Thoughts on Markets

Tuesday, January 11, 2011

Trust in the Lord Who never changes - Debt $14 Trillion - Gold Demand High -

"It is better to take refuge in the LORD Than to trust in man." (Ps. 118:8) Man is ever changing with every politically correct theme for the present. God, on the other hand, changes not from everlasting to everlasting. Man will die and his promises will have no more validity. God's promises are as everlasting as is He. Thus, for full assurance, we must place our trust in that which is eternal in King Jesus. All else becomes worthless in time. Praise Him daily!

From Gold News @ Bullion Vault:
The U.S. NATIONAL DEBT now has a "14" handle, as in $14 trillion to start 2011, writes Gene Arensberg from Houston, Texas in his Got Gold Report.
Good thing for the US Dollar that the current focus of sovereign debt angst is across the pond on the PIIGS in Europe. Those serious debt worries have cut the legs out from under the Euro (again), giving an "assist" to gold and silver bears in US Dollar terms, with the metals already under profit taking pressure.

We Vultures (Got Gold Report subscribers) expected this pullback or correction and have prepared for it by lightening up on mining share high flyers and laggards in November and December, building up a bargain-hunting ammunition stockpile of ready cash. Short-term in the metals, and as the first week of January closed – a week which saw the European common currency pummeled almost 3.6%, inviting the equally troubling US Dollar Index to advance over 200 basis points by default (the Dollar isn't all that much more attractive, but at least it isn't in Europe) – we marvel that our trading stops for Gold Futures and Silver Prices survive to enter week two of January.

The action suggests to us that there is more physical metal dip buying than even we thought possible after such a fabulous, high-percentage run in 2010. We also believe it is merely a question of time before the sovereign debt anxiety focus once again shifts back across the Atlantic. We can give up to 14 trillion reasons why we think so, and that is not the whole debt-ridden, broke-back, three-legged blind dog of a story. This is an informative read. Note: the comment on demand upon dips in prices. There is much more in the article and a great graph you should at least study a bit. You can catch it HERE.

From Mine Web:
Silver and gold back from the brink: both move upwards in Europe
Silver and gold prices seem to be staging a recovery on European and Asian buying and may be set now for another good rise as doubts about the global economy and inflation continue to impact. Interesting read. HERE.

From Mine Web:
Gold rises slowly but premiums up at a 2-year high
Euro zone debt concerns pushed the price of the yellow metal higher in trade on Tuesday while investor-buying pushed gold bar premiums to two-year high. This testifies to the extensified demand for the metal. HERE.

From Mine Web:
China gold buying forces premiums to 2-year high
A surge in Chinese demand ahead of the Lunar New Year and shortage of bullion has driven premiums for gold purchases to the highest since 2008 in Hong Kong and Singapore. This is relatively new demand, too. HERE.

From Mine Web:
U.S. District Court judge orders in camera review of secret Fed gold swap records
GATA says it has achieved a small, but significant victory in its fight to force the U.S. Federal Reserve to open up its gold swap agreements from 1990 on to public scrutiny. I wonder if the court will be able to follow through and force the Fed to reveal this information. I would prefer Ron Paul's move to abolish the Fed. That would solve more than one of our challenges. HERE.

From Town Hall:
Thomas Sowell
A Republican Showdown?
They say that, in politics, "overnight is a lifetime." In other words, the journey from triumphant hero to discredited scapegoat can be very brief.
In the wake of the Republicans' triumphs in last November's elections, great hopes are being held out that Republican control of the House of Representatives can slam the brakes on Barack Obama's march toward a completely government-controlled economy and ruinous deficit spending. HERE.

From Mine Web:
Gold the pre-eminent asset to protect against financial meltdown - Williams
ShadowStats Editor John Williams' asserts that the bottom-bouncing economy is weaker than ever and, gold is the single best asset that people can use to ride out the storm. Gold Report interview. In times of financial crisis, many begin to turn back to real money in stead of reliance upon unbacked paper Federal Reserve Notes. HERE.

The miners from Scottrade:
The currencies from KitCo:

Some prices: FVITF 4.57; OLVRF 1.28; SILA 0.315; HHWW 1.72; TBT 38.73 (Bonds down a bit): DOW up 59.52 to 11696+; SPX up 6.69 to 1276.55; Gold 1377.60 up 1.60 (a bit higher earlier); Silver 29.51 up 0.42.

Best to each, Doug


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