Thoughts on Markets

Wednesday, November 25, 2009

National Repentance is Essential - Gold Rompts - Silver Struggles

Gold touched above 1180 at NY opening. It moves relentlessly higher. Of course, there should be lighter trading in the markets today and Friday morning as traders enjoy the holidays. This is often the time to make good buys or, at times, to sell losers at higher prices ahead of the year in tax selling season.
The boyz seem to be really after silver this time around. I bought silver eagles at 21.10 including shipping yesterday, because I believe we will see a big jump in silver as it moves to catch up with gold in the near future. This can occur at any time. Silver seems to being capped at 19 now. Each new time around the cap appears to be moved a bit higher. It has remained above 18 for three days of trading now. That is a step forward.


A Minority View: Voluntarism or Self-Interest?
by Walter E. Williams

How many things in our lives would we like to depend upon the generosity and selflessness of our fellow man, and do you think we would like the outcome? You say, "Williams, are you now putting down generosity and selflessness?" No, I'm not. Let me ask the question in a more direct way. Say you want a nice three-bedroom house. Which human motivation do you think would get you the house sooner: the generosity of builders or the builders' desire to earn some money? What about a nice car? Which motivation of auto companies and their workers do you trust will get you a car sooner: the generosity of owners and workers, or owner desire for profits and worker desire for wages? As for me, I put my faith in people's self-interest as the most reliable way to get them to do what I want and believe most other people share my faith. What would your prediction be about the supply of housing, cars and most other things if Congress enacted a law mandating that a house or car could only be donated, not sold? If you said there would be a shortage of houses and cars, go to the head of the class. Read it HERE.

Economist Walter E Williams is a sound Economist from the Austrian School of Economics and a supporter of a return to our Consitutional government. He is always worth reading.


Relentless upwards drive for gold - will something give?

The gold price is continuing its upward drive and talk of a price bubble is seemingly having little impact.

Author: Lawrence Williams
Posted: Wednesday , 25 Nov 2009


The gold price seems to be continuing in its almost relentless upward push which has been under way since it broke through the $1,000 barrier at the end of September. Every time the price stutters big money buying seems to come in to support the new status quo, which suggests there is far more to this than just normal investment demand. Indeed the previous big drivers in the form of ETFs and ETCs no longer seem responsible for the big price upturns, although some new increases have again been seen recently, so it is metal purchases which seem to be the root cause - but who is it who is buying?

The general Western investment public is probably not the source of most of the money going into the yellow metal. Read it HERE.


Have Central Banks lost their desire to cut gold reserves?

With India leading the charge a desire not just to be conservative but also to been seen as conservative will see central banks helping bolster the gold price.

Author: Geoff Candy
Posted: Tuesday , 24 Nov 2009


Russia's announcement Tuesday that it will buy some 15.6 tonnes of gold further reinforces a growing trend among central banks - a distinct lack of selling.

Indeed, if anything the trend is exactly the opposite, underlined by the massive purchase of some 200 tonnes of the IMF's gold by the Reserve Bank of India. So where does this leave the third, and latest Central Bank Gold Agreement (CBGA) that sets out the timetable for official gold sector sales?

Consultancy, VM Group, in collaboration with BNP Paribas, asks this exact question in its latest Yellow Book report on the gold sector. It points out that there are only two major changes between CBGA 3 and CBGA 2: the ceiling on central bank gold lending has been dropped and the annual sales limit has been reduced from 500 to 400t/year.

As the VM Group points out, while not a signatory, the IMF is the only significant confirmed seller of the yellow metal. Which makes the statement that the IMF's sale can be "accommodated within the above ceilings" a huge understatement. Read it HERE.


Russia's central bank bought 15.6 tonnes of gold in October

The purchase pushed up the country's gold holdings by 2.6%; bank says it aims to increase gold's share in its reserves this year

Posted: Tuesday , 24 Nov 2009

MOSCOW (Reuters) -

Russia's central bank gold stocks rose by 0.5 million ounces (15.6 tonnes) or by 2.6 percent in October to 19.5 billion ounces (606.5 tonnes), data on the bank's web site showed.

Russia's central bank has said it aims to increase gold's share in its reserves this year to keep its investments diverse. The metal is also seen as a safe-haven at times of financial market turbulence and economic crisis -- a status which has helped send the price of gold XAU= to record highs this year.

The web site said the total value of gold in the bank's stocks rose to $20.4 billion at Nov. 1 from $18.8 billion a month earlier. Gold made up 4.7% of Russia's total gold and foreign exchange reserves -- the world's third largest -- which stood at $434.43 billion at the start of November. Read it HERE.

Perhaps, the banks are wiser than most Americans. See the U.S. Dollar to Gold graph, below. Which would you rather be holding: the depreciating dollar or the precious metal? Think about it.


Which of the “Rich Four” Countries Will Default First?

By Martin Hutchinson
Contributing Editor

Money Morning

Volume in the credit default swap market for rich countries has soared and so have credit spreads, according to a recent Financial Times story, while volume in emerging markets CDS has stagnated. In other words, traders are betting against the governments with high budget deficits, like Britain and the United States, as well as against those with high debt levels, like Japan and Italy. Read the thoughts considering an answer to the headline question HERE.


India plans to buy more gold from IMF

The move to gold continues!

The miners from streaming quotes:

The Currencies from

BULM is 0.80; BYDDF is 8.50; DOW is up 47 at 10480; Gold is 1184.30, and silver is 18.73.

Folks, we need to heed God's word in 2 Chronicles 7:14. If "My people humble themselves and pray, and seek my face and turn from their wicked ways, then I will hear from heaven, will forgive their sin, and will heal their land." Do not think that since this is from the Old Testament and not applicable today. Ask yourself what part of the Bible did the Apostles and early church use before they had the Apostles letters? What part of the Bible did Christ use? You must see that the whole Bible is the word of God.

While it is true that God is long suffering and patient with His people, His patience is not eternal. He has wiped out nations which were disobedient to Him throughout history. He even destroyed His chosen nation of Israel in 70 AD. He will destroy America unless we return to Him. I believe there is great hope for America since I believe that God is not through with America. Let us heed His call to repentance and restore the glorious dream of our forefathers in seeking to further the kingdom of God.

Best to each, Doug


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