Thoughts on Markets

Friday, February 26, 2010

Gold & Silver Up - DOW Down - King Jesus in Control

Both of our precious metals are up today. They are showing a good bit of life. The economy is not growing are we are being told. In fact, it seems to be getting worse. Unemployment up, consumer confidence down, housing not looking good, and banks are not lending easily. Perhaps, investors are beginning to look at the economic facts, and not being swayed as easily by the Washington rhetoric. Note Ron Paul's call for an end to the Federal Service and a return to a gold standard.

Washington and the Federal Reserve are nestled uncomfortably on the horns of a dilemma. Either they raise interest rates to strengthen the dollar and crash the economy or they continue on the course of easy money and wreck the dollar. Ron Paul has the answer, but it will never fly until every last Keynesian has left for a desert island away from the world.

But we are pleased that the metals are experiencing a moment of less intervention and a slight taste of freedom. Can this last long? We will certainly find out.



From MineWeb.com:
A LARGE SWING AWAY FROM THE EURO

Gold: A picture tells a thousand words

The net long dollar position on Inter continental exchange is 150 times the six-year average; CME Euro is heavily oversold

Author: Rhona O'Connell
Posted: Thursday , 25 Feb 2010

LONDON -

As gold appears to be marking time amidst an array of uncertainties, it is probably quicker for the reader to look at a series of pictures than to be presented with screeds of text. Essentially gold's superficially lack-lustre performance in the middle of February can be lain at the feet of questions over future economic policies for the world's largest industrial countries, including interpretation of Dr Bernanke's latest statements, the moves within China and the latest concerns over Europe, notably the likelihood of a downgrade of Greece's debt. Read it and view some interesting graphs HERE.

From MineWeb.com:

CONTRADICTORY RUMOURS

China will buy IMF gold, China won't buy IMF gold - who knows?

First the rumours are that China won't buy the IMF gold, then there are equally strong rumours that it will. If China or India, the other rumoured buyer, don't cough up does it really matter?

Author: Lawrence Williams
Posted: Thursday , 25 Feb 2010

LONDON -

No sooner had most Western pundits come to the conclusion that China was unlikely to buy the IMF's remaining 191.3 tonnes of gold for sale, with reports in China Daily lending support to this interpretation of Chinese buying policy, than the Russians in the form of Pravda published an article saying that China was in talks with the IMF to relieve that august body of this bullion which is obviously burning a hole in its pocket. Read it HERE.

There is secrecy all around us. This is just another example. It will be interesting to see if the IMF does sell and know to whom it was sold.

From Bloomberg.com:

Turkey Risks Worst Currency Slump on Military Arrests

Feb. 25 (Bloomberg) -- Investors are betting political turmoil will weaken Turkey’s lira more than any other currency as the arrest about 50 army officers over an alleged coup plot raises tension between the government and the military. Read it HERE.

Another Greece on the horizon. The turmoil of this type seems to be at the starting gate. There will be more.

From ChicagoTribune.com:

Illinois stuck in a ‘historic, epic’ budget crisis

Talk of major tax increases coupled with draconian spending cuts is building in Springfield

Illinois government is staring down the barrel of an explosive financial mess, and perhaps nothing frames the danger better than two big numbers.

The first is $26 billion, the grand total that lawmakers have allotted this year for the meat of what the state does: funding education, health care, child welfare, public safety and the machinery of government itself.

The second number is $13 billion, the total of red ink in the state's main checking account that, by law, has to be erased — at least on paper — before a penny can be set aside for day-to-day operations in the fiscal year, which begins July 1. Read it HERE.

These are signs of recovery? I think we are still in deep water, possibly quicksand of financial trouble.

From GoldSeek.com:

Stocks Waft Higher, Oblivious to Reality By: Rick Ackerman

Read it HERE now. For those of you who believe that in stock investments one is playing on a level field, this is a must read. It divulges a savage game played on investors and and war between the ultimate big guys.

From PersonalLiberty.com:

Ron Paul Wins CPAC Straw Poll, But Not Everyone Is Impressed

At the recent Conservative Political Action Conference (CPAC) conference, Rep. Ron Paul (R-Texas) has once again called for a return to the gold standard and abolishing the Fed, and his message seems to be resonating with many conservatives. However, Paul’s growing popularity has many GOP insiders worried. Read it HERE.

The Miners from Scottrade.com:
The Currencies from Kitco.com:
Some current prices: BYDDF 7.80; FVITF 2.17; XDSL 0.0275; SNWT 0.136; DOW off 16 to 10302; Gold up 2.90 to 1109.50; Silver up 0.10 to 16.19.

The markets and currencies have been trading in a narrow range for the week and it has not been an exciting week. Even the metals, though down for most of the week, are up a bit today while the general market is down a bit. It is always interesting, but often it is wisest to simply stand aside and watch. This may be one of those times.

Let's just rest in the Lord and know that His way is always best. King Jesus is in control and moving all things together for the good of His people in the long run. That is a very comforting thought which we need to lay hold of and rest in His love.

Best to each, Doug

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