Unbacked Paper Currencies Forbidden - Gold is HOT!

God's word speaks very strongly against the use of unequal weights in monetary transactions. He told the nation Israel that they should not even have such weights in their homes. He knows people! He knew that rather than through such weights away or destroy them, people would keep them in the home as reminders of the past evil sin. He knew that the very presence of the unequal weights would be a temptation for all, and that many would yield to the temptation.

When the founders of our nation wrote the Constitution, they gave the power to COIN, not print money, to the Congress. As Rushdoony reported in his American History series, the colonist were familiar with FIAT paper currency. They had used it to pay the English traders for merchandise brought over by ships. The traders would object, this was legal tender in the colonies, but worthless anywhere else. The traders would go home to England and King George would forbid the colonists from issuing that currency. However, the communication process was slow, so the colonists had months in which they could use it. When the order came, they would issue, not the same, but another Fiat currency and the slow process would be a repetition of the past.

Yes, they were aware of the dangers of paper currency and sought to disallow it in the new nation. However, in the enlightened age in which we live, our leaders have violated God's Law and the Constitution by issuing unbacked paper currencies. Thus, we have the financial fiasco of the present. We will not be out of this trouble for some time. God must be rollicking about in Heaven as He looks upon this folly of man. Unbacked paper currencies are a violation of God's Law forbidding the use of unequal weights. In fact, the value of such currencies has been ever changing in concern with the whims of man.

God's word is replete with examples of the use of gold and silver as real money. This is real money and provides the stable currency for all. It provides more freedom for man and this is what governments fear the most.

The bail outs continue to put dollars and other paper currencies in different banks, financial institutions, and assorted businesses. Still the credit crunch remains stubborn. Consumers do not want to borrow and lenders are reluctant to lend unless the potential borrower qualifies at higher standards. So nothing happens except for the explosion of paper currencies. This inflation is bound to result in price inflation and in the not too distant future.

The run up of precious metals is testimony to this. The supply of coins is being overwhelmed by the great demand. As reported recently, even the well heeled are buying bars of gold. The word is getting out. Can the Gold Rush be much farther ahead? Could we see it toward by the second half of this year. Watch the entertainers on TV news and the newspapers for reporting on the movement of gold prices. This is the normal tip off of the coming rush. More people read the media news; therefor, if gold is presented more frequently in the mass media, more folks will be interested. It is coming! The big question is "WHEN?"

From the Daily Pfennig: "A trader friend of mine there sent me this note..."One of HSBC's bullion customers is a large coin manufacturer - we learned today that the demand for investment coins continues at an astonishing pace - the order book for Q109 has already surpassed C2008. The main order flow is European." So... There you have it! Gold is hot!"

Chuck Butler said that correctly! Both silver and gold are showing signs of being allowed by the cartel to trade at a higher level. Perhaps, they will be targeting above $900 for gold. It may become a bit expensive for them to continue their capping.


Once again, we can see almost identical graphs for both of the precious metals. Gold is 917.10 and silver is 12.49 and both are on up ticks. They are off from their highs, but still holding for now. Our trading stocks are holding as follows: DROOY 6.90; HMY 11.73, and VGZ 2.29.

From Financial Times:

Wen and Putin lecture western leaders

By Andrew Edgecliffe-Johnson and Gillian Tett in Davos and John Thornhill and Catherine Belton in Moscow

Published: January 28 2009 19:17 | Last updated: January 29 2009 08:39

The leaders of China and Russia on Wednesday turned the tables on their western counterparts who have dictated the world’s economic agenda, lecturing them for policy failures they said had led to the global financial crisis. Read it HERE.

How about that! Though China and Russia may not be our closest friends, they are showing a good bit of insight into the genesis of the credit crunch. Maybe they will do better than we in the future which seems to belong to Asia.

From Financial Times:

Hedge funds offer to price in gold

ByJames Mackintosh and Javier Blas

Published: January 29 2009 00:15 | Last updated: January 29 2009 00:15

A hedge fund has begun offering investors the chance to have their investment denominated in gold, as worries grow over governments debasing their currencies by printing money.

Osmium Capital Management, a $178m hedge fund manager based in Bermuda, is launching a new share class allowing investors to hold shares measured as troy ounces of the fund, rather than US dollars, sterling or euros. Read it HERE.

Pricing in gold! Wow, what a wonderful concept. Would that all would do this. Perhaps, some day we will return to a gold standard. I still wonder which country will be the first to go to such.

From Reuters:

DAVOS-UPDATE 2-Gold likely to hit new highs on dlr fear-Barrick

DAVOS, Switzerland, Jan 29 (Reuters) - Gold is likely to hit new record highs, spurred by serious concern about the U.S. currency and doubt about the state of the world economy, the chairman of Barrick Gold Corp. said on Thursday.

There was even a possibility, although not a probability, central banks, including China's, might start to switch from dollar holdings to gold, which could cause the metal's price to treble or more. Read it HERE.

Of course, Barrick was deeply into hedging the price of gold a while back. This should be no new revelation to the company.

Lots going on these days. It is important to keep our eyes, thoughts, and efforts directed toward service in obedience to our Lord and Savior Jesus Christ. He is life and all else is death.

Best to each, Doug

God Abhors Chaos - More Bailouts - Corn Syrup

From the Cultural Mandate or Dominion Covenant given to Adam and Eve and restated to Abraham by God, we are to bring everything in the world under the dominion of God. We are to take dominion as Christians under King Jesus. It is a matter of doing the best we can with fear and trembling before our Sovereign to bring order to replace the sinful chaos of the world.

Children are to be taught this at a very early age. They must be taught to keep order by picking up their clothes, replacing toys in their proper places, making their beds, and cleaning their messes from every source. Thus, they are taught to take dominion of everything within their scope of authority. They must keep their rooms in order. To do any less is to disobey God.

We as parents must be good examples to the children and grandchildren. It is not enough to be a good speaker of truth, our actions must exhibit a diligence in practicing what we preach. This is not easy, believe me. I am often ashamed of the way my office appears. There are generally papers strewn about. At present, it is time for me to get with the program and bring order out of the chaos of this office. This I purpose to do as soon as this goes out over the wire & air waves.

