Thoughts on Markets

Wednesday, August 18, 2010

Gold Rush in China & Europe? - Boyz Back - Dr. Copper

More reports are coming through about the fact that an increasing amount of trading for products within Asia and some outside countries using currencies other than the dollar. This, as it increases, will be putting ever more pressure for the eventual dumping of the dollar as a reserve currency. When this happens, should expect at least a 50% decrease in the purchasing power of the dollar, and a significant increase in the dollar value of precious metals. Of course, this will put us all in a bind as we shop, because prices will be escalating in dollar amounts beyond what one can perceive at present. Beware of this, because only the precious metals will retain purchasing power and will protect our wealth for such a dollar disaster. I firmly believe that it is coming. My question is not IF, but WHEN?

We, as a nation, have not been good stewards of the reserve currency of the world entrusted to us. Thus, we have robbed the world of things in exchange for a rapidly depreciating dollar. The real depreciation began on August 15, 1971, when other nations were barred from exchanging dollars for our gold. That opened the flood gates for decades of lessening the value of the dollar in relation to other currencies and commodities. We have defrauded ourselves and the world. 

Ourselves, by allowing our government, in violation of the Constitution, to produce unbacked paper dollar. This is a hidden tax that few recognize. Other nations by accepting their commodities and products in exchange for a fake currency.

By the way, note that the Chinese and Europeans are more knowledgeable in precious metals than we. They have for centuries used precious metals to escape from all kinds of disasters. They have used them in the past to purchase necessities when the currencies were worthless, for escaping oppressive governments, for bribing officials for special privileges, and many other life saving purposes. They have the experience that we lack. Two articles further down reflect action based upon  this historical knowledge. 


Will Republicans Save Us? 
Democrat control of the White House, House of Representatives and the Senate has produced an unprecedented level of political brazenness and contempt for the limitations placed on the federal government by the U.S. Constitution. As such, it has raised a level of constitutional interest and anger against Washington's interference in our lives that has been dormant for far too long. Interesting, as usual, Walter Williams reports on what Republicans did in the past. HERE.


Dismantling America: Part II

"We the people" are the central concern of the Constitution, as well as its opening words, since it is a Constitution for a self-governing nation. But "we the people" are treated as an obstacle to circumvent by the current administration in Washington. Great insight by Thomas Sowell HERE.

From SeekingAlpha: 

Profiting From the Chinese Gold Rush

China's first gold rush is underway. I mentioned in my article how big the coming stampede is. HERE.


European gold demand - Bernhard Schnellmann, director for Precious Metals Services at Argor-Heraeus

A look at current levels of European gold demand and what is likely to happen to prices as people come back from their summer holidays


Demand perspectives: driving the gold price ever higher
Six key demand factors which will come together and help drive the gold price upwards over the next couple of years. HERE.


Mindich's Eton Park Leads Hedge Funds Joining John Paulson's Bet on Gold

Eric Mindich’s $13 billion Eton Park Capital Management LP led hedge funds in raising gold investments last quarter, joining billionaire John Paulson’s bet that bullion will increase amid inflation concerns. HERE.


Embry Still Burns Bright
Sprott Asset Management's Chief Investment Strategist John Embry loves to talk gold. And we love to listen. We thought you might, too, because he's always long on opinion and predictions. John envisages that the "extraordinarily painful" economic times ahead will ultimately lead to a new currency backed by, of course, gold.


Gold Prices Trapped in Tight Range 

Gold for December delivery was losing $1.20 to $1,227.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,228.60 and as low as $1,221.70 on light volume. The U.S. dollar index was losing 0.20% to $82.06 while the euro was rising tentatively to $1.29 vs. the dollar. The spot gold price Wednesday was down 50 cents, according to Kitco's gold index. HERE.

Below are very suspicious moves of both of our precious metals at precisely the same time. I believe the boyz are back in action after taking a day or so rest. This does not appear to be normal market activity. I am holding tightly to the hand rail on the sinking USS Dollar and keeping my precious metal investments. You decide. Such moves will shake out the weak investors and make further upward progress more sure than ever.

Dr Copper, as Richard Russell calls it, is giving us mixed signals. However, the price is holding well and may even be moving upward. Copper prices give an indication of the international economies. Of course, we should remember that China is consuming a great amount of copper and is still shopping for commodities around the world.

 The miners from

The currencies from

 Some current prices: FVITF 2.169 (Down a bit, but holding well); GBG 1.99; TLT 105.50; DIA 103.94; Gold off 5.40 to 1219.30; Silver off 0.29 to 18.24; DOW off 51 to 10355; SPX off 4 to 1088.37.

Rest securely in King Jesus for real, eternal security. There is no other way.

Best to each, Doug


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