Thoughts on Markets

Monday, May 23, 2011

Rapture Hoax just that! Stalling Economy - QE II ends on time - Another form of easing will be here later - Gold - Silver - Miners - Currencies

Folks, I am sad to announce that after all of our rapture drills, the date passed AGAIN and we are still here unless left behind. I am thankful to God and His Scripture that speak clearly to us that we can never know the exact date that Christ will come and I am equally thankful that Scripture, in my opinion,  debunks all the Left Behind series.

Jesus Christ told us to do business until He comes again. Scripture tells us that His second coming will be at the time of the Great White Throne of judgment for both the living and the dead. It is then when the "rubber really meets the road. He also said that, "No man comes to the Father except through Me." To be known by Jesus Christ is life. Those who do not know Him are currently living a death and have nothing but Hell to look forward to. I pray that each of you know and serve Him to best of your ability under the power and direction of the Holy Spirit.

Praise King Jesus daily, because He, alone, is the way, the truth and the light which reconciles us to the Father and every lasting life with Him.

QE II seems bound to expire on schedule in June. However, the USG and Federal Reserve know very well there is no way for the US to even service its debt without  depreciating the dollar farther. QE III likely by some other contrived name will begin later this year. Until then, we are likely to see precious metals in the dole-drums. The demand will remain strong as China and central banks continue their buying spree and once again joined by India.

Gold Money:
Commodities and a stalling economy
The sharp fall in prices over the last few weeks was not confined to precious metals, but affected a wide range of other commodities. Their prices have been rising for some time, reflecting dollar weakness, and there is little doubt that the whole complex had become over-bought.
The sell-off coincided with growing evidence of a slowing American economy. It is becoming clear that the Fed’s monetary stimulus has had little economic benefit and analysts are revising their GDP forecasts downwards. Simplistically, this lowers potential demand for all commodities, including energy, so on the face of it prices must be too high. But this simple argument ignores the fact that the price of any commodity also reflects the value of the currency in which it is priced. So in dollar terms, commodity prices have risen strongly, but in real terms many of them have hardly risen at all. Read it HERE.

Investment Postcards:
Former OMB Director David Stockman talks US debt crisis
He suggests tax increases and is looking for new taxes rather than lower spending. Some of what he says is profitable, though. Remember he is a politician. See the video HERE.

Mine Web:
South African gold and coal mines faced with 14% wage increase demand
South Africa's beleaguered gold mining companies which have some of the highest costs in the industry are facing a demand from the National Union of Mineworkers for a 14% wage hike. More trouble for our south African miners. HERE.

Mine Web:
At last: big cash for gold diggers
A review of the performance of ten global gold majors during first-quarter 2011during which a decade-long bull run in dollar gold bullion helped produce record cash flows. HERE.

Mine Web Pod Cast:
Gold stocks back to year-ago levels, sector rotation and movement into the big diversifieds
A look at the gold sector now that all the big gold diggers have reported, the movement back into big diversified miners and the case for aluminum. Listen HERE.

Mine Web:
View from Benoni - End of week gold and silver review
The gold price seems to be consolidating around the $1500 level and silver is picking up as well, but these are mainly dollar related movement with the return to greenback weakness. HERE.

Greek ratings cut helps gold to near 2-week high 
Gold rallied to its highest in nearly two weeks on Monday as investors seeking safety bought the precious metal after a barrage of bad news on debt and ratings from euro zone countries such as Greece. HERE.

By the way, I believe we may have another opportunity to purchase more silver at slightly lower prices this summer.

Miners from Scottrade:

Currencies from KitCo: The Commodity currencies are still holding their own against the dollar and remain above par.

Some Prices: DOW off 131.53 to 12380.88; S&P off 14.45; NASDAQ off 44.03 to 2750.29; Gold up 0.40 to 1513.90; Silver up 0.03 to 35.09.

Best to each, Doug


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