God is a God of order and decency. He abhors wildernesses and tolerates them only to challenge His people to take dominion and eliminate the chaos. Remember, He left the pagans in the promised land until Joshua was able to conquer and occupy the land. He left the pagans there in order not to let the land return to wilderness.

Let us dedicate our lives to bringing order to all that God has entrusted to each of us and our families. Thank Him daily for the opportunities He presents to us. Be always ready to answer for the hope and joy that He brings to us.



Both graphs of our precious metals are suspiciously similar. The boyz must have been at it again. This was expected with the expiration of options yesterday. However, look at the way the metals are springing upward after the overnight capping. The bull market continues. We must just be patient and see any corrections as buying opportunities.

Gold is 894.50 and silver 12.07 with both on up ticks. The mining stocks are beginning to climb on board again, too. DROOY +0.03 to 6.73; HMY +0.34 to 11.62, and VGZ +0.22 to 2.21. Check out the following silver miners: CDE +0.01 to 0.73; PAAS +0.51 to 18.05; SLW +0.16 to 6.58, and SSRI +1.15 to 20.25. How about Central Fund of Canada (CEF) into both silver and gold +0.07 to 10.64. All in all, they are moving in the right direction.

From MineWeb.com:

Gold finding huge traction with money managers

Fears about the state of the U.S. Economy with the metal holding firm in a deflationary environment has led to renewed interest in gold as an investment from professional money managers.

Author: Frank Tang and Jennifer Ablan
Posted: Thursday , 29 Jan 2009

NEW YORK (Reuters) -

Gold, the traditional safe haven in times of economic turmoil, proved to be more a commodity that everyone loved to hate last year even amid the turbulence that engulfed world markets.

But as 2009 gets under way the yellow metal has found huge traction with money managers.Read it HERE.

This is the type of news typically signaling a great increase in knowledge of the value of real money over the paper currencies. As this news becomes wider spread, the knowledge will be of interest to the masses. Look for such news in your local newspapers. Then get ready for the Gold Rush. I believe it is coming sooner than most believe. Such news reminds me of the volcano at the Mirage Hotel in Las Vegas. As a prelude to the actual eruption of the volcano, animal sounds are broadcast to the people. As the sound increases, excitement grows among the audience. Then comes the big show and the sound and heat of the explosion excites all present.

More from MineWeb:

As South African mining job cuts mount, unions threaten to strike

South Africa's mining companies are cutting thousands of jobs, adding to the country's high unemployment rate and triggering strike warnings by powerful unions in the country.

Author: James Macharia
Posted: Thursday , 29 Jan 2009

JOHANNESBURG (Reuters) -

South Africa's mining companies are cutting thousands of jobs as the prices of most metals fall, adding to the country's high unemployment rate and triggering strike warnings by the country's powerful unions.

So far about 14,000 mining jobs are on the line, South Africa's Chamber of Mines has said, but analysts say more than 40,000 or 8 percent of the workers in a sector that employs close to half a million people are likely to lose their jobs. Read it HERE.

Just when the South African mines began to flex muscle in the markets, the threat of a strike. Were the strike to come to fruition, these stocks would be temporarily hit. Our trading stocks: DROOY and HMY are South African. We should watch for this news, and perhaps even consider sell stops on a portion of our holdings. The strike would provide an opportunity for adding more to the portfolios.

On the new stimulus package from Chuck Butler's Daily Pfennig today: "Now this is really going to get my blood boiling, but this newest Stimulus Bill... Another almost $900 Billion on the red side of our ledger... And for what? The same graft and cronyism that went on in the 30's with the WPA, and spending on people that if you give them money, what incentive will they have to work on that bridge or highway that needs to be repaired? I'm really sick in my stomach about all this folks... I really just don't know how the media is taking this hook, line and sinker!

I know that the House approved $819 Billion, but I believe that by the time the Senate gets finished with it the Bill will have grown to $890 Billion, or close to $900 Billion as I sate above! When it's all said and done, I bet there's some pork there... And some money allocated to things you wish you knew about and could vote on before it was passed... But wait, we can't vote on these things, we can only vote for the dolts that passed the Bill... Hey... It's your representative, folks... We The People put them there!"

Of course, Chuck knows about our "free" and "objective" media. There are many who are more than slightly aware of the bias in all of our media. He is right on about the bail out package. After all, the uncontrolled Fed has publicly announced that it will take any and all action to end the recession and prevent a depression. Never is the eventual cost mentioned, and typical of all failed actions, the failure was due to "insufficient funding." People in government and pseudo governmental agencies have never believed in the economic principle of "sunk cost."

Sunk cost applies to the cost of past decisions. There is no way to recover this cost as it has been expended. Rather than let that cost shade financial decisions today, it is better to examine the current value of the program on its merit and decide whether it is rational to spend more on it or is it more practical to scrap it and start a new project. This is applicable to investing, as well.

Too often, the investor considers his cost of a particular investment. He should be considering the present market value of the investment. He should weigh his action in regard to the present market value, and ignore his initial cost. The decision which must be faced is what is the best use of the present value. Perhaps, the asset has a great potential of profit from this point forward. Or, maybe the asset should be sold and better use of the proceeds be made in a different investment. He should never let his initial sunk cost inter into the consideration. He can do nothing about the original cost.

Quotes from the past presented in the Daily Pfennig today:

"If the American people ever allow the banks to control the issuance of their currency, first by inflation, and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property, until their children wake up homeless on the continent their fathers conquered ... I sincerely believe that the banking institutions having the issuing power of money are more dangerous to liberty than standing armies." --Thomas Jefferson

"Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism"-Karl Marx, Das Kapital, 1867

Sounds to me like we have ignored Jefferson's warning and followed Karl Marx. What do you think?

Are you interested in the health of yourself and your family? There is so much conflicting information on eating properly, it seems that we must avoid all that tastes good and eat only that which is "healthy." The problem comes in knowing what is healthy and what is not. Here is an interesting article which is not covered in Snopes.com. The title is "Mercury Found in Corn Syrup."The video is HERE.

