Thoughts on Markets

Friday, August 05, 2011

Crashing Market - Rest & Trust in King Jesus - Metals have rebounded - General Markets going lower - Miners are nearing my buying range.


The markets are in crash mode. Yesterday was a disaster for most people and there must have been quite a few margin calls with resulting sales of stocks to cover the calls. That spilled over into the mining stocks and the precious metals. The precious metals have rebounded a good bit this morning, but the miners are still suffering with the general market.

These are the times when the best laid plans of mice, etc. so hang on tightly. I am trusting in the Lord who is in control and standing aside for the time being. Of course, I am well positioned in the miners and metals to weather the storm and will be looking to add to the portfolios when the time is ripe. You must make your own decisions based upon your cash, present portfolios, and your individual risk tolerance. 

I suggest you make your plans in accordance with the principles and guidance of the Holy Spirit as you study God's Word which is sufficient for every area on life. He made everyone and everything and knows us better than we, ourselves. It is perfectly logical that His operation manual: the Bible, would be the best guide ever made. Study it and follow it to grow in the grace and love of King Jesus. Rest continually in Him, alone.


8 Reasons Young Americans Don't Fight Back: How the US Crushed Youth Resistance
The ruling elite has created social institutions that have subdued young Americans and broken their spirit of resistance.
Traditionally, young people have energized democratic movements. So it is a major coup for the ruling elite to have created societal institutions that have subdued young Americans and broken their spirit of resistance to domination. This is worth a read as it is an eye opener. HERE.

The Swiss Franc is the currency of choice for many investors with the yen a close second as investors shun the dollar in the face of a crashing market. Notice that gold and silver are both on the positive track this morning. Even the general market is rebounding from its oversold condition. I am not a buyer in the either the general or metals market at present. 

The general market does not look very stable and I expect great volatility for the time being. The miners have taken a big hit in concert with the general market, but I am not yet a buyer. The metals are holding much better than the miners, so CEF, GLD, and SLV have held fairly strong during this minor correction. My portfolios suffered big hits via the miners, but I have every confidence that they will rebound with vigor, possibly today and into the Fall.

The Daily Pfennig (

"The precious metals have been holding onto their values, and both Gold and Silver are up slightly today.  You would expect the precious metals would be rallying big time with all of the questions regarding the direction of the global economy.  Both gold and silver are excellent 'uncertainty' hedges, and have the distinct advantage of intrinsic value which the fiat currencies just can't match.  However, their ability to maintain value during times of crisis also has a downside.  Stock investors will certainly be facing large margin calls on leveraged equity positions, and will be looking for any asset which is liquid and has maintained value in order to meet these calls.  

This is why sometimes the metals face large selling pressures after dramatic moves in the equity markets.  While they have been holding their value through the volatile markets this week, we could see some selling forced by margin calls over the next few trading days.  Another reason our Timeless Metals MarketSafe CD is an excellent way to invest in the metals markets.  The longer term of the cd and guarantee of your principal helps alleviate some of the worry which can come from investing directly into the commodity markets." This echos the message I wrote in an email yesterday. Margin calls make investors cash in almost everything in an effort met the demands of the brokers. Many of the investors are heavily into margin to purchase stocks.
Mine Web:
Junior gold stocks suffer in market meltdown - is this 2008 over again?
Comments yesterday from the president of the ECB on the spreading Eurozone debt crisis precipitated a general global stock market crash with the mining 
sector and metals amongst the major fallers. This is not unusual. The miners will follow the general market in serious drops such as yesterday. HERE.
Safe haven buying boosts gold as markets slump
Investors looking for refuge from falling equity and debt markets amid continued concerns about the global economy helped buoy prices of the yellow metal. HERE.

A good time to buy battered gold juniors - West
James West, who advocated a move out of equities and into bullion in June thinks now might be a good time to get the most out of juniors that are looking a bit worse for wear- A Gold Report interview. Yes, "could be" is the operative phrase. A lot depends upon the contents of one's present portfolios and his risk tolerance. We are headed into some rough times in the markets for a while. I just noticed that after a beginning up move in the general market, they have gone south a bit. There seems to be struggle between more downward pressure and upward pressure. I am standing aside and observing.  HERE.

Precious Metal Stocks look undervalued - Gerbino
As more and more strain is placed on the global economy, so a greater number of investors are turning to gold and silver and, precious metals stocks should mop up some of that demand. The miners are definitely not following the price of gold, but have taken big hits along with the general market stocks, as to be expected. However, historically they have recovered very rapidly as the price of the metals escalates into the Fall and Winter. HERE.

The loss of the gold standard and why US foundations are firmly in foreign money
When Richard Nixon closed the gold window, foreign money stepped in to fill the gap left open between taxes and spending, the question now becomes how long is that likely to last. HERE.

Can gold lead the way back to a 'true' value of money?
Announcements by the Bank of Japan and the Swiss National Bank that they are to weaken their currencies are the latest indictment of the weaknesses in the global currency system; can gold really provide a solution? Gold, along with silver, is historical money. Even the central banks are stocking up on the precious metals as a better reserve than dollars in the world today. HERE.
Gold rallies, Japan joins the "currency war", Treasury advisors say dollar "slipping" as reserve currency
Today's London Gold Market Report form Bullion Vault sees further precious metals rises as currency wars move to the fore. HERE.


RPT-PRECIOUS-Gold holds firm after U.S. data
LONDON, Aug 5 (Reuters) - Gold held firm on Friday after upbeat U.S labour market data soothed immediate fears of a recession, but longer-term uncertainty about economic growth and concerns about the euro zone debt crisis supported demand for the precious metal. HERE.

Miners from Scottrade:

Currencies from Kit Co:

Some Prices: DOW off 35.42 to 11348.26; S&P off 4.67 to 1135.40; NASDAQ off 19.22 to 2539; Gold up 14.90 to 1663.70; Silver up 0.97 to 39.25. Metals holding fairly strong. Were this to continue, we should expect the miners to join in when gold and silver move farther upward this Fall.

Best to each, Doug


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