Thoughts on Markets

Thursday, September 09, 2010

Miners - Gold Silver - The War on Gold - Yuan - Currencies

Well, folks, I did some selling of DROOY yesterday, and as is often the case, the price went up. It seems that I always suffer an immediate loss when I buy or sell. However, in most cases, the trade turns out to be the wise thing. DROOY is 4.31 as this is written. You decide what is best for you.


Record Highs for Gold ETF
A slowing economic recovery, falling equities, trouble in Europe and a general feeling of concern pervading the markets have converged to send investors rushing to the safe-haven of gold exchange traded funds. Gold prices are responding in kind. HERE.


Hot gold bullion, hottest global gold stocks
As dollar gold bullion flirts with near-record levels, we take a look at which stocks are getting investors all hot under the collar in our review of the 100 most in-demand gold stocks. HERE.


Deflation Never Had a Chance
Lately we've been hearing a lot of talk about Kondratieff cycles, Elliot Wave super cycle, end of the world, deflation, deflation, deflation.
What the deflationists fail to acknowledge is that in a purely fiat monetary system deflation is a choice not an inevitability. To put it in simple terms, if a government is willing to sacrifice its currency there is absolutely no way deflation can take hold in a modern monetary system.
It doesn't matter how large the debt contraction is, 10 trillion, 100 or 1000 trillion, any government with a purely fiat currency can, with the stroke of a computer key, print enough money to wipe out the debt. Granted they will destroy the currency by doing so, but at some point we are going to be faced with the choice of print or deflate. I have little doubt Bernanke will choose to throw the dollar on the sacrificial alter. HERE.

Kabul Bank Literally Forced To Beat Back Depositors As Cash Reserves Run Low
The bank run in Afghanistan we mentioned over the weekend took a turn for the nasty today.
A mob of depositors swarmed Kabul Bank's single open branch, only to be literally beaten back by police. HERE.


Yuan Trading Against Ruble Said to Start Within Weeks
China may start yuan trading versus the Russian ruble within weeks, seeking to encourage use of its currency for global trade instead of the dollar, according to three bankers with knowledge of the matter.
The central bank sent out a document last week allowing banks to apply for ruble trading licenses and the approval process may take three weeks, according to one of the bankers, who asked not to be identified because the process isn’t public. The People’s Bank of China started yuan trading against the Malaysian ringgit on Aug. 19. It is coming, and likely sooner than we want. HERE.

From James Turk at

Is Silver Ready to Move Higher?
It is gold - and not silver - that gets all of the attention being given to the precious metals these days, and why shouldn't it? After all, gold has risen nine years in a row against the US dollar and appreciated during this period at an impressive average annual rate of 17.1%. In a continuation of this trend, gold is up 9.9% year-to-date, making it one of this decade's best performing asset classes. But don't overlook silver.  I like silver for my portfolios. Read more HERE.


Gold Wars – A Golden Renaissance
By Ben Davies, CEO of Hinde Capital
September 9 (King World News) - We are at War.  It may not feel like it, but we are.  This is no ordinary war.  It is not a military war but it is just as damaging because it has brought about a loss of freedom, poverty and an imbalance in wealth.  The War I refer to is a Gold War. Ben Davis goes on to discuss the war between governments and gold with great graphs and and slide show. This is an important read. HERE.

From Ed Steer's Gold & "Well, gold came close to breaking out to a new high yesterday... and it was only the intervention by not-for-profit sellers that prevented that from happening.  The same applied to silver, although its been above its June 21st high for a few days now... but has a bit to go before it breaks above its old high of March 2008.  Its attempt to do that yesterday suffered the same fate as gold." The complete newsletter is HERE.

Miners from

Currencies from

Some Current Prices: FVITF 2.5542; SILA 0.76; TLT 103.64 (Bonds down again); DOW up 61 to 10448.52; SPX up 9.37 to 1108.36; Gold down 0.10 to 1254.50; Silver up 0.10 to 20.00.
While we always seek perfect foresight, we very rarely are privy to it. 

Thus, we study market volumes, prices, and trends and make the best decisions we can. Then it is wise to commit your plans to King Jesus and depend upon Him for the results. Often He does not give us exactly what we seek, because He has a better way for us. Thus, He directs our way toward His way as we study His word and attempt to apply it to our lives. It is our responsibility to be obedient to Him, to always give Him the glory, and enjoy Him forever. This is the way of life. Other ways are the ways of death whether one acknowledges it or not.

Best to each, Doug


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