Here is another excellent quote from the past presented in Casey's Daily Resource Plus:

A vital function of the free market is to penalize inefficiency and misjudgment and to reward efficiency and good judgment. By distorting economic calculations and creating illusory profits, inflation will destroy this function. - Henry Hazlitt

This is what the government and central banks are trying to avoid at all cost. However, this is really the one true fix for all types of markets and businesses. It really works rapidly and at the least cost.

Best to each, Doug

The Christian World and Life View

Folks,

I wanted to remind each of you, that this blog should have been titled Thoughts on Markets, Economics, and all of Life. The goal is to present a Christian World and Life View as contained in our God's Word. His word covers all of life. It is impossible to segment life into Christian and secular. Every action in life is religious in nature. Our individual actions reflect our inward convictions. These presuppositions outflow into all of our activities.

If we attempt to segment our lives into Christianity by worship each Lord's Day, praying and praising God for His blessings as we take our meals, and an occasional prayer and, then, into the secular the rest of the time, it will not work.

Our Sovereign God is a God of the whole person, body and soul. He demands that we live the Christian life 24-7. It is all or none. The Holy Spirit brings the person dead in trespasses and sins to life through the preaching and reading of God's word, He causes this new person to face his sins, and brings him to the foot of the Savior which is the only way to life. Without this, the person faces eternal death in the absence of God. Nothing could be worse.

It it may prayer that as you read this blog, you will be encouraged to become more dependent upon the living God of all and learn to know Jesus Christ as a dear and trusted King. Remember, He must be Lord of your life, or He is not your Savior.

Thank you for reading and I pray this will become a vital part of your life.

Doug



Silver is demonstrating more volatility than gold, but is generally following the same path. It has managed to spend most of the time above $12 which shows strength.
Gold has failed to hold above $900 and must move above about $930 to be well on its way to higher levels. Currently, it is performing with less strength than silver.
Using Street Track Gold Shares Trust as a proxy for gold, we can see that the price remains well above both the 50 and 200 day moving averages, which is a very good sign that the bull market for the metal is strong. Though it is early in the day, I had expected a larger drop in the price as the options expire today. There is time left, but for now the price has not been capped strongly.

Gold is $884.10 and silver 11.98 with both on down ticks. Our DROOY is 6.74 up 0.06; HMY is 11.03 off 0.29; and VGZ is 2.13 up 0.08. I will give all three more time before establishing a trading range. The higher plateau of prices is holding well. I believe that there will have to be another correction in the miners as the rise to these higher levels has been swift.

In the meantime, we are watching the bubble in the U.S. Treasuries. Were it to burst, that would be a very loud BANG! Many dollars have inflated that bubble. There may be pretty bubbles in the air, but all burst sooner or later.

Some interesting stories follow.

From Guardian UK:

Buba could consider selling gold-German lawmaker

• Reuters, Tuesday January 27 2009

BERLIN, Jan 27 (Reuters) - Germany's Bundesbank central bank should consider selling its gold reserves to finance the government's stimulus measures, the budget spokesman for Chancellor Angela Merkel's Christian Democrats said on Tuesday. Read it HERE.

This is more than likely rhetoric of a politician. However, there is more on the Internet about it. Is it just rumor?

From The Moscow Times:

Putin to Seek New Economic Order at Davos

28 January 2009By Anatoly Medetsky / Staff WriterPrime Minister Vladimir Putin will call for a change in the world economic order and deliver his assessment of what caused the global economic debacle in an opening speech at the World Economic Forum in Davos on Wednesday night.

While it would not be new if Putin blamed the United States for the crisis, his appearance at the five-day forum will mark the first time that a Russian prime minister attended the gathering of the world's political and business elite since Mikhail Kasyanov in 2002. You can read it HERE.

"Change in the world economic order" sounds much like the New World Order mentioned often by George Bush (the father). Do you think that maybe the current financial chaos is a step in that direction. Someone could come in riding a white horse and establish a world currency. Were it to be backed and interchangeable for gold, it might fly. I, for one, would not like to see it. However, we have a Sovereign God who did not allow the original Tower of Babel. I rest in Him.

From The Financial Times:

Nations turn to barter deals to secure food

By Javier Blas in London

Published: January 26 2009 23:32 | Last updated: January 26 2009 23:32

Countries struggling to secure credit have resorted to barter and secretive government-to-government deals to buy food, with some contracts worth hundreds of millions of dollars.

In a striking example of how the global financial crisis and high food prices have strained the finances of poor and middle-income nations, countries including Russia, Malaysia, Vietnam and Morocco say they have signed or are discussing inter-government and barter deals to import commodities from rice to vegetable oil.You can read the whole article after FREE registration HERE.

That is absolutely amazing! Nations are involved in barter. Bet you never thought that could happen. Of course, we have all considered it as a possible way of individual and family life were the financial markets to collapse, but nations???? It can happen! What do you have to offer in barter? That is something to consider!

In case you missed it, here are some of the economic statistics:

S&P/Case Shiller Home Price Index for November down 19.1% and December down 18.2% for a record year on year.

Consumer Confidence December 37.7 which is a record low. November was 38.6.

From Bloomberg: California home prices were down 42% in December, but sales were up 85% over December, 2007.

If you find this blog of value to you, please, pass it on to others. I greatly appreciate suggestions and comments.

Thank you for reading this,

Best to each, Doug

Gold & Silver Strong, but Down a Bit

This graph of GLD which serves as a proxy for gold shows the rapid, strong upward surge of gold over the last few days. We may already be seeing signs of some capping in view of options expiry date tomorrow. However, the higher lows and higher overall highs are very encouraging for the metal. We should expect that gold will move very much higher and, probably, soon.
Silver is hanging in very well, too. It currently is down below $12 to $11.98. Perhaps, it is also being capped. We shall see.
Gold has moved down to $897.80 and both silver and gold are on down ticks. It seems that the game continues. The Federal Reserve through the bullion banks are interested in keeping a bridle on the precious metals. Governments greatly fear the monetization of the metals which threatens them in two ways: (1) They would lose the power of controlling their FIAT currencies, and (2) They recognize the freedom that monetized precious metals would provide for the citizens. After all, they covet control of citizens.

My previous trading stocks are down a bit today, but holding at near highest levels: DROOY 6.92; HMY 11.36; VGZ 2.46. In fact DROOY is the only one down today.

