Mercy! Last week was a ride. Friday saw 1,000 point swing in the DOW and it looked like the sky was falling, and I'm not talking rain.

But the wonderful thing is that the markets continue, in spite of government interaction which scares me. Who in their right mind wants the US Government to become a part owner in banks? Let alone banks that are healthy.

Well, enough of that rant. Right now with the DOW and performing well in this market bounce, gold fell over it's weekend high. At the moment it's trading at $838 so it's moving up as the day's close draws near.

Here's some interesting news items I stumbled across this morning:

Austria witnesses new gold rush

The interest in gold coins is so great that many of the world's major mints are struggling to keep up with demand, including the Austrian Mint, which produces the Vienna Philharmonic - one of the best-selling bullion coins worldwide.

Sales of Vienna Philharmonic gold coins have gone up by more than 230% since last year.

 

All Eyes on the U.S. Dollar

Capital Gold Announces Record Gold Production at Its El Chanate Mine

And I thought this blog entry cool because it features some pics from the latest Mining Expo in Vegas.

Our lust for metal is great.

1. We all agreed that it was hands down the coolest trade show any of us have EVER attended.  Sign up now for the next one in 02012 and give yourself two days to see it all.
2. It is amazing to me that - with the exception of Greg’s stuff - that there was basically no robotics on display there.  This is bizarre for an industry that has huge labor costs and the most dangerous work environment in the world.
3. The machines we build to extract metals and minerals from the earth are the most terrifying machines in the world.

Until next time. Be sure to check out the free real time market price widget ExactPrice for gold, silver, and platinum.

I spent most of today away from the computer and the market news. I was even away from the tv or radio news. But what I did have the opportunity to do was interact with people on "main street" and over all there is worry about the financial crisis and what it means in the long run.

Talk of recession and even depression came up. Anger over things like AIG's spa trip was one of the sore spots for a more than a few. And of course just who could solve this problem as a President kept coming up. As if one person could solve this mess.

All I know is that precious metals look more and more like a good investment. I've heard some talk of shorting gold because it's volatile and one can make some quick cash.

It's 9:34 PM Eastern and right now the free widget ExactPrice is $905.70. That's down from it's high today which I think was $910.10. Will it go higher. Yeah I think so. The governments around the world look like they are all printing paper money to buoy up the banks.

Speaking of which did you see this article:

More banks will fail, Paulson says

I found this article by David Chapman very informative:

THE FINANCIAL PANIC OF 2008

Financial panics have been around at least as long as organized economies. The first recorded panic in modern economies was in 1819. At its heart was a failure of the banking system following the War of 1812. It was preceded by a change in monetary policy caused by heavy borrowings to finance the war, and the monetary expansion in turn spurred an expansion of banks and bank notes. The resulting speculative investment led inevitably to collapse, with bank failures, bank runs and bankruptcies....

....A common theme in all depressions is massive bank failure. Great depressions are all about a collapse in the banking system and debt implosion. We (and many others) had constantly noted that this time would be no different, and that the massive debt build-up of the past two decades along with the proliferation of new instruments and derivatives was going to end in a disaster. The disaster is now unfolding, and the panicky body language of people such as Henry Paulson and George W. Bush is obvious. Fed Chairman Bernanke is trying to act coolly but even he now seems out of his depth as would we suspect most if not all of us.

Check it out. The article features some charts looking at past financial crashes and causes.

I got a kick out of this blog post:

How to Ruin the U.S. Economy
by Ben Stein

1) Have a fiscal policy that creates immense deficits in good times and bad, burdening America's posterity with staggering burdens of repaying the debt.

Oh and get this:

Mint Widens Freeze on Gold Coin Sales

People are reacting to the market and fear is building on the street. And here's one evidence:

More People Buying Safes

Well, tomorrow is a new day and perhaps it will be laced with opportunity. I'm sure it will. We just need to keep our eyes open.

This is turning out to be a very interesting day.

The US Congressional bailout is passed and those "smart" Congressman have gone home to campaign and beat their chests to load up their war chests and the DOW plummets below 10k.

