Thoughts on Markets

Monday, March 22, 2010

Metals Capped - Obamacare Passing - Buying Opportunity

Folks,

The boyz are still in the game. I imagine their deep pockets and government sanction gives them unlimited access to manipulate the markets at will. There actions are blessed by the central banks and governments in the war on gold. Both of these entities are struggling to maintain the monopoly they have on unbacked paper currencies. The paper currencies give them control over populations; therefore, they see it as a means of maintaining and expanding this throat hold.

It seems that Obamacare is almost completely bought by Obama through the Congress; regardless of what the citizens and doctors want. Our Congress is truly proving to be a pawn of Obama rather than representing the good of the people. Let's vote them all out (except for Ron Paul) this year and next.

These precious metals graphs show the very suspicious non-market moves for the last two trading days. Such moves by not for profit bullion banks keep an unrealistic cap on precious metals. Thus, the price of the metals do not truly reflect the value of the metals in relation to the devaluation of the paper currencies of the world. Some day they will more accurately reflect market prices and that is why the metals provide the long term value of whatever wealth we own.

However, the boyz are providing some opportunity for adding to our mining stocks. I am interested particularly in Hecla (HL), DRD Gold (DROOY), Harmony (HMY), and Fortuna (FVITF) at these prices. There will be a gold rush and such will enable us to be ready for it when it comes.



From Kitco News:

A.M. Kitco Metals Roundup: Gold Weaker on Stronger U.S. Dollar, Weaker Crude Oil

By Jim Wyckoff
22 March 2010, 8:18 a.m.

Gold prices are modestly lower in early trading Monday, on follow-through selling pressure from solid losses posted on Friday. April Comex gold was last quoted down $5.50 an ounce at $1,102.10. Gold is feeling downside pressure from bearishly postured "outside markets" early Monday--a firmer U.S. dollar against the other major currencies and weaker crude oil futures prices. The U.S. dollar index hit a fresh three-week high overnight, while crude oil prices are holding true to recent historical form and backing down after challenging the $85.00-a-barrel level last week.

Spot gold in Europe was also weaker Monday. London traders said the gold market saw pressure from a weaker Euro currency, amid ongoing European Union debt problems. There are worries among traders that EU members may fail to agree on a debt aid plan for Greece. Wire reports quoted Germany's Chancellor Merkel as saying Greece did not need aid. Read it HERE.

From Bloomberg.com:

Gold Falls in New York on Dollar Strength, Indian Rate Increase

By Nicholas Larkin and Kim Kyoungwha

March 22 (Bloomberg) -- Gold declined in New York as the dollar continued its advance and India’s interest-rate increase dampened investor demand.

The dollar traded near a three-week high against the euro on concern the European Union will fail to agree on an aid package for Greece. Bullion slid 1.8 percent on March 19, the most since Feb. 4, as the greenback climbed after the Reserve Bank of India unexpectedly raised borrowing costs. Gold typically moves inversely to the U.S. currency. Read it HERE.

Note: The Bank of India raised interest rates. We must remember that rising interest rates inversely affect the market value of existing bonds. Thus, it seems that the value of bonds will be lower in the future. I am using the ETF TBT which rising inversely to the market value of bonds. It is, in effect, a short on bonds. My preference for my accounts is calls on TBT expiring in January 2011.

Miners from Scottrade.com:

Currencies from Kitco.com:

Some current prices: BYDDF 9.70; FVITF 2.33; UUP (Dollar ETF) 23.71; TBT 46.81; Gold 1097 off 10.90; Silver 16.72 off 0.24; DOW up 43 to 10875.

I am a buyer of HL at < class="blsp-spelling-error" id="SPELLING_ERROR_31">DROOYat < class="blsp-spelling-error" id="SPELLING_ERROR_32">FVITF at <>

Only the Lord knows the timing and the future, because He controls it in spite of what men think. Rest in His judgment. After all, we all was created by King Jesus and He now intercedes on behalf of His people at the right hand of the Father.

Best to each, Doug



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