LIR Gold Target by 2019: $3,000.
If the facts don't fit the theory, change the facts.
Albert Einstein.
Today we offer our condolences and sympathy to the families of all who were killed and injured in yesterday’s atrocity in Moscow. Yet another attack on western civilization. We also wish all our Jewish readers a very happy Passover wherever they may be celebrating it this year.
We open today with Ireland, where the government later today will effectively take over the banking system. The banks will pass on their bad loans, dodgy securities and toxic waste to the National Asset Management Agency. In effect the bad bank of the citizens of the Republic as they bailout their failed gambling banksters. I suspect that this is the model the ECB will use all across Europe, once the Club Med dominoes start falling when the double dip recession begins to hit. Stay long precious metals during this price pause.
Approach each new problem not with a view of finding what you hope will be there, but to get the truth, the realities that must be grappled with. You may not like what you find. In that case you are entitled to try to change it. But do not deceive yourself as to what you do find to be the facts of the situation.
Bernard Baruch.
March 30, 2010
Ireland on the brink of full-scale bank nationalisation
The Republic of Ireland faced the prospect last night of having most of its banking system nationalised amid growing speculation that the Dublin Government would raise its stakes in both remaining private sector operators — Allied Irish Bank and Bank of Ireland.
Shares in both slid yesterday after a report that the Government’s stake in AIB would rise from 25 per cent to 70 per cent and its holding in BoI would be lifted from 16 per cent to 40 per cent.
Each bank will be offered less than originally expected for questionable loans and other toxic assets being transferred into the state-run “bad bank”, the National Asset Management Agency, according to The Irish Times.
Those “haircuts”, bigger than anticipated, would erode capital and force the banks to tap the Government for fresh equity, analysts said.
The agency is due to issue a statement today about taking on €54 billion (£48.5 billion) of the assets, while the Irish Government is also expected to announce details of future capital requirements for the banks. The Government’s existing equity in the two banks was accepted in lieu of cash when they were unable to pay interest on preference shares issued to the Government in return for a previous rescue.
With the Irish Nationwide and EBS building societies being merged and nationalised, and Anglo Irish Bank, the other large banking company, also nationalised, most of the industry would be in the State’s hands.
Ireland is the first significant Western country to be faced with the humiliation of wholesale bank nationalisation in this crisis, although the Republic took its three main banks into state ownership 18 months ago. In the mid-1990s Sweden was forced into bank nationalisation but emerged from it with a profit.
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article7080026.ece
Elsewhere in EU-land, rinse and repeat has entered the repeat phase in East Europe. It’s hot money time once again, according to the IMF. Why should it end better second time around, doesn’t seem to be a concern of the hedge funds and banks. Below, Bloomberg covers wave two of the great financialised funny money investment game in East Europe. We have learned nothing it seems, except that failure will get bailed out, so get in quick and get rich.
IMF Concerned About East European Currency Gains, Belka Says
By Agnes Lovasz
March 30 (Bloomberg) -- East European governments and central banks should move to curb currency gains that threaten to derail the economic recovery and damage competitiveness, an International Monetary Fund official said.
The zloty has surged 22 percent in the past year against the euro, the second-best performer after South Africa’s rand among currencies in Europe, the Middle East and Africa. Hungary’s forint is up 17 percent, the Czech koruna has gained 8.6 percent and the Romanian leu has risen 3.9 percent as investors regained appetite for emerging market assets.
Strengthening currencies will “negatively” affect growth, said Marek Belka, director of the IMF’s European department, in an interview in Warsaw yesterday. “This is something that we should fear. An excessive appreciation of domestic currencies can undermine growth.”
The zloty, forint, koruna and leu are benefiting as investors switch funds from some euro-region economies including Greece, Portugal, Ireland and Spain to buy assets in the eastern members of the EU, which have the potential to grow faster and where deficit and debt levels are lower.
Investors are rewarding austere fiscal policies, including IMF-led programs in Hungary and Romania. Poland, the only EU member to avoid a recession during the credit crisis, and the Czech Republic are also returning to fiscal tightening after spending to stimulate economies and bail out banks.
‘Potential Danger’
“All this liquidity that is in the world is looking for yields,” said Belka, who served as Polish prime minister in 2004. “The assessment of risk has improved so the money is flowing in. This is certainly a potential danger.”
