Timely gold report Bill, I bought this morning because of it, thank you.

Awesome Bill, how do you do it? One day we will hopefully learn.

Hooray for me. At the open as soon as I saw that Gammon had bad news I sold my position. Didn't really care that it was identified earlier as one of few outperformers and that it was down 10 percent on the open. 'Cause it kept going down this morning and these miners get punished big time for a long time. EGO though is recovering. Harmony is not.
Thanks to Bill I replaced it with the impressive iamgold, which is now substantially higher than at the open.
Since following gold this spring, first time that miner stocks have gone counter to the equity mkt when the latter was this crummy. Great insight of Bill that this was possible and even likely.

My fav image inspired by Bill is the one with gold bricks in my pockets as i walk across treacherous waters. One to remember into rallies of any asset class that I'm holding.

Second ave..
perhaps you could help me with this. Could not agree with Bill more that one HAS to manage risk. My brain is so wired to sell with the bend in the trend (your turn of phrase) that I'm squandering gains and accept that I need to learn another way. Thick as a brick I do not understand how selling a partial position into a rally reduces "cost basis." For example if I sell 50 of 100 shares, the remaining 50 shares still have the same cost per share. Though, if the position had doubled in value I've used my profits to pay for the original investment...now, playing with house money. Is this the intent? (Caution, on narcotics past few days as I wait for a root canal evaluation.)

ALOHA !!

Somebody please explain how the Euro is any better than a US Dollar? Both fiat currencies are busy sponging up unprecedented debt while they sell off assets like manufacturing, infrastructure and gold. Remember some entity was buying all that gold they have been selling! I believe those entities are China(Asia), Russia and OPEC countries.

I love the logic ... SAVE THE DEBT-SELL THE GOLD!

It is nice to know that when I retire my Social Security Trust Fund will be full of IOUs from Fannie Mae and Freddie Mac! It behoves all Americans to consider not having any Social Security checks to look forward to ... like Katrina refugees ... WE'RE ON OUR OWN! Beware your 401ks could be taxed at ever higher rates in the future via capital gains tax in excess of 28%. I make no contributions to my retirement account. Desperate and corrupt governments commit desperate and corrupt deeds!

GOVERNMENT IS ONLY AS HONEST AS ITS MONEY ...

READ ON:
ECB, Fed Inject Cash to Ease Fears

The European Central Bank scrambled to head off a potential financial crisis on Thursday by making an emergency injection of E94.8 billion worth of funds into the region's money markets, after signs that liquidity was drying up.

The level of funds markedly exceeded the ECB's only previous major intervention on the day after 9/11, when it lent E69 billion followed by E40 billion over subsequent days. Even more striking was its one-day pledge to meet 100 percent of all funding requests from financial institutions ...

Link: http://biz.yahoo.com/ap/070810/europe_market_jitters.html?.v=11

Like Bill says this weekend the G20 are looking at ways to avert a disaster and that means pound gold! It is a battle royale ... paper vs gold!

2nd Ave

PWE

I was doing some research on energy trusts and one caution I noted was that if their oil souces start to decling then the dividend will start to be lower and the price will decline. They will have to use cash to buy more production. Is there information as to the existing and future sources for PWE?

Thanks. jfs

Btw: My daughter just graduated from UCI. Just a great school. The first move in day is crazy.

jfs-i'll have to do some research on PWE...BernardF referenced the trust a couple of days back as a recommendation by Bill from last October...

thanks for the kind word re UCI...

Dear jfs and 2nd_ave,
I suggest you visit www.mcdep.com which is operated by Kurt Wulff, a top notch energy analyst. Just click on Stock ideas and scroll to PWE for its reserves.

BruceThomas-thanks

McDep is positive on the trust, recommending what amounts to an overweight rating: http://tinyurl.com/2dtagx

Having said that, a quick review of Bill's perspective on Canadian Income Trusts shows he is less than enthusiastic about them, although PWE is among six of his picks from May 2006. Below is a condensed amalgam of his comments (note the last paragraph, which has me reconsidering my position as a long-term holding):

"Senior Canadian banker TD Newcrest covers the majority of good quality companies that trade on the TSX. On May 1, they released an Action List. Have a look. When I get the time, I'll review each of the 33 picks for you.
For those conservative investors who are oriented to Canadian income trusts, there are six picks (first price in CAD was current at time of report May 1; second is 12-month target):
Diversified Income Trusts
Chemtrade Logistics Income Fund CHE.UN $10.21 $14.00
KCP Income Fund KCP.UN $9.77 $13.50
Sleep Country Canada Income Fund Z.UN $27.35 $33.00
Oil & Gas Royalty and Income Trusts
Penn West Energy Trust PWT.UN $43.27 $46.00
Trilogy Energy Trust TET.UN $20.89 $22.00
Power Income Trusts
Macquarie Power Income Fund MPT.UN $10.21 $12.00As you know, I happen not to be a big supporter of trusts. I think it is a quirk of Canadian income tax law that permits slow-growth corporations to return capital in the form of dividends, and in doing so attract the interest of long-term conservative capital owners.
If all corporations were structured as trusts, with high dividend payouts, and secondary offerings required for acquisitions, the playing field would be levelled. Then traders would simply buy shares of the best quality companies, and the so-called "trust" issue would die.
Be that as it may, the broad market today (stocks and bonds) is at ultra-high risk levels, which means that serious owners and managers of capital need to protect their assets more than usual.
So today I am looking at Canadian Income Trusts. There are some " certainly not all " that bear watching and considering as a place of relatively safe haven.
The ones I'll write about later today will be on the recommended list of Canada's major broker-dealers for fundamental reasons given. I respect their research. The value-add I'll try to bring to the table is to filter those many recommended trusts to a smaller list that to me make sense to a conservative account.
So rather than waste anybody's precious time, let me say (again) that there are some good Income Trust vehicles that pay very high dividends because of the unique legal and financial structure plus a solid business model and prudent management oversight. The latter two features are missing in many of these companies, unfortunately.
RBC Capital Markets " Canada's largest broker-dealer " has issued the following report on this subject. Income oriented accounts ought to read the material. Download RBC Aug 9 Income Trust report.
As for me, I'm not a big fan of these trusts, but, as a former RBC DS employee, I have the utmost regard for their professional work.
About the trusts, I think the accounting doesn't make sense. I believe that, due to crazy accounting rules, a lot of the dividend is just a return of capital, and that the financial structure is set up so as to reward those companies that don't do much in the way of capex spending, proper facilities maintenance, and so forth.
Having said that, I admit I'm not an expert. For that expertise, I turn to Al Rosen a Toronto-based forensic accountant who happens to be one of the most brilliant people I ever met. There's nothing about accounting this man fails to understand. And he hates these income trusts. So buyer beware."

