Thursday, August 9, 2012

So how well has gold performed over the past 5 years?

Pretty good.

I still remember that top investors all saw gold as having no value.  Well it certainly never LOST value out performing all the other asset classes.   Maybe that's what they meant?



Asset performance since start of financial crisis

Wednesday, August 1, 2012


It's like they're all on vacation and the pot was left on the stove and has gone dry... meltdown coming IMO

The market is losing its (partici)pants.  The masters of the equity universe are leaving the building.  Methinks they've gone too fr driving everyone from the game.

Is it too late for gold with big bad Bernake's helicopter without fuel?


More to come.

YIKES!—Bill Gross joins the 'Stocks are Dead' Club—is the end near?

As I said—YIKES!


After the the " Flash Crash", MF Global Theft, and today's recent market glitch. It's no surprise that many are abandoning the market in droves. We been witnessing this for years which is apparent by the anemic market volume. The below article is about Bill gross joining the stocks are dead club. There is very little confidence left or people with jobs to be participants, retail has been dead for years. All that there is now is institutions and hedgies with black box algo systems, so this is the new normal. Sad days indeed.

I personally have been still trying to find the bulls in this whacky market and ACI JAG are a few of recent, but as I told much of you over the years, take the profits out of the stocks and put them into something real. The financial cliff is approaching and I wouldn't want to be holding paper when it hits.


Bill Gross Is Latest to Join 'Stocks Are Dead' Club
By Jeff Cox | CNBC – Tue, Jul 31, 2012 1:11 PM EDT

Stocks will no longer generate the kinds of returns they've had over the past century, ending the "cult of equity" that has been Wall Street's mantra for generations, Bill Gross, managing director at bond giant Pimco, says in his monthly market analysis.

He also predicts the stock market's consistent annual return will be reduced to a "historical freak" that will never be repeated.

Read more here

Investing Legend Quits the Markets as it Continues to Destroy Itself

Nasty day today!

Clearly, the powers-that-be are losing it.  Legends are leaving not just electing to stand on the sidelines.

How soon will 'they' let gold run?  Are they ready yet?  It looks to me that we do not have long to wait.

Funny money is getting a 'black-humor' quality while gold remains cheap in the face of growing cracks in the monetary systems machines.


First article:

Investing Legend Louis Bacon Has Had Enough Of Algos And Central Planners, Calls It Quits

Markets are toast as Louis Bacon plans to give back 25% of his fund to investors as "liqudity and opportunities have become more constrained." As Bloomberg notes, Bacon is struggling to make money in his typically macroeconomic trend exploiting fund as "the risk on / risk off environment appears to be an abiding presence that has keep engagement low." Macro funds lost an average of 1.3 percent in the first six months of the year. Bacon, pointed out that "Markets are increasingly distorted by central banks’ attempts to squeeze drops of growth from an over-indebted private sector across much of the developed world." The U.S. markets are hindered by "a caustic political environment and an anti-business administration," he said.

U.S. banks have retreated from making markets in many securities because of the Dodd-Frank legislation, which limits them from trading for their own accounts. Bacon added that 'in some Kafkaesque absurdity,' the rule is "named after the two high protectors from regulatory oversight of perhaps the most egregious of U.S. financial miscreants, Fannie Mae and Freddie Mac."

Bacon pulls no punches as he goes after inept regulators in Europe and the US, and describes the state of affairs as "Disaster Economics, where assets are valued based on their ability to withstand a lurking disaster as opposed to...

Read full article in Zerohedge here. 

Second article:

Algorithm — The Madness in the Machine

 With this kind of brainlessness allowed in the markets it's no surprize that so many are out of the markets where the machines play!

Broken Market Chronicles: Algos Gone Autosell Wild - Video Explanation Of What Happened

Still scratching your head over what happened this morning (this would be everyone at the SEC but not their porn webstream vendors - even they by now realize just how broken the market is)? Don't be - courtesy of Dennis Dick and Premarket Info, here is a 20 minute video explanation parsing the tape and showing precisely what happened that impacted nearly 150 stocks.

Read more here

Tuesday, July 31, 2012

The Coming 'Great Gold Pivot' and the New Fiat System

Note: This has been extensively rewritten having distilled the essence of my thinking from the 'rant' of the previous version. —G

As I, like the rest of most of my friends, gape in fearful wonder at the financial drought and critical damage to the world's exchangeable currencies caused by the manipulative greed of those who own and operate it, I have cause to look deeper into the potential of little moves which may fell the monster.

I see a scenario emerging where the top 1% can be seen, through market behavior, manipulating the markets to retain (and increase) their wealth and power.  This is not unusual and were I in that position I would, if my existence revolved around wealth and power, be predisposed to do the same. 

Caught in this cycle of planetary change they probably see their danger.  With severely damaged economies shrinking the foundation and extendability of their ascendancy they must be seeing gold's historic behavior as a raft in the storm—like everyone else is.

Unlike everyone though they have benefited greatly from the fiat system which can be seen in the massive gap between their wealth and everyone else.  I believe they are in the process of positioning themselves to use gold and their trading power to use gold as a 'pivot' to migrate their wealth over the inflation abyss and into a revitalized fiat with shrunken debt. 

However, there may be blindness in the unbridled self-interest leaving them with limited vision and the danger of entitlement.  It is that group that has essentially generated the present condition.  I do not see an evil conspiracy rather a shared myopia of political and economic leadership caught in this clear cycle of planetary redefinition.

Though we may want to believe we are above natural law nothing could be further from the truth.  Human beings have never be separate from nature.  As such the larger movements of change are natural.  As with any cycle what was a the top will tend to be on the bottom.  The 'best' are predisposed to clutching to the view of their ascendancy of course.

The beginning of the 'Great Gold Pivot' can be seen in the trading behavior of gold.  Revealed in extended sideways trading gold-price manipulation, holding the price of gold and other precious metals in a range that benefits accumulation.  This I see as the transfer of wealth in preparation for the use of gold and other precious metals as the pivot. 

However, the pivot itself may be in great danger of falling flat with so much attention being given it. The spike may both look different this time especially if there is so little participation by the much much larger group of the relatively unwealthy and unpowerful.

Why?  Because the relatively unwealthy and unpowerful may be in the process of changing the game right under the feet of those who at present hold the board.

Historically the 'board' has consisted of a set of positions held by the 1% actively limiting participation of the 'great unwashed masses'.  But things are different now.  The board's positions are losing relevance to a world of people that communicates freely amongst themselves without effective censorship on the web.  But it is also knowledge and information that flow freely which greatly diminish the potency of the tools of the 1%.  Indeed this has also resulted in the machinations of the manipulators being unmasked more effectively and in real time which, coupled with the previous points, reveal the true shift in power away from the traditional powers.