From TownHall.com:

Tuesday, January 27, 2009

Sowell :: Townhall.com Columnist" style="border-width: 0px;">

What Are They Buying?

by Thomas Sowell

Everyone is talking about how much money the government is spending, but very little attention is being paid to where they are spending it or what they are buying with it.

The government is putting money into banks, even when the banks don't want it, in hopes that the banks will put it into circulation. But the latest statistics shows that banks are lending even less money now than they were before the government dumped all that cash on them. Read it HERE.

Sowell is right on in this important article. Everything planned is too slow to meet the immediate need; therefore, it will be no solution. I suggest you at least scan the whole article.

From Zealllc.com:

Big Inflation Coming

Adam Hamilton January 23, 2009 3458 Words

Late 2008’s stock panic has certainly had a complex and multifaceted impact on popular psychology. Mindsets and outlooks that were scoffed at as recently as 6 months ago have suddenly become fashionable. One of the more intriguing is the meteoric rise to prominence of the deflation thesis.

The growing legions of deflationists see an unstoppable depression-like deflationary spiral approaching like a freight train. They cite some convincing data. The stock markets have been cut in half in just a year. In the past 6 months, some key commodities prices fell farther and faster than they did in the entire Great Depression. House prices are down by double digits across the nation, with no bottom in sight. And credit is a lot harder to come by today than in any other time in modern memory.

In light of these universal falling prices, how could we not be entering a sustained deflationary period? The case may seem airtight, but I’d like to offer a contrarian view in this essay. Believe it or not, despite 2008’s price collapse there is plenty of overlooked evidence suggesting big inflation is coming. You won’t hear much about this on CNBC, but it could have a big impact on your investments in the years ahead. You can read it HERE.

Guess I am a contrarian, too. I believe that we will see inflation beginning about the middle of this year. The deflation caused by bankruptcies, foreclosure, pay off of consumer credit, and write offs has masked most of the inflation which is rising (even in terms of government massaged reports). We can see it in shopping for groceries, all medical, colleges, books, and many other items. You know it, I know it.

More on the recession - depression debate from MineWeb.com:

RECESSION NOT DEPRESSION

Relax: There Will Be No Depression - gold and silver will outperform

LA-based gold commentator Kenneth J. Gerbino tells us why he feels there won't be a depression but we will be faced with inflation, and markets in general, and bonds in particular, will prove to be bad buys, while gold and silver will perform best of all.

Author: Kenneth J. Gerbino
Posted: Tuesday , 27 Jan 2009

BEVERLY HILLS -

I want everyone to relax. You are being bombarded with numerous facts and figures that look pretty bad, but the facts are being interpreted with emotion and hype and hysteria. The predictive value of mis-emotion is usually chaos. There will be no Great Depression. Read it HERE.

He reviews the past and examines the present. Then moves to defend his premise.

More from Mine Web:

Gold continues to uncouple, positively

Gold stocks and gold ETFs are increasingly a natural home for investors fleeing from banking stocks.

Author: Barry Sergeant
Posted: Monday , 26 Jan 2009

JOHANNESBURG -

Dollar gold bullion prices moved to three month highs, above USD 900 an ounce, in the past few days, and to all-time records in currencies such as the euro and Swiss franc, underpinning the ranking of listed gold stocks as the world's best performing equities subsector. At the same time, listed bank stocks, seen on a global basis, rank as the worst-performing subsector, with, however, material discrepancies between country bank performances. Read it HERE.

More from Mine Web:

Gold jumps above $900/oz on haven appeal

Bullion reaches its strongest level in more than three months.

Author: Jan Harvey
Posted: Monday , 26 Jan 2009

LONDON (Reuters) -

Gold climbed above $900 an ounce to its strongest level in more than three months in Europe on Monday, lifted by interest in bullion as a haven from risk.

Spot gold was $905.90/907.90 an ounce at 1046 GMT, up from $898.10 in New York late on Friday. Earlier in the session the precious metal hit $907.40, its highest since Oct 10.

Gold priced in sterling hit a record 661.55 pounds, while euro-priced gold remained near the all-time high it hit on Friday, as fears over the global economic slowdown and volatility in other asset prices spurred buying. Read it HERE.

Remember, as reported by Merrill Lynch recently, even the big money investors are running to gold now.

From the Daily Pfennig Chuck Butler:

"I see that "the cheater" a.k.a. Tim Geithner was confirmed as our U.S. Treasury Sec. I really didn't think I would ever have another punching bag Treasury Sec. like I had with King Henry Paulson, but, then along came "the cheater"... I have to tell you that this is scary stuff folks... In his confirmation he said, not once, but twice, that "President Obama, backed by the conclusions of a broad range of economists, believes that China is manipulating its currency. President Obama has pledged as President to use aggressively all the diplomatic avenues open to him to seek change in China's currency practices."

OK folks, this is where the problems begin... If in his confirmation, he's making statements like that, you can expect that Obama will push for legislature to put tariffs on Chinese goods... Protectionism... This is ALL GOING IN THE WRONG DIRECTION!!!!!!! And believe me now and hear me later... "the cheater" didn't just make up this response! This was given to him by Obama, and "the cheater" made certain that everyone hear him, by repeating the answer!

I've told you before, folks, that Protectionism is to a currency, like kryptonite is to Superman... So... Not only is the Gov't on the path to spending even more than the previous administration spent, they look as though they will go down this protectionism path... Add to that, the recession and zero interest rates, and you've got the ingredients for a huge swat at the dollar..."

Trade wars are anathema. They cripple international trade and often lead to shooting wars. This is terrible political action. We must pray that it is only a rumor presented to pacify the unlearned.

From Casey's Daily Resource Plus:

"Options expiry is tomorrow. I'm sure there's a tonne of call options that would expire in the money on any gold price close over $900 at the end of Comex trading on Wednesday. It will be interesting to watch the price action over the next 36 hours. I would suggest the same thing for silver over $12.00. I don't think that the boyz want to part with all the premiums on these call options that they've written...plus I'm sure that they don't want to risk that someone is laying in the bushes waiting for their $900 call options to finish in the money so they can convert to futures and stand for delivery on the Comex. That's another big no-no. I also note that despite Monday's decent price action, the share action did not match that...and the major gold indexes all finished down a little on the day."

