Flirting With Disaster!

Tags

ANV, Austrian school, AUY, Bailout News, banking crisis, banks, bear market, Bollinger Bands Saudi Arabia, bonds, Brian Tang, bull market, CDE, CEF, central banks, China, cobalt, Comex, commodities, Copper, crash, Currencies, currency, Currency and Currencies, deflation, Dennis Gartman, depression, DGP, dollar denominated, dollar denominated investments, Doug Casey, economic, economic trends, economy, EGO, Federal Deficit, financial, Forex, FRG, futures, futures markets, gata, GDX, GG, GLD, gold, Gold Bullion, Gold Investments, gold miners, Gold Price Manipulation, GTU, hard assets, HL, hyper-inflation, IAU, India, inflation, investments, Jeffrey Nichols, Jim Rogers, John Embry, Keith Fitz-Gerald, majors, Marc Faber, market crash, Markets, Michael Zielinski, mid-tier, mining companies, monetization, Moving Averages, NAK, NGC, NXG, PAL, palladium, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, Sean Rakhimov, silver, silver miners, SLW, small caps, sovereign, spot, spot price, stagflation, SWC, Technical Analysis, TIPS, U.S., U.S. Dollar, volatility, warrants, XAU

     Key Test Today! Stocks are Flirting with disaster, 8268 (DJIA) is the neckline of a head and shoulders. If (DJIA) closes beneath that, then we are definitely starting the next leg back down. Nothing to hold the freefall except some support at 8000 (DJIA) and then secondary confirmation of a new down move if breaks the next support at (DJIA) 7840, 7800, and then 7550. Take your profits now before you ride the DJIA right back down again.

     Gold and Silver however are poised to take off! If Gold successfully closes above $980 then next stop – new ALL time highs. As I mentioned yesterday hre is what I see for Gold. I predict that Gold will break $978- $980 and push up to approximately $1075 to $1090 on the first leg. We will see a normal retracement down to $950- $975 and then blast off to $1150 -$1250. I personally think with the hyper-inflation shoe about to drop, coupled with the remaining half of the derivative crunch. We can easily see $2250 to $2500 Gold by the end of the year. Keep accumulating Gold and Precious metals especially the junior and mid-tier producers. There are still companies out there selling at or below book value.

     In case you missed it yesterday here is the stock tip that I was offered along with an advisory service costing $297 year. This is the stock in their “special report”. just came across a sweet little play in the cobalt industry, supplies are dwindling fast and there will be a shortage just at the time this company comes on line with production. This company will have the only high grade cobalt production in the United States and will be able to supply approximately 12-14% of Cobalt needs for the USA. If you check out what Cobalt is used for you will understand why this stock has the potential to be a Grand Slam. Production is anticipated to be approximately 1525 tons per year with a 10yr life based on current reserves. I just received an offer to buy this tip along with an advisory service for $297 yr. I’ll give it to you for free. That’s just the kind of guy I am, LOL! The name of the company is Formation Capital Corp. Trading symbol (FCACF). I just picked up a bunch @ .35 cents/share, but as always do your due diligence, read the prospectus and company reports. If nothing else put (FCACF) on your watch list / radar. – Good Investing! -jschulmansr

Follow Me on Twitter and be notified whenever I make a new post!

Schedule automatic tweets, Thankyou for following me messages and much more! Be More Productive- Free signup… TweetLater.com

==============================================

Subject: Two trending markets revisited and analyzed for you 

Here is a video analysis of the S&P and Gold markets. The technical analysis was right on at the time, but those markets have changed quite a bit in the last few days. The S&P had a huge rally and Gold is climbing at a  steady rate, so what’s the new analysis? Glad you asked!

Below are two free videos, one on Gold and one on the S&P, that gives us an in depth technical look into these markets. Again the videos are free and very informative. Just Click on the Links Below…

          S&P Video Analysis:                                                    Gold Projections:

Also- Here’s your chance to analyze that stock you have been thinking about adding to your portfolio. Just enter the ticker of any company, name of a commodity, or forex pair and get your complimentary technical analysis. It cost you nothing and no payment info will ever be requested.

Click Here To Enter Your Symbol/s

===================================================

Claim a gram of FREE GOLD today, plus a special 18-page PDF report;

Exposed! Five Myths of the Gold Market and find out: 

• ·        Who’s been driving this record bull-run in gold?
• ·        What Happens When Inflation Kicks In?
• ·        Why most investors are WRONG about gold…
• ·        When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault  

====================================================

 Now For some reports…

Jim Sinclair: 9 Immediate Predictions For Gold – Seeking Alpha

By: Peter Cooper of Arabian Money.net

Jim Sinclair is the doyen of gold experts. It is interesting to see a very clear timeframe for the gold price posted on his website yesterday:

1. Gold reacts as currency support for the dollar enters mid June to a slow decline (that is the official definition of a strong dollar policy, really).
2. End of 2nd week going into the beginning of the 3rd week of June Gold launches towards and this time through the neckline of the reverse head and shoulders formation.
3. Gold rises to $1224 where it hesitates.
4. The OTC derivative market takes on the dollar as short sellers into dollar support.
5. This OTC derivative currency short position builds.
6. t is the US dollar where Armstrong will get his WATERFALL.
7. The main selling takes place when Israel makes a major miscalculation.
8. Hyperinflation is always and will continue to be a currency event.
9. Hyperinflation will be a product of the upcoming massive OTC derivative short dollar raid.

“Should I be correct in the gold price action going into late June, it will fit Armstrong’s criterion for a move to $5,000”, adds Mr. Sinclair whose predictions are not always right, and who got similarly carried away last summer.

But there is the old mantra in forecasting that if you repeat something often enough then it will be bound to happen in the end.

And to be fair to Mr. Sinclair, the gold positive scenario stacking up right now does look unstoppable.

===================================================

My Note: Sounds pretty darn close to my own predictions- Amazing! 

-jschulmansr

===================================================

Gold Battle Lines Drawn at $1000 – Again —Seeking Alpha

By: James West of Midas Letter

Here we go again. The forces of legitimate money versus the incumbent purveyors of the candy floss economy squared off at the $1,000 an ounce line over which yet another battle will be fought. Arrayed against either side are formidable new elements and tried and true old ones. As usual, the first volley has been catapulted over the walls of the hucksters by the defenders of the essential timeless truth of gold’s naturally stored value against the counterfeit paper currencies.

The liabilities of the enemy have increased, and the short positions in the COMEX market are sufficiently stacked that the big bank defenders simply cannot allow gold to win decisively. G7 governments are allied against gold to a man, while emerging economic behemoths China and Russia stand in opposition.

