God of all, and even when I fail, He calls me to repentance and a return to Him I praise Him daily for this and pray that each of you does the same. Without this, America is doomed. However, I do believe that God is not finished with America and has great work for us ahead. Will it be our generation or the next, or the next which will return to Him?

Intervention into the markets continues. The bullion banks and our Federal Reserve proxies are still at it. Each time the precious metals have been able to bounce back. We are without a doubt in the second or, possibly, in the early third phase of the gold rise. The last few moves of gold have pushed the metal to new highs intraday and at the close. This is a strong move. While gold would appear to be overbought, it is still from a technical perspective to move upward.

The 3 Year Gold Graph reveals some of the technical perspective. I have indicated some on the graph. Is gold going parabolic? That is the real question. Were it to do so to a high near the end of this year, it would surprise all of us by the height it would reach. If such is the case, we are likely in the third phase. Remember this is real money and will be used to some extent by the first nation to back their currency with actual metal. That is likely to be China. Think about the Renminbi as it would then replace the dollar as the reserve currency of the world. Were this to happen, we would be a has been in the world of finance to a great extent. That is why I am in the precious metals to preserve what little wealth I have.
All of the articles today are very important reads. Check each one!

From MineWeb.com:

Gold: the haves and the have-nots

Possible "bubble" indicators do nothing to dampen investor demand for selected stocks.

Author: Barry Sergeant
Posted: Monday , 23 Nov 2009

JOHANNESBURG -

As dollar gold bullion continues to make fresh records, so investors still chase certain identifiable individual listed gold stock prices to fresh records, and, at the same time, virtually ignore a fairly long list of names that have been effectively binned for the meantime.

At the fundamental level, there are increasing calls to resist the high emotion saturating gold bullion, on the basis of at least some "bubble" indicators floating about. The dollar price has increased from around US$250 over an extended period in and around 2000 to levels now approaching US$1,200 an ounce. Read it HERE.

From MineWeb.com:

U.S. House Fed audit proposal gives gold another boost

While such an event is unlikely in the current form proposed, as is the Fed losing its independence the fact that such proposals have got as far as the senate has given the yellow metal a lift

Author: James Saft (Reuters)
Posted: Tuesday , 24 Nov 2009

HUNTSVILLE, Alabama (Reuters) -

Auditing the Federal Reserve may or may not be a good idea, but one thing seems pretty sure: just discussing it seriously will tend to drive the price of gold higher.

The U.S. House of Representatives Financial Services Committee last week voted to approve an amendment that would bring about an audit of the Fed, its monetary policy and lending programs, since when gold has gone its merry way higher, hitting an all-time high of $1,174 per ounce on Monday.

The amendment, a provision to a broader financial services reform bill that is still under consideration, was co-sponsored by Republican Representative Ron Paul, author of the book "End the Fed," and the man least likely to be found chairing a panel at Jackson Hole or Davos. Read it HERE.

Reported in The Daily Pfennig today: "And then there was this... My "then there was this" today will be a thought from good friend, David Galland on buying Gold... Here's David...

"Buy gold. Unless and until there is an angry upwelling of popular discontent at the growing size of government - and it has to be far more substantive than just a few vocal talk radio jocks, or even 100,000 or so people peacefully gathering on the Mall in Washington DC - the government will continue to grow, or even just keep running at current levels, which means the destruction of the dollar. Many tangible assets will do well, but their intrinsic value as money means gold (and silver) will do best.""

I would second David Galland's advice to buy gold, but I am also interested in silver at this juncture as it has been lagging the price of gold. I believe it will catch up with gold to some extent in the near future. Silver has been suffering the same intervention as gold. The option contracts on silver are very large and likely at an all time high. This is an overhang that the boyz would like to take advantage of soon.


From The Financial Times:

Bets rise on rich country bond defaults

By David Oakley in London

Published: November 22 2009 18:27 | Last updated: November 22 2009 18:27

The mounting level of debt in the industrialised world is prompting a growing number of investors to use the derivatives market to bet on the chance of rich governments defaulting on bonds. This is an important read HERE.

Yes, we could see the U.S. and other nations default on bonds. Unheard of, but very possible.

From GoldenSextant.com:

Viva la Restoration

Gold Conference

Remarks of Robert K. Landis

Zurich, Switzerland, November 17, 2009


Tonight I’m going to approach the subject of gold from a somewhat oblique angle.

Just over a year ago, the United States underwent a seemingly radical change, seemingly overnight. Its financial system had been revealed as insolvent under the weight of huge liabilities and worthless assets. The government refused to allow all the bankrupt institutions to fail, and thus permit the market to do its job of purging the rot from the system.

Instead, the authorities saved their favorites, effectively merging bank with state. They did so under cover of a witches’ brew of subsidies, guarantees and quasi-nationalizations bearing bizarre acronyms like TARP; PDCF; TAF; TSLF; and my personal favorite, the ABCPMMFLF, otherwise known as the Asset-Backed Commercial Paper Money Market Fund Liquidity Facility.

And those were just the visible programs. The Fed, our central bank, dropped interest rates to zero and monetized additional trillions of dollars worth of problem assets, away from prying eyes. The nature and source of these assets remain matters of speculation, because the Fed to this day refuses to tell us what it bought and from whom.

When the smoke cleared, we Americans found ourselves the subjects of a gangster state, in thrall to a clutch of greedy, corrupt and incompetent banks which only days before had failed. We were now the guarantors of trillions of dollars in worthless assets that had generated billions in profits for those same banks in recent years. Their gains remained their gains; but their losses were now our losses. Our money, the reserve currency of the world, was now backed by toxic waste. View the speech HERE.

From The Free Money Gold Report:

Welcome to Stage Two of Gold's Bull Market


November 23, 2009 – Bull markets are marked by three distinct stages, and when gold climbed above $1,000, it only entered its second stage. In other words, gold has much further to climb in the months and years ahead.

So don’t be misled by what you may hear or read in the mainstream media and even much of the alternative media. After all, how many commentators have correctly identified gold’s bull market, now a decade old?

As Robert Blumen cogently argues: “Many of the financial media have a pronounced anti-gold bias. Of the writers and news anchors now calling gold a bubble, not only did they fail to identify the stock market bubble in the 90s or the subsequent housing market boom as a bubble, they actively promoted the excesses of those unsustainable booms, encouraging their viewers or readers to participate. For the most part, these pundits have failed to identify a rising gold price as an investment trend at any point in the past ten years (during which gold had a positive return each and every year).” Robert then goes on to observe the silly incongruity of their warnings about gold: “Witness the irony of the financial media transformed from hypesters who never saw a bubble they couldn’t promote into bubble vigilantes, issuing concerned warnings to ‘get out [of gold], now, before you get hurt.’”


Read it HERE.

Here are the Stocks from Scottrade streaming quotes:

And the Currencies from Kitco.com|

Here are some of the latest quotes: BYDDF 8.10; BULM 0.75; Silver 18.43; Gold 1168; DOW down 28 @ 10423.


Best to each, Doug

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