Thoughts on Markets

Tuesday, September 07, 2010

Gold & Silver Up - DOW & SPX Down - More Uncoupling - Beware of Intervention

With gold pushing toward new highs and silver getting closer to $20, we, of the gold bulls, are looking forward to much higher prices. However, we must keep in mind that the bullion banks have been pumped up with Billions and Trillions of Dollars with which to manipulate the metals markets. They have the resources to do it when ever they want. Some what encouraging has been the effect of demand when the bankers have intervened to lower the price. The price seems to pop back up within minutes, hours, or days. The major bull market in metals has been slowed, but not ended by the bankers yet. 

One wonders how long the bankers will live with the load of paper shorts they have in the metals. It is very high. We must always remember, too, that they have the deep pockets to cover these at any time.

 I still believe that the real threat to the American Empire is the potential replacement of the dollar as the reserve currency of the world. This would be a devastating blow to our purchasing power. That is one of the main reasons for holding real money; Gold and to some extent Silver. My vote is for silver to outperform gold in the longer run, so I prefer silver for myself without neglecting gold. The miners will provide leverage for the final blow off of the metals.


Mining M&A picking up - Michael Lynch-Bell: Head of transactions for metals and mining, Ernst & Young
Merger & Acquisition activity picked up fiercely in the first half of 2010 and, judging by the most recent spate of deals, things don't look to be slowing any time soon
Hear the podcast HERE.


Pent-up gold demand in India to be unleashed when the rupee turns?
A recent downtrend in the currency and the prospects for a good harvest point to the possibility of a resurgence in physical demand from the world's largest consumer
Read it HERE.


DRC sanctions new kind of mining & oil madness
"Asset flipping" hundreds of millions of dollars in the DRC is the brazen new national sport to the benefit of the few while legitimate companies lose their assets. Read it HERE.


Thomas Sowell
Political Fables 
President Barack Obama boldly proclaims, "The buck stops here!" But, whenever his policies are criticized, he acts as if the buck stopped with George W. Bush. Read it HERE.


The Problem With Gold Stocks
I like to analyze stocks by looking at a company's long-term financial results - cash flow, revenue, and what not, and looking at the interplay of these things with stock price. But I have found this approach to be all but useless in picking gold stocks. The performance of gold miners has nothing to do with their current financials other than simply having enough capital to pursue their projects. You see valuation ratios all over the map during their big climbs, much more so than with any other type of stock. They defy just about any monetary type of analysis that may work reasonably well on stocks in general. HERE.


Gold Rebounds on Bargain-Hunting and Safe-Haven Buying Interest

07 September 2010, 8:55 a.m.
By Jim Wyckoff Of Kitco News

Comex gold futures prices have rallied from lower price levels seen in early trading Tuesday, and are now trading higher and near the daily high. December Comex gold last traded up $8.70 at $1,259.80 an ounce. As has been the case recently, gold traders took the opportunity to do some bargain hunting and "bought the dip" in prices Tuesday. Safe-haven buying interest is also evident in gold Tuesday, as the U.S. dollar index and U.S. Treasury prices are rallying, while the U.S. stock indexes are weaker. HERE.

From Nuggets:

Gold Regains Safe-Haven Shine
07 September 2010, 9:15 a.m.
By Allen Sykora
Of Kitco News. HERE.

Miners from

Currencies from

Some Prices: FVITF 2.69 (Still holding strong); SILA 0.75; TLT 105.0799; BYDDF 6.17; DOW off 85.52 to 10366; SPX of 10.12 to 1094; Gold up 11.30 to 1257.90; Silver up 0.11 to 19.96.

It is always nice to have an extra long weekend. The US markets are closed and we can all take a breather. Of course, the over seas markets continue, but are on a much smaller scale. We took the opportunity of obeying God to join in corporate worship, as I trust each of you did, as well. That is a very important part of our lives.

When Christians get together for worship and fellowship, it shows their love for one another. After all, these are the folks we will be spending eternity with in after temporal life ends. It is good to get close to these believers on earth while time remains. Such fellowship is a foretaste of what is in store for us in eternity. 

King Jesus has paved the way for us to be reconciled with the Father and we are brought to the new life by the application of the righteous covering of Christ's shed blood by the Holy Spirit. The Triune God of all does it entirely in His perfect timing. That is the wonder and glory of the 1st Resurrection. It is all of God. We are brought to life from a death of trespasses and sin due to a sin nature inherited from our earthly father, Adam. We can never overcome this on our own, but with God all things are magnificently possible. Praise Him daily.

Best to each, Doug


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