Authorities must look at ways to limit the inflow of funds from abroad, including curbing the availability of foreign currency-denominated loans, Belka said. Difficulty in rolling over those loans contributed to Hungary’s near-default in late 2008 after the credit crunch froze its bond market.
“The countries should look at prudential regulation that should discourage some of the foreign currency investments and loan-taking denominated in foreign currencies,” said Belka.
Central bankers are speaking out against the currency gains and have threatened to intervene to halt the moves.
http://www.bloomberg.com/apps/news?pid=20601095&sid=aEvwdjrmFFOU
On the other side of the Atlantic, another largely under reported problem continues to grow. Below, the NY Times covers a story that ends in defaults if/when the feared double dip recession actually arrives.
State Debt Woes Grow Too Big to Camouflage
By MARY WILLIAMS WALSH Published: March 29, 2010
California, New York and other states are showing many of the same signs of debt overload that recently took Greece to the brink — budgets that will not balance, accounting that masks debt, the use of derivatives to plug holes, and armies of retired public workers who are counting on benefits that are proving harder and harder to pay.
And states are responding in sometimes desperate ways, raising concerns that they, too, could face a debt crisis.
New Hampshire was recently ordered by its State Supreme Court to put back $110 million that it took from a medical malpractice insurance pool to balance its budget. Colorado tried, so far unsuccessfully, to grab a $500 million surplus from Pinnacol Assurance, a state workers’ compensation insurer that was privatized in 2002. It wanted the money for its university system and seems likely to get a lesser amount, perhaps $200 million.
Connecticut has tried to issue its own accounting rules. Hawaii has inaugurated a four-day school week. California accelerated its corporate income tax this year, making companies pay 70 percent of their 2010 taxes by June 15. And many states have balanced their budgets with federal health care dollars that Congress has not yet appropriated.
Some economists fear the states have a potentially bigger problem than their recession-induced budget woes. If investors become reluctant to buy the states’ debt, the result could be a credit squeeze, not entirely different from the financial strains in Europe, where markets were reluctant to refinance billions in Greek debt.
“If we ran into a situation where one state got into trouble, they’d be bailed out six ways from Tuesday,” said Kenneth S. Rogoff, an economics professor at Harvard and a former research director of the International Monetary Fund. “But if we have a situation where there’s slow growth, and a bunch of cities and states are on the edge, like in Europe, we will have trouble.”
California’s stated debt — the value of all its bonds outstanding — looks manageable, at just 8 percent of its total economy. But California has big unstated debts, too. If the fair value of the shortfall in California’s big pension fund is counted, for instance, the state’s debt burden more than quadruples, to 37 percent of its economic output, according to one calculation.
Unstated debts pose a bigger problem to states with smaller economies. If Rhode Island were a country, the fair value of its pension debt would push it outside the maximum permitted by the euro zone, which tries to limit government debt to 60 percent of gross domestic product, according to Andrew Biggs, an economist with the American Enterprise Institute who has been analyzing state debt. Alaska would not qualify either.
State officials say a Greece-style financial crisis is a complete nonissue for them, and the bond markets so far seem to agree. All 50 states have investment-grade credit ratings, with California the lowest, and even California is still considered “average,” according to Moody’s Investors Service. The last state that defaulted on its bonds, Arkansas, did so during the Great Depression.
Goldman Sachs, in a research report last week, acknowledged the pension issue but concluded the states were very unlikely to default on their debt and noted the states had 30 years to close pension shortfalls.
http://www.nytimes.com/2010/03/30/business/economy/30states.html?hp
We end for today with events and commentary on China. Below, two different views on China. It’s not a bubble, says JP Morgan’s man in far away London.
Don't focus too much on China, says JP Morgan AM
Chinese valuations are not yet in bubble territory, but investors should avoid confusing economic performance with stock-market returns, says emerging-markets head Richard Titherington.
By Joseph Marsh 29 March 2010
Much has been written in recent months about whether Chinese stocks or property are overvalued, and a growing number of editorials and research papers seem to be coming out on the side of the bears.