Thus the stage is set for what may be both a diminished gold bull cycle and a new system of monetary exchange ripped from the grasp of divide-and-conquer's traditional masters

The core thread of the whole theme is exchangeable value and who controls it.  Gold has historically been the ultimate store of value because everyone thinks it is.  But the thinking is changing as the 'masses' perception of money's present masters' activity rises to general awareness.

It is very important to understand it is people who have always determined value.  But up to now that determination has been utterly manipulated.  

The idea of fiat currency is actually quite functional much more so than gold.  The only problem with the fiat system is that it has been controlled and manipuated by 'special' self-interest groups.  This is now revealed as problematic for emerging planetary society as it continues to move towards democratic management—political and otherwise.

Is there a system, a currency system that has the potential to cut the shackles of the powerful moneyed tribes?

Yes there is: Bitcoin

This or something similar is the little stone that could be the path of the changing economic reality.

Begin your research and add your mind to the change for the better which our world needs now.


PS  Here is a video, article and links for Bitcoin.

      Video: Bitcoin & The End of State-Controlled Money —

      Start looking into this and be prepared to be safe from the falling giants. —G

Friday, July 27, 2012

Is it really resource nationalism?

Resource nationalism is really economic nationalism.

Think about it.

The size and complexity of our economic and communications world has expanded exponentially but the economies in it have not and see the American version of the free market for what it is: greed and power.  And that's what they want too, the what-used-to-be the American Dream.

It should come of no surprise that they want what they see as theirs within the boarders of their country.   in order to be able to play well with others.

We are seeing is the emergence of new realities in markets and governments.

I feel sorry that companies are getting caught in the sea change that began at the turn of the century.

Don't get mad about it and realize that the big cop on the block, the USA, simply can't threaten, cajole or control this new world in the process of reordering itself.

Investors need to learn to see things as they are and seek insight into how to benefit from this.

It is my opinion that investors should be choosing jurisdictions that will protect their investments and flee those that do not.  It is that simple.  And their are a lot of options for them in stable jurisdictions.

The article below is from the local business paper in Vancouver, 'Business In Vancouver' about local companies in the mining and exploration business internationally.  It talks about how companies are trying to protect their "assets in foreign lands with legal agreements and key relationships".

But remember politics and corruption can trump any of these.


Rising tide of resource nationalism threatens Vancouver miners

Tue Jul 24, 2012 12:01am PST
Companies protecting assets in foreign lands with legal agreements, key relationships

High commodity prices and a shaky world economy are intensifying Vancouver mining companies’ clashes with resource nationalism.

Two recent examples include Bolivia’s recent threats to nationalize South American Silver Corp.(TSX:SAC) and Rusoro Mining Ltd.’s(TSX-V:RML) July 18 announcement that it is filing for arbitration after Venezuela nationalized the company’s investments.

A Ernst & Young LLP’s recently releasedglobal survey identified resource nationalism as the top business threat facing mining companies for the second year running. In 2008, the risk ranked eighth on the survey.

Tom Whelan, leader of Ernst & Young’s national mining and metals practice, said the forces driving the trend aren’t hard to identify.

“Every government treasury around the world is under difficult circumstances, and if you look at [high] commodity prices and some of the earnings of the major mining companies … it’s easy to see why there’s a target,” he told Business in Vancouver.

Whelan said companies can protect their assets against the threat in a number of ways.

“It starts with building transparent relationships with the host government so that they understand the entire value of the project to the host government.”

He noted that companies should emphasize everything from tax dollars to infrastructure developments and jobs that projects bring.

Fred McMahon, the Fraser Institute’s vice-president of international policy research, said mining companies need to engage positively with local communities in a project area.

Beyond playing nice with governments and communities, however, companies are seeking legal mechanisms to protect their projects.

Chris Baldwin, a partner with Lawson Lundell LLP, noted that resource nationalism can span everything from tax increases to outright seizure of company assets. He said the key legal protection companies can obtain from a host government is a stability agreement.


Tuesday, July 17, 2012

Redesigning Goldbggr

I am redesigning Goldbggr over the next few days.  Please excuse what I hope will be temporary awkwardness.

Thursday, June 28, 2012

Return of Gold Juniors Looking Real

We all know it's going to happen.  We all know why, mostly.  We just don't know when and because a watched pot never boils it has become particlarly painful to watch and wait.

Well the waiting looks like it's over.  Time to play.   =)   So find your favorite little junior gold stocks and start thinking about building that sand castle... keeping an eye out for the beach bully—because he will be back to try and make us all fearful, again.

The window for high-return gold equity shopping is now open IMO.


June 28, 2012, 9:06 a.m. EDT

Top Junior Gold Mining Stocks Gained 28%

Jun 28, 2012 (ACCESSWIRE-TNW via COMTEX) -- TORONTO, Canada: In tracking the small cap stock universe for Wednesday, June 27, 2012, Ubika Research found that the top 10 small cap stock gainers from each of the listed sectors performed as follows: 

Metals & Mining stocks: +24% 

Gold stocks: +28% 

Energy stocks: +21% 

Technology stocks: +9% 

Clean Tech stocks: +9% 

The top individual small cap stock gainers include Strata Minerals Inc. (CVE:CA:SMP) with a 46% gain in metals and mining, Stronghold Metals Inc. (CVE:CA:Z) with a 70% gain among gold stocks, Sundance Energy Corp. (CVE:CA:SNY) with a 67% gain in Energy, Zaio Corp. (CVE:CA:ZAO) with a 31% gain among technology stocks and Run of River Power Inc. (CVE:CA:ROR) with a 17% gain in the cleantech category. 


Tuesday, June 12, 2012

Fools Gold? (G: The return of the retail investor)

Retail investors are turning to look at gold again.  Have a read of Christopher Barker's (of The Motley Fool) article "The Best-Kept Secret in Gold".  The really great thing about The Motley Fool is that they do a thorough job when they make a pick.  A fact their community knows well.

I'm tracking the shifting sentiment of retail investors searching (hoping?) for their return to equity markets.  When they do that will herald a return to the healing of stock markets. 

The retail investing community informed by The Motley Fool is sizable so take this note as an indication 'perhaps' that the return of the precious metals bull market is immanent.


The Best-Kept Secret in Gold

My investment portfolio is chock-full of names you've never heard of. That's just how I roll.

For the small minority of investors out there that actually have made room within their nest eggs for a slice of silver and gold, most will select from a small set of predictable vehicles. Many have no doubt abandoned the mining and exploration equities altogether given their dastardly trailing underperformance -- to an admittedly shocking degree -- vis-à-vis the popular bullion proxies SPDR Gold Trust (NYS: GLD) and the iShares Silver Trust.

