Thoughts on Markets

Wednesday, June 09, 2010

Insightful Videos - Commodities Correction? - Gold - Silver - Unemployment

From MineWeb.com:

BCA Research: commodities "are in the midst of a bull market correction"
Recommends holding core positions, especially commodity currencies, selected energy plays, and precious metals.
Author: Barry Sergeant
Posted:  Tuesday , 08 Jun 2010
JOHANNESBURG - 
Quality precious metal stocks aside (dollar gold bullion made fresh record highs today), mining stocks have been battered from early in April, on the back of most commodity and metal prices heading into sharp corrective territory. For some weeks, market chatter has focused on the possibility of the global economy heading into a "double dip" recession.
"Dr Copper", said to be the most economically sensitive metal, has been on the slide for two months, from more than USD 3.60/lb, to around USD 2.75/lb. The contraction has not, however, been as deep as in 2008, when copper prices collapsed on the back of global financial contagion, from more than USD 4.00/lb to just USD 1.28/lb by the end of that year. . . BCA Research concludes that commodity markets are in the midst of a bull market correction, and that core positions should be held, with an emphasis on commodity currencies, selected energy plays and precious metals. This is a great article by a sound think tank which you can read  HERE.

From MineWeb.com:

Gold climbs to new record as double dip recession talk grows
With gold breaching the $1250 level Tuesday, talk of the dreaded double dip recession is gaining credence.
For some time now we've been saying that the global financial turmoil had a way to run yet, but markets, which were then rising, and soaring commodity prices, looked to be belying our forecasts.  But, the past few weeks has seen a complete turnaround.  Firstly metals commodities prices slumped - initially on fears that Chinese demand had been falling as the government tried to rein back on unbridled growth - then came the Greek debt crisis and the pressure on the Euro, and stock indices around the world plunged, with the only real benefactors being short sellers and gold holders. Read it HERE.

From MineWeb.com:

Of gold and volatility - advice from Frank Holmes
Frank Holmes reckons that even the most prudent investor can't escape the wild volatility that's come to characterize the markets. Interview with The Gold Report.
Author: The Gold Report
Posted:  Tuesday , 08 Jun 2010
KENWOOD, CA -  - 
The Gold Report: In a recent interview, you stated that price-wise, gold performs exceptionally well whenever three factors coalesce-negative interest rates, deficit spending and an increase in the money supply. Essentially, as I read it, the combination of those three factors makes gold a hedge against a devaluing currency-whether it's dollars in the U.S. or euros in Greece, Portugal or Germany, wherever they use euros. Is this coming confluence the major reason Americans and Europeans should be investing in gold at this time?

Frank Holmes: Yes, and deflation is the big factor to remember at the back of this. It's fighting deflation, and 80% of the time since the year 2000, interest rates on U.S. Treasury Bills have been less than the CPI number. That means a negative interest rate environment, and it means the government is trying to fight deflation; it's not really concerned about inflation. Gold will rise when you have temporary short deficits, but what we have is sustained long-term deficit spending while we're fighting deflation and negative interest rates. That makes gold extremely attractive against the U.S. currency. Although the dollar is not currently as anemic as it was, we've seen that in the U.S., and we're certainly seeing it in Europe, with what has taken place with Greece and the debasement of the euro. Interest rates in Europe have not risen either; they're basically negative. Read it HERE.

From Ed Steer's Gold and Silver Daily:
















Folks, We see here the impact of census takers and other manipulation of the employment figures; however, the most significant thing is that it is governmental workers which increased and not the private sector where jobs are vitally needed. Remember, governments produce nothing and only sap the salaries and profits from the private sectors. I am often reminded of the saying, "I from the government here to "help" you." Don't believe it for an instant. The government seeks ever more control over the citizens.

From Bloomber.com:

Pimco’s Crescenzi Sees ‘Endpoint’ in Devaluations 

June 8 (Bloomberg) -- Nations have reached a “Keynesian endpoint” as exhausted balance sheets leave policy makers with few options to bolster economic growth, according to Anthony Crescenzi, an investor at Pacific Investment Management Co., the world’s largest bond-fund manager.
“Time, devaluations, and debt restructurings might be the only way out for many nations,” Crescenzi wrote in an e-mailed note titled “Keynesian Endpoint” that referenced the Great Depression era economist John Maynard Keynes. Debt-fueled spending programs aimed at combating the global financial crisis of 2008 are among policy tools now “being seen as a magic elixir that has morphed into poison.”  Read it HERE.

From TheRealNews.com:

What happened to the "death of the dollar?"  See this interesting video HERE.

Hear the  McAlvany Weekly Report with Stephen Roach on The Next Asia HEREHe says that China can react more quickly than the West and will have a stronger economy as a result thereof.

The miners from Scottrade.com


















Currencies from Kitco.com:

Some prices: BYDDF 7.97; FVITF 1.9125; TLT 97.70; TBT 38.79; DOW up 60 to 9999; Gold down 0.40 to 1234.40; Silver up 0.05 to 18.33.

ETFs and do not intend to sell at any time soon. Looking to buy calls on TLT for the short term if I can get my price, and am holding calls on TBT which are presently losers. Expect to see a turn around in U.S. Treasuries 20 year Bonds in the 4th Quarter of this year. Also, I anticipate that miners and precious metals will hold fairly strong for the rest of this year and will likely increase in current dollar cost. 

My will will not be done, but I know King Jesus and depend upon His will which is much better than mine. His will be done without a doubt and He loves and cares for His people. 

Best to each, Doug

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