The strategist for the investment arm of a large Asian state-owned institution recently told AsianInvestor that they believe the country is heading for a crash. There are too many potential problems in the Chinese economy and financial markets for that not to happen at some point, she argues. In which sector or part of the economy that crash takes place is less certain, says the strategist, but it is inevitable.
"We should only be in China with calculated risk and exit strategies based on the senario of a crash somehow, somewhere that will have a domino effect and impact investments in China," she adds. Now that Chinese prime minister Wen Jiabao has publicly said (in mid-March) that it will take the nation another 40 years to be a moderately developing country, it means those
"who want to hitch their wagon to China's back" have to "deal with it".
Of course, there are plenty of people who say prices in China have some way to run before they hit bubble territory. One is Richard Titherington, chief investment officer and head of emerging markets equity at JP Morgan Asset Management in London. He oversees the firm's global emerging-market funds, including emerging Europe, the Middle East and Africa, and Latin America.
"I don't think China valuations, either of equity or property, are bubble-like in general," he says. "There are always individual property projects or stocks that are overvalued of course. It might become a bubble, but is not there yet."
On average, Chinese price-to-earnings ratios are in the mid-teens, which he does not feel is excessive. Some stocks, such as China Mobile, have a P/E closer to 10x, and China P/Es range from 10x to 40x, he says.
"It's still a market where stock selection is extremely important," says Titherington. "When you look at previous bubbles, everything was overvalued, and that's not the case with China."
Asked what sort of levels would concern him, he said he would be concerned if P/E ratios were to significantly exceed earnings growth. "If you assume Chinese earnings growth is in the high teens or 20%," he says, "then if you're paying significantly above that, you're in dangerous territory."
Yet while Titherington plays down the 'China bubble' concerns, he does feel there is too much focus on the country to the exclusion of other emerging markets.
http://www.asianinvestor.net/News/170637,dont-focus-too-much-on-china-says-jp-morgan-am.aspx
After the recent Google hack attack and the outrageous treatment of the Rio Tinto three in a communist travesty of justice in a kangaroo court in Shanghai, although that does an injustice to kangaroos everywhere, I suspect that far fewer will now want to trust in Chinese good intentions and goodwill. Why would anyone in Taiwan want to join such an unjust system. I suspect that China’s bubble is about to get severely tested in the year ahead. When “the next Lehman” hits and it will, I expect China to go “boom.” Below, Morgan Stanley disagrees. I think the great vampire squids are talking up their book.
Chinese Stocks to ‘Break Out,’ Morgan Stanley Says
By Shiyin Chen
March 30 (Bloomberg) -- China’s stocks, among the worst performers globally this year, may “break out” in the second half as the yuan strengthens and slowing inflation eases concerns about monetary tightening, Morgan Stanley said.
A “weak” recovery in developed nations may reduce the risks from higher consumer prices while a stronger Chinese currency will fuel gains in Chinese stocks traded in Hong Kong, Morgan Stanley analysts led by Jerry Lou wrote in a report today.
“Because we think growth will remain robust and inflation will ease in the second half, the market could break out with tightening concerns easing,” Lou wrote. “Given the strong momentum in China’s domestic economy and the already recovering export sector, we think even a double dip in developed economies in 2010 would not derail China’s growth.”
The benchmark Shanghai Composite Index has dropped 4.7 percent this year, the fourth-worst among 92 global measures tracked by Bloomberg, amid concerns over the nation’s currency policy, the outlook for the property market, the risks of non- performing loans in the banking industry, the impact of tightening on growth and the outlook for the global economic recovery, Morgan Stanley said. The Hang Seng China Enterprises Index of H shares has lost 4.5 percent.
‘Fragile’ Recovery
Widening deficits in Europe and a failure to boost employment in the U.S. have spurred concerns the global economic recovery will falter. A so-called double dip is a “real possibility” because the global economy remains “quite fragile,” World Bank chief economist Justin Lin said March 25.
-----Morgan Stanley economist Wang Qing expects the yuan to resume a “gradual appreciation,” starting with a marginal revaluation early in the second half, Lou wrote in today’s report. The currency could end the year as much as 5 percent higher against the dollar, the analyst also said.
Efforts by Chinese officials to curb rising property prices will weigh on the property and materials industries only in the “near term,” Morgan Stanley said. A credit crunch is also unlikely, according to the report.
