Thoughts on Markets

Tuesday, January 05, 2010

Gold Starts the New Year with a BANG!

Thank the Lord for the New Year and new beginnings for us. Look to His word for guidance in all areas of life. For us to succeed we must have a Christian World and Life perspective which can only come from submission to King Jesus.

Both of our precious metals jumped out of the starting gate sprinting into 2010. The boyz still have the clout to push both down, but the Chinese and central banks are building a strong demand for gold, in particular, and silver to some extent. Ted Butler indicates that he believes the boyz will be out of the way of silver at some time in 2010. If and when are the real questions. They still have a great number of shorts to cover. We shall see as the markets continue into the New Year.

Below are graphs on Hecla and Fortuna which are two of our best performing silver miners. Both look strong from a technical perspective on the daily graphs. I am not buying more at this level, because I have a nice batch of both in my portfolios. However, I am looking for fall backs which will give me buying opportunities for both. Silver still has a lot of catching up to do to match percentage wise the advance of gold.
The weekly graph of Hecla is not as strong, but has some strong indications amid the mixed signals. It seems to still have a way to go upward.

From the Daily Pfennig: "Yesterday, I told you that PIMCO announced that they were reducing their U.S. debt positions... Today, I'll tell you that friend, Bill Bonner, of the Daily Reckoning (www.dailyreckoning.com) has announced his new trade of the decade. You might recall his old trade of the decade, which was to sell the DOW and buy Gold... That one worked out pretty good... His new Trade of the Decade has as it's "sell side" a sell of U.S. Treasuries... And I can't argue with that!

How could I? I've called U.S. Treasuries the next bubble to pop... I've done a 15-minute video for the Sov. Society about the Treasury Bubble, and how to protect yourself from the Bubble popping, and I've gone on record here in the Pfennig about the Treasury Bubble... So much so, I added the tracking of the 10-year yield to the currency round-up each day!

So... That's just another person that sees what I've been talking about! It's nice not being the only boy crying wolf!"

This is another reason for me to like TBT which is in effect a short against the long term Treasuries.

Beware of Money Market Funds - a warning from ZeroHedge.com:

This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied


When Henry Paulson publishes his long-awaited memoirs, the one section that will be of most interest to readers, will be the former Goldmanite and Secretary of the Treasury's recollection of what, in his opinion, was the most unpredictable and dire consequence of letting Lehman fail (letting his former employer become the number one undisputed Fixed Income trading entity in the world was quite predictable... plus we doubt it will be a major topic of discussion in Hank's book). We would venture to guess that the Reserve money market fund breaking the buck will be at the very top of the list, as the ensuing "run on the electronic bank" was precisely the 21st century equivalent of what happened to banks in physical form, during the early days of the Geat Depression. Read the whole report HERE.

From Gold-Eagle.com:
CHINA'S PRESSING NEED TO BUY GOLD
(…there will NEVER be a peak gold price)
vronsky
December 29, 2009
Without any doubt the fastest growing country in the world is also the largest in many ways. CHINA rightfully claims that title.

In total population China dwarfs all others...in territorial area…it is second only to Russia. Furthermore, China's economic growth - whether measured in annual percent increase in GNP or in absolute total dollar growth is second to none. To be sure the Sino country's export trade (and resulting Trade Surplus) is the envy of its global competitors. Unfortunately, China's exponential growth in Foreign Reserves has fostered a serious problem. Read it HERE.

From TownHall.com:

Intellectuals and Society

by Thomas Sowel

Intellectuals generate ideas and ideas matter, whether those ideas are right or wrong, and they matter far beyond the small segment of society who are intellectuals. Ideas affect the fate of whole nations and civilizations. Nowhere is that more true than in our own times, when some people make suicidal attacks to kill strangers who have done nothing to them, as on 9/11, because the attackers are consumed with a set of ideas-- a vision-- and driven by the emotions generated by those ideas and that vision. Read it HERE.

From MineWeb.com:

Ignore the chatter, gold will still pull its weight in 2010

As events around the world continue to change we should use gold to protect our wealth.

Author: David Levenstein
Posted: Monday , 04 Jan 2010

JOHANNESBURG -

After having the very fortunate opportunity of living in numerous major cities around the world, and while trying to assimilate with various different cultures, I realized that one's perception of the truth is a matter of interpretation. What I mean by this is that even though you may have been raised to behave in a certain matter or believe in certain things, it doesn't mean that your way is necessarily the correct way. And, instead of criticizing and insulting those people who do not believe in the same things as ourselves, instead we should embrace their differences in case there is something we can learn from them. In other words sometimes what we see or hear may not be the truth at all. You may well be asking what this has got to do with precious metals, in particular gold, well I'm going to get to that, so please indulge me for a few minutes. Read it HERE.

Here are the miners from Scottrade:

Here are the currencies from Kitco.com:
BYDDF 9.05 (Nice Upward Movement); FVITF 2.37 (Way to go!); KENS 0.025 (laggard); DOW off 39 to 10544; Gold 1122.20, and Silver 17.82.

Best to each, Doug

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