For those intrepid souls determined to stand strong with precious metal equity exposure -- presumably sharing my bullish expectation of a major reversal of fortune once the metal prices regain their momentum -- most will likely settle upon the closest things we have to household names in the sector. Although I wholeheartedly condone the inclusion of superstars like Goldcorp and Silver Wheaton (NYS: SLW) within a well-crafted basket of gold and silver selections, I encourage Fools to dig a little deeper into this forlorn and under-followed galaxy of stocks to find their own diamond in the rough. I think I've located one particularly attractive stock that, perhaps in part because it's not listed on a major U.S. exchange, continues to fly under the radar of most U.S. investors.

The second time is a charmThis isn't the first time I've loaded up on shares of Sabina Gold and Silver (Symbol "SBB" on the Toronto Stock Exchange; "SGSVF" for U.S. investors through the OTC market). I first built a position back in 2006 as the company enjoyed terrific exploration success at a polymetallic project called Hackett River in Canada's Nunavut Province. I enjoyed a powerful multi-bagger performance before locking in gains in early 2011. Thereafter, the stock suffered a dramatic decline while the sector turned suddenly sour, and my Foolish bargain-hunting radar began to sound. As a result, I selected Sabina as one of my "Top 10 Gold Stocks for 2012."

To my amazement, the selling proceeded mercilessly into 2012, and Sabina presently sits 38% beneath where I recommended the shares last December. From its 52-week high, Sabina has tumbled 64%! Undeterred, I have continued to increase my stake, such that Sabina Gold & Silver is now a core holding of mine for the second time in this precious metal bull market. I think the second time around will be as charming as the first, and I aim to tell you why I'm so excited about the outlook.

Read full article here

Monday, June 11, 2012

Germany wants Gold to be the 'effective' currency of the Eurzone

Here we go.  The chatter will turn now to using gold to 'manage' the debt.  Watch and learn.  The masters of our world have never been watched in such detail.

They/We MUST DO THIS.  The world cannot work its way out of debt.  It's that simple


Here's the article in the Globe and Mail by Eric Reguly :

A golden idea to save (or doom) the euro

Gold is back in the news, big time, and not just because the price may be on the verge of another upswing or that Peter Munk is turning Barrick, the world’s biggest gold company, into a CEO meat grinder. It’s because Germany, it appears, wants to make gold the effective currency of the euro zone before the region plunges to the bottom of the seas like a concrete U-boat.
The weakest euro zone countries are tapped out financially and economically. But a few of them are brimming with gold reserves. Take Italy, the euro zone’s third-largest economy. The Italians love gold and it’s stashed everywhere, in their central bank and in their jewellery and safe deposit boxes. (I once saw a religious-festival parade of children in a mountain town, with each child groaning under the weight of heavy gold necklaces and other baubles). At last count, the central bank had 2,451 tonnes of gold, valued at close to €100-billion ($128-billion). That’s not a fortune compared to Italy’s €1.9-trillion national debt, but it’s not bad when Rome is raiding the pantry to pay its ever-rising debt.
Germany’s idea is coyly named the European Redemption Pact and it is nothing if not creative. While details are scant, here is roughly how this gilded baby would work. Countries with debts greater than 60 per cent of gross domestic product – the (ignored) limit under the European Union’s Maastricht Treaty – would transfer those debts into a redemption fund, which would be covered by joint bonds. The scheme has been called “euro bonds lite.”
Here’s the catch. Countries using the scheme (most would, including Germany, because of generally high debt-to-GDP ratios) would have to cover 20 per cent of their debt with collateral, payable in gold or currency reserves. Default on the payments and you lose your gold. The “sinking” fund would retire the debt over 20 years.

Read full article here

More on Buffet, Munger, Berkshire and Gold

This is a follow-up on the little article on Warren where it reveals to me the reason why inflation will return and return with the clear intent of destroying the massive debt largely created by greed unbridled by regulation which, to be fair, became and continues to be out-of-date as the world's economy continues to expand.

I like this article by Eric Fry which includes another version of the earlier chart.  It ponders their (Buffet and Munger) establishment view and their approach to talking gold down.

Love this stuff.



On Jelly Donuts and Gold

Source: Eric Fry, The Daily Reckoning  (6/6/12)

"Gold is not merely a great thing to own amidst extreme circumstances. It can also be a great thing to own amidst merely marginal circumstances, for example, if you happen to be living during the tail end of one of the most powerful, world-dominating economic expansions in human history. . .rather than at the beginning of it."

Gold is "forever unproductive," says Warren Buffett, CEO of Berkshire Hathaway.
"Civilized people don't buy gold," says Buffett's sidekick, Charlie Munger. Civilized people, says Munger, "invest in productive businesses."
So let's see. . .Where does that lead us?

If. . .
A) Berkshire Hathaway invests in productive businesses and;
B) Investing in productive businesses is civilized and;
C) Warren Buffett and Charlie Munger direct Berkshire's investments;
Then. . .
D) Buffett and Munger are civilized.
Gee whiz! That's lucky!
But to make sure the world appreciates just how civilized these two civilized gents are, they continuously (and very publicly) belittle both gold and the uncivilized masses who consider it a store of value.
"Gold gets dug out of the ground," Warren Buffett famously observed, "then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
Yes, that's right, anyone from Mars. . .or from Berkshire Hathaway headquarters. But most of the other seven billion folks residing on either Earth or Mars understand that gold has at least some utility. At a minimum, they understand that gold possesses

Friday, June 8, 2012

I like Warren Buffet but I am happy...

I am happy to see his sticking to his knitting.  You can see his from his attitude towards gold in the article from January where he said:

“I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today’s market prices about $7 trillion dollars – that’s probably about a third of the value of all the stocks in the United States.”

“For $7 trillion dollars…you could have all the farmland in the United States, you could have about seven ExxonMobils (XOM, quote), and you could have a trillion dollars of walking-around money…And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally…Call me crazy, but I’ll take the farmland (DBA, quote) and the ExxonMobils.”

I am happy because the performance of his stock, Berkshire Hathaway, shows the effect of our present economic condition on the best-in-class of the US economy.  This is what gold will (and is being albeit in the background at present) be used to fix.  The effect of the accumulated shared debt is a knot so tight all growth is being strangled.  It simply must be loosened.  The debt will be reduced in value.

This is why inflation is a good thing.  The alternative actually is austerity which handled poorly will lead to depression and which if handled well by large sainted masses of participants will crawl along much like the chart below for a long time.