The brokerage is joined by Martin Currie’s Chris Ruffle in predicting a rebound in Chinese shares. Ruffle, who helps manage $19 billion, said in a March 26 interview with Bloomberg Television the stock market may “move forward again” after May and June as inflation concerns ease.
http://www.bloomberg.com/apps/news?pid=20601089&sid=a.s.i1FZbhm8
We have arrived at the end of quarter waiting for the usual market window dressing to get underway. In this thinner trading week of Holy Week and with Passover underway as well, dressing up the markets should be easy for the NY Fed and their Caribbean Cronies and the other helpers.
At the Comex silver depositories Monday, final figures were: Registered 54.24 Moz, Eligible 61.60 Moz, Total 115.84 Moz.
http://www.bloomberg.com/apps/news?pid=20601089&sid=a.s.i1FZbhm8
We have arrived at the end of quarter waiting for the usual market window dressing to get underway. In this thinner trading week of Holy Week and with Passover underway as well, dressing up the markets should be easy for the NY Fed and their Caribbean Cronies and the other helpers.
At the Comex silver depositories Monday, final figures were: Registered 54.24 Moz, Eligible 61.60 Moz, Total 115.84 Moz.
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Crooks & Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
Today, a NY Times article that casts doubt on global warming, man made or otherwise. In typical NYT editorial form, the article is heavily spun to downplay the skepticism and to push the “GW” agenda, now rebranded as “climate change” in the European media, since the facts no longer fit in well with global warming. Unfortunately, the planet has always undergone “climate change” and as politically correct, PR terms go, climate change as stand-in proxy for man made global warming from CO2, doesn’t quite excite the public enough to force them to adopt all the carbon trading scams. I suspect that just as soon as the left wing promoters of carbon taxes, plus the great vampire squids who profit from them can manage it, climate change will morph back into global warming again, with the emotive rubbish of extinct polar bears and melting glaciers back on the mainstream media agenda.
False facts are highly injurious to the progress of science, for they often endure long but false views, if supported by some evidence, do little harm, for everyone takes a salutary pleasure in proving their falseness.
Charles Darwin.
Among Weathercasters, Doubt on Warming
By LESLIE KAUFMAN Published: March 29, 2010
The debate over global warming has created predictable adversaries, pitting environmentalists against industry and coal-state Democrats against coastal liberals.
But it has also created tensions between two groups that might be expected to agree on the issue: climate scientists and meteorologists, especially those who serve as television weather forecasters.
Climatologists, who study weather patterns over time, almost universally endorse the view that the earth is warming and that humans have contributed to climate change. There is less of a consensus among meteorologists, who predict short-term weather patterns.
Joe Bastardi, for example, a senior forecaster and meteorologist with AccuWeather, maintains that it is more likely that the planet is cooling, and he distrusts the data put forward by climate scientists as evidence for rising global temperatures.
“There is a great deal of consternation among a lot of us over the readjustment of data that is going on and some of the portrayals that we are seeing,” Mr. Bastardi said in a video segment posted recently on AccuWeather’s Web site.
Such skepticism appears to be widespread among TV forecasters, about half of whom have a degree in meteorology. A study released on Monday by researchers at George Mason University and the University of Texas at Austin found that only about half of the 571 television weathercasters surveyed believed that global warming was occurring and fewer than a third believed that climate change was “caused mostly by human activities.”
More than a quarter of the weathercasters in the survey agreed with the statement “Global warming is a scam,” the researchers found.
-----Several well-known forecasters — including John Coleman in San Diego and Anthony Watts, a retired Chico, Calif., weatherman who now has a popular blog — have been vociferous in their critiques of global warming.
The dissent has been heightened by recent challenges to climate science, including the discovery of errors in the 2007 report by the United Nations’ Intergovernmental Panel on Climate Change and the unauthorized release of e-mail messages from a British climate research center last fall that skeptics say show that climate scientists had tried to suppress data.
http://www.nytimes.com/2010/03/30/science/earth/30warming.html?hp
Science is facts just as houses are made of stones, so is science made of facts but a pile of stones is not a house and a collection of facts is not necessarily science.
