Thoughts on Markets

Thursday, February 10, 2011

King Jesus - Mexico - Egypt - Gold - Silver - Miners - Currencies


As the old song tells us about King Jesus, "He has the whole world in His hands." 

About King Jesus, it is written in Hebrews 10:12-17  "But this man, after he had offered one sacrifice for sins for ever, sat down on the right hand of God; from henceforth expecting till his enemies be made his footstool.
For by one offering he hath perfected for ever them that are sanctified. Whereof the Holy Ghost also is a witness to us: for after that he had said before,
This is the covenant that I will make with them after those days, saith the Lord, I will put my laws into their hearts, and in their minds will I write them; and their sins and iniquities will I remember no more."

Thus, in Jesus Christ, the Only Begotten Son of God, the Father, we can have reconciliation with the Father and a promise of eternal life with the God head avoiding the eternal consequences of our sin. Praise Him daily!

Town Hall:
Cal Thomas
Told You So
One of liberalism's many problems is that once an idea or program is proved wrong and unworkable, liberals rarely acknowledge their mistake and examine the root cause of their error so they don't repeat it.
Take multiculturalism ... please!
In a speech to a security conference in Munich, British Prime Minister David Cameron declared state multiculturalism a failure. For good measure, Cameron said Britain also must get tougher on Islamic extremists. Predictably, this has angered Islamic extremists.This is right on! Liberals never give up and idea even when it has failed or proven wrong or bad. The liberal solution is to throw more dollars at the program or to get more vocal about the idea. HERE.

Mexico's Gun Supply and the 90 Percent Myth
For several years now, STRATFOR has been closely watching developments in Mexico that relate to what we consider the three wars being waged there. Those three wars are the war between the various drug cartels, the war between the government and the cartels and the war being waged against citizens and businesses by criminals. Interesting report on our southern neighbor. It is important to understand the interaction between our governments. HERE.

Yahoo Finance:
Foreclosures ramp up as 30% of mortgages are underwater
Sometime, somehow, the foreclosure crisis will ease. But probably not anytime soon.
Home prices dropped 2.6% nationwide during the last three months of 2010, pushing more borrowers underwater, according to a quarterly real estate market survey from
Now 27% of homeowners with mortgages owe more than their homes are worth. That's up from 23.2% a quarter earlier.
That will surely lead to higher foreclosure rates soon. That's because being underwater is second only to unaffordable payments in leading to foreclosure, according to Zillow's chief economist, Stan Humphries. Of course, we are told about a growing economy here, but there are detractors in unemployment, price inflation in food & energy ( not measured ) and now foreclosures increasing. HERE.

Zero Hedge:
Guest Post: Egypt's Warning: Are You Listening?
One day, a fruit and vegetable seller was arrested in Tunisia, sparking social unrest, and a few weeks later the government of Egypt was set to topple.
Such is the nature of complex, chaotic, and unpredictable systems. The stresses build for years and years, and nothing really seems to be happening, but then everything suddenly changes. Egypt is therefore emblematic of what we might expect in any complex system in which pressures are building, such as the US Treasury market. Such could be spreading throughout the world and coming home to America. This is a warning for us. Beware! HERE.

Mining Weekly:
China may increase gold reserves beyond Fort Knox level – Hale
CAPE TOWN ( – China’s central bank is being advised to increase its gold holdings nearly ten fold to a level greater than the world’s biggest bullion depository, the US’s Fort Knox.
Global economist David Hale, who addressed the packed Mining Indaba in Cape Town attended by a record 5 700 people, says that China’s gold reserves are currently at 1 050 t – only $30-billion to $40-billion compared with the country’s total assets of $2,8-trillion. China's accumulation of gold is going to have a big impact upon the price as this new demand increases.  HERE.

The miners are showing signs of weakness which may be indicating that the correction will continue. Here are the graphs of the small and larger miners ETFs:

 Note that the larger miners ETF remains well below the 50 Day MA. By the way, I did sell a major portion of my holdings in BULM yesterday. It is even lower today. It is a time to be very cautious in markets of all kinds. Long run, the dollar will continue to depreciate and the precious metals will continue in their bull market. As goes the dollar, so goes America.

Miners from Scottrade:

Currencies from KitCo:

Some Prices: FVITF 4.17; BULM 0.92; OLVRF 1.26; HHWW 0.9201; REMX 24.6227 (Rare Earth ETF recommended by Richard Russell - I have yet to buy); DOW off 40.50 to 12199.29; SPX off 3.27 to 1317.61. Note that the miners are going the same direction as the DOW. Remember that when/if the DOW crashes, the miners will do the same, but I believe they will recover more rapidly than the general market.

Best to each, Doug


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