In particular, China’s revelations that it has been in a continuous accumulation mode for the last several years and is now the fifth largest sovereign reserve of gold has created an impetus in the gold camp that has been seen lacking in the past. Institutional and sovereign investment entities now perceive a floor in the gold price based on this information, and one must beg the question as to why China would make such a revelation when it threatens to undermine the value of its $2 trillion in U.S. debt holdings.

China has also been careful to avoid buying gold on the international market, for fear, it says, of creating a stampede into the precious metals that would immediately increase the cost of its stated intention to continue accumulating gold towards the backing of the yuan (renmibi) as a global reserve currency.

Yet that is precisely what has happened. Ostensibly, the justification for tipping their hand exists in the fact that they’ve resigned themselves to the fact that selling poison toys and pet foods to Americans in exchange for a currency that loses value like light into a black hole is an acceptable if imperfect transaction. With $50 billion a year in interest payments from the U.S., they can hedge the risk buy using it to buy gold.

With the perceived floor arguably at $850, downside risk is limited in gold far more so than in U.S. treasuries, which, if mainstream media is to be taken as remotely credible, is the current favorite of safe haven investors.

‘Safe Haven’ is about to get painted with same fragrant brush as ‘AAA-rated’ investments.

Goldbugs are salivating at the prospect of vindication, but seasoned veterans of the war know that the governments and central banks arrayed against gold are not fair fighters. Since the largest players in the futures market occupy both sides of the contract, and never take delivery of the physical gold, they can orchestrate a perpetual negative sentiment towards gold by driving the future price downward by simply amping up the short positions, thus making gold appear poised for a sell-off. This has been standard operating procedure for the last decade, and it is interesting to note that ever-bigger short positions are having less influence over shorter durations before the bulls shrug off the flimsy performance and take gold higher.

Critics and observers of this U.S. Dollar image management program point to the fact that such activity, while shoring up demand for U.S. Dollar debt in the short term, effectively undermines the entire global economy, and is among the fundamental causes of financial crises such as the housing collapse and the whole current global financial fiasco.

Proponents of this manipulation, who are increasingly legion in number, correctly predict an inevitable bursting of the damn catalyzed by investment demand overwhelming the short positions, forcing them to buy and cover to limit losses, which will, in itself, stimulate the gold price even further.

With the limited oversight and feeble reporting standards of the CFTC, the ploy is facilitated by complicit (or ignorant) regulators who ensure data is obfuscated and disclosure limited. It has been this collective effort on the part of the Dollar Defenders that continuously defeats gold’s advances, repeatedly castrating the bulls and sending them whimpering to lick their wounds and regroup.

But China is now leading the charge, and the bet is that they’re willing to forgo the lost value of their USD holdings to decisively undermine the global reserve currency once and for all and replace it with the Yuan, a move that would effectively mark the beginning in the shift of the global balance of power from west to east.

The United States, overextended militarily across the Middle East and Asia, with new fronts threatening to open in Iran and Pakistan, is perilously close to an international nervous breakdown. China’s opportunity is to ride to the rescue bearing smiles and steamed pork buns while dividing up what is left of the American industrial asset pool.

Our leadership of the last decade (or more accurately, absence thereof), eager to lubricate the workings of multinational financial interests, have inadvertently played into the patient hands of their biggest creditor by prostituting the national currency shamelessly to the point where every nation in the world can see what used up piece of spent jet trash the old USD has become.

While mainstream media dismisses the idea of the Yuan replacing the dollar as the international monetary standard, those of us who have tuned out at the perception management program on CNN recognize the event as halfway accomplished.

The truly explosive moment for gold will occur when the Chinese, at their discretion, decide to spring the trap, and abandon USD completely in favor of gold, suddenly spiking the price of gold straight north in tandem with the complete collapse of the U.S. dollar.

Don’t pay any attention to the second rate hacks trying to claim credit for predicting the fall…it’s been predicted repeatedly throughout history from Nostradamus to Roubini. Any student of economic history with 20/20 vision could see this coming, and here it is. “I told you so” is a waste of time. Who’s offering a solution?

Whether or not this particular battle at the Great Wall of $1,000 an ounce is the mother of all battles remains to be seen. Desperate times call for desperate measures, and while G7 governments collude to retain power, the unforeseeable is the greatest threat to gold.

That being said, veteran observers are optimistic, to say the least.

According to Bill Murphy, intrepid soldier of gold wars and standard bearer for the Gold Anti-trust Action Committee,

 

The Gold Cartel is giving it all they have no, as evidenced by the sharply rising gold open interest on the Comex … up some 23,000 contracts on Wednesday and Thursday. They are doing all they can to counter new spec buying.

My hunch is the next time we see $1,000, and that could be very soon, gold ought to take off from there, giving us more upside dynamic daily moves. The reasons to own physical gold are off the charts … HUGE investment demand, shrinking visible central bank supply (unrelated to the cabal), shrinking mine supply, shrinking dollar, concerns over sovereign wealth debt, a horrible US economy, and a US printing press that is going flat out and will have to for some time to come.

In my opinion, all gold has to do is to stay over $1,000 for a few days, and then all kinds of bells and whistles go off.

 

Bill is not the only one who thinks the breakthrough is at hand. Bob Moriarty of 321gold.com, himself a historically prescient oracle of market crashes agrees and warns that the stock market will be the first casualty of the new financial reality.

 

If you take a look at the dollar and the long bond, it looks as if they jumped off a cliff. This isn’t gold going up, it’s the dollar and bonds going down. When the market wakes up the stock market is going to take a giant dump. No more fake rally.

 

Investors by now should be well equipped to read the writing on the wall. Whether gold breaks through $1,000 and holds there, charts new territory at much higher levels, or is beaten back down through the offices of JP Morgan (JPM), HSBC (HBC) and Goldman Sachs (GS), is irrelevant.

Gold producer stocks are up, on average, over 22% this year in the Midas Model Portfolios, while intermediate producers and close-to-production juniors have piled on gains ranging from 20 to 200%, all since January this year.

You won’t hear anybody pointing that fact out on television, and you won’t hear that from your broker, in most cases. But the lesson is clear. Gold bullion is the place to be for wealth preservation, and gold producers and explorers is where risk capital is going to see utterly stupendous gains this year.

If you buy the hype of Wall Street and Washington and wade into the general equities markets, you have nobody to blame but yourself for the heavy losses you will surely sustain.

===================================================

Claim a gram of FREE GOLD today, plus a special 18-page PDF report;

Exposed! Five Myths of the Gold Market and find out:

• ·        Who’s been driving this record bull-run in gold?
• ·        What Happens When Inflation Kicks In?
• ·        Why most investors are WRONG about gold…
• ·        When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault

====================================================

 Gold vs Silver: There Is No Debate — Seeking Alpha

By: Market Sniper of We Just Trade

It is mildly amusing that when the precious metals markets are in confirmed uptrends, the perennial debate of whether it is best to own gold or silver always comes to the fore.