Henri Poincare
The monthly Coppock Indicators finished February:
DJIA: +95 UP. NASDAQ: +291 UP. SP500: +118 UP. The great Bull market goes on with the all three continuing higher in positive numbers.
DJIA: +95 UP. NASDAQ: +291 UP. SP500: +118 UP. The great Bull market goes on with the all three continuing higher in positive numbers.
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Help the LIR fight Banksterism, the EU, and for sound money.
If you can, help the LIR stay around and make a difference. Please make a donation at the PayPal link on the website or better still become a sponsor for what looks like an exciting 2010. Capitalism not banksterism.
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Sunspots – A 22 year colder world? (From 2004?)
Spotless Days March 29
Current Stretch: 0 days
2010 total: 6 days (7%)
2009 total: 260 days (71%)
Since 2004: 776 days
Typical Solar Min: 485 days
http://www.spaceweather.com
The long minimum seems to have ended.
Are Sunspots Different During This Solar Minimum?
-----But something is unusual about the current sunspot cycle. The current solar minimum has been unusually long, and with more than 670 days without sunspots through June 2009, the number of spotless days has not been equaled since 1933.
----During the period from 1645 to 1715, the Sun entered a period of low activity now known as the Maunder Minimum, when through several 11- year periods the Sun displayed few if any sunspots. Models of the Sun's irradiance suggest that the solar energy input to the Earth decreased during that time and that this change in solar activity could explain the low temperatures recorded in Europe during the Little Ice Age.
----The same data were later published [Penn and Livingston, 2006], and the observations showed that the magnetic field strength in sunspots were decreasing with time, independent of the sunspot cycle. A simple linear extrapolation of those data suggested that sunspots might completely vanish by 2015.These observations caused researchers to wonder whether the characteristics of sunspots are different now than in other solar cycles.
http://www.leif.org/EOS/2009EO300001.pdf
http://www.leif.org/EOS/2009EO300001.pdf
Big freeze could signal global warming 'pause'
The Arctic conditions which have brought Britain to a standstill over the past week could be the start of a "pause" in global warming, some scientists believe.
Published: 9:20AM GMT 11 Jan 2010
http://www.telegraph.co.uk/earth/environment/globalwarming/6965342/Big-freeze-could-signal-global-warming-pause.html
The Arctic conditions which have brought Britain to a standstill over the past week could be the start of a "pause" in global warming, some scientists believe.
Published: 9:20AM GMT 11 Jan 2010
http://www.telegraph.co.uk/earth/environment/globalwarming/6965342/Big-freeze-could-signal-global-warming-pause.html
Sunspot cycle 24: Together with sunspot cycle 25, the next two global cooling cycles. The new “Dalton Minimum?” Twenty Eight months now with low sunspots numbers, and counting. February was the 28th month of yet another low number of 18.6 http://en.wikipedia.org/wiki/Dalton_Minimum
Smoothed sunspot numbers (SSN). 2007, Oct. 0.9. The end of cycle 23.
Sunspot cycle 24: Nov 1.7. Dec 10.1. Jan 3.4. Feb 2.2. Mar 9.3 April 2.9. May: 2.9. June 3.1. July 0.5. August 0.5. Sep 1.1 Oct. 2.9. Nov. 4.1 Dec 0.8. Jan 1.5. Feb 1.4. Mar 0.7. Apr 1.2. May 2.9. June 2.6. July 3.5. Aug. 0.0. Sep 4.2. Oct 4.6. Nov 4.2. Dec 10.6 Jan 13.1 Feb 18.6
Sunspots. http://solarscience.msfc.nasa.gov/SunspotCycle.shtml
The count. http://sidc.oma.be/products/ri_hemispheric/
Why a New Minimum. http://sesfoundation.org/dalton_minimum.pdf
The “Carrington Event,” September 1, 1859.
http://science.nasa.gov/headlines/y2008/06may_carringtonflare.htm
Current Space Weather.