Welcome to the global financial crisis. Or I should say the global credit crash. The whole monetary system is built on the idea of credit and frankly that scares me.

I'm blown away by what other governments from Asia to Russia to Ireland have been faced with today. They've been so bad that the dollar is the one coming out strong today. That says something about the global woes.

And I've been reading some interesting news items on gold too.

Central Banks to slow gold sales

Here are several links to items I found of interest today in my reading while I watched the precious metals react to the market losses. I use the free real time software widget from Lear Capital for tracking those markets.

Confessions of a Market Convert

Let’s start with a little disclosure.

I have a confession to make, and it’s a bit embarrassing, because any time you change a long held opinion, friends, relatives, associates and acquaintances are sure to take issue. So be it. In the interest of everyone being in the know, here it is:

I am now a bull.

I always like watching this guy in the morning as he does a short Youtube video on the day's market open:
Trading for the Masses

I see little to do in an environment that the rules are changing on the fly, so we have pushed to the sidelines to wait for the dust to settle some. Trades will be there, we just don’t see the easy trades right now, so we will wait for the setups to return!!

And I found this commentary on Bloomberg worth reading for it's not of history in the Fannie and Freddie vein:

How the Democrats Created the Financial Crisis: Kevin Hassett

Back in 2005, Fannie and Freddie were, after years of dominating Washington, on the ropes. They were enmeshed in accounting scandals that led to turnover at the top. At one telling moment in late 2004, captured in an article by my American Enterprise Institute colleague Peter Wallison, the Securities and Exchange Comiission's chief accountant told disgraced Fannie Mae chief Franklin Raines that Fannie's position on the relevant accounting issue was not even ``on the page'' of allowable interpretations.

Gold has been doing well this week as I watch it with ExactPrice.

I was thrilled last night to go to bed and watch it get close to $900. I was pretty sure that it would break that over night, but I was wrong.

However it was nice to see that it did break $900 during trading today.

Not so cool though is that it dropped from that when the DOW rallied on news that Paulson was entertaining thoughts of what amounts in my mind to more government bailouts.

Here's the news on that:

Dow Surges 410 on Bailout Hopes

The late-day rally was sparked by various reports that Paulson has been shopping around the idea of creating a modernized version of the Resolution Trust Corporation, an entity was used for banks' bad assets during the S&L crisis in the 1980s. The idea of a bailout sent financial stocks soaring, eventually closing the day nearly 8% higher.

In the long term I think this will be good for gold and silver because it's just going to lead to a weaker dollar. But I have to say that it greatly disturbs me that more bailouts are coming.

Man, all the precious metals are taking a hit today. I was looking at the yearly charts on the free widget ExactPrice and I note that the gains over the past year have been almost all lost. Except for Silver which is actually lower.

That said I thought these two articles were interesting and worth checking out.

Can Gold Be Suppressed Indefinitely?

snippet:

"It seemed obvious to me, as it does to many of the writers lobbing
missives into the blogosphere on the subject, that the continuous
printing of currency would cause a proportional devaluation of said
currency in line with the excessive representation of ersatz wealth it
theoretically should be backing. And that’s the bottom line for a
currency, isn’t it?"

and:
Go for Gold

snippet:

"All in all, it has not been a pretty picture, but I have reason to
believe that the outlook for the next 6-12 months is even more
pessimistic. Fortunately for us, when there’s blood on the street,
there’s opportunity to make money, and I think we are entering a
period of truly fantastic profit potential. First, let’s take a look
at why I carry such a pessimistic view for the near and intermediate
terms."

I was reading this morning this article:
GOLD FUNDAMENTALS STILL POINTING TOWARDS $2000+
And it struck some pretty good cords with me. Though I don't know if gold will hit over 2 grand but here's a graph that scares the pants off me

As you can see here total US debt is growing faster than its national income. Ever tried to run a business which its debt grows faster than its income? Well, needless to say you would be heading straight into bankruptcy. And that's exactly what's happening with the US, they're heading straight into bankruptcy which is of course extremely dollar negative. The only way to work its way out of debt is through inflation.

Something to think about. The article includes a bunch more graphs and statistics worth considering.