Thoughts on Markets

Tuesday, March 23, 2010

Debt is the destroyer of nations. Gold & Silver Buying Opportunity?

We are being offered further buying opportunity in the precious metals and in mining stocks by the recent lower prices. Check out the following two graphs on gold and silver. Then check on the mining stock prices. Some may be suitable for your purchases.


From Free Money Gold Report:

Debtor Nation

March 22, 2010 – Only a few decades ago, the United States was the world’s largest creditor nation. American capital spanned the globe financing all types of investments in virtually every country. But that dominance began to erode in the 1960s because growth in consumption in the United States was starting to outpace new production. Wealth built up over generations was being consumed. Read it HERE.

From Economic Edge:

THE Most Important Chart of the CENTURY

The latest U.S. Treasury Z1 Flow of Funds report was released on March 11, 2010, bringing the data current through the end of 2009. What follows is the most important chart of your lifetime. It relegates almost all modern economists and economic theory to the dustbin of history. Any economic theory, formula, or relationship that does not consider this non-linear relationship of DEBT and phase transition is destined to fail. Read it HERE and view the graphs and charts which are very good.

From Free Money Gold Report:
Don't Count on the Consumer

March 20, 2010 – There is a prevailing view held by American policymakers that debt and resurgent consumer spending will lift the country from today’s financial morass. The thinking goes that the road to recovery will be reached only if consumers once again start to borrow and spend. It was therefore interesting to read a recent report by David A. Rosenberg, Chief Economist & Strategist Gluskin Sheff that identifies “the new paradigm of consumer deleveraging and frugality”. Noting that “the consumer has led 80% of all past post-recession revivals.” Read the report HERE.

From Kitco.com:

Gold Weaker as Bulls Lose Near-Term Technical Momentum

By Jim Wyckoff
23 March 2010, 8:45 a.m.

Gold prices are modestly lower in early trading Tuesday as the bulls are fading from a near-term technical perspective. April Comex gold was last quoted down $4.80 an ounce at $1,094.70. Gold is again seeing downside pressure from bearishly postured "outside markets" early Tuesday--a firmer U.S. dollar index and weaker crude oil futures prices.

Spot gold in Europe was also weaker Tuesday. London traders said the spot gold market saw selling pressure from a weaker Euro currency on worries the European Union will fail to agree on a debt aid package for Greece when the group meets in Brussels later this week. Germany is increasingly at odds with other EU countries, regarding bailing out Greece. Greece's finance minister said Tuesday his country did not need any financial aid, but traders paid little attention to that political rhetoric. Gold traders will continue to very closely monitor any new developments coming from the European Union, regarding Greece. Read it HERE.

Miners from Scottrade.com:

Currencies from Kitco.com:

Some current prices:

BYDDF 9.99 (Nice, isn't it?); FVITF 2.50 (Holding Strong); TBT 47.22 (Short on LT bonds); UUP 23.70 (ETF on US Dollar); Gold up 0.60 to 1103.20 (Appears to be big demand at these prices); Silver off 0.02 to 16.94; DOW up 44 to 10824. All markets seem trapped in a rather tight trading range with no real direction. It continues to be a strange time in all markets. I am sticking with precious metals and mining stocks with a few dollars to meet current expenses.

I rest in the Lord Jesus Christ who is in control and working for the eventual good of His people. We are to glorify Him and enjoy Him forever. This can only be done as the Holy Spirit blesses our reading of the Scriptures and empowers us to do the will of God. Thus, we must study the Word and stay in fellowship with other Christians.

Best to each, Doug


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