Thoughts on Markets

Tuesday, September 28, 2010

FVITF Falters, but is recoving - Gold to New Hi - Silver Moving upward

This is another exciting day in the markets with a lot of volatility. FVITF presented a very negative graph, but then turned around about the time I started to sell. I am holding off sales for now.

Without the Lord, I would be lost for certain. That is, lost in the matter of the soul and lost in the day to day life. To be without the Lord is in reality death. To be with Him is peace and joy even in times of challenge and trouble.


Thomas Sowell
Politics Versus Gold
One of the many slick tricks of the Obama administration was to insert a provision in the massive Obamacare legislation regulating people who sell gold. This had nothing to do with medical care but everything to do with sneaking in an extension of the government's power over gold, in a bill too big for most people to read.
Gold has long been a source of frustration for politicians who want to extend their power over the economy. First of all, the gold standard cramped their style because there is only so much money you can print when every dollar bill can be turned in to the government, to be exchanged for the equivalent amount of gold.This is a great read. HERE.


Double-Dip Recession With Mayo on It!
Chuck Norris:

Just in case you missed the news, it's official: The recession is over. Or so say the Business Cycle Dating Committee of The National Bureau of Economic Research and the Obama administration media machine. Actually, it's been over since June 2009. Yes, you read that right: June 2009!
Is it just me, or did anyone else miss the recovery, too?
Granted, don't wince that the NBER's committee of eight made that economic conclusion on a quick conference call the day before the president's town hall-type CNBC meeting last week, during which he defended his failing economic plan. What convenient and coincidental timing! Interesting comments on the timing, as well as, the fictional report. HERE.


The Message of Tokyo's Kowtow
Pat Buchanan:

Hubris will do it ever time.
The Chinese have just made a serious strategic blunder.
They dropped the mask and showed their scowling face to Asia, exposing how the Middle Kingdom intends to deal with smaller powers, now that she is the largest military and economic force in Asia and second largest on earth.
A fortnight ago, a Chinese trawler rammed a Japanese patrol boat in the Senkaku Islands administered by Japan but also claimed by China. Tokyo released the ship and crew, but held the captain.  Talk about hitting the nail on the head. This is likely the Chinese philosophy in dealing with the world. HERE.


Dollar Trades Near Five-Month Low After U.S. Home Price Rise Slows in July
The dollar traded at almost a five- month low against the euro after U.S. home prices rose at a slower pace in July, fueling speculation the Federal Reserve will ease monetary policy.
The greenback was mixed against 16 most-traded counterparts as U.S. economic reports were expected to increase the likelihood the central bank will restart the purchase of government debt. The yen strengthened against the dollar to the strongest level since Japan intervened in the market Sept. 15 to weaken the currency. HERE.

From via Ed Steer's Gold & Silver Daily:

This is graph showing the debt increases for each of the last few presidents. Please, note the beginning increase during the Reagan years:

From John Embry of Sprott Management:

Largest Gold Swap Ever Almost Escapes Notice
Read it HERE.


A Red-Alert Threat to the Regime
by Gary North This is an article which describes the Federal Reserve and Federal Government's fear of an audit of the gold reserves. It is a very important read. HERE.


Gold is the final refuge against universal currency debasement 
States accounting for two-thirds of the global economy are either holding down their exchange rates by direct intervention or steering currencies lower in an attempt to shift problems on to somebody else, each with their own plausible justification. Nothing like this has been seen since the 1930s. This is an article which lays it on the line. It expresses the fear of gold that governments and central banks have. HERE.


Silver's break to 30 year highs - John Licata, chief commodity strategist at Blue Phoenix
Investment demand for silver has increased dramatically but it is its industrial uses that are possibly more interesting as the metal increasingly becomes a leading barometer for economic growth says, Blue Phoenix's John Licata. This is an interesting audio and read. Check it out HERE.


Harmony gold's Bambanani operations remain suspended after tremor
The gold miner says a tremor hit its Bambanani operations on Monday injuring four workers and trapping two others. This has an impact on the price of one of my core mining stocks. Hopefully, this will pass. HERE.

More on the growing trade war between US & China from The Daily Pfennig ( "The subject which has been dominating the news wires over the past few days is currency intervention. The US has been trying to pressure China into allowing greater appreciation of the Renminbi which has risen just 2% vs. the US$ this year (and all of that rise has come in the past 3 months). US lawmakers will vote at the end of this week on legislation that would allow US companies to petition for higher duties on imports from China in order to compensate for the effect of a weak currency. In response, China has announced it would slap a higher tariff on American poultry imports.
Sure looks like the beginning of a trade war which is not what the US needs right now! Especially when the engine of global growth is centered in China. The US is going to need the growing markets of China in order to sustain any hope of a recovery, and a trade war could quickly escalate; cutting off any hope of an export driven recovery. US lawmakers need to just stick to jawboning the Renminbi lower, and stay away from tariffs. China has begun to allow the slow appreciation of their currency, and slapping tariffs won't speed up the process. They will continue their slow and steady approach to currency appreciation."

Our EveryReady Bunny is faltering. Yes, Fortuna has turned negative for the immediate future. I will likely be selling some later today, but will not close out entirely. This will be to lock in some profit and to build a higher cash concentration for later buying more mining stocks. This is my plan, you make your own decisions.

I am no rush to act, but it seems prudent for me at present, so I will begin selling slowly and only a portion. 
Miners from
 Currencies from

  Some Prices: FVITF 3.08 (Turning up again today, so I may not be selling. Follow the price as best you can and make your decisions. I will broadcast if I decide to sell today. The current ask price is 3.12 with a bid of 3.07 - last was 3.08); SILA 0.80; TLT 105.82 (Bonds are showing a bit of life today); DOW off 0.37 to 10811.82; SPX off 1.67 to 1140+; Gold up 11.30 to 1305.90; Silver up 0.11 to 21.59. This is a new high for gold and silver is moving upward. Silver was down earlier.) More excitement!

Best to each, Doug



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