This will test the boyz resolve. Will they be brazen enough to slam both gold and silver to protect their profit? I think they will, so maybe tomorrow will be a good day for us to add to our portfolios. Consider it carefully and make your own decisions.

From GoldSeek.com:

Restoring Sound Money in America

By: James Turk, Founder & Chairman of GoldMoney.com
-- Posted Monday, 26 January 2009

There is a determined grassroots movement in the United States seeking the restoration of sound money. There are many different groups comprising this movement, but all share the same aim. It is to restore gold and silver to its rightful role as the money of the United States, as mandated by the Constitution.

I have written about this movement before. In “The Quest for Sound Money in New Hampshire” in May 2005 I discussed the bill, called the “New Hampshire Sound Money Bill”, that was drafted by Constitutional scholar and lawyer, Dr. Edwin Vieira. It was presented to the New Hampshire legislature, but sadly, remains pending in committee. Read the article HERE.

This would provide a long term solution to much of the financial woes of the day. There would be a period of painful adjustment. Many would say there is not enough gold and silver to manage such a change. However, they fail to recognize that the currency price of gold would be moved high enough to make it feasible. Think of the advantages of a stable currency which would allow more accurate forecasting in budgets for the future. From a family perspective, it would allow families to confidently put aside funds for future college education of children. It would be one of the blessings of God, Who gave us the historical record of gold and silver by weight as true money.

The Bible prescribes the foundation for a free market while not explicitly demanding a free market. However, people are to become slaves to no man or government, because God's people were bought with an price of unbelievable magnitude, that of the blood of Jesus Christ the Son of the living God of all.

It is good to remember that when politicians, the media, and government schools speak or teach about inflation, they have redefined the term to an increase in prices which we know a price inflation. This double speak is to obscure that the only entity that can create inflation is the government with the help of the central bank. The historic definition of inflation is the unwarranted increase in the supply of unbacked paper currency in circulation which results in price inflation of virtually all goods and services.

Bill Buckler's The Privateer has accurately stated "When dealing with financial matters, and especially with money, modern "economics" is not designed to enlighten, it is designed to control." (The-Privateer.com)

This is a form of false witness in violation of God's Commandment. Nations, just as are individuals, must be obedient to God's law in all areas of life. Violations of God's Law-Word will not be taken lightly by God. We are promised blessings from obedience and curses for disobedience. Remember, God's Word does not return void, it accomplishes all for which it was sent in the first place.

Blessed is the nation who God is the Lord.

Best to each, Doug

Metals Reaching for Higher Plateau

The miners are going up in response to the higher level of gold prices. The stocks in which I was trading are much higher now >> DROOY 7.03; HMY 11.58, and VGZ 1.84. The silver stocks are moving, as well >> CDE 0.85; PAAS 18.62; SLW 7.36, and SSRI 20.55. These are good moves; however, the moves have been substantial in the last 2-3 days of trading and we should expect some consolidation before higher moves.
The graph on gold, above, is dated January 13th. It should be updated to show the current price of 909.90. Gold must remain above 900 for moves to the higher level. However, the move has been comforting for the time being.
The three day gold graph shows rather consistent moves to a higher plateau of price for the premiere monetary metal. This is leading the way for the mining stocks, but beware of a correction in the near future. I am not selling any mining stocks currently. We have yet to see the gold rush, but more folks are recognizing the true value of the metals and mining stocks and are jumping on board at present. The real rush is yet to come. It can be very sudden, though. Beware of selling too early. But also be very careful in buying. I will be a buyer on any dips. I am so thankful to the Lord for pushing me to sell the Renmimbi and adding to the Everbank World Markets Metals Select Account.

Silver is coming along for the ride, as well. It is currently 12.11. Patience in the precious metals is very important, but can be very rewarding. There are some very important articles, below. Take time to at least scan them.

Latest from James Turk Goldmoney.com:

Gold Breaks Above $850

Last week was a good one for the precious metals, as gold managed to climb back above $850, which has been a barrier for months. From their closing low the week before, gold climbed 11.0% in terms of US dollars while silver did even better, jumping 14.5%. The gains were even greater in other currencies as the dollar generally strengthened during this period.

The same factors continue to drive gold higher. In today's monetary and financial turmoil, people are looking for safe havens, and gold is the safest of them all. Read the article HERE.

From Bloomberg:

Gold Advances to Highest in Three Months on Demand for Haven

By Nicholas Larkin

Jan. 26 (Bloomberg) -- Gold rose to a three-month high in London as investors increased holdings of the metal as a haven on concern the global recession will deepen.

Bullion exceeded $900 an ounce on Jan. 23 for the first time since October and gold holdings in exchange-traded funds surged to records. Economists expect a report tomorrow to show German business sentiment slumped, while U.K. home prices had the biggest annual decline since at least 2001.

“All the comments you read about the economy are negative,” Wolfgang Wrzesniok-Rossbach, head of marketing and sales at Hanau, Germany-based Heraeus Metallhandels GmbH, said by phone. “There’s definitely safe-haven buying” and “this is going to continue,” he said. Read the article HERE.

More from Bloomberg:

Bernanke Risks ‘Very Unstable’ Market as He Weighs Buying Bonds

Jan. 26 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke and his colleagues may try once again to cure the aftermath of a bubble in one kind of asset by overheating the market for another.

Fed policy makers meeting tomorrow and the day after are exploring the purchase of longer-dated Treasury securities in an effort to push up their price and bring down their yield. Behind the potential move: a desire to reduce long-term borrowing costs at a time when the Fed can’t lower short-term interest rates any further because they are effectively at zero. Read it HERE.

From Reuters:

UPDATE 1-DRDGOLD mine loses 1,095 oz output after power outage
Mon Jan 26, 2009 7:07am EST

JOHANNESBURG, Jan 26 (Reuters) - South African gold producer DRDGOLD Ltd (DRDJ.J) said on Monday it had lost about 1,095 ounces of gold at its Blyvooruitzicht mine after a power outage caused by a lightning strike trapped workers and halted output.

DRDGOLD said in a statement operations at its biggest No. 5 shaft at the mine had resumed at the start of the night shift on Jan. 22. Read the article HERE.