Both gold and silver, historically, have been money (merely utility in exchange). Gold in nature is approximately 15 times as scarce as silver. All the gold mined since the dawn of man, if molded into a cube, is said to fit inside a baseball diamond. Silver would nearly fill the stadium. China, now the world’s largest gold producer, had a silver standard as gold was more plentiful in China than silver, a bias that the west took full advantage of up through the 1870s. Silver imports by the Spanish Empire from their New World holdings were so large that it collapsed the European silver market. England, then on a bi-metalic standard, quickly switched to a pure gold standard. The Spanish Empire never recovered from the experience.

In the United States, the debate raged incessantly as to how the ratio would be “fixed” after the discovery of the Comstock Lode with western mining interests’ best known champion, Senator William Jennings Bryan, being the foremost proponent of a lower ratio. Seems it is an old debate. The good news is, you can own both. If/when the world returns to honest, stable money, you will need both: gold for the larger acquisitions and silver to make change.

While we await such an event, ratio trade the two metals to increase your holdings of precious metals.The ratio fluctuates wildly over time. In the 1970s and 1980s I used 28:1 and 40:1 as points that I would switch. At 40:1, I would be in silver. When the ratio dropped down to 28:1, I would exchange silver holdings for gold. Each time I switched, my stack of precious metals would increase in size even after dealing with the spread.

Find a precious metals dealer who will work with you on that. You maybe able to locate one that will only charge the spread on one of the metals and not both when you switch. Since then, the ratio has moved up. At one point it was even at 100:1. I now use 45:1 and 70:1 as switch points. See your tax accountant as to the benefits of such a program. Think 1031 Tax Deferred Exchange.

For those who do not want to break the rear axle of your automobile moving your silver when it comes time to switch, think about using ETFs that only reflect the price of the two metals. There are a variety of ways to accomplish this, from being in just one or the other to being long one and short the other. IF your objective is to accumulate the actual physical metals, do not use ETFs as a substitute for physical ownership. Rather, take profits from your switching trades and purchase the actual metals themselves. Gold vs. silver? No debate. Accumulate both.

Disclosure: long physical silver and gold

===================================================

A new site that is in pre-launch state that will become a virtual world – chat, shop, play, videos, etc. Anyways they are giving free shares (that should become actual company shares) to anyone who signs up and more shares if you refer people.

 ==================================================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments.

Good Investing!–  jschulmansr

Advertisement

I’m Back- Time to Play!

Tags

ANV, Austrian school, AUY, Bailout News, banking crisis, banks, bear market, Bollinger Bands Saudi Arabia, bonds, Brian Tang, bull market, CDE, CEF, central banks, China, cobalt, Comex, commodities, Copper, crash, Currencies, currency, Currency and Currencies, deflation, Dennis Gartman, depression, DGP, dollar denominated, dollar denominated investments, Doug Casey, economic, economic trends, economy, EGO, Federal Deficit, financial, Forex, FRG, futures, futures markets, gata, GDX, GG, GLD, gold, Gold Bullion, Gold Investments, gold miners, Gold Price Manipulation, GTU, hard assets, HL, hyper-inflation, IAU, India, inflation, investments, Jeffrey Nichols, Jim Rogers, John Embry, Keith Fitz-Gerald, majors, Marc Faber, market crash, Markets, Michael Zielinski, mid-tier, mining companies, monetization, Moving Averages, NAK, NGC, NXG, PAL, palladium, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, Sean Rakhimov, silver, silver miners, SLW, small caps, sovereign, spot, spot price, stagflation, SWC, Technical Analysis, TIPS, U.S., U.S. Dollar, volatility, warrants, XAU

I’m back but before we get into the markets, I want to give everyone Thanks for your prayers for my Dad. We though we were about to lose him. So, I arranged for everyone to come out and see him, even his Grandkids. The visits perked him up tremendously. I continued to stay with him along with my wife. We took him out to his favorite restaurants and other places. So for the 3 weeks we were there he gained 16lbs, his color came back, and his body even started to produce Red Blood Cells. Even though he still needs occasional transfusions, was a major step in the right direction.He has regained his will to fight instead of giving up and slowly dying. So a very heartfelt Thank You to all who were praying! Each of you is very appreciated and I know God will Bless You manifestly in return…

Now for the markets… Wow! these last three weeks have been very interesting! When was the last time you have seen Stocks, Gold, and Oil rally at the same time? I will use the Dow (DJI) for my post today and provide links to some excellent analysis on the S&P 500 and Crude later in the post. Once again 8500 is the key marker for the Dow, failure to close strongly and move higher will mean we have a head and shoulders top here. A breakout above 8640 will confirm continued uptrend. Conversely a break below 8265 will mean the beginning of a strong correction to the 8000 level first and then 7850. If screams below that then down to 7500 with a test of the low around 6547. Personally I predict we will test the lows of 6550 first before we will ever see the DJI at 9000 or even 10,000. Sorry you bulls out there that is what I see in the charts.

For my favorite complex of Gold, Silver and Precious metals, a breakout over $978 signals a new strong push over $1000, or at least another test. Personally, I like the action of Gold here, building a nice base at $950. I predict that Gold will break $978 and push up to approximately $1075 to $1090 on the first leg. We will see a normal retracement down to $950- $975 and then blast off to $1150 -$1250. I personally think with the inflation shoe about to drop, coupled with the remaining half of the derivative crunch. We can easily see $2250 to $2500 Gold by the end of the year. Keep accumulating Gold and Precious metals especially the junior and mid-tier producers. There are still companies out there selling at or below book value.

I just came across a sweet little play in the cobalt industry, supplies are dwindling fast and there will be a shortage just at the time this company comes on line with production. This company will have the only high grade cobalt production in the United States and will be able to supply approximately 12-14% of Cobalt needs for the USA. If you check out what Cobalt is used for you will understand why this stock ahs the potential to be a Grand Slam. Production is anticipated to be approximately 1525 tons per year with a 10yr life based on current reserves. I just received an offer to buy this tip along with an advisory service for $297 yr. I’ll give it to you for free. That’s just the kind of guy I am, LOL! The name of the company is Formation Capital Corp. Trading symbol (FCACF). I just picked up a bunch @ .35 cents/share, but as always do your due diligence, read the prospectus and company reports. If nothing else put (FCACF) on your watch list / radar.

Follow Me on Twitter and be notified whenever I make a new post!

==================================================

Subject: Two trending markets revisited and analyzed for you 

Last week I watched a video analysis of the S&P and Crude Oil markets. The technical analysis was right on at the time, but those markets have changed quite a bit in the last few days. The S&P had a huge rally and Crude seemed to steady out, so what’s the new analysis? Glad you asked!