http://www.swpc.noaa.gov/
Sunspot cycle 24: Nov 1.7. Dec 10.1. Jan 3.4. Feb 2.2. Mar 9.3 April 2.9. May: 2.9. June 3.1. July 0.5. August 0.5. Sep 1.1 Oct. 2.9. Nov. 4.1 Dec 0.8. Jan 1.5. Feb 1.4. Mar 0.7. Apr 1.2. May 2.9. June 2.6. July 3.5. Aug. 0.0. Sep 4.2. Oct 4.6. Nov 4.2. Dec 10.6 Jan 13.1 Feb 18.6
Sunspots. http://solarscience.msfc.nasa.gov/SunspotCycle.shtml
The count. http://sidc.oma.be/products/ri_hemispheric/
Why a New Minimum. http://sesfoundation.org/dalton_minimum.pdf
The “Carrington Event,” September 1, 1859.
http://science.nasa.gov/headlines/y2008/06may_carringtonflare.htm
Current Space Weather.
http://www.swpc.noaa.gov/
What happened to global warming?
http://news.bbc.co.uk/1/hi/sci/tech/8299079.st
http://news.bbc.co.uk/1/hi/sci/tech/8299079.st
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This week’s featured links: Silver & Gold Miners + Rare Metals.
With US trillion dollar deficits stretching as far as the eye can see, and voodoo economics the order of the day at the central banks, I think it is now time to begin selectively scaling into precious metals companies that mostly meet the following criteria:
Adequate cash reserves. Good management. Strong in-ground reserves or prospects. NAFTA based, or else located in countries with strong rule of law.
Endeavour Silver Corp. TSX: EDR. http://www.edrsilver.com/s/Home.asp
Semafo TSX: SMF http://www.semafo.com/home_company_intro.php
ATW Gold Corp. TSX.V: ATW. http://www.atwgold.com/
US Silver Corp. TSX.V: USA. http://www.us-silver.com/s/Home.asp
Excellon Resources Inc. TSX: EXN. http://www.excellonresources.com/
First Majestic Silver Corp. TSX: FR http://www.firstmajestic.com/s/Home.asp
New Jersey Mining Company. OTCBB: NJMC
http://www.newjerseymining.com/index.html
Atna Resources Ltd. TSX: ATN. http://www.atna.com/s/Home.asp
Barkerville Gold Mines TSX.V: BGM. Formerly International Wayside Gold Mines Ltd.
http://www.barkervillegold.com/s/Home.asp
Shoreham Resources Ltd. TSX-V: SMH
http://www.shoreham.ca/
ATAC Resources Ltd, TSX.V: ATC. http://www.atacresources.com/s/home.asp
Evolving Gold Corp. TSX.V: EVG http://www.evolvinggold.com/
Lydian International Ltd. TSX: LYD. Note: LYD operates in Armenia, a region carrying higher risk than our usual safer picks in NAFTA lands. http://www.lydianinternational.co.uk/
The story of rare earths and metals is mostly one of China producing and exporting, Japan, America and everyone else importing. Vital to our new technologies, and lifestyle, and critical to hybrid and electric cars, Rare Earth Elements and Heavy Rare Earths, are a strategic choke point held in China’s hands. Lately China has been squeezing that choke point. I think that AVL at Thor Lake Canada, has a property of global importance. A property with the ability to offer NAFTA access to REEs and HREs for the decades ahead. As America and the west move to reduce over dependence on oil from unstable regions, we will see demand for rare metals take off.
Avalon Rare Metals Inc. TSX: AVL. www.avalonraremetals.com
We will be adding more REEs as appropriate.
Warning.
Sadly we are all in unexplored territory. The world has never before suffered a severe recession/depression while operating on fiat currency. As is widely apparent, the central banks haven’t a clue and are making up the rules as the flounder along. They never saw it coming they claim, although it was obvious to many fine writers though not unfortunately in the mainstream media, that a giant financialised derivatives gambling economy would always end badly. There are no experts now, for the simple reason that we have never before faced such a sudden synchronised and deep collapse in the global economies.
The unfortunate fact that we are operating on fraudulent currencies is highly likely to mean it all ends many months from now, in a fiat currency revulsion, but only after the monetary authorities have first tried pouring in endless amounts of newly created money. A derivatives gambling world with an estimated quadrillion dollars of face value has to be unwound and the losses absorbed. In this sort of investing environment, cash, gold and silver and tangible assets are favoured over stocks and intangible assets.
