Thoughts on Markets

Thursday, May 19, 2011

Money? - Gold - Silver - HL - FVITF - Dollar - Reserve or Dominant Currencies of History

Without a return to historic money: gold and silver, citizens will always be subject to the whims of bankers and governments and lack the economic freedom that the precious metals offer. God's word shows time and time again that gold and silver were used for centuries as money. Both were scarce, durable, transportable, widely recognized, and divisible into smaller portions of proportionally less value.

There is a misconception that we work for money. That is not actually the truth. We work for and desire money, not for money, itself, but for the food, shelter, clothing, transportation, other things we need and want, and to tithe to the Lord and support the orphans and widows. To crave money for itself is to be a miser which is a miserable way to live. All that we do must be to the glory of God and the furtherance of King Jesus' Kingdom. 

Praise King Jesus daily and work for His glory. 

KitCo News Pod Cast:
Have Gold and Silver Bottomed? Started this last night, but will post it on Thursday morning. HERE.

Mine Web:
Gold is moving from West to East and the demand is still growing
The latest Gold Demand Trends report from the WGC shows that investment demand for gold is strong but, it also illustrates just how much demand is coming from the East. This is not good for America and the West. It shows a lack of understanding of the importance of precious metals as a hedge against inflation and as monetary metals on the part of Americans. Many will wake up after the boat has left the dock. HERE.

Mine Web:
Are gold and silver poised for another take-off?
A look at the gold and silver markets and whether they are likely to collapse, or are just in a consolidation phase getting poised for another take-off. I believe both are in a consolidation phase. Note the comments on manipulation which I believe is very strong in the metals and in silver in spades. HERE.

Mine Web:
Silver crash not a correction but a ‘drive-by-shooting' and ‘criminal act'
Report on a round table discussion on silver by a group of top specialist silver analysts which puts forward a hugely bullish case for investment in the precious metal. HERE.

 


Here is an interesting posting from Ed Steer's Gold & Silver Daily of Casey's Research:
WSJ Online:
Fund Falls Behind In Global Changes
Empires do not succumb quietly. Old powers do not readily surrender prerogatives. Rising ones do not wield clout with agility.
"Global shifts have almost always fanned economic conflict, created problems for economic management and heightened diplomatic tensions," economic historian Barry Eichengreen of the University of California at Berkeley recently told a Bank of Finland symposium. Sometimes, they have erupted in military conflict; often, they show in tensions in international economics and finance. Interesting! Read it HERE.

Bloomberg:
JPMorgan Says Crude Oil, Gold to Drive Rebound in Commodities on Shortages
Crude oil and gold will lead a rally in commodities as production fails to keep pace with demand, said Ray Eyles, chief executive officer of JPMorgan Chase & Co. (JPM)’s commodity business in Asia.
Oil supply will trail consumption in the second half as the Organization of Petroleum Exporting Countries and other producers won’t increase output fast enough, the bank said in a report May 6. Rabobank Groep expects shortages in corn and cotton this year while Barclays Capital is predicting deficits in copper, nickel, tin, lead and platinum.A worthwhile read. HERE.

Today, I am trying to put a case on for an accumulation or consolidation phase in the precious metals and mining stocks. I see some indications that we are near or at the bottom of this correction. However, I do not expect to see a rapid return to booming metals and commodities as the period of consolidation could continue weeks or months into the future. Historically, there should be a strong upward move in the fall. Let's take a look at a few of the core holdings in my portfolios.




Look at the sad shape of the US Dollar in comparison to these miners. One has to wonder how long the world reserve status of the dollar can persist with its value dropping so drastically over time. Ask yourself, would you rather have dollars or gold several years from now?

Here is gold for comparison.

Miners from Scottrade:


Currencies from KitCo:

Some Prices: DOW up 8.32 to 12509; S&P down 0.12 to 1340.56; NASDAQ off 1.75 to 2814.08; Gold off 5.80 to 1491.10; Silver up 0.22 to 35.21. Silver continues to be the more volatile.

Best to each, Doug

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