Below are two free videos, one on Crude Oil and one on the S&P, that gives us an indepth technical look into these markets. Again the videos are free and very informatitive. Just Click on the Links Below…

          S&P Video Analysis:                                                    Crude Oil Projections:

Here’s your chance to analyze that stock you have been thinking about adding to your portfolio. Just enter the ticker of any company, name of a commodity, or forex pair and get your complimentary technical analysis. It cost you nothing and and no payment info will ever be requested.

Click Here To Enter Your Symbol/s

===================================================

Claim a gram of FREE GOLD today, plus a special 18-page PDF report;

Exposed! Five Myths of the Gold Market and find out: 

• ·        Who’s been driving this record bull-run in gold?
• ·        What Happens When Inflation Kicks In?
• ·        Why most investors are WRONG about gold…
• ·        When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault  

====================================================

Now for some current news…

Peter Schiff on $1000 Gold and Senate Bid – Gold Stock Bull

Source: Gold Stock Bull and Fox News

Peter Schiff was on Fox Business today and made the following points:

* Gold to break $1,000 soon and push much higher this time
* 50% or more of Peter Schiff’s liquid assets are in gold/gold stocks
* Most people should have 10-20%, more if you are young and aggressive
* Many gold stocks could go up 50 or 100 times from current levels
* At some point, the rest of world will stop lending the United States money
* America is in for a rude awakening, when we have to return to producing and saving again
* It is impossible for the U.S. government to pay back its debt. Default is only option.
* Peter Schiff might run for Senate in Connecticut

===================================================

A new site that is in pre-launch state that will become a virtual world – chat, shop, play, videos, etc. Anyways they are giving free shares (that should become actual company shares) to anyone who signs up and more shares if you refer people.

===================================================

What Is Even More Enticing than Gold? SILVER! — Seeking Alpha

By: Andrew Mickey of Q1 Publishing

The dollar is out. The U.S. dollar index has fallen 5% in the last week.

Treasury bonds are quickly falling out of favor. The yield on 10-year Treasury bonds has climbed from 2.5% to almost 3.5% since March signaling inflation fears and an unwillingness to fund ballooning government borrowing.

Gold is hot. Gold prices are back on the rise and gold stocks have done even better.

Is this a sign of things to come?

Well, if you take a look at the mainstream headlines, you’d think so.

An editorial headline on Bloomberg proclaims, “Dollar is dirt, Treasuries are toast, and AAA is gone.”

Even CBS News is warning, “Inflation could be coming to a U.S. dollar near you.”

To me, it seems just like a typical overreaction in the short-term.

Yes, the long-run trend for the dollar is down as the Fed keeps printing more and more of them and monetizing government debt. And yes, the prospects for gold get brighter and brighter with each passing week.

But there’s no reason to lose your head here. It’s going to take a few years for all this to play out. And the window of opportunity is still wide open to buy precious metals, real assets, and assets not denominated in the dollar (like ADRs).

That’s why, despite the strong interest in gold at the moment, I encourage you to continue to look for value in the sector. Right now, there seems to be some exceptional value in an asset which is so undervalued, it could outpace gold by 400% or more.

I’m talking about Silver.

When Gold Climbs, Silver Soars

In the past few weeks gold has been getting a lot of attention. With all the big money finally taking a liking to gold, the attention is justified. Remember, a turn in the big money’s attitude towards gold must happen before gold can break through the $1,000 mark and stay there.

The excitement surrounding gold’s surge has only pushed silver further onto the back burner. (You don’t hear about any major hedge funds loading up on silver do you?) And that’s the point. Gold is hot and silver is – in a relative sense – not.

So if you want to find an investment which isn’t so hot but still has a lot of potential in an inflationary environment, you’d want to look at silver. When you do, it won’t take long to realize silver – at current levels – could easily trounce gold in the months and years ahead.

That’s right. Silver has a much brighter future than gold. All you have to do is look at the silver / gold ratio to see how potentially lucrative the situation has become.

Ratios Don’t Lie

We’ve looked at a few ratios in the past. The reason is because ratio analysis can help identify value even in volatile markets. For instance, we looked at how the gold / oil ratio was signaling oil was a buy back in January. Oil prices are up almost 50% since then.

We looked at gold / gold stocks ratio back in December. We saw that gold stocks were significantly undervalued relative to gold. Since early December, gold is up a respectable 22% while gold stocks – as a group – have rebounded 70%.

That’s the value of ratio analysis. They can quickly show you how undervalued some assets are relative to others. And if you’re able to find them at extreme points, you can get into a trade or investment with less risk and greater upside.

Right now, the gold / silver ratio (the measure of how many ounces of silver can be bought for an ounce of gold) is at an extreme and working its way back to historical norms.

The chart below shows the gold / silver ratio is slowly working its way back to a much more normal level:

As you can see, the gold / silver ratio hung around 50 for most of 2008. Then the credit crunch threw everything out of whack and now it’s slowly working its way back to normal. But this chart doesn’t show the real upside in silver. That comes from the long-run average.

Over the long term, the gold / silver ratio has averaged about 30. That means one ounce of gold would buy about 30 ounces of silver. Today, with silver at $14.60 an ounce and gold at $953, the gold / silver ratio is 65. In other words, an ounce of gold would buy 65 ounces of silver. That’s more than twice the long-run average.

Silver prices would have to double just to be in line with the long run average.

Silver Slingshot

But here’s the kicker, when gold races, the gold to silver ratio gets flipped around. During the last precious metals bull market in the late 70s and early 80s the gold / silver ratio hit lows of 15.

That means if gold goes nowhere (granted, chances are pretty slim of that), silver could easily shoot up to $50 an ounce. That’s a 400% move for silver without gold moving up a single dollar.

Here’s the thing though, gold isn’t staying where it is. Over the next few years, gold is going much higher. And silver is going to go even higher. Silver will slingshot past gold.

Think about it. With a gold / silver ratio of 15…

At that ratio, silver would be at $66 when gold hits $1,000.

$1,500 gold = $100 silver.

$2,000 gold = $132 silver.

So if you expect gold to do well, you’ve got to expect silver to do even better.

According to the historical relationship between gold and silver, if gold does well, silver will do exponentially better. In past gold bull markets, silver prices zoomed past gold in relative terms. There’s no reason to expect this time to be any different.

In Search of Value

In the end, precious metals have been one of the few sectors which have maintained an uptrend through all this. As the long run prospects for the U.S. dollar continue to worsen, I expect the uptrend to continue. However, I expect this to take a longer time to play out than most.