The present potential for a bottoming of gold equities offers the greatest leverage for returns on investment within this range and so is, in my opinion, a fertile sector for some stock research. Best of luck everyone.


Gold Equities & Gold Price Divergence Nearly Over

We've all been waiting for the end of the market distortion that has resulted in gold bullion value and gold equity values going their separate ways.

The battle to keep gold in an 'accumulation' range for central bank buying is almost over.  While gold will be bouncing as the super-traders in the employ of government work hard to keep it in the desired range.  But the equities will be catching up soon as investors sidelined by the fierce short 'para-financial' black-ops traders realize that gold equities are where to be before the run.

You will see more and more articles like the following one in the coming couple of months (even while the talking heads babble on about the confusion that they see all around them).

Accumulate good gold equities now...


Gold Divergence from Equities is about to End

by John Galt
June 8, 2012 05:30 ET

On my radio program of June 6, 2012 I pointed out how gold has been leading the equity markets. In this commentary, I shall show how the two divergences from 2007 to this year will end and result in a short term collapse in stock prices. First, let’s review the chart of the S&P 500 versus the GLD ETF from 2007 to June 7, 2012:

The initial divergence as highlighted in the chart above shows that gold and equities had a wide spread with no indication of economic problems and the proverbial “risk on” trade that was initiated by the Federal Reserve under Alan Greenspan could continue for some time. There was no reason to invest in gold as the economic perception was that there was not a detectable economic emergency or crisis. That false perception changed after the collapse started in February 2007 as gold climbed sharply only to end the divergence in the summer of 2008 where everything started to collapse. After the reflation trade of 2009 began with the Fed’s QE1, the GLD (aka gold) led the S&P 500 until the summer of 2011 where the second major break in the chart pattern occurred. This break was due to the Federal Reserve’s half measure known as “Operation Twist” where as gold was predicting a massive Quantitative Easing program which never happened.

The second chart puts the past year’s events into sharper focus:

The chart illustrates with the two blue and red arrows the synergy between gold and equities moving in tandem until the break last summer. After the  perceived failure to reflate an economy that would deteriorate in the future was realized, the circled portion of the chart indicates the double top in the GLD/Gold which has been in a long term decline since last summer. Meanwhile equities diverged from the move in gold and rallied one more time in 2012 as the markets have been given a Pavlovian like reaction to believe that the Fed would bail out everyone regardless of the economic consequences.

Gold however has warned that this is not the case. When you analyze the year long bear market in gold prices it becomes apparent that this consolidation has one more major move to the down side and support in the GLD is between 124-128, in the physical gold between $1260 to $1360 per ounce...

Read full article here

Gold's new location: Ground Zero "It's all up from here!"

We are watching the formation and coming confirmation that the bottom in gold is in.  Inevitably this also means that the world's economy is hitting its head on the ceiling for growth as a result of financial damage.

It is already clear that we cannot get ourselves out of the mess created by our management of the fiat system and its built-in requirement for the type of monetary imbalance that encourages the growth of apparent wealth (like apparent wind if you are a sailor).

Because it is clear that austerity will limit the return to economic health political bodies will opt for the solution that will destroy the value of the debt already held.  That solution is inflation.  Printing money. 
Returning us to the human-shared notion that gold is money.  The central banks have been bulking up with gold.  China and the US have already planned how the movement will happen in such a way that China will not lose the wealth it presently holds in US dollars.  That have been and continue to employ US dollars in the accumulation of gold.  They are not alone either, all central banks have been doing the same.  The super-traders job has been to manage the gold price by direct and indirect manipulation. 

Regardless of the co-ordinated misdirection, miss-information and disinformation distributed through various public media one must keep focused on the real prize.  It is coming for those who do not lose their heads in the storm of BS.

As Marc Faber says:

There's No More Downside For Gold

Gold which was trading near one-month highs yesterday, is off 0.47 percent today,and at $1,626.20, is well off its 52-week high of $1,922.
Marc Faber, author of the Gloom, Boom and Doom report was on Bloomberg TV saying gold has bottomed out:
"I'm not sure that Gold will not make a new high this year, but I think we've bottomed out and some gold mining shares have become very very inexpensive compared to the reserves they have.
And i think that in the current environment where it is clear that the worse the economy becomes the more the money printers will be at work, that to own a currency whose supply can not be increased at the will of some clowns that occupy the central banks is a desirable investment."

Wednesday, April 25, 2012

Gold Bears... Be Afraid, Be Very Afraid

Bill Gross just put out a warning in the form of an investment in QE3.  The past QEs have been very good for gold.  So gold bears would do well to pay heed.


This guy has placed a $133 billion bet QE3 is going to happen

Frik Els | April 20, 2012

After failing to scale the psychologically important $1,800 an ounce bar at the end of February, gold has taken a few hard knocks on the way to its current trading level of around $1,650.

The spikes downward have all been thanks to Ben Bernanke and the US Federal Reserve and the fortunes of the precious metal seem increasingly linked to monetary policy in the US.

At the start of April for instance gold dropped some $60 an ounce in a single session when Fed minutes appeared to indicate a third round of so-called quantitative easing was off the table and its policy of zero interest rates may be coming to an end sooner than previously thought.

If the Fed stops flooding markets with cheap money, gold’s allure as a storer of wealth and an inflation hedge is diminished. Tighter monetary policy also strengthens dollar, further hurting the yellow metal.

Quantitative easing has been a massive boon for gold. The Fed’s new near-zero interest rate policy and purchases under QE1 kicked off on 16 December 2008. On 15 December 2008 an ounce of gold cost $837.50. Late on Friday, June contracts in New York changed hands for $1,642.80.

That’s a 96% improvement for the precious metal on the back of QE1 and QE2 (first mooted in August 2010) and ‘Operation Twist‘ (started in September last year and set to expire at the end of June). Before QE1 the Fed’s total assets were below $1 trillion. It is now closer to $3 trillion.

Read full article here

Monday, April 23, 2012

Manipulation makes Us a Gift of Gold and Silver

Manipulation of precious metal prices?  Yes?  No?  Regardless of what you 'believe' Harvey Organ's view must be taken into account when trying to read the planted (IMO) tea leaves that are left to the rest of us who don't 'own' this market.


Harvey Organ has been analyzing the bullion markets closely for decades. The quality and accuracy of his work is respected enough to have earned him an invitation to testify before the CFTC on position limits for precious metals back in 2010.

And he minces no words: Gold and silver prices are suppressed. With extreme prejudice.

In this detailed interview, Harvey explains to Chris the mechanics of how he sees this manipulation occurring, why he predicts this fraudulent pricing scheme will collapse soon, and why it's critical to be holding physical (vs. paper) bullion when it does.

