Thoughts on Markets

Monday, October 03, 2011

Christians repent and return to your first love - Southern Copper (SCCO) - Miners - Gold - Silver - Currencies

Folks,

The big things to look for these days is the direction of the dollar, the European PIIGS, tax increases, and the manipulation of all markets. There are no free markets today except in the illegal drugs, but that is not the business to be in because of the dangers from those in it and the government war on drugs. 

A free market needs to have a steady money, not FIAT unbacked paper currencies, private property, individual liberty, and protected markets without government intervention except to wield the sword of the Lord as a minister of God to punish evil. The bible certainly does not explicitly call for a free market, but has many of the fundamental foundations principles of a free market economy. Then as we look about to determine Economics which implements this principles illustrated and prescribed by the Word of God, we are lead to the historic or Austrian School of Economics. The current Keynesian Economic Theory is what brought us in violation of God's Law into the chaos of financial fiasco whirlpool. 
I believe God is using our current financial woes to call us to our knees and to turn back to Him. We must kiss the Son of God else God's wrathful judgment will come in full force. Pray for the Holy Spirit to encourage His people back to their first love: King Jesus. It may be too late already, but without a return to Him, the end of America will come.

One of the ways we honor our King Jesus is regular attendance in corporate worship at a Trinitarian Church which preaches the entire word of God, practices the two Sacraments (Baptism and the Lord's Supper), and exercises discipline over its members. This is essential!

The Privateer:

"Calling the near term fate of ANY investment or asset in current market conditions is all but impossible. The desperation of the global monetary powers that be are reaching such heights that they are willing to perform any fiscal or monetary form of atrocity to (they hope) hold things together. Meanwhile, on the paper investment markets, the participants are literally at their wits end. And whenever that happens, their "faith" in the "system" is all they have left to sustain them, so they retreat to the US Dollar and US government debt paper. After all, if THAT folds up, so will the system.
That's why everyone needs to own physical Gold. Look upon this correction as an enhanced opportunity to add to holdings or, if you haven't got any Gold yet (Why not?) to start accumulating. Anyone who bought Gold at any point in the corrections of 2006 or 2008 has been sitting pretty ever since. Despite the fact that Gold is now about $US 270 lower than it was three weeks ago, they still are."

MineWeb:

Well-timed price slump has Indian gold traders expecting a bumper festival season
Good monsoons and price weakness ahead of the 9-night Navratri festival, which kicks off the Indian festival and wedding season has traders rather excited. A real break for India. HERE.

Gold rises for third straight day; longest gains in a month
Gold climbed on Monday, recording its third straight daily rise, having posted its largest monthly slide since 2008 in September. This is good news for gold. Maybe we are near the bottom of the correction in gold. Silver has yet to show a good bottom. Silver remains more volatile with more risk at this point.  HERE.

Should the recent price fall mean gold no longer a "safe haven"?
If your house catches fire, do you call your insurer before trying to escape the flames...? Gold was still a better 3rd quarter performer than equities and industrial metals and its defensive value pays out over time. We are to expect this from time to time. This one came on rather suddenly and gold has given back some of its gain for the year, but I like to think in longer term. The bull is still snorting albeit softly for the time being. I expect it to be roaring shortly. HERE.

Europe's debt crisis clearly very bullish for gold and silver - Gardner
If you want to know the future, pay attention to the decisions European policymakers will have to make regarding debt, says Scott Gardner, chief investment officer at Verdmont Capital. Gold Report interview. More people moved into gold before this last correction. More will be coming as the world economic fiasco gets worse. HERE.

Have gold and silver market conditions changed, fundamentally?
Gold and silver prices are being pulled back solely in the search for liquidity, not because the safe-haven qualities of gold and silver have evaporated. Liquidity is always a problem. I have had to make major repairs to the sewer lines under our home. This has taken much of my liquidity. I feel their pain in this regard. HERE.

MoneyMorning:

Southern Copper Corp. (NYSE: SCCO) Gives You High Yield, High Profit Potential
Because Southern Copper has world-class assets and high profit potential, but its share price has taken a dive amid all of the recent market turmoil.
I love to find a sound business whose stock price has been pummeled in the uncertain markets. It screams bargain and is a major buying opportunity.
And in this case, the fact that Southern Copper's stock price has dropped means its already-juicy dividend has increased. Currently the company's $2.48 dividend equates to a 9.5% yield.Here is a stock one might consider for the dividend, alone. The fact that the price has been hit very hard does give the potential for substantial gain when/if construction picks up in the U.S. and continues in China. I have always liked this company and have bought into oversold condition in the past. I am considering it for dividend. HERE.
I am buying for my portfolios SCCO @ 24.30-24.36. You investigate and make your own decisions. Remember SCCO could go down in the near future

MineWeb;

Scotiabank forecasts US$4/lb. copper price for 2011, 2012
While copper consumption growth is expected to slow in China, iron ore prices in the country will stay strong, Scotiabank VP Patricia Mohr forecasts, which bodes well for Canadian iron ore miners. HERE.

India's commodity exchanges poised for massive growth; faces regulatory hurdles
India's commodity exchanges have generated an annual turnover of $2.5 trillion since futures trading started in 2003 and are poised for steady growth over the next few years, but political hurdles abound. HERE.

Miners from Scottrade:
Currencies from KitCo:
Some Prices: DOW down 18 at 10895; S&P down 2.10 at 1129.27; NASDAQ down 4.77 to 2410.48; Gold up 26 to 1650.80 and Silver up 0.84 to 30.81. Lots of volatility in all markets.

Best to each, Doug

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