Thoughts on Markets

Monday, August 15, 2011

Laugh at Government Spending - HMY (I have bought) - Gold down - Silver Up - God's people must repent to save America

Folks, The monetary situation here in River City, OOPS, America is getting real shaky. I believe we are headed into more of the recession/depression of late. The unemployment, though reported a tiny bit better last week, remains a drag on the economy. There seems to be no end to the spending binge of Congress and there are no candidates on the horizon who meet the Biblical standards for president and vice president. The Bible has fallen out of favor with most of the elite. 

Governor Perry of Texas in his call to prayer and fasting and repentance of the people should be commended for this stand. Many more must follow suit before we are awakened to God's call. Remember, it is His people who are called to do this and not the whole nation. It is up to us. Unless we answer soon, we may not have another opportunity. 

Let us all return to God's Word by studying it diligently and applying it to every area of life. To use any other standard in place of that which the Creator has given us is to shake our fist in the face of the Sovereign God of all. We must heed His warning else we will be one of the nations crushed under the foot stool of King Jesus.
It has been widely suggested that the largest bubble yet is in the Treasuries. If this is true, then one has to wonder where the dollars will go as the bubble begins to lose dollars. It is likely that they will find their way into gold and silver. If this happens, gold and silver will jump in price as never before seen. There are indications that the current Treasury auction has not gone well. Most of the sales were in the 10 year notes. Thus, QE III must surely be on the way. If these auctions do not go well, it means that foreign buyers are not showing up as well as needed to satisfy our need for debt. Is the day coming closer for the U. S. Dollar to be removed as the world reserve currency. I believe the only reasons it has not been replaced are (1) All are familiar with it and have become accustomed to it since WWII, and (2) There is not as highly liquid currency to replace it. This would also apply to a basket of currencies which has been suggested from time to time.

Mine Web:

Bullish on precious metals for years to come - Louis James
Even with the turmoil in today's markets, Louis James says business really does go on. He stresses that he remains very bullish on precious metals. Gold Report interview. HERE.

Gold moving sideways after the fall
Gold pulled back fairly sharply from last week's peak when it looked to be overbought, but positive story for gold largely unchanged. This is likely a consolidation for a further run up in the Fall. HERE.

Nixon's not-so-happy gold legacy 40 years on
Are those who advocate a return to a U.S. gold standard mystical fanatics, or visionaries who have learned from history's lessons and seek a practical solution to today's financial chaos? I would like to see at least one currency backed with gold, but know that there are great forces opposing such a move. Also, there are problems to be ironed out, but it could work if the currency was backed by a market price for gold. HERE.

Costs bite in Harmony Gold's June quarter; profit falls to below expectations
Rising costs and charges relating to Target 3 shaft acquisition from Pamodzi Gold bit into Harmony's earnings which fell below market expectations despite gold price boost. This is one of my core holdings. It is a good company. I could have the opportunity to pick up a few shares if the price reflects this news. HERE.

Analysts recommend steering clear of junior miners in current environment
A number of stock market analysts recommend established miners in the resource space in the current economic climate and see juniors as too risky citing the example of 2008 meltdown. Of course, the juniors are the ones which should provide the best opportunity for profit during the pending Gold Rush. That is, when and if there is a Gold Rush the junior miners normally give more bang for the buck. However, I believe that caution should be the watch word for the present in all markets. HERE.

Seeking Alpha:

Correlation Between Treasuries and the Broad Market: A Beta Study
On August 8, 2011, I posted this StockTalk:

Panic if both Treasuries and Markets sell, and sell hard. Not the case right now, would seem a buying opportunity.
The correlation between Treasuries and the broad market has been pretty well documented. When people sell stocks, much of the money is often reallocated into Treasuries, sending their rates lower. This is commonly referred to as the "risk-off trade". I decided to take a closer look at this concept, and how well it is holding up in the recent sell-off to determine if I needed to revise my stance. This is an interesting analysis. Worth a read HERE.

Miners from (Note: I have buy orders in for HMY @ 13.13. No executions, yet!

Currencies from KitCo:

Some Prices: DOW up 132.75 to 11401.81; S&P up 15.06 to 1193.68; NASDAQ up 21.77 to 2529.75; Gold off 5.31 to 1741; Silver up 0.52 to 39.59. 

Note: I got some executions on the buy orders for HMY @ 13.13. The last trade in the market was at 13.35. I got it at less than that.

Best to each, Doug


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