From Brasschecktv.com:

"It's not like before"

This is a 5 minute video worth watching. See it HERE.

From the Daily Pfennig:

"A Chinese newspaper reported that Chinese officials are calling for Beijing to sell U.S. Treasuries... Whoa! This is completely different than people outside of China giving them their 2-cents worth of opinions on how they should run their economy (read, Schumer, Graham, Bernanke, Paulson, and now Geithner a.k.a "the cheater")... Let's go to the story...

"BEIJING (Nikkei)--Calls are growing in China for the government to reduce its holdings of U.S. Treasury securities, as some observers expect their prices to decline amid heavy issuance to fund U.S. economic stimulus plans.

Such sentiment -- in part motivated by indignation over recent American assertions that China is partially responsible for the global financial crisis-- threatens to cast a cloud over relations between Beijing and the new U.S. administration.

"China should sell some of its U.S. government bonds and increase its euro and yen assets," Yu Yongding, a former member of the People's Bank of China's policy board, wrote in a Chinese newspaper earlier this month. Yu warned that the supply of Treasuries may far exceed demand in the future.

Such remarks by Yu, who currently serves as director-general of the Chinese Academy of Social Sciences' Institute of World Economics and Politics, has sparked discussion within the government on how to manage its foreign reserves, according to a source familiar with the matter."

I told the boys and girls on the desk about the story, and Ty noted that the markets weren't really picking up on it... But by noon, you could tell something was going on, as the euro traded to 1.30 (+2 figures), Gold was up $40, and the Long Bond in Treasuries was down 2 whole points!

Now, I'm not saying that "this is finally the last shoe to drop" You see, just because a Chinese official calls for Beijing to sell their Treasuries, doesn't mean Beijing does. However, look at the damage done to the dollar, and Treasuries when we have a single individual within China calling for this!

So... Judging from the currency reaction overnight... There's been no follow up to the NIKKEI story... But what a performance from Gold! WOW! The shiny metal traded over $900 for a short time on Friday... I do see the Gold futures on the internet, and they are showing Gold will be over $900 today..."

This other shoe will drop sometime. Possibly as Chuck Butler says, above, this is a recommendation which Beijing may not heed. Beijing will make up its mind at some time in the future. When is the big question?

From Mineweb today:

Gold continues to uncouple, positively

Gold stocks and gold ETFs are increasingly a natural home for investors fleeing from banking stocks.

Author: Barry Sergeant
Posted: Monday , 26 Jan 2009

JOHANNESBURG -

Dollar gold bullion prices moved to three month highs, above USD 900 an ounce, in the past few days, and to all-time records in currencies such as the euro and Swiss franc, underpinning the ranking of listed gold stocks as the world's best performing equities subsector. At the same time, listed bank stocks, seen on a global basis, rank as the worst-performing subsector, with, however, material discrepancies between country bank performances. Read the article HERE.

The Bible tells us that we must be wise as serpents and harmless as doves. Since we are created in the very image of God, we have brains. Like any other talent or asset which God has entrusted to each of us, we must diligently exercise it or lose it. I suggest that you spend much time in study of the word of God. The Bible is the operation manual for every aspect of life. After, our Creator is also the Author of this manual. We must engage in daily study, memorization, and meditation up this value manual to discover God's way for each of us.

It will provide much guidance for our specific calling in life. More than that, it provides with the power of the Holy Spirit the way to recognize our individual sins, shows us that our only hope is in Jesus Christ, and leads us to submit to Him completely. We are each to be asked, "What say ye of Christ?" If we do not recognize Him as the Only Begotten Son of God and our Lord, we are choosing death. There is life in no other. Therefore, chose Jesus Christ for life.

At this point in time, gold is 905.30 and silver 12.07. Both are on up ticks.

Best to each, Doug

Metals Strong - Paper Curencies Floundering

Both silver and gold are in a strong upward move today. Gold is 859.60 and silver 11.45.
Meanwhile, the DJI are down 165+ after yesterday's big gain. Have the metals decoupled from the general market? Might be temporary, but one can dream.

My trading miners >> DROOY 5.99; HMY 10.19; VGZ 1:43. I am still seeking a new trading range which is comfortable.

From the Telegraph UK:

Monetary union has left half of Europe trapped in depression

By Ambrose Evans-Pritchard
Last Updated: 9:36AM GMT 18 Jan 2009

Events are moving fast in Europe. The worst riots since the fall of Communism have swept the Baltics and the south Balkans. An incipient crisis is taking shape in the Club Med bond markets. S&P has cut Greek debt to near junk. Spanish, Portuguese, and Irish bonds are on negative watch.

Dublin has nationalised Anglo Irish Bank with its half-built folly on North Wall Quay and €73bn (£65bn) of liabilities, moving a step nearer the line where markets probe the solvency of the Irish state.

A great ring of EU states stretching from Eastern Europe down across Mare Nostrum to the Celtic fringe are either in a 1930s depression already or soon will be. Greece's social fabric is unravelling before the pain begins, which bodes ill. Read it HERE.

From TimesOnLine UK:

World Agenda: riots in Iceland, Latvia and Bulgaria are a sign of things to come

Our third global political column explores the start of an age of rebellion over the financial crisis - beginning in Iceland

Icelanders all but stormed their Parliament last night. It was the first session of the chamber after what might appear to be an unusually long Christmas break.

Ordinary islanders were determined to vent their fury at the way that the political class had allowed the country to slip towards bankruptcy. The building was splattered with paint and yoghurt, the crowd yelled and banged pans, fired rockets at the windows and lit a bonfire in front of the main door. Riot police moved in.

Now in the grand sweep of the current crisis, a riot on a piece of volcanic rock in the north Atlantic may not seem to add up to much. But it is a sign of things to come: a new age of rebellion. Read it HERE.

From the Telegraph UK:

Gordon Brown brings Britain to the edge of bankruptcy

Iain Martin says the Prime Minister hasn't 'saved the world' and now faces disgrace in the history books

By Iain Martin
Last Updated: 8:41AM GMT 21 Jan 2009

They don't know what they're doing, do they? With every step taken by the Government as it tries frantically to prop up the British banking system, this central truth becomes ever more obvious.

