Thoughts on Markets

Wednesday, May 04, 2011

FaceBook Spy Machine? - Gold Standard - Speculators - Picking the bottom of corrections

Folks, 
We must always remember that there is not true security in earthly wealth of any kind. There is not security in any existing governments. 

Governments were ordained by God to protect the life, liberty, and property of the citizens. Ask yourself which government in the world today is concentrating upon this? An honest answer would be NONE! All seek to control the citizens. I perceive that this is because it gives the elite a feeling of power over the ignorant population. We have politicians and not statesmen here in the USG and in the rest of the governments today.

Politicians always seek some one else to blame for their failures. Very often they blame the failure of programs on too little currency allocated to the programs. They rarely, if ever, see that the program was ill conceived and doomed from the git go for failure. Thus, they through increasing amounts of currency down rat holes and resort to debasing unbacked currencies resulting in the price inflation we will continue to have.


Huffington Press:
Julian Assange: Facebook Is 'Appalling Spy Machine' (VIDEO)
It's not new ground for the Wikileaks founder. In March, Assange told Cambridge University students that the Internet is "the greatest spying machine the world has ever seen."
During the Russia Today interview, Assange explained that Facebook, Google and Yahoo all provide automated interfaces for the U.S. intelligence (starts around 2:00 in the video below). "When they add their friends to Facebook," Assange said, "they are doing free work for United States intelligence agencies." This has been a personal concern for some time. The amount of personal data recklessly posted on FaceBook is open for almost everyone to view. Hackers likely have no problem gaining access and government hackers may even be better. Think about it! HERE.

Forbes:
Ben Bernanke’s Lone Positive Legacy: A Return To The Gold Standard
I’ll make two predictions with utter confidence. The first is that one day Federal Reserve Chairman Ben Bernanke will be ridden out of town on a rail, joining Arthur Burns in that special circle of hell reserved for monetary debauchers. The second is that in the aftermath of our pending inflationary disaster we will see the gold standard return. Bill Frezza makes a bold forecast in this article. Most of the objections are that there is not enough gold, but one should remember that the value of that gold could go to any extreme to insure that there is sufficient gold. HERE.





Town Hall:
Walter E. Williams
Let's Blame Speculators

Here's a non-rocket science question: If you expect a reduced harvest of wheat, corn, rice or any other commodity some time in the future, what would be the wise thing to do about your consumption today? I bet that the average person would answer: Consume less now so that more will be available in the future.
But how in the world can people be encouraged to consume less now? Enter the futures market, which consists of a worldwide group of millions upon millions of traders, often called speculators. Speculators, betting on a future shortage, buy up wheat, corn and rice today in the hopes of making money selling it for a higher price when the bad harvest hits. As speculators buy more and more wheat, corn and rice, they drive up today's prices. As today's price gets higher, people consume less, but more importantly, people do the intelligent thing without bureaucratic edicts. The vital role of the futures trader, or speculator, is to allocate goods over different time periods. And, it's not just wheat, corn and rice that must be allocated over time but all commodities including oil. Walter Williams is usually right on as he insights into Constitutional or Economic ideas. HERE.


Mine Web Pod Cast:
Gold and silver a little ahead of themselves - Nichols
In the short term gold and silver are likely to decline but, according to Jeff Nichols looking out beyond the next month or two, both will be in a renewed cyclical upswing. HERE.

We are experiencing another correction in the precious metals and at the same time a hesitation in the general stock market this week. It has been gut wrenching for silver and scary for gold, as well. This is another time of shifting out the weak hands and those who can not tolerate the volatility in precious metals. I am not ignoring the obvious manipulation by vested interests. The over hang of the paper metals markets, including the derivatives, which can easily be used by the elite to greatly influence the prices. I am hanging tough at this time looking forward to the end of the correction and a resumption of the bull market in precious metals. From time to time I may pick up a few more shares of miners, but I if I buy in will be in smaller bites to conserve cash for bottom picking. Here are the latest 24-hour graphs from KitCo:

Mine Web:
An evergreen question: gold stocks or gold bullion
RBCCM delves into the vexed issue of why listed gold stocks seem to be underperforming the extended bull market for gold bullion and comes up with some cost-heavy answers. In theory the mining stocks provide leverage as the Gold Rush gets rolling, but the gold and silver in hand provides increased security. HERE.


I want to present a strategy that I am planning to use to spot the reentry point for gold and gold miners on the Gold graph, below. If the price of gold were to fall to and fail to break through one of the lower support lines, it is an indication to me that gold will be at or very near the bottom of this correction. If the price of gold were to break through and go above the resistance line at about 1575, it would be a probable indication that it would go higher. Tomorrow, I intend to produce a similar strategy for silver. At present, I am not a buyer of either mining stocks or metals as my portfolios have sufficient of each with cash to add when the timing is correct.

Miners from Scottrade:

Currencies from KitCo: Notice that the dollar is not holding up well against the commodity countries currencies.

Some current Prices: DOW is off 97 to 12709.12; S&P down 9.74 to 1346.88; NASDAQ down 12 to 2829.70; Gold down 5.30 to 1531.80; Silver down 1.74 to 39.92 ( This might be a good buying range for more Silver Eagles, Junk Silver Dollars, and junk Silver Dines and Quarters, except that I have a few.)

Best to each, Doug

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