As always if thinking about making an investment, it’s important to do one’s own due diligence. No one has more at risk in an investment than you do yourself. In these difficult economic times, there will likely be several false bottoms before the real one arrives and hindsight allows us to confirm that the bottom is in. Even then, a “V” shaped rebound is highly improbable. A double dip recession seems likely. Beware the false "statistical" government subsidised "recovery." It is a "recovery" bought from a future of fiat currency collapse.
Graeme Irvine
London Irvine Report: www.londonirvinereport.com/
Graeme@londonirvinereport.com
With US trillion dollar deficits stretching as far as the eye can see, and voodoo economics the order of the day at the central banks, I think it is now time to begin selectively scaling into precious metals companies that mostly meet the following criteria:
Adequate cash reserves. Good management. Strong in-ground reserves or prospects. NAFTA based, or else located in countries with strong rule of law.
Endeavour Silver Corp. TSX: EDR. http://www.edrsilver.com/s/Home.asp
Semafo TSX: SMF http://www.semafo.com/home_company_intro.php
ATW Gold Corp. TSX.V: ATW. http://www.atwgold.com/
US Silver Corp. TSX.V: USA. http://www.us-silver.com/s/Home.asp
Excellon Resources Inc. TSX: EXN. http://www.excellonresources.com/
First Majestic Silver Corp. TSX: FR http://www.firstmajestic.com/s/Home.asp
New Jersey Mining Company. OTCBB: NJMC
http://www.newjerseymining.com/index.html
Atna Resources Ltd. TSX: ATN. http://www.atna.com/s/Home.asp
Barkerville Gold Mines TSX.V: BGM. Formerly International Wayside Gold Mines Ltd.
http://www.barkervillegold.com/s/Home.asp
Shoreham Resources Ltd. TSX-V: SMH
http://www.shoreham.ca/
ATAC Resources Ltd, TSX.V: ATC. http://www.atacresources.com/s/home.asp
Evolving Gold Corp. TSX.V: EVG http://www.evolvinggold.com/
Lydian International Ltd. TSX: LYD. Note: LYD operates in Armenia, a region carrying higher risk than our usual safer picks in NAFTA lands. http://www.lydianinternational.co.uk/
The story of rare earths and metals is mostly one of China producing and exporting, Japan, America and everyone else importing. Vital to our new technologies, and lifestyle, and critical to hybrid and electric cars, Rare Earth Elements and Heavy Rare Earths, are a strategic choke point held in China’s hands. Lately China has been squeezing that choke point. I think that AVL at Thor Lake Canada, has a property of global importance. A property with the ability to offer NAFTA access to REEs and HREs for the decades ahead. As America and the west move to reduce over dependence on oil from unstable regions, we will see demand for rare metals take off.
Avalon Rare Metals Inc. TSX: AVL. www.avalonraremetals.com
We will be adding more REEs as appropriate.
Warning.
Sadly we are all in unexplored territory. The world has never before suffered a severe recession/depression while operating on fiat currency. As is widely apparent, the central banks haven’t a clue and are making up the rules as the flounder along. They never saw it coming they claim, although it was obvious to many fine writers though not unfortunately in the mainstream media, that a giant financialised derivatives gambling economy would always end badly. There are no experts now, for the simple reason that we have never before faced such a sudden synchronised and deep collapse in the global economies.
The unfortunate fact that we are operating on fraudulent currencies is highly likely to mean it all ends many months from now, in a fiat currency revulsion, but only after the monetary authorities have first tried pouring in endless amounts of newly created money. A derivatives gambling world with an estimated quadrillion dollars of face value has to be unwound and the losses absorbed. In this sort of investing environment, cash, gold and silver and tangible assets are favoured over stocks and intangible assets.
As always if thinking about making an investment, it’s important to do one’s own due diligence. No one has more at risk in an investment than you do yourself. In these difficult economic times, there will likely be several false bottoms before the real one arrives and hindsight allows us to confirm that the bottom is in. Even then, a “V” shaped rebound is highly improbable. A double dip recession seems likely. Beware the false "statistical" government subsidised "recovery." It is a "recovery" bought from a future of fiat currency collapse.
Graeme Irvine
London Irvine Report: www.londonirvinereport.com/
Graeme@londonirvinereport.com
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