Thoughts on Markets

Wednesday, July 06, 2011

Precious Metals Strong - Pulling Miners upward - Let's all get on track in the Christian World & Life View of everything

 This is the time of year when precious metals languish during the heat of summer. The prices generally have melted in the past. This year, it could be different. We will have to watch the market and see where it goes from here. Long term, the dollar, along with other currencies will continue to drop in value, and gold and silver will be more costly in terms of the paper currencies of the world. Today, they are up in terms of all currencies. 

It is interesting to read and study the debate between those who see inflation against those who see deflation ahead. None of us knows for certain; however, the Lord has created us with brains to equip us to think and reason. Remember that God's written word equips us for every good work, so any reason must come from an understanding and application of biblical principles. All other reason comes from fallible man and not from God. Every thought and action must be based upon God's world and life view; else it is false. We are called as watchmen to warn others of these facts and to present the gospel to the world making disciples of all. Nevertheless, even though we carefully plan and execute our plans, we must depend upon God for success or redirection. I pray that each of us repent before the Sovereign God, so He will heal our fallen nation.

My thoughts on the direction of our economy is that we are headed for a time of inflationary depression or stagflation and a lower standard of living here and most of the rest of the world.

Thomas Sowell

Thomas Sowell   Politics Versus Reality: Part II

No one is more of a master of political talking points than President Barack Obama. Remember "shovel-ready projects"? These were construction projects where the shovels were supposed to start digging the moment the government gave them the "stimulus" money.

Two years later, Obama can joke about the fact that the shovels were not as ready as he thought. In reality, the shovels were never ready. It can take forever to get all the environmental approvals to build anything in today's political and legal climate. HERE.

Walter E. Williams

Walter E. Williams  Gross Media Ignorance

There's little that's intelligent or informed about Time magazine editor Richard Stengel's article "One Document, Under Siege" (June 23, 2011). It contains many grossly ignorant statements about our Constitution. If I believed in conspiracies, I'd say Stengel's article is part of a leftist agenda to undermine respect for the founding values of our nation.

Stengel says: "The framers were not gods and were not infallible. Yes, they gave us, and the world, a blueprint for the protection of democratic freedoms -- freedom of speech, assembly, religion -- but they also gave us the idea that a black person was three-fifths of a human being, that women were not allowed to vote and that South Dakota should have the same number of Senators as California, which is kind of crazy. And I'm not even going to mention the Electoral College." HERE.

Paper gold and silver markets are a joke, Eric Sprott tells Chris Martenson
"I think Comex is a joke and I think all the paper markets are a joke. ... We trade a billion ounces of silver a day -- a billion ounces. The world produces 900 million ounces a year. Rather than us saying, 'Well, the buyers are speculators,' what are the sellers thinking? They are trading a billion ounces in the sell side, and there is all of 28 million ounces in the Comex. There is obviously a shortage of silver. What is the guy selling it thinking? He is the guy with the unlimited losses. At least the guy long silver knows what his loss can be, but the guy shorting silver? We have already seen silver from a year ago go up by 150 percent. Just think of the outside losses. So I do not really think that the Comex and the LBMA are serving much purpose in terms of supposedly being involved in the physical market. They are not physical whatsoever. They are just paper markets." More emphasis upon silver. This is an important serious read. HERE.

On the way to a new gold standard?
In another extract from his comprehensive 90-page Special Report on Gold, Ronald Stoeferle examines the pros and cons of the case for a return to some form of gold standard. Interesting perspective. HERE.

Gold a lifeboat which will not be sunk
The state of the gold market today as seen by gold specialist Julian Phillips in South Africa. I am convinced that this is the only lifeboat with the exception of silver. In fact I am beginning to favor silver fot the time being. HERE.

Folks, Below is a 10 Year picture of the golden life boat. This has been for centuries the life boat. However, today, we are facing a world of unbacked paper currencies. In such an environment, all currencies are being devalued and have value only in relation to the other currencies. Currently, the Swiss Franc, Norwegian Krone, and Singapore Dollar appear to be the strongest along with the Canadian and Australian Dollars. The Chinese Renminbi seems strong as well, and it likely will be in the future; however, all data out of China is suspect. As you observe the graph of the life boat price over 10 years, ask yourself if you want to be in dollars or precious metals for the next 10 years?

Miners by Scottrade:

Currencies by KitCo:

Our precious metals are rallying and are pushing the miners up, as well. The rally seems quite strong, but we do not know the future. Last week the metals were hit very hard. 

Some Prices: DOW up 3.86 to 12573.31; S&P off 2.69 to 1335.25; NASDAQ off 1.89 to 2824.08; Gold up 12.90 to 1529.20; Silver up 0.44 to 35.92.

Best to each, Doug



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