Thoughts on Markets

Monday, November 07, 2011

Greek - Italy - France - Gold, Silver, and Miners Sprinting - Fortuna Good News.

Isn't it amazing that the news about the financial fiasco that we are facing in America is given little attention while the focus is on Europe >> the PIIGS. Greece is moving toward a "solution," and now we are exposed to Italy and France taking center. Folks, there "is trouble right here in River City." (Remember Music Man?) 

Ours is much worse than almost the rest of the world put together. We have an obscene individual, business, and national debt which continues to grow. We have a Congress and White House on the greatest spending binge ever seen for the 4-7,000 years since the world's creation by our Sovereign God. There seems to be no end in sight for either the end of the debt or a slowing in the spending. Our unemployment is very high and is having a severe impact upon any hope of recovery.

Nevertheless, Europe takes center place in the news and receives the criticism, because they do not put more fuel (debt) on the fire created by debt. Who really believes that more of the cause will solve the debt problem? Of course, the heart of the matter is the unbacked paper currencies of the world and the fractional banking system which so easily creates "new money" at will.


Papandreou’s Gamble on Greek Democracy Sours as Vote Plan Leads to Ouster
George Papandreou took a gamble on the most ancient of Greek traditions: democracy. Unlike his past success in extracting European bailout packages that avoided default, this idea helped lead to his departure.
During his two years in office, Athens became the nucleus of the European debt crisis and the Greek prime minister was its public face. While his legacy may be that of a man who tried to save the euro, he leaves his country struggling to maintain the needed flow of foreign aid. Now the interest is turning to Italy. At least, Italy is turning more into the news item. The Greek situation will still have to play out. HERE.

Berlusconi Struggles to Keep Power Before Key Votes
Prime Minister Silvio Berlusconi struggled to hold on to power and prove he can implement austerity measures pledged to European Union allies as reports of his imminent resignation sent Italian stocks surging.
News agency Ansa said Berlusconi denied a report by Giuliano Ferrara, his former spokesman and editor of newspaper Il Foglio, who wrote today that the premier would step down “within hours.” Berlusconi will likely resign next week in return for support in a vote on the austerity and economic- growth measures, Ferrara said in a phone interview after his initial report.Update on Italy. HERE.

France Unveils $9.6 Billion in Taxes, Spending Cuts to Defend AAA Rating
France unveiled tax increases and spending cuts amounting to 7 billion euros ($9.6 billion) for next year to defend its triple-A rating as growth slows and Europe’s debt crisis deepens.
The country will increase some levies on large companies, push up the lower end of its range of value-added taxes and curb welfare spending, Prime Minister Francois Fillon said today. And France, too. HERE.


Gold up as euro debt crisis intensifies
Gold climbed more than 1% on Monday as investors piled into the traditional safe haven asset as Europe's debt crisis intensified on worries about political instability in Italy and Greece. HERE.

30% year on year price growth for gold as economic instability continues
The latest economic news out of the Eurozone is hardly conducive to light at the end of the global economic imbroglio and thus gold and silver would seem likely to continue a steady upwards path overall. HERE.

KitCo News:

Technical Trading: The Week Ahead - Gold Bulls Charge Out of Starting Gates

07 November 2011, 10:37 a.m.
Mon Nov 7—The bulls charged out of the starting gates Monday morning and propelled Comex December gold futures to their highest level since September 22. The near term technical pattern has turned solidly bullish and momentum is trending higher, which is supporting healthy gains in early Monday action.
After spending much of October in a sideways consolidative pattern, gold bulls seized control of the near-term trend on October 25 and the market has been climbing higher in a new pattern of higher highs and higher lows. Daily momentum tools including the relative strength index (RSI) and the slow stochastics indicator are pointing higher in a bullish position. HERE.


A ‘sweet little deposit' in Mexico drives Fortuna Silver's growth
Production is on the up for Fortuna Silver Mines with a second mine in operation now; and with near term plans for expansion Fortuna Silver eyes doubling silver output. A nice report on one of my core holdings. HERE.

Silver is up, too, but not faring as well as gold. It may have received some more intervention, but the demand remains high. As usual, the apparent intervention is in the paper futures markets for the metals and not in the physical spot metal markets. 

Massive increases in Q3 gold miner profits but no re-rating yet
As gold companies continue to announce strong results from this round of quarterly earnings, dividends continue to be a hot button topic for analysts. HERE:

Miners from Scottrade:

Currencies from KitCo:
Metal Prices: Gold up 28.30 to 1782.30 and Silver up 0.55 to 34.68.

Best to each, Doug


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