Thoughts on Markets

Wednesday, October 06, 2010

Gold & Silver UP BigTime - Foreclosures Up - Dollar Continues Down

Folks, The big news is that gold and silver are booming upward in moves which have not been seen in recent times past. Reminds me of the late 1970s. The big question is whether the bullion banks will intervene again, and if so, when? That is a political and not a market question. I hope that most of you are out of the dollar which continues its fall like a rock in water. The White House and Federal Reserve would rather see it on a small decline over time, but there are times when it really drops as foreigners become more and more distrustful of the international reserve currency. One must wonder how long they will continue to buy our debt to support the wasteful spending binge of our governments.

As a result of the climbing of precious metals prices, the miners are jumping, as well. Those of you who are well into the miners and the metals should be thankful that God has revealed to you the value of such investments. These are in a long term up trend while the dollar is in a growing long term downward trend.


Red Herring Politics: Part II
Thomas Sowell: 

Some of the longest-serving members of Congress, whose party has overwhelming majorities in both houses, are having far closer election races than they are used to. These include Senate Majority Leader Harry Reid and Speaker of the House Nancy Pelosi, not to mention 18-year veteran Senator Barbara Boxer.
Despite their long records, they seem to want to talk about everything except their records. They could tell us why they voted for ObamaCare and huge stimulus bills, without time enough to read them. Instead, they have come up with enough red herrings to stock an aquarium. HERE.


Politicians Exploit Economic Ignorance
Walter E. Williams: 

One of President Obama's campaign promises was not to raise taxes on middle-class Americans. So here's my question: If there's a corporate tax increase either in the form of "cap and trade" or income tax, does it turn out to be a middle-class tax increase? Most people would say no but let's look at it.
There's a whole subject area in economics known as tax incidence -- namely, who bears the burden of a tax? The first thing that should be recognized is that the burden of a tax is not necessarily borne by the party upon whom it is levied. That is, for example, if a sales tax is levied on gasoline retailers, they don't bear the full burden of the tax. Part of it is shifted to customers in the form of higher gasoline prices. Walter Williams always has great economic insight and this is up to his usual level of understanding. The general public and our fearless "leaders" have been trained and have bought into Keynesian economics which is a false concept. The public is not aware of any economics except what they learn from sound bites and public education. Read it HERE.

Check out McAlvany Weekly Report: This week there is a discussion on the stimuli and the lack of impact and some other important comments on the markets; such as more foreclosures on the way and negative value on home compared to mortgage balance. We are still a long way from being out of the woods. HERE.

Folks, our dollar is continuing its downward trend and there is nothing on the horizon to reverse it; although, it could bounce upward from time to time. Here is the dollar graph from This is a very sad graph showing that the dollar is in a very strong downward trend.

The Miners from

The Currencies from

Some Prices: FVITF 3.30 (Up over 10% since Monday); SILA 0.795; TLT 105.06 (Up slightly today); DOW up 3+ to 10946.31; SPX up 1+ to 1159.57; Gold Up 5.60 to 1346.20, and Silver up 0.03 to 22.90.

Best to each, Doug


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