Just take a look at what happened earlier this week. The Financial Times reported China is continuing to buy U.S. Treasuries. Granted, they’re switching to short-term durations, but they haven’t even come close to invoking their “nuclear” option yet and probably won’t for a long while.

We’re in the midst of a slow and steady decline of the dollar. The Fed is printing dollars to fund the growing government deficits and there haven’t been any significant inflationary consequences…yet.

That will change and it’s not too late to get prepared. Now is the time to buy precious metals and precious metals miners for your portfolio. Right now, with the gold / silver ratio indicating silver as undervalued and gold a hot topic, silver is a bit more enticing.

===================================================

Claim a gram of FREE GOLD today, plus a special 18-page PDF report;

Exposed! Five Myths of the Gold Market and find out: 

• ·        Who’s been driving this record bull-run in gold?
• ·        What Happens When Inflation Kicks In?
• ·        Why most investors are WRONG about gold…
• ·        When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault  

====================================================

                                        – Trend Analysis Revealed –

Substantial moves like the ones that we have recently witnessed present opportunities to succeed or fail in the markets. Traders who stayed on the correct side of the trend were rewarded substantially.

Serious questions effecting your portfolio still remain:

– Have we seen the Indexes bottom or top?
– Is a reversal in the near future?
– Is it too late to go short?

Stay on the correct side of the market. Let our Trade Triangle technology work for you. It’s free, It’s informative, It’s on the money.

Free Instant Analysis delivered to your email inbox. Analyze ANY Stock, Futures, or Forex symbol.

Click Here For Your Free Analysis

====================================================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

And the Winner Is…

Tags

ANV, Austrian school, AUY, Bailout News, banking crisis, banks, bear market, Bollinger Bands Saudi Arabia, Brian Tang, bull market, CDE, CEF, central banks, China, Comex, commodities, Copper, Currencies, currency, deflation, Dennis Gartman, depression, DGP, dollar denominated, dollar denominated investments, Doug Casey, economic, economic trends, economy, EGO, Federal Deficit, financial, Forex, FRG, futures, futures markets, gata, GDX, GG, GLD, gold, gold miners, GTU, hard assets, HL, hyper-inflation, IAU, India, inflation, investments, Jeffrey Nichols, Jim Rogers, John Embry, Keith Fitz-Gerald, majors, Marc Faber, market crash, Markets, Michael Zielinski, mid-tier, mining companies, monetization, Moving Averages, NAK, NGC, NXG, PAL, palladium, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, Sean Rakhimov, silver, silver miners, SLW, small caps, sovereign, spot, spot price, stagflation, SWC, Technical Analysis, TIPS, U.S., U.S. Dollar, volatility, warrants, XAU

Wow! again what a week in all of the markets. Gold is continuing to slowly build into a major rally, look for $1050 to go down this time! We have seen the retracement in the stocks (normal retracement) in a very bear marketas I also mentioned earlier. I still have my 720 Sp 500 puts and look for a nice pop before next weeks expiration. Continue to accumulate more mining stocks and I hope you got in to DGP when I did and let you know via twitter on Monday. The winner if you haven’t guessed is Gold! We have a new player entering into the melee. Crude Oil has finally flashed it’s first buy signal in 18 months. Look for strong resistance at the $50 mark. If it clears then we’re back to $80 minimum, probably $100 in the first leg. I would play this one slowly as there still is a huge pool sitting out there in tankers to be used up first before we can get into a serious rally in Crude Oil and distillates. One thing to mention is our President Obama, at least he waited until the close of markets before speaking yesterday, it almost seems he is determined to drive the stock markets down. If the Dow doesn’t hold here then the 5000 range for the Dow is not out of the question in fact a very real possibility; a full 70% retracement would actually take us down to the 4500 level. Protect yourself and Buy Gold any form and BUY it NOW! Good Investing! jschulmansr

Follow Me on Twitter and be notified whenever I make a new post!

 

Schedule automatic tweets, Send Automatic Thankyou for following me messages, and much more! Be More Productive- Free signup… TweetLater.com

 

Claim a gram of FREE GOLD today, plus a special 18-page PDF report; Exposed! Five Myths of the Gold Market and find out:

·        Who’s been driving this record bull-run in gold?

·        What Happens When Inflation Kicks In?

·        Why most investors are WRONG about gold

·        When and How to buy gold — at low cost with no hassle

Get this in-depth report now, plus a gram of free gold, at BullionVault here…

===========================================================

A new site that is in pre-launch state that will become a virtual world – chat, shop, play, videos, etc. Anyways they are giving free shares (that should become actual company shares) to anyone who signs up and more shares if you refer people. me2everyone.com

=========================================================

 

 

Can the U.S. survive $80 crude oil?- INO.COM

 

Source: INO.com

For the first time since September of 2007, the crude oil (NYME_CL) market has flashed a positive signal that it is headed higher. This is the first buy signal that we have seen in over 18 months in the energy markets. 

 

The big question is, if crude oil is headed higher, how much of a price increase can the US economy afford and withstand?

Here is a raw commodity that is used by everyone and the US has no control over. This key commodity to commerce just happens to be in areas that are normally hostile to the US. If we see a hiccup in the supply chain that changes this market dynamic, even for a short time period, we could see oil move back to the $80/barrel range in a heart beat.

So how will this affect the US equity markets? If crude oil heads back to the $75-$80 range, I expect that the major indices will head south. I call it the 551 syndrome. 5000 on the Dow, 500 on the S&P 500, and finally 1000 on the NASDAQ.

In this short video I will share with you the potential target zones we could see in the next 6 to 12 months in crude oil.

So with the trend in crude oil in a positive trajectory and the trend in the US equity markets in a negative trajectory, I think the two will feed off themselves. Look for traders and hedge funds to move aggressively in both these areas with abandon.

Lastly with no reinstatement of the up-tick rule, expect stocks to once again get pummeled to oblivion.

Enjoy the video and all the best in trading,

Adam Hewison
President, INO.com
Co-founder, MarketClub

 =============================================================

Sell the Swiss Franc, Buy Gold- Seeking Alpha 

Source: FP Trading Desk

“Forceful relaxation” – it brings to mind a trader at a Mexican beach resort, not Swiss monetary policy, but that is exactly what the Swiss National Bank (SNB) announced in its Monetary Policy Assessment Wednesday, joining a growing chorus of central banks engaging in quantitative easing. Sell the franc and buy gold.

The SNB cut its target range for three-month Libor by 25 basis points to a range of 0–0.75% and announced plans to purchase domestic bonds from the private sector and sell francs in the open market. The resulting biggest ever one-day drop in the franc versus the euro and dollar is likely to be followed by franc depreciation over the next year.

