Thoughts on Markets

Tuesday, July 27, 2010

Death of Paper Money - Contracts Expire Thursday - Exciting Week


There is lots of news this week. As reported yesterday afternoon, the DOW hit a new high and the Transportations confirmed with a new high. Thus, we should expect higher prices for the general market. 

Be sure to listen to Gingrich's speech, below.

From Ed Steer, Thursday is the last day of trading for the metal contracts for the month of July. Prices will be very volatile this week. Expect more intervention between now and Thursday.

"Death to Paper Money," below is an interesting article. However, this may be some time in coming, but I believe it is a matter, not if, but when. 

More exciting times ahead with the month of August almost here. 

I am expecting a big rally in the precious metals this fall. Therefore, we may be treated to some opportune buying times in precious metals and mining stocks before then. 

Always consider your own risk tolerance, present portfolio, and cash position before any purchases. Then be very cautious in any buying.

Trust in the Lord and not in men. Diligently study His word and live in accordance with it. He will provide total security in the long term, even though you may be tried and tempted from time to time. This is all part of His plan for your growth in faith. Be certain that every part of your life gives Him the glory and you will rest secure in Him. Jesus Christ is King and He ever intercedes on behalf of His people before the Father. 

Best to each, Doug


The Death of Paper Money

by Ambrose Evans-Pritchard

As they prepare for holiday reading in Tuscany, City bankers are buying up rare copies of an obscure book on the mechanics of Weimar inflation published in 1974

Ebay is offering a well-thumbed volume of Dying of Money: Lessons of the Great German and American Inflations at a starting bid of $699 (shipping free.. thanks a lot).

The crucial passage comes in Chapter 17 entitled "Velocity". Each big inflation – whether the early 1920s in Germany, or the Korean and Vietnam wars in the US – starts with a passive expansion of the quantity money. This sits inert for a surprisingly long time. Asset prices may go up, but latent price inflation is disguised. The effect is much like lighter fuel on a camp fire before the match is struck. Read it HERE


Gold remains muted, despite bullish signals

Even though there was a lot of bullish news for gold last week, trading in the yellow metal remains stuck in a two tier trading range


The first bit of news that should have had a bullish impact on gold was the news at the beginning of the week. It was the announcement that Moody's had downgraded Ireland's sovereign debt rating from Aa1 to Aa2. And, then the EU and IMF suspended talks with Hungary. They urged the country to do more to cut the budget deficit before resuming the use of the bailout funds. The breakdown in talks means that Hungary will not have access to remaining funds of about 5.5 billion euros (US$7.1 billion) in its 20 billion euro financing deal until the review is completed. Strangely, this news didn't do much to the value of the Euro or the price of gold. Gold is still being capped, so what should one expect. Read it HERE.


Has the U.S. Lost its Grip on the Credit-Rating Business?

There's a new name in the credit-rating-agency business these days: It's Dagong Global Credit Rating Co. Ltd., and this Beijing-backed business is China's bid for a spot in the global-credit-rating oligopoly. HERE.


New Home Sales: Worst June on Record

Ignore all the month to previous month comparisons. May was revised down sharply and that makes the increase look significant. Here is the bottom line: this was the worst June for new home sales on record.

The Census Bureau reports New Home Sales in June were at a seasonally adjusted annual rate (SAAR) of 330 thousand. This is an increase from the record low of 267 thousand in May (revised from 300 thousand). Recovery going strong. NOT! Read it HERE.


'I Enjoy Crushing Bastards'

In a SPIEGEL interview, WikiLeaks founder Julian Assange, 39, discusses his decision to publish the Afghanistan war logs, the difficult balance between the public interest and the need for state secrets and why he believes people who wage war are more dangerous than him. HERE.


Jim Rickards - The Myth of August 

By James G. Rickards

July 26 (King World News) - It comes as no surprise that European bank regulators completed their bank stress tests in late July.  After all, what self-respecting European bureaucrat wants to spend the month of August thinking about the word stress.  August, of course, is the European vacation time par excellence and the continent practically grinds to a standstill except for those jobs directly involved in the transportation, lodging and feeding of vacationers.  Over time, this sense of August as a “time out” has become firmly entrenched in the United States and, as a result of globalization, is now truly a worldwide phenomenon.  Whether it’s central bankers in Jackson Hole, Russian apparatchiks in the Crimea or Chinese mandarins in Dalian, the whole world seems ready for a break.  And if the power elites are letting their hair down and applying the SPF 50, then it seems safe for us mere mortals to do likewise, secure in the knowledge that no geopolitical or economic catastrophes will occur if the leaders who cause them are on the beach. HERE.

From Ed Steer's Gold & Silver Daily: "There was monstrous volume in gold on Monday... but the lion's share of that was roll-overs and spreads, as options expiry in the Comex futures market is tomorrow... and last day of trading in the July contract is on Thursday... as is the last day for delivery into the July silver contract.  So once you take out all that activity, there wasn't much real trading going on.
Silver volume was very light... and there are still 129 silver contracts left to deliver in July... and they've got the next three working days [including today] to get it done.  I expect that this won't be an issue, but why the issuers waited this long to deliver is still a mystery."

Gingrich reviews Economics and society over the last few years HERE


Is Gold Losing Its Luster? 

Over the course of human history, some 5.3 billion ounces of gold have been mined. And gold has been many things over time. It is currency, jewelry, industrial metal, a store of value, an investment. And yet, China doesn't seem to like it all that much. SAFE (the State Administration of Foreign Exchange) announced recently that China won't be buying too much gold in the future. And considering that China is the world‟s second largest gold market, that matters. Read it HERE

Miners from

 Currencies from

 Some Prices: FVITF 2.11; BYDDF 6.70; TWWI 0.0499; TBT 37.01; Gold off 12.50 to 1169.50; Silver off 0.36 to 17.82; DOW up 9 to 10534; SPX up 0.90 to 1116.


Post a Comment

Links to this post:

Create a Link

<< Home