Thoughts on Markets

Monday, January 03, 2011

Let us rejoice in the Lord! - Gold -Silver - Miners - Currencies - Hyper-Inflation

"This is the day that Lord has made, we will rejoice and be glad in it." (Psa. 118:24) And He has given us a new year for encouragement. As we study His word and follow it, we can truly rejoice and be glad in it. This is particularly true as the Holy Spirit strengthens our faith by reminding us of the many times we have seen the Lord care for us in the past during challenges, threats, and good times. He has cared for us so many times in the past just as did His people during biblical times. Thus, we can rest assured that He will care for us in the future. Claim His promises for security and rest in Him knowing that He is our Creator and Protector. Thus, you will enjoy a blessed and holy New Year for all of 2011.

From Bloomberg:
Illinois Has Days to Plug $13 Billion Deficit That Took Years to Produce
Illinois lawmakers will try this week to accomplish in a few days what they have been unable to do in the past two years -- resolve the state’s worst financial crisis.
The legislative session that begins today will take aim at a budget deficit of at least $13 billion, including a backlog of more than $6 billion in unpaid bills and almost $4 billion in missed payments to underfunded state pensions. There are much more deficit and debt problems here in "River City" than there is in all of Europe. Several larger states are in big trouble, but we don't hear much about that. HERE.

From Bloomberg:
Bank of America Sees $2 Billion Charge on Home Loans
Bank of America Corp., the biggest U.S. bank by assets, resolved disputes with Freddie Mac and Fannie Mae by agreeing to pay more than $2.6 billion to settle claims that it sold loans based on faulty information.  We will see more of this as time marches. We might even see some of "The rest of the story." HERE.

From  Gold Switzerland:
Hyperinflation will drive gold to unthinkable heights
We now live in a world where governments print worthless pieces of paper to buy other worthless pieces of paper that combined with worthless derivatives, finance assets whose values are totally dependent on all these worthless debt instruments.  Thus most of these assets are also worth-less.
So the world financial system is a house of cards where each instrument’s false value is artificially supported by another instrument’s false value. The fuse of the world financial market time bomb has been lit.  There is no longer a question of IF it will happen but only WHEN and HOW.  The world lives in blissful ignorance of this. This article probably comes from a company with a vested interest; however, with the paper currencies we have today it is certainly plausible. HERE.

From Zero Hedge in August:
Guest Post: How Hyperinflation Will Happen
Right now, we are in the middle of deflation. The Global Depression we are experiencing has squeezed both aggregate demand levels and aggregate asset prices as never before. Since the credit crunch of September 2008, the U.S. and world economies have been slowly circling the deflationary drain.
To counter this, the U.S. government has been running massive deficits, as it seeks to prop up aggregate demand levels by way of fiscal “stimulus” spending—the classic Keynesian move, the same old prescription since donkey’s ears. This was referenced in Ed Steer's Gold and Silver Daily.  I believe we will have inflation and hyperinflation, but when? HERE.

Gold and Silver are showing signs of strength with both up this morning. Silver seems to be outshining gold. Maybe it is on a path toward catching up in the race to higher prices. Gold closed out 2010 at 1421.60 and Silver at 30.91, and both are up in early trading. Here are the Kitco graphs:

The Miners from Scottrade:


The currencies from Kitco:


Some prices: FVITF 1.93 (The Bunny keeps on running); OLVRF 1.525 (Another Bunny?); SILA 0.29 ( I'm glad I sold this out.); HHWW 1.70 ( Not in this, but it is performing well. Will be looking at it as 2011 continues); TLT 93.74 (Bonds are weakening for the time being); DOW up 107.39 to 11685.01 (Quite Strong); SPX up almost 15 to 1272.25 (Also, strong); Gold down 5.40 to 1416.20 (Was up, but is bouncing around today.); Silver down 0.05 to 30.86 (Same comment.)


Have a Holy New Year to enjoy in the love and care of King Jesus,  Doug

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