Swiss lending to foreigners brings new meaning to Lord Polonius’s advice to Laertes to “neither a borrower nor a lender be.” The Swiss risk losing more than the friendship of the Hungarians who borrowed extensively in Swiss Franc between 2006 and 2008. They also risk losing their money as Eastern Europe struggles under a mountain of debt. All told, Swiss banks claims on foreigners rose from five times Swiss GDP in 2000 to roughly eight times GDP in mid-2007, according to the Bank for International Settlements (BIS).

The majority of these claims are denominated in US dollars, and that factor will continue to put pressure on the franc versus the dollar over the next year. Swiss banks’ net US dollar books approached $300 billion by mid-2007, according to the BIS.

Now that the SNB is actively trying to push the franc down to raise inflation expectations in Switzerland, watch out. This policy raises the prospects for franc depreciation and increases the case for owning gold versus all reserve currencies.

=====================================================================

Related: This is one of a multitude of reasons to Buy Gold-see next article below – jschulmansr

Swiss Action sparks talk of ‘Currency War’ – Financial Times

Source: Financial Times

By Peter Garnham in London

Published: March 12 2009 20:14 | Last updated: March 12 2009 20:14

The Swiss National Bank moved to weaken the Swiss franc on Thursday, the first time a big central bank has intervened in the foreign exchange markets since Japan sought to weaken the yen in 2004.

The bank’s move, which sparked fears that other countries could follow suit, comes as the value of the Swiss franc has soared as investors seek a haven from the recent market turmoil. In October, after the collapse of Lehman Brothers, it rose to a record high of about SFr1.43 against the euro, a level it has come close to again in recent weeks.

 

But it fell to its lowest level this year on Thursday after the SNB said the currency’s strength represented an “inappropriate tightening of monetary conditions” as it battled against a slowdown in the Swiss economy.

“In view of this development, the SNB has decided to purchase foreign currency on the foreign exchange market to prevent any further appreciation of the Swiss franc against the euro,” the central bank said.

The Swiss franc dropped 2.6 per cent to SFr1.5192 against the euro and dropped 3.2 per cent to $1.1894 against the dollar.

Analysts said the move was likely to increase talk that countries were set to engage in a bout of competitive devaluation.

“Let the currency wars begin,” said Chris Turner at ING Financial Markets.

Countries around the world faced with the constraint of zero interest rate levels might feel it was acceptable to intervene to weaken their currencies in order to ease monetary conditions, he said, adding that other export-dependent economies such as Japan would “probably be at the head of the queue”.

Michael Woolfolk at Bank of New York Mellon agreed.

“Market intervention by a major central bank such as the SNB opens up the door for other central banks, namely the Bank of Japan, to follow suit,” he said. “The yen is widely perceived in Japan to be overvalued.”

The SNB also cut its interest rates by 25 basis points, taking its three-month Libor target range down to zero to 0.75 per cent, and announced plans to adopt a quantitative easing approach to monetary policy.

Analysts said the move towards quantitative easing was sparked by a drastic revision to the central bank’s forecast for growth, which is now expected to fall between 2.5 and 3 per cent in 2009, much worse than its previous forecast of a drop of between 0.5 and 1 per cent.

The SNB said economic conditions had deteriorated sharply since its last policy meeting in December and that there was a risk of deflation over the next three years.

“Decisive action is thus called for, to forcefully relax monetary conditions,” the central bank said.

Additional reporting by Haig Simonian in Zurich

Copyright The Financial Times Limited 2009

====================================================

John Embry: Gold and Silver Are the Ultimate Insurance Policy- Seeking Alpha

By: Andrew Mickey of Q1 Publishing

John Embry: Exclusive Interview with Canada’s Foremost Gold Investor

Is gold the next “hot” investment? Or will it never break through the $1,000 threshold?

Some of the world’s leading investors are currently placing their bets.

For instance, hedge fund manager David Einhorn recently bet big on gold. Einhorn manages $6 billion at Greenlight Capital and has averaged a 20% annualized return by booking only one losing year since 1996 (last year). His fund recently bought more than $200 million of SPDR Gold Trust ETF (NYSE:GLD) and more than $75 million worth of Market Vectors Gold Miner ETF (NYSE:GDX).

On top of that, the big money managers have already pumped billions of dollars directly into gold mining companies to fund takeovers and new mines and expansion.

It’s looking like a lot of smart and big money is betting on gold. And as the financial markets, economy, and future outlook worsen, gold is holding up as a last bastion of hope for many investors.

How can you get in on it? Is it just gold? What about silver? Where are the real values to be had? What about other hard assets – water, agriculture, etc.?

It’s best to start getting prepared now.

Most recently, Q1 Publishing’s own Andrew Mickey, editor of the Prosperity Dispatch, had a private one-on-one conversation with John Embry, one of the leading gold investors in the world.

Embry has been following the gold sector for 35 years (that’s since the early 1970’s) and is one of the leading authorities on gold. Embry is currently the Chief Investment Strategist for Sprott Asset Management – a legendary name to long-time gold investors.

Prior to joining Sprott, Embry oversaw more than $5 billion in assets including the Royal Precious Metal Fund as VP, Equities and Portfolio Manager for RBC, a top-tier Canadian bank. Under his watch, the Royal Precious Metals Fund returned 153% in 2002 and was ranked #1 across all funds in Canada (remember 2002 was a horrible year for stocks as tech stocks continued to fall).

Andrew Mickey: Precious metals have been getting a lot of attention lately. But it seems like there has been a divergence between gold and silver. We’ve been watching the gold to silver ratio (the number of ounces of silver which can be bought for an ounce of gold) get wider and wider. Gold to platinum too. Do you see the divergence tied to the industrial aspect of metals like platinum and silver, gold is the supreme precious metal, or is there something else going on behind the scenes?

John Embry: No – it’s a very strong manipulative aspect at work. If you go to the COMEX and look at the trading patterns and the short positions and such, clearly the prices are being messed around with.

Silver is a smaller market and can be messed around with more easily. I think silver probably has a bit more upside potential because the price is so far behind where it should be.

Andrew Mickey: So do you see silver as one of the bright spots?

John Embry: Oh yeah, it’s an extreme bright spot. I could easily see it three times where it is now in the not-that-distant future.

Andrew Mickey: As far as gold supply, there is one period in the world gold supply where gold production kind of crested around 2007 or 2008. Are we facing a “Peak Gold” kind of situation?

John Embry: Yeah, we have most assuredly crested in terms of mine supply without question.

Andrew Mickey: So, when you look at five, ten years out…let’s say in a world where gold is $2000 or $3000 or higher, how much more gold can realistically be produced in a year?

John Embry: Zero, I think. In fact, I think you probably need a lot more lead time – maybe five to ten years.

Just look at what happened in the ‘70s. The gold price went from $35 to $800 and, believe it or not, gold production was at a lower level worldwide after that 10-year period.

