Thoughts on Markets

Friday, June 10, 2011

What are your children learning in Government Schools? - Weak Dollar is Destructive - S&P Raises Metals Price Target 2011 - Silver New China's Gold - Gold/HUI Ratio - 3 year Gold

Praise King Jesus daily that He will delay the total destruction of our nation and have the Holy Spirit lead the His people, His families, and His churches back to His completed word for repentance and return to His law as the total way to all of life and man's institutions. Today's government schools, commonly & wrongly call "public education," are nothing but hot houses for indoctrination of the young into the socialistic, communistic mold and spreading moral decay. Let us all reject any education which is not Christ centered and providing a Christ world and life view centered upon the word of God. We must take heed before it is too late. This is simply my opinion based upon the Word of God.  

Mine Web:
S&P raises gold and base metals price assumptions for 2011
Standard & Poor's has raised its metals price assumptions for 2011 and beyond, citing the increased volatility of the markets but worries about sharp risk of fall in investor demand for gold. HERE.

Mine Web:
African mining, De Beers, BEE - Oppenheimer speaks out
Nicky Oppenheimer, De Beers chairman, gave a U.S. audience his forthright views on the future of Africa's mining sector and that of South Africa and its BEE legislation.
Barry D. Wood
Posted: Friday , 10 Jun 2011
WASHINGTON , DC-De Beers chairman Nicky Oppenheimer
told a Washington audience Thursday that Africa has a bright future if its eaders embrace globalization and allow the private sector to flourish."Globalization is a huge force for good," he said. An open and accessible world economy is vital for African growth. HERE.

Mine Web:
Silver in China could turn out to be the new gold
China has turned from a net exporter of silver to a big net importer with both industrial and investment demand soaring. Middle Eastern demand also appears to be picking up strongly. The price has much to do with this. HERE.

Mine Web:
Gold bulls are looking sluggish and tired for now
Gold bulls appear to be running out of steam according to technical chart analysis and price appears to be stalling as a result. HERE.

Finance and Economics:
The destructive power of weak money
The exponential rise in the monetary base from the post-war years was enough on its own perhaps to eventually guarantee a hyper-inflationary outcome for the dollar, even before the credit bubble suddenly burst in 2007. The Federal Reserve Board then responded to contracting bank credit by increasing the quantity of money threefold in less than four years. This raises the question of inflationary implications for prices, given the Quantity Theory of Money as understood by mainstream economists.

Milton Friedman, who is associated with monetarism, summed it up by repeating Hazlitt’s earlier assertion: inflation is always and everywhere a monetary phenomenon. Indeed, it is generally forgotten that there cannot be an increase in the general level of prices without an increase in the quantity of money. This is too imprecise for modern economists who theorise over what measure of money to use. Today, the economists at the Fed lead us to assume that the link between monetary inflation and prices applies to the broadest measure, which includes bank credit. This is suspiciously convenient, given the deflationary implications of a contraction of bank credit, which left unchecked would threaten the end of the fractional-reserve banking system. Using the broadest measure allows the Fed to argue that deflation arising from contracting bank credit must be balanced by the expansion of raw money, when their true concern is the prevention of a banking collapse. This is instructive and should be read by all. HERE.

Lars Shall:
“The Devaluation Against Gold Is The Inflation“
Here is an exclusive interview with James G. Rickards, a leading practitioner in the realm of capital markets, national security and geopolitics, on inter alia “quantative easing as a success,“ the currency wars of the past and the present, and the question why you are fighting every central bank in the world in case you own gold. All such roads lead to price inflation. HERE.

Mine Web:
S&P raises gold and base metals price assumptions for 2011
Standard & Poor's has raised its metals price assumptions for 2011 and beyond, citing the increased volatility of the markets but worries about sharp risk of fall in investor demand for gold. HERE.

Below is a longer range graph of gold which presents a strong picture. As we struggle to preserve whatever wealth we possess, it is wise to look for such stability.

Before signing off today, I wanted to present a different graph. Below is the ration between the price of gold and the miners (HUI). The change in May is significant. Recall, that the miners should surpass the rise in metals prices as we move into the final third phase of the Gold Bull Market.



Below are the 3 Day graphs of gold & silver from KitCo:




 Miners from Scottrade:


Currencies from Kit Co:

Some Prices: DOW off 120.49 to 12000.9; S&P off 12.23 to 1276.88; NASDAQ off 23.94 to 2660.92; Gold off 14.90 to 1529.30, and silver off 1.11 to 34.46.

Best to each, Doug

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