Yesterday marked a new low for all involved, even by the standards of this crisis. Britons woke to news of the enormity of the fresh horrors in store. Despite all the sophistry and outdated boom-era terminology from experts, I think a far greater number of people than is imagined grasp at root what is happening here. Read the article HERE.

From Commodity OnLine:

China overtakes India in Gold sales

2009-01-22 16:50:00

Commodity Online
India has been until now, the undisputed single-largest Gold bullion consumer, with its own final demand outweighing the next largest market – China by almost 57 percent. But it seems now, that the Chinese Gold buyers have caught up during 2008.

World Gold Council’s latest data says Chinese demand is surging rapidly (up by 15 percent year-onyear) while Indian demand fell as Indian Gold sales collapsed by about 65 percent in the first six months of 2008. Read it HERE.

It is great to know that our God is in control. That provides peace, comfort, and joy throughout life.

Best to each, Doug

God's Law or Chaos - We Now Are In Chaos

Gold is holding up better than commodities. I have advised that my grandchildren move their mutual funds from general natural resources to precious metal miners. Jim Rogers suggests commodities and precious metals. However, I believe the biggest move will be by the precious metals. Above it can be seen that gold is trading on a higher level for the time being.

The mining stocks are holding well, too. DROOY 5.87 +0.08; HMY 9.67 -0.19 (good buying range for me), and VGZ 1.47 +0.01.

Gold is presently 845.50 and silver 11.12 with both on a down tick.
With yesterday's upward move by gold even with the strong dollar, it looks to be moving higher as the year continues. Of course, we should expect corrections, but the upward trend is firmly in place. The precious metals seem to be the place to be with all of the pumping of paper currencies into the financial markets by most governments. Can inflation be far behind? I seriously doubt it. As you shop these days, you can see that some inflation is already in the markets. Though subdued at present, how long can it stay at that level?

From Casey's Daily Resource Plus today: "Despite the 'wonderful' day on Tuesday (to go along with Friday's), the gold price still isn't out of the woods yet. It should be obvious to you that there is a gargantuan 'gold war' going on out there with the Fed (acting through select bullion banks...primarily JPMorgan) going short against all longs. And it's been a success as far as the Fed is concerned. Back in 1981, the gold price hit $850. That's where it is at this writing...28 years later."

From the Economic Times:

US and UK on brink of debt disaster
20 Jan 2009, 0419 hrs

LONDON: The United States and the United Kingdom stand on the brink of the largest debt crisis in history.

While both governments experiment with quantitative easing, bad banks to absorb non-performing loans, and state guarantees to restart bank lending, the only real way out is some combination of widespread corporate default, debt write-downs and inflation to reduce the burden of debt to more manageable levels. Everything else is window-dressing.

To understand the scale of the problem, and why it leaves so few options for policymakers, which shows the growth in the real economy (measured by nominal GDP) and the financial sector (measured by total credit market instruments outstanding) since 1952.

In 1952, the United States was emerging from the Second World War and the conflict in Korea with a strong economy, and fairly low debt, split between a relatively large government debt (amounting to 68 percent of GDP) and a relatively small private sector one (just 60 percent of GDP).

Over the next 23 years, the volume of debt increased, but the rise was broadly in line with growth in the rest of the economy, so the overall ratio of total debts to GDP changed little, from 128 percent in 1952 to 155 percent in 1975. Read the article HERE:

They are telling it like it is. I can only say, "Amen!"

From the Telegraph UK:

Help Ireland or it will exit euro, economist warns

A leading Irish economist has called on Dublin to threaten withdrawal from the euro unless Europe's big powers do more to rescue Ireland's economy.

Read the article HERE.

Walter E Williams in Town Hall this morning:

A Minority View

by Walter E. Williams

President Obama was sworn into office placing his hand on Abraham Lincoln's Bible. That is the last Bible I would use to be sworn into office. You say, "Why? Didn't Lincoln's Emancipation Proclamation free your ancestors?" It all depends where they were living. Let's examine the document's text to see why.

President Abraham Lincoln issued the Emancipation Proclamation on January 1, 1863, which reads, "That on the first day of January, in the year of our Lord one thousand eight hundred and sixty-three, all persons held as slaves within any State or designated part of a State, the people whereof shall then be in rebellion against the United States, shall be then, thenceforward, and forever free …" The key phrase is "in rebellion against the United States" because slaves remained slaves in states not in rebellion. Read the article HERE.

I always appreciate Walter E Williams for sharing his insight. He goes to the heart of every subject upon which he writes.

Here is a portion of the Daily Pfennig: "Back to the markets... Well, the Obama bounce didn't come in the first day of his Presidency, as the Dow sold off by 332 points! UGH! OUCH! That's going to leave a mark! So far, one piece of the Obama bounce, the dollar, has rallied... But the other, stocks, have fallen on their face.... We'll have to see what stocks think about the $850 Billion stimulus package that the Obama team is working on...

Here's the skinny on the package, that could still grow... It certainly isn't going to narrow! The stimulus plan covers 5 areas of spending and tax breaks... Health, education, infrastructure, energy, and support for the unemployed and the poor. All worthy areas... Unfortunately, we (the U.S.) don't have the funds to pay for this... Now... If we weren't already in a huge deficit hole, then a stimulus package to get the economy going might be the answer... But, that's not the case! I told a radio station a week ago that the Roosevelt plan worked back in 1933, but it could have just as well failed, it was that touch and go, and if it weren't for the war it might not have... This time, we're starting in a deep, dark deficit hole... I sure hope it works... I just can't get my arms around how adding $2 Trillion to our national debt this year helps...

How did I get to the $2 Trillion? Well... The Congressional Budget Office (CBO) has already told us the deficit in 2009 would be $1.2 Trillion. Recall I had a cow over that announcement! Well, the CBO's budget forecast does NOT include the new stimulus plan of $850 Billion... I'll tell you what it also doesn't include... Any new military expenses... And the remaining TARP money that the Obama team just came into..."

God in His word tells us to Owe No Man Anything except love. He also told the nation Israel to be ready to lend to all nations, but not to be a borrower. These are very wise words. We, as individuals, our businesses, and our governments, have violated these laws and are now suffering the result of disobedience. There is no way that our national debts will be paid. We will renege on the debt or, at the very least, pay some of it back with less valuable currency.

