Thoughts on Markets

Wednesday, May 26, 2010

Precious Metals Resuming Rise - Even the DOW starts up

Well the boyz answered the call to keep Gold below 1200 during the day and they were successful. After the close, there was no need for them to do it. There was suspicious activity in Silver, as well. As we are seeing today, there is a strong demand for both physical metals.

From The Daily Pfennig: "Yesterday, I finished the Pfennig with the euro trading down 2-cents... But then along came Jones, Tall thin Jones, Slow walkin' Jones, Slow talkin' Jones, Along came long lean lanky Jones, to save Sweet Sue (the euro)... In reality, along came the Consumer Confidence report in the U.S., which along with the PPT (in my opinion) reversed the over 200 point loss in stocks... And with risk assets getting bought again, the currencies rallied alongside..." Remember yesterday I commented that the PPT (Presidential Plunge Protection Team) would come in during the last 30 minutes of the market to raise the DOW so it could close much better than it was during the day. They cannot let the DOW close below 10,000. Chuck Butler agrees that it happened.

From Ed Steer's Gold & Silver Daily Report: "Well, there wasn't a snowball's chance in hell that the bullion banks were going to allow gold price to stay above $1,200 during the Comex trading session yesterday... and they didn't. The gold price edged over the $1,200 mark a couple of times during floor trading on Tuesday... but there was always a not-for-profit seller there to knock it gently down again. Gold did manage to close above $1,200... but that was in electronic trading after the Comex close... and that didn't matter, because option expiry had already passed. Once again it was "mission accomplished" for the bullion banks... as all those tens of thousands of call options expired out of the money. Gold's low [around $1,186 spot] occurred at the London open... and the high [$1,205.50 spot] occurred moments before New York electronic trading ended at 5:15 p.m. Eastern time."


Minimum Wage Cruelty
Walter E. Williams

Update"Minimum Wage Cruelty" (4/14/10) was my column about the unemployment effects of Congress' 2007 minimum wage increase on the canning industry in American Samoa, a U.S. territory in the far Pacific Ocean. The 2007 legislation mandated 50 cents annual increases in Samoan minimum wages until it reached the U.S. mainland's hourly minimum of $7.25. In response, Chicken of the Sea International moved its operation from Samoa to a highly automated cannery plant in Lyons, Ga. That resulted in roughly 2,000 jobs lost in Samoa and a gain of 200 jobs in Georgia. Prior to minimum wage increases, Samoan wages were about $3.25 an hour. With the legislated increases, Samoa's minimum wage is $5.25. So the question is: Which is preferable for the Samoan worker -- being employed at $3.25 an hour or being unemployed at $5.25? Which buys more of life's essentials? Read it HERE.

From McAlvany Weekly Commentary:

Report on the bank and new regulations.

Turn up your volume minimize it and hear it HERE.


China: recapitalising global mining

Assessing a new era for the global mining sector, where even the Western World's biggest miners need Chinese capital.

Author: Barry Sergeant
Posted: Tuesday , 25 May 2010


This has been a benchmark week for the mobilization of Chinese capital, with the announcements that USD 2.7bn will be invested in infrastructure to enable an iron ore development in Guinea to get its goods, ready only some good years hence, to the Atlantic coast, and that in a mix of equity and debt, USD 877m has been earmarked for building a mine at a platinum group metals (PGM) deposit in South Africa. Read it HERE.


Greeks queue to buy gold sovereigns for financial security in turbulent times

THEY were parachuted in during World War II to fund local resistance to the Germans and now, with a population mired deep in another -- if very different -- crisis, British gold sovereigns once again are the foreign currency of choice in Greece.

Once again, too, they are offering a tangible sense of security amid turbulent uncertainty.

In the 1940s, as the only reliable currency available, much of it was hoarded in trunks, under floorboards and buried in gardens. Any respectable girl's dowry included a cache of sovereigns.

Now they are being used as a physical hedge against fears that Greece may leave the euro zone. Read it HERE.


Volatility Index 20 Year Chart

Given today’s volatility — we gapped down 2.5%, now are climbing to minus 1.5% – today’s lunchtime chart is this fascinating look at the long term history of the VIX, below. This graph is important and worth some study HERE.



For the past several weeks, Nancy Pelosi, Paul Volcker, John Podesta and Democratic Senate budget Committee Chair Kent Conrad have been talking up the value-added tax (VAT) as a way to resolve the debt crisis that they helped create, says columnist Glenn Garvin.

The president has done nothing to discourage the talk. Asked directly about the possibility of a VAT during an interview with CNBC, Obama replied: "That is something that has worked for some countries." Once again we are seeing politicians seeking more ways to tax than to cut their excessive spending. Read it HERE.

Miners from

Currencies from

Some prices early today: BYDDF 7.40; FVITF 2.00 ( I still like this for myself at >TLT 98.12; TBT 38.97; DOW up 92 to 10133 ( PPT is ready to protect 1000); Gold up 10.50 to 1200.70; Silver up 0.27 to 18.22.

"How long O' Lord?" As David asked and we must, too. How long will the intervention be allowed by You in the markets? Is this Your plan to wreck financial markets? It could well be, each of you should know.

God's wrath is being poured out on a world which has largely turned away from the Sovereign God of all. We must humble ourselves, repent, and turn back to Him else, He will destroy our nation which well deserves it. Until we do this, He will not answer our prayers for America.

Best to each, Doug


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