Now, the big question is what will happen this time? Number one, a lot of the existing mines are being depleted quite rapidly. Number two, when the gold price goes up a lot, mines generally tend to sort of drop the grade they mine because they can make a lot of money with lower grade and they can keep the good stuff for the bad times.

So by definition, they will be mining in the same number of tons but they will be taking the gold grade out of it, so collectively they will be mining less gold. They will make more money because the price is up but they will be mining less.

The other problem is that so many of the new interesting deposits that may or may not be developed in the future are located in these God-awful third world countries. They are having a real battle now with the governments, getting permitting, deciding who makes the money out of the mine, environmental issues etc. The gold deposits are all over the place and the governments are going to delay projects.

Say you find an ore body today. It would probably take a minimum of five years before the gold hits the market with all the attendant problems there are getting it into production. So all that’s already baked in the cake. The gold price could be doing anything it wanted for the next four or five years…gold production isn’t going to increase much – if any – at all.

Andrew Mickey: Amazing, gold production declining in the last great bull market for gold. So what does this mean for gold stocks, from your perspective? Where should we focus our investments across the whole range – from explorers all the way up to the majors?

John Embry: Right now, I think the majors are reasonably priced compared to the overall list. People have sort of focused on liquidity so they have gone after the majors and they bid them up aggressively and left a lot of the more illiquid situations behind.

That will all change. As gold becomes more popular and the price rises, at that point, money will filter down the food chain from the larger companies and they will go looking for the good quality smaller ones.

I particularly like some of the smaller producers now for a lot of reasons.

For one, they are going to make a ton of money in the current environment, particularly if they are producing outside the United States. Like some of the ones that are producing in Canada. The gold price yesterday was I believe $1,230 Canadian.

Another reason is because all of the costs of gold mining are dropping right now. Energy costs, steel prices, and all the things that went up so much and really hurt gold miners’ profitability. They are all going the other way now and at the same time the price of gold is going up. So I think that people are going to be pleasantly surprised going forward by the profitability of some of these mines, which have struggled up until recently.

So I am pretty bullish on small producers and anybody who has got a legitimate ore body that can be exploited sometime within the foreseeable future. I think they are going to be viewed positively too.

But the key thing to focus on is when their production will begin. If they don’t have to worry about getting through the environmental hurdles and getting the finance and et cetera, et cetera, they are going to make a lot of money.

Andrew Mickey: What do you see as the potential risks of politics and environmental concerns preventing anyone from starting production?

John Embry: They are not necessarily preventing a company from going into production, but they are certainly delaying it.

My favorite example is that probably the best ore body that’s been discovered in the last 10 years is Aurelian’s in Ecuador; which was subsequently acquired by Kinross (KGC). But the fact is, as long as the current government in Ecuador stays in power…I just don’t see the thing entering production.

So that’s what I am talking about. It’s such a fabulous mine if it were in a good geopolitical environment. It would be being built as we speak, but there is no progress towards building it at this point.

Andrew Mickey: The gold ETF (like the GLD) has been the number one recommended way to invest in gold in the U.S.

It’s a hot subject of debate by those who are new to gold and those which have been following it for while. The new people to gold always recommend the GLD. What are your thoughts?

John Embry: Well, they are just plain wrong in my opinion.

I think gold and silver are the ultimate insurance policy. When things got really bad in the system you want to make sure the vehicle you own has the gold and silver that it allegedly is supposed to have.

Now, I may buy gold and have it in my own possession. I know I have it. And then there are other gold and silver vehicles like Central Fund of Canada (NYSE:CEF) or Central Gold-Trust (NYSE:GTU), to cite a couple, where the gold is allocated. It’s in a vault and there are regular audits to prove everything that’s behind the vehicle is in fact there. So you are getting what you pay for.

Now, in the case of the ETF I am not totally sure. I mean if you read their prospectuses closely enough you’ll see there is some wiggle room. What they are trying to do is just track the gold price so you don’t necessarily need the physical gold. They could be using paper derivative types of products to back the stock.

What really made me kind of uncomfortable recently, was there was this dramatic ramp up in the amount of money going into the GLD ETF in particular. I looked around and I am going like, where is gold coming from?

As you know, the gold market is acknowledged by virtually everybody to be tight. I know mine supply is falling, I know that – I didn’t see any appreciable change in any of the inventory levels or any of the recognized exchanges like COMEX etc., and there was no particular acceleration in the Central Bank dispositions. So my question is, if suddenly all this new buying appeared because of the ETF having to sort of stock up, where did the gold come from?

I am not sure it bought any gold. I think they might have gone to COMEX and just bought a paper contract.

I don’t know. I just think there are better vehicles than ETFs.

Andrew Mickey: Switching gears a little bit here, let’s talk about the big picture. Everyone wants to know what’s going on.

It’s a crazy time. What’s your take? What going on in the general markets and where are we headed?

John Embry: I think we are probably headed for the worst economic debacle since the Depression – if not worse than that.

And the response for that by governments around the world is going to be, I think, a blizzard of paper money creation. They will run massive deficits, trying to prop up these economies.

So I think the major development is going to be ongoing issues of currency debasement. The value of paper money against real tangible assets is going to fall considerably. Right now, we are going through this deflationary scare. It won’t last. It will change into a hyperinflationary environment in the not too distant future.

Andrew Mickey: A kind of stagflationary situation like we saw in the 1970’s?

John Embry: No, worse than that. I think the inflation would be more intense. The decline in economic activity will probably be worse.

Andrew Mickey: What are the kinds of conditions that bring us to that state? Is it avoidable?

John Embry: Basically, we have already put the conditions in place. We ran economies with constantly too much leverage and debt.

Eventually, you reach a certain point where you can’t really add any more debt because the capacity for the system to handle it has been exhausted. Once it reverses, it’s very hard to change. They are going to try to change it by simply debasing the money.

Andrew Mickey: You seem to focus on the debasement of currencies as a government “solution” – for lack of a better term – to the problem. What are some of the best ways to protect ourselves from this situation? Which are you employing?

John Embry: Our strategy is pretty simple. What we really like is the monetary precious metals gold and silver. We don’t like anything in the financial sphere at this time. The companies that we like are the more solid companies providing basic services and what have you. We like the ones which don’t have overly leveraged balance sheets.

Andrew Mickey: What about other real asset classes. There are other sectors I know you follow outside of precious metals like agriculture. That’s the one thing that I’ve been completely excited about for years, but had to turn and run from over the summer. What’s your take on it now? Is it time to wade back in?

John Embry: Well, I am with you on agriculture. It’s a necessity that we must eat.

I guess one of the positive aspects of global growth is that the third world became a bit more affluent. Improvement in their diets put more demand into the world for basic food stuffs. Now that’s slowed down a bit.