Since the advent of the Federal Reserve, we have lived under a fractional banking system. The purpose of fractional banking is that every debt has increased the supply of dollars. Remember that the classical definition of INFLATION is and increase in the amount of unbacked currency in circulation. This always results in price inflation which is currently incorrectly called, "inflation." The new definition is a detractor which enables those in government to point toward citizen spending, expanding wages, and business passing high prices into the market place as the cause of the newly defined inflation. In fact, only the government and fractional banking system is capable of increasing the supply of unbacked currency in circulation, but elected officials and bureaucrats do not want to admit their blame.

Back in the 1970s, Vic Lockman produced several pamphlets showing God's word in very practical terms. I always remember this significant title: God's Law or Chaos. What an accurate presentation of God's Law. We either live under God's Law or experience the financial chaos of today. Thus, we are reaping our just rewards for ignoring the Sovereign God of all, including finances.

Let us fervently pray that we as individuals and governments will return to God's Law to pull us out of this chaos. Blessed is the nation whose god is THE GOD: Father, Son, and Holy Spirit.

Best to each, Doug

Great God - New Day - New President - Same Problems

Both gold and silver are up today while the DJI are down some 115 to 8162. Gold is currently 854.80 and silver 11.28 with both on up ticks. The mining stocks are looking upward, too. Here are some AGXM .27; CDY 1.11; CDE .81; DROOY 5.68; GDX (Miners Index) 31.06; GFI 8.17; GG 26.96; GSS 1.10; HMY 9.84; IAG 6.19; KGC 18.40; KRY .17; NEM 39.08; PAAS 15.81; SLW 6.14; SSRI 17.71; VGZ 1.40; XRA 2.00, and TRUSTS & ETFs CEF 10.31, and GLD 84.31.
Most are up today.

From the Daily Pfennig today: "Front and Center this morning, I have two quotes from people I truly respect... first from Jimmy Rogers... second from Stephen Roach...

"If I were you, I would be worried about the U.S. dollar," said Rogers, 66, in a speech at the Asia Financial Forum in Hong Kong today. "The Americans are printing U.S. dollars. The Americans are going to do whatever they can to revive their economy, even if it means destroying the U.S. dollar."

And at the same Asian Forum... "

Stephen Roach, chairman of Morgan Stanley Asia Ltd., recommended investors buy "anything to do with the Asian consumer, infrastructure, alternative energy and technology.""

I totally agree with Jimmy Rogers on the dollar and am inclined to agree with Stephen Roach on Asia. Asia is becoming the power house of the world. It has joined the world in the slump, but I believe their slump will be less than ours.

From Town Hall:

Tuesday, January 20, 2009

Lured to Disaster

by Thomas Sowell

Behind the housing boom and bust was one of those alluring but undefined phrases that are so popular in politics-- "affordable housing."

It is hard for me to know specifically what politicians are talking about when they use this phrase. But then politics is about evoking emotions, not examining specifics.

In looking back over my own life, I find it hard to think of a time when I didn't live in affordable housing. Read it HERE.

Yes, when government moves in to make everything easy and less costly for the "poor." Others must pay when the intervention causes greater problems for all without solving the perceived problem.

News on Harmony Gold (HMY) from Mine Web this morning:

Harmony to boost margins in trying times

Harmony Gold tells why the company is in a position to benefit from opportunities created by the financial crises.

Author: Tessa Kruger
Posted: Tuesday , 20 Jan 2009

JOHANNESBURG -

While numerous mining companies have announced cuts in capital expenditure and the suspension of production at operations, gold producer Harmony Gold says its capex plans remain and the company will stretch margins in these trying times.

The company said its capital expenditure plans were still intact despite the impact of the world financial crises on the mining sector. Its pipeline of projects was the future of the company and it regularly reviewed its cash flow to ensure it supported the continuation of the projects that were the low cost mines of the future. Read the article HERE.

More on HMY:

After fatality, Harmony to lose gold production

Harmony Gold is expected to lose up to 1,412 ounces of gold at its Elandsrand mine due to a two day closure following a fatal accident.

Author: Muchena Zigomo
Posted: Monday , 19 Jan 2009

JOHANNESBURG (Reuters) -

Harmony Gold is expected to lose up to 40 kg (1,412 ounces) of gold at its Elandsrand mine due to a two day closure following a fatal accident, a company official said on Monday.

"It's expected that the mine will not produce gold for at least two days, today and tomorrow, to enable us to finalise the investigation," Harmony Chief Operating Officer Alwyn Pretorius told Reuters. Read it HERE.

Mine Web report on DRD Gold (DROOY):

167 workers rescued at DRD's Blyvoor shaft after "act of God"

DRD Gold says it will catch up with lost production at its Blyvoor mine's shaft 5 struck by a lightning. 167 Workers were rescued after spending 20 hours underground.

Author: Tessa Kruger
Posted: Monday , 19 Jan 2009

JOHANNESBURG (Reuters) -

DRD Gold hopes to resume production at its number five shaft at Blyvoor mine on Monday night after 275 workers were trapped over the weekend after an "act of God".

The company does not anticipate production losses from this important shaft. Read it HERE.

We must pray that God will use Obama to solve the financial problems we face by returning to biblical free market concepts and God's Law. He would be wise to uphold the Constitution as he will swear to do today.

We must raise generations of children who understand God's Law, are committed to serving God, and are prepared to go out into the world as the light and salt as the bible requires Christians to do. They must be diligent in the study of God's word else, they will not know their responsibilities. Of course, they will need to be able to earn a living or manage a home in accordance with their callings, but their first, primary responsibility is to be a servant of the Living God.

This is the way to bring these United States of America out of the pagan slump into which we have moved. We must not continue to be the nation that follows the course that Hollywood and television have laid before us. I am firmly convenced that we must become discerning in the what we watch in movie houses and on our televisions. The current offerings are anti-Christian, anti-family, and solidly against the patriarchial society prescribed by God.

We are all slaves to either Satan or King Jesus. The first master brings death, the second brings a life of freedom and joy. The second master even brings peace when troubles are brought into our lives. Which do you serve?

Best to each, Doug