The real suppression of the metals started in 1988. That’s when the leasing game started and was invented by J.P. Morgan.

These guys would go around to the mining companies and say, “Listen, I’m going to pay you for your gold in the ground and I will sell it. You just pay me as you bring it out.” So that was cheap financing to the miners. Barrick, the biggest mining company of them all, went in on this and it financed a lot of Nevada projects.

Once the leasing game came, the actual selling, the extra selling, suppressed the price. In the first five years, it started at maybe three hundred to four hundred tons. It didn’t start to get really bad until probably ’97-’98 with the Long Term Capital affair. And that’s when the leasing started to become around maybe 1,000 tons of gold. And it hasn’t stopped.

And silver is the same.

And that’s why you've had a long-term, 20 years of suppression of the metals. The problem now is that the physical is now gone. Where is going? It’s gone from West to East.

A lot of people don’t know that China used to refine close to 80% of the world’s supplies of silver, because it’s very toxic. Up until probably ’85, the Chinese handled 80% of the world’s refining of silver. Now they're down to 40%, but that’s still a major part of China’s industry. They are keeping every single silver ounce they refine, and gold. They are keeping it for themselves; their reserves are rising (though they don’t tell exactly). Two years ago they went up to 1,054 tons and I can assure you it’s probably triple that now. These guys are not stopping. Just like they are not stopping in oil. They know what the game is and they are slowly taking all their U.S. dollars that are on their shelf and converting them to gold, oil, copper – anything that’s real.

Continue to read this article.

Friday, March 16, 2012

Goldbggr Brief: New Carolin Gold Corp.

This is a rare opportunity, in my opinion, for investors please review—do your own due diligence and speak with a qualified person before making any investment decision.

I believe this is a very unique opportunity for investors interested in the long term value potential for gold equities in terms of current conditions and forward currency stability concerns. It's present valuation given the recent P.E.A. done on the gold resource contained in the old Carolin Mine tailings impoundment is highly disconnected from the implied fundamental present value.

Presently I am working with New Carolin Gold Corp. and own shares in it. —G

Goldbggr Brief on:
New Carolin Gold Corp.
Closed Friday March 16, 2012 at CDN$0.145

The LAD.V share price at $0.145-0.165 is quite undervalued given the facts. The question is when will others see the potential growth value here?

As a near-term gold producer:

LAD.V has a property with 5 historical underground gold mines on it
- last mined actively in 1982-84 - closing after the gold price fell below US$350/oz

The key points for being able to quickly become a gold producer here are the Company maintains BOTH the mine permit and tailings impoundment permits in good standing.

The project location is in a stable mining-friendly jurisdiction (2 hours drive from Vancouver in British Columbia, Canada).

Tailings recoverable gold: The Company has assessed the economic potential for gold recovery from the old Carolin Mine tailings impoundment. The recoverable resource has been stated that the "project as designed is expected to produce a total of 24,483 ounces of gold contained in concentrate" at a capital cost of $8.3 million and a "current industry estimate of USD $1,100 per oz as a long term gold price".

See the news release:
New Carolin Gold Announces Positive Preliminary Economic Assessment Of The Tailings Reclamation Project:

The Company is also awaiting two NI 43-101 resource reports
1. On the 40,000 metres of drilling done on the Carolin Mine which need to be brought up to NI 43-101 standard having been originally reported on before the implementation of the NI 43-101 standards for resource calculation.
2. On the open pit potential of two separate zones

However, New Carolin Gold Corp. is doing BOTH mine development and exploration.

As an gold resource explorer:

The key point being that even though there are several small past producing underground gold mines on the property there has been very little actual exploration to define the size of its gold resource.

Recent airborne geophysical exploration offers a glimpse on what they are looking at. See their recent "Airborne Geophysical Survey" (see news release below).

From the January 19, 2012 news release:

New Carolin Gold Announces Results of Airborne Geophysical Survey Over The Ladner Gold Property

Thursday, 19 January 2012

"...The results indicate the presence of a major magnetic linear structure that can be traced for over 18 km within the Company’s claims that comprise in part the Coquihalla Gold Belt. This linear structure is attributable to the presence of serpentinite, which is associated with gold mineralization. The calculated vertical gradient map also indicates the presence of northeasterly striking fault structures. The northwesterly trend of this magnetic linear structure parallels the major Hozameen fault structure.

The Emancipation Mine, Carolin Mine, Idaho/Aurum Prospect, Montana Prospect, McMaster Zone and Georgia No 2 Prospect all occur along this magnetic boundary. The Pipestem Mine is located approximately 800 metres to the east of this contact, but also higher up in the stratigraphic sequence. There remain several kilometers of untested ground along this magnetic anomaly.

The Total Count radiometric data (sum of potassium, thorium and uranium values) indicate the presence of potential felsic rocks in the northern part of the claim area. Gold prospects in this area are associated with felsic dykes.

The vertical gradient and total count radiometric maps can be viewed on the Company website:

New Carolin Gold Corp. has a past producing gold mine (Carolin Mine) with unknown resource dimensions and many important reasons to properly assess it fully. The Company has already identified a "major magnetic linear structure that can be traced for over 18 km within the Company’s claims" (see Jan 19th news release above).

With so many historical mines the potential to expand the resource is very high as indicated already in this early stage of exploration.

New Carolin Gold Corp. will be focusing on BOTH the delineation of the dimensions of its potential gold resource and restarting gold production as it moves forward.

The money:
 The Company just closed two private placements for a total of approximately $750k
2. PEA (Preliminary Economic Assessment) of the tailings (see March 14 news release) shows a recoverable 24,000 oz gold-resource providing the company potential cash flow.

The Company is presently awaiting the results from two NI 43-101 resource reports on:
1. the 40,000 metres of drilling done on the Carolin mine (before the advent of the NI 43-101 standard) and;
2. the open pit potential of two separate gold zones

I believe this is still very early days in the development of New Carolin Gold Corp. into a near-term junior gold producer with real potential to increase its resource asset. Given that the behavior of gold stocks share valuation in general relative to the valuation of gold and taking the existing conditions of the current financial and currency instability I believe that we could be seeing good upside potential across precious metals equities in general. This is my opinion.

Presently LAD.V is trading between $0.145 and 0.17. If I am right, in my opinion, I wonder for how long LAD.V's share price will remain at this level.

Tuesday, February 21, 2012

Gold is Deepening its Hold on the World's Financial System

So much afoot in the world of shifting financial power.

