Thoughts on Markets

Thursday, September 22, 2011

QE III is the Twist Played for Us by the Fed - Metals taking it on the chin - Markets Down, Down, Down

The twist the Fed has announced as a new QE have been rejected by the general markets as all are down big time. The dollar bulls are having a field day for the time being. Even with the very poor fundamentals of the dollar these bulls are pouring funds into them long term treasuries and dollars. There will very likely come a day of regret for them. In the mean time the metals and miners have moved into very tempting price ranges. Remember to make your own decisions. These are to inform you of the market decisions I am making for myself.

These are times which are perfect for God's words in Psalm 46: 
"For the choir director. A Psalm of the sons of Korah, set to Alamoth. A Song. God is our refuge and strength, A very present help in trouble.
Therefore we will not fear, though the earth should change And though the mountains slip into the heart of the sea;
 Though its waters roar and foam, Though the mountains quake at its swelling pride. Selah.
 There is a river whose streams make glad the city of God, The holy dwelling places of the Most High.
  God is in the midst of her, she will not be moved; God will help her when morning dawns.
 The nations made an uproar, the kingdoms tottered; He raised His voice, the earth melted.
 The LORD of hosts is with us; The God of Jacob is our stronghold. Selah.
  Come, behold the works of the LORD, Who has wrought desolations in the earth.
 He makes wars to cease to the end of the earth; He breaks the bow and cuts the spear in two; He burns the chariots with fire.
  "Cease striving and know that I am God; I will be exalted among the nations, I will be exalted in the earth."
 The LORD of hosts is with us; The God of Jacob is our stronghold. Selah."


One could play this rise in the dollar as it kicks the stuffing out of all but the Yen. However, I choose to rest in the Lord King Jesus and do nothing for the time being. I expect to have an opportunity to add to my portfolios and have dollars "kept dry" for just such purpose. In the meantime, I have battened down the hatches and taken a long term view on the metals and miners by putting them on hold for me..

Daily Pfennig (Pfennig@EverBank.com):  "The Fed did announce a different plan yesterday, called Operation Twist, in which they will purchase 6 year and 30 year Treasuries to the tune of $400 Billion, and sell an equal amount of Treasuries 3 years and less to maturity. This has pushed the dollar to the front of the class, and the only standing currency other than dollars is the Japanese yen. The perfect storm for a period of dollar strength that I talked about a couple of weeks ago, has hit the shoreline. better batten down the hatches." This is the QE III which I have been saying the Fed would deliver. It has given the dollar wind in its sails and it is soaring. This could last for week or even months before people realize that this will not work any better than the other QEs. For the time being expect dollar strength and, with the rejoicing of the bullion banks, the precious metals will take it on the chin. Also, it is wise to batten down the hatches to protect you from the storm. We should see great buying opportunities in the metals and miners very shortly, so keep your powder dry.

MineWeb:

Online gold buying gets a boost in India during traditionally inauspicious period
While traditional Indians observe a period of mourning and stay away from the gold market, store operators and traders are wooing them back with online discounts, hoping customers flood the internet to buy gold. This is a break for the dealers, as the price of gold declines in face of a dollar rally. HERE.

Gold dips as dollar gains post Fed decision; palladium at lowest in 10 months
After the Federal Reserve's widely-anticipated move to boost U.S. growth lifted the dollar, gold fell on Thursday, with palladium falling to its lowest price in 10 months at $667.22 /oz. This is a knee jerk reaction to the Fed announcement. It is temporary. HERE.

Rare earths shortages could exacerbate U.S. foreign policy risks, Congress told

U.S. rare earth reserves are economical to mine, which can help ease foreign policy challenges concerning rare earths, while creating U.S. jobs, says the Center for a New American Security. The are vital to most military hardware and many civilian products. China has been buying them up all over the world. This has brought the concern to the forefront. HERE.

Personal Liberty Digest:
 Riding The Silver Bullet
Riding The Silver Bullet
September 22, 2011 by Brien Lundin 
Silver investments are becoming increasingly attractive in an uncertain economy. With good timing and the right strategy, you could reap huge profits on the expected gains in silver. As an investment tool, silver enjoys unique advantages. In its dual role as both an industrial commodity and a monetary asset, silver’s impressive industrial qualities make it more than just another shiny metal.I have long preferred silver to gold. This is particularly true as silver has lagged behind gold. HERE.

Miners from Scottrade:
So many of the miners are in tempting buying ranges for me. 

Metals from KitCo:
Currencies from KitCo:
Some Prices: DOW off 336.99 to 10791+; S&P down 34 to 1232.77; NASDAQ off 69.03 to 2468+; Gold off 53.30 to 1727.20, and Silver off 2.84 to 36.70. Both precious metals are in good buying ranges for me. However, they could go lower. You must make up your own minds about what and when to purchase.

Best to each, Doug









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