Thoughts on Markets

Wednesday, September 28, 2011

Swiss to Launch Gold Currency on Exchange - What is FIAT Money? - Gold & Silver at or near bottom? - Miners are Ripe for Selective Picking.

As I mentioned in my email and yesterday's blog, I am bottom fishing which many may call dumpster diving. Yes, I am accumulating additional miners (mainly, HMY, FSM, & HL). This is what I am doing, but this may not be correct for you. Make your own decisions. 

I am working from a long term perspective in what I see as a continuing bull market for the precious metals. Silver has been hit very hard, but the demand for physical silver remains very high, as it does for gold. If you have shopped around for silver or gold, you have found that premiums are going up very rapidly, and dealers are having difficulty filling orders. This situation is world wide. Why then are the prices remaining low? You already know my answer. Many others have joined in these thoughts on intervention and manipulation. 

As strange as the markets are acting, it is very comforting to be able to rest and trust in King Jesus. He is in control and has everything and everybody completely in tow. We are simply to obey Him and work for His glory and the kingdom. That way, we can rest assured and enjoy Him completely.


Democrat Governor Calls for Suspending Elections
File this in the random-things-politicians-say file. Speaking to a Cary Rotary Club today, N.C. Gov. Bev Perdue suggested suspending Congressional elections for two years so that Congress can focus on economic recovery and not the next election. Was she serious? HERE.

From Chuck's Daily Pfennig:

"To recap. The currencies were unable to add to their gains reported yesterday, and until just a few minutes ago, were trading in a tight range. The euro has gained some ground this morning, and is pushing the other currencies higher too. Gold couldn't hold its gains from yesterday morning, and after hitting a higher of up $70, it closed to up only $22. UGH! Home prices continue to fall. and U.S. consumers continue to lose ground with wages." The fundamentals remain the same as yesterday. Our economy is not in good shape, at all. It seems to be getting much worse. I wonder how long the FIAT paper currencies will exist.


Swiss Stock Exchange to launch gold currency
Market action at the end of last week confirmed that the US Federal Reserve has disappointed traders; although the Fed's announcement of Operation Twist had been expected by many analysts, the market had been hoping for more quantitative easing. This disappointment, combined with Bernanke’s pessimistic assessment of “significant downside risks” to the US economy, has hurt all asset classes except the US dollar and Treasuries – in particular commodities. On Friday the gold price experienced a sharp setback of up to $101.90, or nearly 6%, to $1,639.20 per troy ounce. However, the Swiss Stock Exchange said it will soon introduce a gold currency that is designed to offer new clearing services to its trade customers.
Fears among investors that the world economy is slipping back into recession have intensified since the middle of last week. The Fed’s Operation Twist is designed to invest another $400 billion in the purchase of long-term Treasury bonds – the same amount is going to be sold in the form of short-maturity government bonds. The Fed´s move is designed to keep long-term US interest rates at low levels. Many market participants do not like the idea that the Fed’s new monetary strategy runs through the end of June 2012. If the Fed does not follow through with additional programs to improve the liquidity in financial markets, further asset sell-offs could be prompted by banks and hedge funds hungry for cash. HERE:
FIAT Money 
Despite every effort by governments, the gap between rich and poor continues to grow. It is now the biggest it has even been in history. All sorts of reasons for this have been proffered, but few, however, seem to realise that is a simple, inevitable consequence of our system of money and credit. This video, a shorter version of which appears in the film The Four Horsemen, explains. This is a short video with a good explanation of FIAT currency. HERE.


Gold and silver fall overdone but are they on the way back?
The recent plunges in the gold and silver price for whatever reasoning one puts behind them would seem to have been hugely overdone but, reality suggests the falls will be shortlived. Oversold, but slowly coming back in my way of thinking. HERE.
Gold rises as lower prices attract physical buyers
After Monday's dramatic $120 price drop, gold rose on Wednesday and continued the previous session's consolidation as price-sensitive physical buyers bought into the market at lower prices. Same goes for silver, as well. HERE.
Gold, copper top Simon Tonkin's commodities list
Gold remained at the top of Australia's favoured investment commodity list, while copper is also a key recommendation for the senior resources analyst for Australian stockbroking firm Pattersons Securities. We must remember Dr. Copper whose price indicates the status of economies. HERE.
Tumbling silver prices prompt U.S. Mint suspension of silver coins
Volatility in precious metals markets prompted the U.S. Mint to temporarily suspend a number of silver numismatic products. Bullion coin sales remain unaffected. HERE.
Gold ETF investors not heading for exit
Newest figures show that the loss of confidence that caused gold prices to fall 10% in the four days through Monday has not yet unnerved investors in the leading gold exchange traded fund. The ETFs must be in stronger (wealthier) hands.  HERE.
Forbes Magazine:
 The Chinese Mean To Control The Global Gold Market
Get ready for the Pan Asian Gold Exchange, scheduled to open in June, 2012 in Kunming City, Yunman Province– the gateway to all of Southeast Asia. This is serious, as the Pan Asian Gold Exchange is a part of China’s five year plan– which means it is part of China’s strategy for dominance in global financial markets and the global economy. HERE.
John Hathaway - Here is Why Gold & Silver Have Bottomed
With gold and silver rebounding, today King World News interviewed four decade veteran, John Hathaway, the prolific manager of the Tocqueville Gold Fund.  When asked if this latest decline in the metals felt like 2008, Hathaway stated, “It certainly did, the last two weeks especially, it was so panicky.  The difference is that the governments in Europe, for sure, and the US, have shown their willingness to step in to provide a backstop (through money printing), in order to prevent a complete meltdown.”
John Hathaway continues:

“You can debate whether ‘Operation Twist’ is going to make any difference at all, but it certainly shows an activist Fed stepping in to be as supportive as it can.  The precedent has been established that should we have another decline in the markets, the central banks in Europe and the US are going to be on the side of money printing." HERE.
Miners from Scottrade:
Currencies from KitCo:
Some Prices: DOW off 18.62 to 11177.75; S&P off 5.40 to 1169.98; NASDAQ off 8.99 to 2536.78; Gold off 10.50 to 1639.20; Silver off 0.97 to 30.91. I believe we are at or very near the bottom in this metals correction.
Best to each, Doug


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