It is my opinion that the inflation that affects the price of gold will NOT be because of inflation in US$—the US$ is on its way off center stage. The 'reserve currency' battle is already being lost where the US dollar is concerned: countries are already actively avoiding using the US$ in trade agreements like the one now happening between China and Japan. But it's not just in trade agreements. Iran in having been kicked out of most of the world's central banking cabal is now using gold as a currency. Read this:

"...This week we're informed that Iran is using gold or oil to buy food as new financial sanctions have hurt its ability to import basic staples for its 74 million people. The difficulty paying for urgent import needs has contributed to sharp rises in the prices of basic foodstuffs, causing hardship for Iranians with just weeks to go before an election seen as a referendum on President Mahmoud Ahmadinejad's economic policies.

New sanctions imposed by the United States and European Union to punish Iran for its nuclear program do not bar firms from selling Iran food but make it difficult to carry out the international financial transactions needed to pay for it.

"Grain deals are being paid for in gold bullion and barter deals are being offered," one European grains trader said. Some of the major trading houses are involved. Another virtue of using gold is that barter or gold payments are the quickest option to get imports..."


"...Iran is a classic case of why gold is a last resort, reserve asset. Iran's currency is worthless outside its borders; its name is mud in the developed world -it's this that Alan Greenspan described as "in extremis".

He said, "Gold is money, in extremis". For Iran that is a very real and present situation now and gold is providing a rescue for them. It's doing the job it's expected to do. The most prudent investors in the world are central banks and those that have made sure they hold a good quantity of gold. Those who can now afford to are buying it up as fast as the market will allow.

Right now, the price of gold in the Iranian currency is sky high, but the value of that currency outside the country is zero. So much for gold prices in local currencies! When such a situation is reached, then what we have repeatedly said comes true,

"It's not the price of gold that counts, it's the number of ounces you have!"

Are there countries out there that could move down the same road as Iran? Can developed countries face the same situation? Maybe not so far down that road as things stand now, but in an uncertain future, that could happen to several rich and poor countries including the U.S.

  • If the dollar cannot hold its sole, reserve currency position and foreign buyers cease to accumulate more, the value of the U.S. dollar will fall heavily. The U.S. will then be forced to stop issuing dollars for imports but rather sell goods to earn foreign currencies -the same as all other nations have to.

  • If the Eurozone fragments, those nations leaving the Eurozone will have to turn back to their old currencies and a two-tier currency system. Then their gold reserves will take on extra importance. The continued doubts about Greece tell us that Greece is moving closer to default and to "In extremis" times. We now hear that despite it cooperative implementation of austerity measure Portugal's debt is still rising strongly as a percentage of GDP. As cash flow to repay debt contracts, it is inexorably moving into extreme times..."

The above is from Julian D. W. Phillips article:

Why Gold, 'In Extremis?' Are We There?

Read the full article here.

and gold continues to return to its position as the basis for money in OPPOSITION to the fiat currency—more from the same article:

"...We are watching the euro struggling stay up against the dollar despite the massive support the currency swaps have given the euro. Just one bank signaling distress may well be the single shot that started the First World War. Then lack of confidence in the monetary system in Europe will force a wider use of gold in support of currencies.

Gold as Collateral - to unclog money flows, but at any price

We have seen gold used as collateral by commercial banks and behind closed doors by sovereign states in the last couple of years. This has discreetly mobilized gold and returned it to the monetary role in a critical but shadowy way, so far.

Gold brings interbank/international liquidity to clogged credit markets, acting as a guarantee of repayment and allowing for the lowering of interest rates on interbank/international loans. This role supports the paper money system and does not oppose it. Banker's like that! They can love as well as live with gold in that role.

Whatever way gold is used, whether it be in an Iranian situation or to support the monetary flows between institutions, we are seeing gold's value prove time and again a vital, active, reserve asset!..."

Read the article here.


Wednesday, February 1, 2012

More "Go Long" Gold Junior Chatter

Another point on this wagon that appears to be in for a ride... a point of view that has a technical spot light: the S&P TSX Venture Composite Index (CDNX)

The Index looking like its definitely come off the bottom and broke the down trend that ran for most of last year. For the careful: wait for the confirmation that the down trend is officially over. Or put on a little risk and start accumulation your favorite targets. I believe the index will trade a little sideways for a bit yet perhaps waiting for the golden cross formation.

I haven't waited. I don't believe we get many opportunities like this and so I am acting. Remmeber to do your own due diligence and speak to an accredited financial advisor.


Here are some excerpts from Matt Badiali, editor, S&A Resource Report :

It's Time to Get Long Junior Miners

Wednesday, February 1, 2012

Things are looking bullish for junior mining stocks...
Junior resource stocks are some of the riskiest, most volatile assets in the market...
...From peak to trough, the Venture Index lost about 45%.
Today, though, it looks like things are turning around... The Venture is up 16% over the last month. And it's crossed above its 120-day moving average – a simple trend indicator. I think this could be the beginning of another bull run in junior resource stocks. The conditions are perfect...

The long-term bull case for gold and silver is still intact. The U.S. and Europe still have huge debts and unfunded liabilities that can only be paid back with devalued paper money (which is bullish for precious metals). And the growing economies of Asia are still accumulating more gold each year.
After almost a year of terror, all the bad news is priced into the market. Several companies were trading for less than the cash in the bank. And some of the best stocks in the sector dropped 80%-90%.
But now, investors are tired of being afraid. And it looks like the world might not end... So some investors are dipping their toes into the risky pond again. The Venture Index is within spitting distance of breaking its November high at 1,670. Once it does, the rally is official...

Read full article here.

Tuesday, January 31, 2012

Another Mining Analyst Asks: Is It Time to Get into Gold Junior Mining Plays?

Looks like there is a lot of talk building around this sector.

In this article by Philip Ker he points to the opportunities to: "identify lower-risk opportunities in projects that are backed by strong management, and ones that can provide value growth in the future"

It all bodes well for little companies like New Carolin Gold Corp. (LAD.V) over the coming year in my opinion.

...and yes i do hold shares of LAD.V


Here are some excerpts from the article ·see link at bottom to read full article.

Is It Time to Get into Gold Junior Mining Plays?

Philip Ker, a mining analyst for Canada-based Union Securities Ltd., says while current market conditions are affecting the junior mining space, they are also helping investors to identify low-risk opportunities and projects that may provide future value growth. In this exclusive interview for The Gold Report, Ker discusses how the industry will need to continue to see positive news, especially from senior and midtier producers, which should trickle down to the juniors.

he Gold Report: Philip, welcome. In a recent Union Securities research report, you wrote, "Despite global market volatility and foreign debt issues, we believe market valuations for mining companies, particularly in the precious metals sector, appear to be at incredibly low prices, on level with values seen prior to Q310's commodity bull run. This is regardless of gold and silver being approximately 30% and 50% higher, respectively." I agree that current share prices in the junior precious metals space are comparative to that timeframe, but we have been in a risk-off sector investing environment since last July, and you are operating in a high-risk sector. Share prices are low but without investors bidding up prices, how are we going to see a rebound in junior precious metals equities?