I think the real arbiter in the short run might be the climate. I see a lot of industry people bringing this up, changing sunspots. These changes in the sunspots suggest that we may be facing drought conditions in a lot of the world all at the same time.

If that’s the case, I think you are going to see massive food shortages which would underrate a considerable price appreciation in the food because there will be a real fight for it.

Andrew Mickey: So, I don’t want to get too technical with this subject, I assume that you’re referring to increasing activity in sunspots?

John Embry: Yes, there is increasing activity in sunspots; which apparently, sort of cools the world out. It’s really interesting because there has always been, as you know, there is debate about global warming.

I do believe that all this carbon release is creating global warming, but at the same time, we have this mass of long cycles in nature which sort of move from the ice age then back to a period where it gets too hot. In that cycle, we are headed towards cooling again and the sunspot is just one aspect of it.

Andrew Mickey: Can the sunspots cause some of the farming areas to change?

John Embry: Yes, they do. They have a role – for whatever reason – they have a major impact on increasing odds of getting hit by a drought. We have a lot of droughts going on in the world currently. There are droughts in Australia, South America, Northern China and Africa. But Africa has always had a drought.

There is a lot of food supply interruption. If a drought were to strike North America then that would really create a problem. I have seen some work suggesting that we are due for a drought based on certain cycle work.

Andrew Mickey: Okay, this is more or less an agricultural cycle that you are referring to I imagine. How long is this kind of agriculture cycle? Is it like an 80-year almost Dust Bowl scenario type?

John Embry: Well, yes…I hesitate to go there because…it’s like Murphy’s Law, “everything goes wrong at the same time.” And with the financial world right now in a mess the last thing we need is a sort of replay of the ‘30s in the agricultural space.

The pessimists among us think that there is a good probability that drought conditions could strike North America, and that would be the last thing I want to see.

Andrew Mickey: What about farmland then? It’s an asset class which has had extremely consistent returns over the past 50 to 60 years. But, we’ve been waiting for a time like this.

John Embry: Farmland prices have fallen off a cliff. I just saw a guy in Minneapolis; again, he was saying that farmland is on offer everywhere right now.

This is a great thing. I am now in favor of buying farmland at the right price and that price is probably – as we are cleaning this whole mess up – the right price is going to be reached.

Andrew Mickey: The same is true for all kinds of natural resources. Oil, natural gas, copper, iron ore, uranium, etc. They’re all over the world and the government s which control them are in position to really inhibit or assist private companies who want to exploit them.

Recent US policy changes favor certain alternative energies. The one that really concerns me is uranium. In your opinion, when we look at uranium, should we look at it as declining uranium supply from current mines and or how new power plants can come on line if they can’t get it? Which is the real problem? Or is it both?

John Embry: Excellent question. I do think there is a problem. The Cigar Lake up in Northern Saskatchewan has gone through all sorts of problems. Another major problem area is with the Olympic Dam mine in Australia. It has been having problems too.

So again, there’s an issue with existing production.

In that light, I think that’s going to make new discoveries. Quality discoveries in uranium which are really worthwhile and the problem, again, is how long it’s going to take to exploit them. There just aren’t too many good deposits. We had that huge run in uranium a couple of years ago, but a lot of the deposits were really junky.

The great advantage in uranium is that the true cost of producing the power, is in building the reactor. So, there’s a lot of flexibility there. They don’t care about what they have to pay for uranium just as long as they can get it.

So I think that’s one of the aspects I like about uranium. The price is sort of inelastic in that sense. Just because the price goes up doesn’t mean it’s going to start to reduce demand.

Andrew Mickey: With respect to potash, nitrogen and phosphate, where do you see opportunities there? Most people are familiar with potash, the high capital costs to build a mine and the like. Are there any opportunities in nitrogen and phosphate because it’s too easy, how do you guys kind of look at those

John Embry: Well, we actually – we meaning our Sprott Resource Corp – have been looking around for interesting opportunities in phosphate and what have you. We believe that as this whole agricultural thing unfolds that it will be a good business.

But right now, farmers are having trouble getting money like everybody else is. So really, there is a bit of a low in the fertilizer business. Looking for longer term opportunities, the short term is going to be a little problematic.

Andrew Mickey: Are there any other things that you think individual investors should keep in mind as this is the first time in a long time that any of us had to go through a downturn like this?

John Embry: Well, it’s downright ugly out there. I was born in United States and I am a huge admirer of the U.S. I think what’s happened is tragic. Consequently, people are looking to protect themselves and I really do think that precious metals in particular and solid commodity opportunities are going to be one way that’s going to pay off in the end.

Andrew Mickey: What’s your take on all the stimulus packages and infrastructure building and everything that’s going on there?

We have been really bearish on infrastructure companies. How can the government support these businesses which are mostly private?

John Embry: I think that you are right. Typically, the market overacts to these things and obviously the infrastructure spending is partly implied; because, it’s been neglected to such a great extent in North America.

We have the same problem in Canada. Our roads are falling apart. Really, they could spend a ton of money in the sector. Problem is, they don’t have the money. They are going to have to create it out of thin air.

Andrew Mickey: One last thing. Are you currently looking at or investing in water? If so, would you be looking into water rights or a pipe manufacturer for example?

John Embry: We haven’t done as much as we should have. I think water is going to be a major issue going forward.

As for ways to invest in water, I’m more interested in water rights. The good thing about Canada is, there is lots of water up here. The problem is going to be down in the U.S., particularly in Southwest and other areas. I just look at that and I shake my head.

Andrew Mickey: Well, thanks very much for spending some time with us. Is there anything else that you would like to add?

John Embry: Just that I think that it’s important that your readers know all this. The world is a lot different than it was 10 years ago.

Andrew Mickey: And probably it will be a lot different in another 10 years.

John Embry: Well, it would be a lot different looking back from five years from now too, you bet, but I think we will be stood in good stead, certainly being in precious metals and end products, I think those are the two that I like the best.

Andrew Mickey: Well, thanks for your time, I appreciate it.

John Embry: My pleasure. Anytime.

===========================================================

Claim a gram of FREE GOLD today, plus a special 18-page PDF report; Exposed! Five Myths of the Gold Market and find out:

·        Who’s been driving this record bull-run in gold?

·        What Happens When Inflation Kicks In?

·        Why most investors are WRONG about gold

·        When and How to buy gold — at low cost with no hassle

Get this in-depth report now, plus a gram of free gold, at BullionVault here…

===========================================================

Have a Great Weekend!-jschulmansr

Follow Me on Twitter and be notified whenever I make a new post!

 

Schedule automatic tweets, Thankyou for following me message and much more! Be More Productive- Free signup… TweetLater.com

 

===============================================================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr