Thoughts on Markets

Thursday, June 24, 2010

America, the Not So Beautiful - Silver Eagles - Gold

Take a look at gold. It is staying well above 1200 for the time being. At times it does not seem to be rewarding us, but remember, it does retain its purchasing power. That is the reason for keeping it through good times and bad. We are waiting for the third phase which does not seem far away.

By the way, here is a look at gold prices in dollar terms over 10 years. Would you rather have held ever worthless paper dollars than gold?  I think not! From near $300 an ounce, gold is now over $1200. What about the purchasing power of the dollar? It is way down and destined to go farther.


Nine reasons gold will go past $1500 - Jeff Nichols: MD, Precious Metals Advisors

As history repeats itself the yellow metal is likely not only to hit $1,500 by the end of this year, but also to go subtantially higher in the next few years< From The Daily Pfennig:  "Front and Center this morning, Julia Gillard became Australia's first female prime minister after Kevin Rudd stepped aside as leader of the governing Labor Party, paving the way for the government to drop a controversial new 40% levy on mining profits that has damaged its standing in voter polls." Read it HERE.

What's in store for Australian mining with the fall of the House of Rudd?

A precarious peace pact has been struck between the Australian mining lobbies and the Federal Government following the sudden departure of Kevin Rudd as Australian Labor Party Leader and thus the Prime Ministership.
Author: Ross Louthean
Posted:  Thursday , 24 Jun 2010
The advent of Julia Gillard as Australia's first female Prime Minister will see a review of political issues and one of the most contentious issues that saw the Government under Rudd getting into electoral trouble - the resource super profit tax (RSPT) - will now be up for discussion.
Gillard told the Canberra media gallery today that she would bring to an immediate halt to the Rudd-inspired expensive advertising campaign to promote the case for a 40% super tax on miners, and she hoped the mining lobbies would follow suit so there could be meaningful talks. Read it HERE.


Gold can provide protection against looming U.S. debt hurricane

Storms ahead for the stock markets and perhaps it is only gold which may provide some respite against major prospective wealth decline.
Author: Lawrence Williams
Posted:  Wednesday , 23 Jun 2010
Forty-eight U.S. states will be in deficit this year and the combined shortfall will probably exceed $300 billion.  That puts Greece's expected 2010 budget shortfall of around $28 billion into perspective.  Indeed Greece's shortfall is put at around 13.6% of GDP, whereas there are a good number of U.S. states anticipating deficits of more than 20% this year - including some, like California, New York, Florida and Illinois, with far bigger economies than Greece.  Indeed there are around a dozen U.S. states with bigger economies than Greece and most of these anticipate 2010 deficits at this kind of level!  And look what news of the Greek deficit, once it was generally publicised, did to the markets! Read it HERE.


New demand sources to bolster silver prices

Investment demand remains a big driver but, growing, new industrial uses are expected to eat away at the current supply surplus
Author: Geoff Candy
Posted:  Wednesday , 23 Jun 2010
Demand for silver from new sources like the solar energy, medical and water purification sectors is likely to quadruple in the next 10 years.
This is one of the forecasts made in the VM Group/Fortis Bank Nederland, Silver Book. According to the research, demand for such products is likely to rise to at least 230 Moz to account for roughly 25% of world silver demand.
And, coming on the back of significant, continued inflows into silver ETFs, means that the fundamentals over the medium to long term for the metal are "more convincingly bullish that they have been for some time".  Read it HERE.

The following, from Casey Research, is an assessment of America from the perspective of the Constitution. Our once great nation was founded upon Christian principles using the Geneva Bible as a guide. Its foundation was made possible against the world's greatest army by the providence of our Triune, Sovereign God. His providential blessings flowed toward this "Nation set on a Hill" as a light to the world has been undermined from within as individuals, families, and churches have turned their backs on God. 

We are now receiving our just rewards from King Jesus. However, these are warnings He is using to call us all to repentance just as He did for the Old Testament nation Israel. Israel failed to heed the warnings, so the Day of the Lord came to Israel in judgment in 70 AD when Titus utterly destroyed Jerusalem as Christ had predicted in Matt. 24. 

Israel was God's chosen people, but they chose other gods and were completely destroyed except for a small remnant which God protected. The new Israel the Church of King Jesus replaced the old church, Israel, in 70 AD. Now we are following the same path as that chosen by Israel. If God did not spare Israel, do you believe He will spare us without our diligent and immediate returning to Him? He will not preserve America unless we respond to His warnings. 