Philip Ker: We are seeing current market conditions affect the junior mining space, but also educating investors and helping them identify lower-risk opportunities in projects that are backed by strong management, and ones that can provide value growth in the future. We will need to see continuous positive news, particularly from the senior and midtier producers, at which point it should give more traction toward junior equities. I also expect mergers and acquisitions (M&A) activity to be a key factor for the juniors as a result of the strong balance sheets senior producers continue to build; as they look to replenish diminishing production portfolios they will target junior developers coming online.

TGR: Are you saying to stay on the sidelines at your peril?

PK: Not necessarily. It is more or less identifying the correct opportunity and the projects that are most targeted for growth that would be a good fit for a senior producer in its portfolio. ...
TGR: One thing, though, with regard to M&A activity, we recently watched Kinross Gold Corp.'s (K:TSX; KGC:NYSE) shares fall about 20% after it announced there were problems with its Tasiast gold mine in Mauritania, which it acquired through the takeover of Red Back Mining Inc. (RBI:TSX) early last year or the year before. Do you think something like that might make the majors think twice about dipping into the sector with some juniors with prospects that look promising?

PK: What was skeptical about that original takeover was that Kinross was stepping outside of the gold space and more into a copper play. Getting that project into development has been a task for Kinross and, as seen recently with the write-down along with the higher-than-anticipated costs, affected them considerably.

TGR: Will that have any trickle-down effect on the sector at large in terms of potential takeovers?

PK: No. There is always going to be M&A. The seniors need to do their due diligence in order to identify the best-fit projects and ones that they can develop or take over at a stage where they can restructure or integrate the management and more efficiently operate the new project.

Read full article here.

This is The Year for Gold and Silver Juniors to Shine

You gotta love this year so far in the markets: Stock markets are performing like there's no problem. This could mean that the 'owners' of our world have their servants working the crowd seeking 'buyers' for the coming reality-check which may be delivered via a nasty short attack across all markets as the 'sleepeze' wears off and Europe finds more challenges again. Or it could mean that, because money will stay cheap, what we are seeing is actually a form of inflation—'throwing money from a helicopter' (to quote Bernanke). Or, of course that the world is doing wonderfully well thank you very much and there is no real problem LOL.

One thing which is for sure, in my opinion, is that regardless of the reasons gold will not fall and last year's under-performing gold stocks will start performing and price appreciation is almost inevitable.

In this interview from The Gold Report with Matthew Zyistra there reason for optimism:
"There is definitely a good selection of underpriced junior gold and silver stocks available before the rest of the herd finally wakes up and smells the gold."

Junior gold, silver and pgm stocks to perform in 2012

After a tough year in 2011, there is definitely a good selection of underpriced junior resource stocks available for astute investors to focus on before the rest of the herd finally wakes up and smells the gold. In this exclusive interview with The Gold Report, Matthew Zylstra, mining analyst at Northern Securities, reviews the gold, silver and PGM markets and tells us why he believes that better times are ahead for junior miners in 2012 and which ones he particularly likes at current price levels. - Zig Lambo of The Gold Report (1/30/12)

Excerpts from the Interview:

The Gold Report: When you last spoke with The Gold Report in early March of last year, gold was trading around $1,420/ounce (oz) and silver was around $36/oz. Silver peaked about $49/oz in late April and then gold hit around $1,900/oz in September. Now we're back up above $1,700/oz on gold and about $33/oz on silver. Where do you see these prices going this year, after it appears that they have likely bottomed out?

Matthew Zylstra: We're long-term bulls on both metals. Gold has been correcting since September and it looks like it bottomed out around $1,500/oz. We believe the recent decline is a normal pullback in a longer-term uptrend where nothing has really changed to the outlook. We see a perfect environment for the metal-concerns over our currency debasement, negative real interest rates, geopolitical friction, etc. I expect gold will reclaim the 2011 highs and could reach $2,000/oz.

For silver, the picture is less clear. Silver is, in part, an industrial metal accounting for around 50% of demand and less of a currency. Silver peaked at almost $50/oz in April 2011 and the price has been very volatile. We think the move is a correction, again, in a longer uptrend going back to 2003. I expect silver will trade around the mid-$30/oz range this year.

We actually feel platinum has a lot of potential. South Africa, Zimbabwe and Russia account for about 90% of platinum production and there's a scarcity of good platinum metals group (PMG) projects outside those countries. We expect increased investment demand and believe that supply disruptions, as well as resource nationalization concerns, will drive the price higher. We note that Sprott Asset Management has formed a physical platinum and palladium trust, which could boost investment demand. ...

TGR: So, what do you think is going to be some sort of catalyst to get people more excited faster? Or is this just going to have to be a gradual progression and we are going to have to wait for $2,000/oz gold and $50/oz silver for people to really get into this market?

MZ: The disconnect between gold/silver prices and mining company equities has grown considerably. The sector is cheap by historical standards when you consider the price of gold miners' shares relative to the price of gold. The Philadelphia Gold and Silver Index (XAU), which is an index of 16 precious metals and mining companies, is close to the lowest level it has been since the 2008 crisis relative to gold. We expect this ratio to gradually work its way back to the average. If we see gold mining stocks move up to even the low end of their historical range versus gold, it will mean a significant gain for many of these companies.

Increased merger and acquisition (M&A) activity in the sector will get people interested in a lot of these companies. As the price of gold and silver continues to rise, the economics become very compelling, especially for large- and mid-cap companies to acquire smaller players.

More interest in precious metals will help too. With what I see as a developing currency war-a race to devalue-I think more investors are going to turn to precious metals and related equities.

TGR: It certainly seems like there are a lot of smaller companies out there with some interesting looking projects that may be sitting ducks for being taken over. If they have to keep going back to the market to raise more money and create more dilution, that could be a problem. What's your thinking on that?

MZ: Small exploration companies are going to continue to need funds to advance their projects, and costs have been increasing. That's a major problem. The need to raise capital isn't going to change but we are seeing alternative ways of financing such as gold and silver streams, alternative debt arrangements and joint ventures, which mean less dilution. ...

Read full article here.

Tuesday, January 17, 2012

This Year and the BS from Last Year

Well, Happy New Year (the one somewhere between the Christian and the Chinese one)...
Time to get back at it!

