Thoughts on Markets

Thursday, March 31, 2011

Hecla Mining (HL) - Inflation - Cyber Weapons - Silver & Gold Rebounding- Miners Up - Currencies (Dollar Down)

God's providential care in the founding and preservation of the U.S. is largely ignored, and even denied,  by too many people here. After all, how could a few untrained farmers, merchants, and preachers defeat the strongest, best trained, and well equipped army in the world at the time. King Jesus also provided one of our greatest leaders in George Washington without whom the victory would likely have gone to Briton. 


Our "troubles" of today are the call for us to repent and turn back to the Sovereign King Jesus. Let us repent, seek His forgiveness, and turn back to Him before He destroys our nation as He has done to other nations in the past. Praise Him daily, diligently study His word, and participate in corporate worship as a member of a sound Christian church.


It is time again to check on the U.S. debt. Use the US Debt Clock HERE. There is simply no end to the deficit spending and the loss of exports. Governments at all levels continue to lay tax burdens on the citizens, and never seem to even consider the possibilities of spending cuts. The best they seem to come up with is a bit less increase in spending. This is usually politically referred to as cutting spending. What a farce! That is the political answer to fool the average Joe in the street.

Bloomberg:
Food Commodities Surge Seen Swamping Consumers With Inflation
Coffee, sugar and cocoa prices will rise five- to 10-fold by 2014 because of shortages that will mean consumers getting “swamped” by food inflation, according to Superfund Financial.
A lack of farmland and rising costs means growers will fail to keep up with demand, said Aaron Smith, managing director of Superfund Financial (Hong Kong) Ltd. and Superfund USA Inc. Commodities account for about 40 percent of Superfund’s $1.25 billion assets under management. Smith correctly predicted record copper prices in November and a month later rightly anticipated that silver would outperform gold.I think, with tongue in cheek, that it is wonderful we are facing no inflation according to the government and many writers. The facts at the grocery stores tell us the truth >> Inflation is here already. HERE.

Bloomberg:
Jobless Claims in U.S. Fell by 6,000 Last Week to 388,000
Fewer Americans filed applications for unemployment benefits last week, a sign the labor market is firming heading into the second quarter.
Jobless claims fell by 6,000 to 388,000 in the week ended March 26, Labor Department figures showed today in Washington. The government also issued its annual revisions to the seasonal- adjustment factors, which caused a “mild upward shift” in the number of applications, an agency spokesman said as the figures were released to reporters.So, many have given up the search for non-existent jobs and run out of benefits. This fact and the manipulation of the actual count result in "improvement." HERE.

Mine Web:
Times are good for silver investors
Investment demand is competing with practical demand to push silver prices ever higher. These are heady days for silver. Article from The Gold Report. Silver is proving to be better than gold percentage wise. This has been reported before. There seems to be a growing interest in silver which gold is lacking. It may be that the lower price of silver encourages higher investment by many. Silver is beginning to have more place in the news lately. HERE.

TED Ideas Worth Spreading: 
Ralph Langner: Cracking Stuxnet, a 21st-century cyber weapon
When first discovered in 2010, the Stuxnet computer worm posed a baffling puzzle. Beyond its unusually high level of sophistication loomed a more troubling mystery: its purpose. Ralph Langner and team helped crack the code that revealed this digital warhead's final target -- and its covert origins. In a fascinating look inside cyber-forensics, he explains how. Interesting talk which explores a very difficult, complex cyber weapon. This is a must listen video.  HERE.

Resource Investor:
Gold’s Hyperbolic Trajectory
I am not a mathematician, but those knowledgeable about math have explained to me the difference between a parabola and a hyperbola.  I’ll cut through the math to get to the key point.  A hyperbolic rise in price is much faster than a parabolic one. This is an insightful article with good graphs comparing gold's rise in several currencies by James Turk. HERE.



Turning to silver, I believe there was substantial intervention by not for profit bullion banks in silver yesterday and it appears to be again today. However, yesterday, after the intervention the price moved up smartly. Will it do so again today? Note the action in the graph, below.
While we are seeing silver out perform gold, let's look at another core holding of mine: Hecla Mining (HL). This has proven to be a good holding as it is a sound company. I like the action even though it has hit several sandy spots along its climb to higher prices. As silver rises, I would expect the price of HL to do as well. Perhaps, later the metals will begin to lead the prices of the metals, themselves as would be normal in the third phase of the precious metals bull market.
Miners from Scottrade:

Currencies from KitCo:

Some Prices: FVITF  5.51 (I should have bought more.); OLVRF 1.7589; BULM 1.52; BYDDF 3.84 (Still in a good buying range for me.); TBT 37.67 (LT Bonds are down a bit along with the dollar); DOW barely up 1.35 to 12353.60; SPX barely down 1.04; Gold up 13 to 1436.80; Silver up 0.17 to 37.65 (It was much higher before the capping). Note, too, that the miners are out pacing the general market for stocks by a good bit. This is type of uncoupling has been experienced during the last few trading days. It has happened in either direction up or down.

Best to each, Doug




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