Take heed, repent, turn from your wicked ways, and follow the Law-Word of the Living God before it is too late.

From Casey's Daily Dispatch: "Naturally, we want to think of America as America the beautiful. Taking off the rose-tinted glasses, however, presents a different image altogether… that of a bankrupt, highly militarized, and hair-triggered socialist empire that is daily finding new ways to tax its struggling citizenry and tramp all over the Constitution.

Not to be overly dramatic, but the real face of America is increasingly like that of an early-middle-aged woman I saw the other day. She was wheelchair bound, with only one leg, her overweight body covered in poorly rendered tattoos. With a cigarette hanging from the corner of her mouth, she rolled out of a liquor store, a telling brown paper bag in her lap. In other words, the very picture of a life dominated by bad decisions.

While America hasn’t yet been laid so low, it would be a mistake to think it can’t – and won’t – happen. If its leaders and a majority of the population persist in their ignorance of the causes and effects of economic failure, it is all but certain.

And it’s not just economics. Over the weekend I re-read both the Declaration of Independence and the Bill of Rights, and it struck me that if the Founding Fathers were alive today, they would be considered terrorists and rounded up. Furthermore, because the Bill of Rights has been all but voided at this point, they might be dropped into the equivalent of a dark hole with no right to a speedy trial, or any trial at all, for that matter.

Trading our freedoms for security is a bad decision because, in the end, the nation will be neither free nor secure. Much in the same way that, to paraphrase one sage, a government that habitually saves all fools from their bad decisions, ultimately creates a nation of fools.

Fools that, like the letter writer, are clearly not self-made but rather look to the coddling nanny-state to guarantee an agreeable lifestyle. By virtue of the massive wealth that its post-WWII hegemony provided the United States, the nation’s finances could support – for a time – an increasing crowd of moochers. But that wealth is now gone, leaving in its place the world’s largest debtor.

And so it is that in the world now emerging, one where reality trumps fantasy, when talk turns to further stimulus, the conversation should no longer revolve around the ways that the government can prime the economic pumps with yet more borrowing and spending. That’s how we got here in the first place, and a sure road map to an even worse catastrophe.

The continued failures of the government’s misguided efforts can be seen in the latest bad news on the housing market – bad news we warned subscribers to The Casey Report, and to this service, to expect for months now." I suggest you subscribe and read this FREE report HERE


Coeur Enters into Agreement with China National Gold for Processing of Kensington Gold Concentrates

COEUR D’ALENE, Idaho--(BUSINESS WIRE)--Coeur d’Alene Mines Corporation (NYSE: CDE - News (TSX:CDM - News (ASX: CXC - News) today announced that Coeur Alaska, Inc., a wholly-owned subsidiary, has entered into a contract with China National Gold Group Corporation, China’s largest gold producer, for the purchase and processing of gold concentrates produced at Coeur’s new Kensington gold mine. This agreement is the first of its kind between a state-owned corporation of the People's Republic of China and a U.S. precious metals mine. Read it HERE.


Economists consider tearing down homes to protect housing market

Douglas Duncan, vice president and chief economist for Fannie Mae, raised a provocative idea at a recent meeting of real estate journalists in Austin: Some of the misconceived housing developments built during the boom years might have to be torn down because they don't make financial sense.
Duncan agreed with Stan Humphries, chief economist at, who warned that a "tremendous shadow inventory" of homes is poised to come on the market. That includes future foreclosures (due to negative equity and continued high unemployment), homes that will end up in foreclosure after failed loan modifications, and homes from what he calls "sideline sellers" who have been biding their time until the housing market improves. Humphries said home prices won't bottom out until the third quarter of this year, leading to "the second phase of the housing recession": below-normal price appreciation for several years. (The long-term appreciation norm is 3 to 5 percent per year.) Some economists are really showing their lack of wisdom. Realize, of course, many of these are the same ones who recommended making homes available to all at almost no down payment and subsides loans which created the mal-investment in the first place. Read it HERE.

Miners from

Currencies from

Some prices: FVITF 2.03 ( I have GTC orders in at 1.96-1.99); BYDDF 7.91 (Would like to buy below 7.80); SSG 16.62 (Have unfilled orders for Sept 15 Calls); TBT 37.32; TLT 99.31; DOW off 75.73 to 10222; Gold up 4.30 to 1241.60; Silver up 0.02 to 18.53 ( I am thinking about more Silver Eagles and Maple Leafs.

Best to each, Doug



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