Thoughts on Markets

Monday, July 11, 2011

Gold & Silver probably capped - Austrian vs Keynesian Economics - Plan for lower standard of living - Trust, not in men, but in King Jesus and His word.

Today, we are being treated to a continuation of the rise in the price of gold while silver, possibly being capped, lags again. The miners seem to be following the current path of the general market. From time to time they have slightly uncoupled with the general market, but that is not the case for today. Also, we are seeing the miners mixed and lagging behind gold.  

This is the Good Old Summer time when metals generally are in the doldrums. Gold seems to be breaking out all over which is a nice change. The big season for the precious metals lies ahead in 2-3 months. That is, this is normally the case and I expect it to be the same this year. 

There is much going on in the world of Keynesian Economics. We must always look to Classical or Austrian Economics to see the final result of Keynes followers. We lack the insight of King Jesus in knowing the timing, but biblical economics to which Austrian is the closest provides the long range impact of daily actions by governments, all of which are following Keynes. Remember as the Bill Buckler of has said, "When dealing with financial matters, and especially with money, modern "economics" is not designed to enlighten, it is designed to control." Sad, but so very true."

The same is true with politicians and bankers. Our economy is not booming, as we are told. It will not do so until the unemployment levels and welfare levels decline. It would also help for us to get out of the business of war and depreciation of the dollar. Time is running out for us to be living in a debt paced economic economy. Individuals, businesses, and governments can no longer wallow in debt without dire consequences. We must live beneath our means and become so frugal that it hurts for the time being to save and prepare for the future of lower standards of living. Begin now while there is yet time.

Summer gold - so far so good
The relatively stable performance of gold over the northern summer so far could bode well for the yellow metal's price performance in the Fall. HERE.

Russia is still buying gold - not selling it
A perhaps misleading headline in the New York Times last week suggested that Russia is selling its gold - but as far as the country's central bank is concerned it is still a purchaser. Russia like China is buying gold. HERE.

Gold at $1,850 still possible this year; don't rule out $10,000 long term - Hommelberg

Eric Hommelberg has called a few in his day. In 2009, he predicted gold to reach $1300 the following year - and it did. But $1850 gold by the end of this year? Gold Report interview. HERE.

ECB debt move suggests Eurozone crisis worsening. Are gold or silver the answer?
The ECB statement that it will accept lower-rated sovereign debt as collateral after Moody's downgraded Portuguese debt to junk status has significant potential implications for gold and silver investor. HERE.

 Miners from Scottrade:

Currencies from KitCo:

Some Prices: DOW off 170.55 to 12480.74; S&P off 24.22 to 1319.69; NASDAQ off 52.64 to 2806.91; Gold down 0.30 to 15443.90 (Gold was up about 10.00, earlier. It must have been hammered again); Silver down 1.06 to 35.65.

Best to each, Doug


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