Thoughts on Markets

Tuesday, June 22, 2010

Bullion Banks Have Returned - Bonds - Gold - Silver - Minning Stocks

Well, it seems that the boyz are back. "How long, O'Lord?"

A new song by James Cobb -- "Time to End the Fed!" It's on youtube HERE. The sentiment of this song is right on. Listen and broadcast it to all.


When Will the Bond Auctions Begin to Fail? 

There’s great concern over the sustainability of US deficits. Most of the fear mongering, hyperventilating, flat earth economists believe foreigners will at some point stop “funding” our spending. The hyperinflationist crowd likes to keep a very close eye on US government bond auctions hoping foreign demand for debt will dry up, auctions will begin to fail and interest rates (and inflationary pressures) will surge as the United States effectively defaults (which is technically impossible) and dies the death that so many of these people wish upon it.

Unfortunately, 99% of the inflationistas have a very poor understanding of reserve accounting so their arguments have not only been wrong for a very long time, but they never really carried any weight to begin with (as one reader eloquently put it – “at some point being right has to count for something” – the inflationistas have been horribly wrong throughout this downturn). So what is really happening when the government auctions off bonds? Let’s take a look. Read it HERE.

This is an interesting article, but I believe that I am one on the other side which believes that the world buys bonds to support our over consumption. At some time in the future, the world will cease doing this and then we will not be able to sell bonds. I want to do away with the Fed and its attack upon the citizens of this nation. They have failed to accomplish the task they were sold to the U.S. to do. Of course, our government has virtually torn up the Constitution and is operating largely outside the limitations thereof.


Gold Sets Another Record  
2010 June 19
James Turk writes --
Five weeks ago gold closed in London at a new record high against the British pound. That result is not surprising. The pound is generally considered to be the weakest of the world's major currencies, so it is logical that it would fall first against the strength that gold has been displaying in recent weeks.
Surprisingly, the next currency to fall was the Swiss franc. Gold closed three weeks ago at a new record high against what used to be considered the world's premier 'safe-haven' currency. It no longer holds that title because the Swiss National Bank has been intervening to keep the Swiss franc from strengthening against the euro, which has been sinking because of its well-publicized problems. So the Swiss franc has been falling along with the euro, which itself has not been immune to gold's strength. Last week gold set a new record against the euro. Great graph - Check it out HERE.


Gold reclaims its currency status as the global system unravels

Jean-ClaudeTrichet, the president of the European Central Bank (EC), talked days later of "the most difficult situation since the Second World War, and perhaps the First".  The article goes into details of the current situation. It is worth a good read. HERE.


What G20 will not discuss this weekend (but probably should)
By James G. Rickards

There's a growing sense that the current global economic "Plan A", i.e. substitute public debt for private debt and use fiscal stimulus to keep economies afloat until private demand kicks in, has failed. Not surprising to many of us; it was destined to fail, but now the reality of that is becoming undeniable so leaders are scrambling for Plan B.

Others are not so sure.  One problem is timing.  There are several Plan B's, but they all take 5-7 years to implement, e.g. yuan as reserve asset, SDR's as a new liquidity source, etc.  The two-tier Euro plan is just another Plan B although it might possibly be implemented in 2-3 years rather than 5-7. A return to a gold backed reserve currency? A possibility. Read it HERE.


12 American Warships, Including One Aircraft Carrier, And One Israeli Corvette, Cross Suez Canal On Way To Red Sea And Beyond

Arabic newspaper Al-Quds al-Arabi reports that 12 American warships, among which one aircraft carrier, as well as one Israeli corvette, and possibly a submarine, have crossed the Suez Canal on their way to the Red Sea. Concurrently, thousands of Egyptian soldiers were deployed along the canal to protect the ships. The passage disrupted traffic into the man made canal for the "longest time in years." The immediate destination of the fleet is unknown.  More saber rattling for the Mid-East. Read it HERE.


Gold is now in the mainstream

With Sunday papers now getting into the gold investment recommendation game, is it time to get out of the yellow metal? Frank Holmes thinks not
Author: Frank Holmes
Posted:  Monday , 21 Jun 2010
The New York Times dedicated a chunk of last Sunday's paper to gold as a mainstream investment. In other words, gold is now legit -- no longer can it be dismissed as the asset of choice for fringe types with a cellar full of canned goods and a stash of bullion buried in the backyard.
Soros on the left and commentator Glenn Beck on the right as examples of the newly converted. Gold in the local news indicates the beginning or near beginning of the third phase. This is an important read. HERE.

Miners from

Currencies from

 All true joy and peace comes from King Jesus. We rest securely in His love and providential care. If you do not know and trust Him, you are lost. Do not remain in that condition. Seek Him through His word and worship with His people. You will find Him.

Some prices: BYDDF 8.03; FVITF  2.08; SSG 15.49; TBT 38.45; DOW off 8.17 to 10440; Gold up 8.50 to 1241.10; Silver up 0.22 to 18.93.

Best to each, Doug



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