My points to start this year:

Gold bubble? Utter nonsense—is the financial crisis over? Not by a long shot!

Last year was a year of downside surprises—this year will be a year of upside surprises.

Will Europe disintegrate? Not a Chance in heaven or hell.
  1. The whole world has a vested interest in healing this problem
  2. The Germans, always complaining in the press. HA HA HA. In reality that's just entertainment for the fools who still watch the politician-pet-dogs of the owners of our world. Just know this: If there was no Euro what would the value of the Deutschmark be? The point being the Germans for all their bellyaching would find that their wonderful top-of-class products would be far too expensive for the rest of the world. Would that be a good thing?
  3. Greece is full of Germans.
The manipulation of silver and gold is becoming increasingly dangerous for the deep-pocketed ones and as retail investors storm back into the markets this year the owners-of-our-world are already very much invested in gold and silver (metals) and continue to accumulate. Why do you think they were really manipulating silver and gold?

The wolrd is actually a simple place. Just turn down the noise from the financial commentators and you will hear the music. Turn away from the disinformation and distraction of the dust from the financial sector's spinning wheels and simplify your investing approach. Time to be like Jesse Livermore!

I've included several articles of interest below.

2012 Gold Market Outlook

Gold Investing News: Michelle Smith

...While there is a substantial amount of optimism about gold’s performance in 2012, there are also an abundant number of warnings that price declines—drastic ones by some accounts— are also likely, especially in the beginning of the year.

A Deutsche Bank report notes that since the onset of the financial crisis over four years ago commodity markets have to contend with increasingly frequent longer lasting episodes of heightened asset market volatility, and that risk aversion is likely to continue through 2012.

Last year undoubtedly taught a lot of investors a lesson about risk and volatility. Many had turned to gold because of its reputation as a safe haven and the fanfare surrounding that status. Those who were in the game for safety and wealth preservation were prepared to sit back for a breather and watch prices climb. Then, to their surprise, gold revealed it also has a risk personality.

Other investors prioritizing margins, such as fund managers, contributed to the shock when they liquidated positions to obtain cash and limit losses. Those sell-offs helped shake investor confidence and perpetuate concerns of a gold bubble. That shaken investor confidence may continue to weigh on the metal for sometime.

Read full article here.

A 12th Straight Year of Gold Price Gains?


December's losses were "just noise"...

GOLD ANALYST Joe Foster has been in the mining and investment businesses for over 25 years. He is the lead investment team member for several of Van Eck's Gold ETFs, including the company's Market Vectors ETF Trust – Gold Miners ETF (GDX) and Junior Gold Miners ETF (GDXJ).

Joe Foster is frequently quoted in the Wall Street Journal and Barron's. He's also a frequent guest on CNBC and Bloomberg TV. Hard Assets Investor Managing Editor Drew Voros spoke recently with Foster on the gold market in general as well as the Gold Mining sector.

Hard Assets Investor: Do you think the Gold Price will see its twelfth straight year of positive gains in 2012?

Joe Foster: I continue to think that we're somewhere in the middle of the bull market. We're nowhere near the end. And having that outlook, I think we'll trend higher in 2012.

HAI: Do you anticipate that central banks will continue to be net buyers of gold in 2012?

Joe Foster: In 2011, central banks bought almost 500 tonnes of gold − at least that's what the estimates are saying − which is a tremendous amount of gold. And central banks are Buying Gold for the same reason that we are, for the same reason we're investing in gold-mining stocks. They see a tremendous amount of uncertainty.

They see countries that debase their currencies. They see the debt problems we've been reading about in the papers. Central banks are looking for something that's going to hold its value. The motivation for Buying Gold will continue to be there into the foreseeable future, so we expect another heavy year of central bank buying.

HAI: Why is gold suddenly so tied to the hip of the Euro?

Joe Foster: The trading pattern for gold over the past several months has been a little bit unusual compared to what we've seen in earlier phases of the cycle.

Despite all the turmoil in Europe, gold has had a high correlation with the Euro. It's not acting as a safe haven as it had earlier in 2011. It's had a split personality lately. Some days it will trade as a safe haven; some days it will trade as a risk asset. The market can't quite make up its mind how it wants to trade gold at the moment. I think that's just sort of a phase that it seems to be going through.

Read full interview here.

Junior Gold Carnage

AheadOfTheHerd: Scott Wright

...Since its low of $256 in 2001, gold has soared 640% to its high earlier this year. And with only a couple days remaining, gold is looking to close out 2011 with a 9%+ gain despite its recent selloff.

But while gold was one of the top-performing assets in all the markets this year, the same can’t be said for the stocks of the companies that bring it to market. You’d think that gold stocks would have been a sector that worked for investors in 2011 considering gold’s strength, but they had a dismal year. And this is alarming considering the nature of their business.

Exploring for and mining gold is a risky business. Mining companies are faced with geological, operational, and geopolitical risks among the many. On top of this they are slave to market risk, with the price of their product at the mercy of traders. If these companies are to be successful they need to discover economically-feasible gold deposits, and then produce the metal at low-enough costs to deliver profits for investors. And many quality miners are doing just that.

But in order to entice investors to take on the risks of owning these companies, their stocks simply must outperform gold. If they don’t materially outperform gold, then it makes no sense to own gold stocks. Investors would be better off just owning the metal.

For the most part over the course of gold’s bull gold stocks have indeed outperformed the metal. Investors have seen legendary gains in some of the elite explorers and producers, outperforming the metal by many multiples....

Read full article here.

Even As Schiff Sells Gold, Mining Stocks Hold Their Own

Forbes: Addison Wiggin

...“In this environment, to make the big money,” says our old friend Rick Rule, “you need to enter [gold] stocks that aren’t institutional momentum favorites. Those stocks aren’t going to work.”

Instead, you need to look for “the kinds of stocks that are going to be sold to the Rio Tintos and the BHPs and the Newmonts and the Barricks of the world. The buyer this year is going to be the industry.”

Thus, “the impetus for the market in exploration stocks this year will be takeovers. The companies that have done a good job, although they may not find traction among institutional or retail investors, will be taken over by larger mining companies.

“These larger companies have both the need to replace production and the financial strength to complete the takeovers and to build out the discoveries that have been made by the juniors.”

As a result, Rick sees the majors paying substantial premiums for the juniors — more than you’d normally see.

“If the industry sees $2 billion in discounted free cash flows and they see a market cap of $600 or $700 million, they are willing to pay $1.3 billion to secure net-present value. So it’s possible that you will see 70%, 80% or even 100% premiums in bad markets, for good assets, in select names.”

Options traders are already sniffing this out...

Read full article here.


The Real Goldbggr