Thoughts on Markets

Thursday, April 14, 2011

Silver & Gold Rompting - Review of FVITF & HL - God calling for repentance

Folks, 

The optimism may be dwindling a good deal as consumers are facing higher prices in virtually everything they buy. Meanwhile the politicians discuss minimal decreases in the proposed spending and haggle back and forth. It seems that there are so few statesmen and an overwhelming number of politicians in USG offices. Thus, there seems to be little hope for significant curtailment of spending in the near future.

We must repent, seek God's face, turn from our wicked ways back to His Law-Word, and then we can ask for King Jesus to "Bless America" in good faith and He would answer by removing His wrathful call to us. Our "woes" appear to me to be His call to us. He called to the old Israel by sending armies to carry them off to captivity. They did not heed the call, and I pray that we will before it is too late.

Gallop:
U.S. Economic Optimism Plummets in March
Confidence drops across income, gender, age, and political party categories
by Dennis Jacobe, Chief Economist
PRINCETON, NJ -- Americans' optimism about the future direction of the U.S. economy plunged in March for the second month in a row, as the percentage of Americans saying the economy is "getting better" fell to 33% -- down from 41% in January. It is also down three points from the 36% of March 2010. HERE.

Prudent Bear:
PIIGS ahoy! 
Martin Hutchinson
April 11, 2011
The news that Portugal has requested a bailout from the EU is hardly surprising. The outgoing socialist government, having wrecked the economy and emptied the government coffers, wants to tie down its center-right successor, due to be elected June 5. Similarly, when later this year Spain finds itself in similar or worse trouble and approaching an election in April 2012, you can be pretty sure that the corrupt Spanish socialist government will make the same choice. However Americans and Brits should not sneer: the inexorable forces of out-of-control fiscal and monetary policy will quickly bring both countries into the same unpalatable situation. Both countries have so far thought themselves immune because they control their own currency issuance, but in the long run, that is a technical rather than a fundamental difference. HERE.

Mine Web
S&P forecasts gold prices will remain high in ‘next year or so'
Standard & Poor's expects gold prices to remain high in the next year because of economic challenges in Europe, increasing global inflation and potential economic fallout from the Japanese earthquake. HERE.

Mine Web:
Commodities and the global economy after QE2 - Simon Hunt
Simon Hunt says, 2012 will see a new round of money printing by the Fed resulting in another bout of commodity and equity buying after the pullback seen in the summer of 2011. I believe that QEII will end in June, but I also believe that another round of something "new" will be used as soon as it is found that the slight pick up in the economy was due to the QEs, smoke and mirrors. Printing will indeed continue in the form of computer blips. HERE.

Reuters:
FACTBOX-Gold and silver market trends for 2010-GFMS
Demand for gold bars grew strongly last year, helping lift overall physical investment despite weaker inflows into exchange-traded funds, metals consultancy GFMS said in its annual Gold Report on Wednesday. HERE.

King World New Blog:
Jim Grant - US Will Resolve Debt by Returning to Gold Standard
With so much turmoil going on around the globe, King World News interviewed one of the legends in the business, Jim Grant, Founder of Grant’s Interest Rate Observer.  When asked about the Fed’s arrogance Grant responded, “I think there’s an intellectual cock-sureness that has no grounding.  When you listen to Ben Bernanke as he held forth on Sixty Minutes at the end of last year assuring the journalist doing the interview that he, Bernanke, was 100% sure, 100% certain of what he could do, you cringe because nobody is 100% sure of anything in this world.”  Well, this is a unique idea which I have not found before. It seems very unlikely to me that the U.S. would return to a gold standard, but who on earth really knows? We would really have to be willing to redeem paper for all the gold we have.  HERE.

Mine Web:
Gold finds support in China & India
Investors in both India and China are becoming increasingly wary of inflation and are buying gold items to hedge inflation risk. A Telegraph article reports that the Indians are becoming more interested in silver likely because they believe silver will continue to out perform gold. However, the current article is of interest. HERE.

Look at how the metals are rebounding as more people climb on board. The demand must be very high as people move away from the depreciating paper currencies into real money.
Below, are two silver stocks which are prominent in my portfolios. The brevity of the "correction" caught me by surprise, but appears to me a confirmation of capping by not for profit entities.

Ted Butler believes that this or the next upward leg for silver will be significant. I tend to agree, am saddened that I did not buy more earlier this week. Hopefully, I will have another opportunity and be ready for it. Nevertheless, this rebound is quite large today.
Miners from Scottrade:

Currencies from Kit Co:
Some Prices: FVITF 6.53 (Strong rebound); OLVRF 1.7482; BYDDF 3.67 (still in my buying range, but I am holding for the time being); SENY 0.769 ( not exciting for me); TBT 37.70 (up slightly as LT bonds are down a bit); DOW off 35+ to 12235.57: SPC

Best to each, Doug

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