Government Rejects Easing Limits
08.10.07, 6:03 PM ET

WASHINGTON - The government on Friday said it will not ease investment limits on home-loan finance giants Fannie Mae and Freddie Mac. The companies had argued that allowing them to take on more debt would help pump cash into the struggling mortgage market.

The announcement by the Office of Federal Housing Enterprise Oversight came at the end of a week of speculation that the regulators would allow the government-sponsored companies a wider investment berth. The companies' shares had soared on Wall Street in an otherwise skidding market.

http://www.forbes.com/feeds/ap/2007/08/10/ap4009967.html

2nd_ave
If you explore Wulff,s reports you will see his enthusiasm for the Canadian income Trusts, in spite of the tactics being used by the current Canadian administration to roll back the tax benifits. However, he also likes US Trusts SJT,
and HGT which throws off a nice fat 10% dividend.

ALOHA !!

Today, Friday, August 10th, the central banks of Malaysia, Indonesia and the Philippines intervened to support their currencies by selling their US Dollar reserves. My how they must be getting scolded this weekend by the US FED!! This is the type of selling ... starting off with smaller banks ... that can trigger a major currency crisis(confidence crisis).

As the Western central banks today, mainly pumped liquidity(debt)into the markets these smaller central banks were busy selling the main culprit of their financial and inflationary woes ... the US Dollar.

Link: http://tinyurl.com/38mak7

I guarantee you somewhere in the global banking world a large entity is in trouble ... The SEC is investigating books of five large US investment banks such as Goldman Sachs and Merrill Lynch.

Yesterday and today I bought British Gold Sovereigns. I have not cashed out of any of my PM shares.

ALOHA !!

SAVE THE BANKS~NOT THE GOLD !!!

ON CRUMBLING EMPIRE
How can US business thrive without modern and dependable infrastructure? How can the US government keep entitlement commitments to the US corporations and the poor with falling tax revenues? This is yet another snowball waiting to happen ... Most US corporations depend on US government contracts(welfare)for their bottom line. They made their beds ...

Reading the article below is why I live on a food producing farm in a part of the World(Hawaii)that has abundant supplies of fresh, clean air and water! Suburbia will suffer most only outpaced by large US cities! Observe the red flags ...

READ ON:
The Cunning Realist
Thursday, August 09, 2007

Lagos-On-Hudson

In this post five months ago, I wondered if New York City had "a growing quality of life problem." After something no one could have predicted -- a heavy rainstorm during the summer -- shut down the city's transit system on Wednesday, I think the answer's pretty clear. If you don't know the details, here's one NYT report. A few of the comments posted by the paper's readers on this message board:

- I am stunned how unreliable the New York Transit system is. For the price it must be the most poorly run system in the world; For half the system to be knocked out by a night of heavy rain is embarrassing. I won’t even mention how dirty and broken the stations are.

- The MTA is a joke. it is by far one of the worst subway systems i have experienced. Some third world countries have better transportation.

- It took my girlfriend 2 hours to go from 181st st. on the A to 103rd st. only to be stranded there. MTA is a total joke! No one communicated what was happening which leaves a very sick feeling about what would occur if this were a terrorist event. Can we please stop rebuilding Iraq and like, invest in decent drainage and communication systems for our largest commuter subway system?

- I’m disgusted and appalled by the city, though very impressed by the fortitude and endurance of the people who live here. My advice to them: move! It’s not worth it.

- It is just terrible. I ran back and forth from one station to the next, stood inside the train station for three hours and nothing. The MTA workers dont know anything. They keep on saying "We dont know."

- My biggest problem was that the MTA website was completely down!

- I’ve lived in Bombay where the conditions were much worse and yet the trains managed to run on time.

- I have been in Tokyo during (not the morning after, but DURING) a typhoon and neither the above ground nor below ground trains were a second late.

Go take a look at the hundreds of other comments. The Bloomberg is off the rose, to put it mildly. Keep in mind this happened on one of the hottest, most humid days of the year. If you blindfolded me and told me I was in Lagos or Kinshasa, I would have believed you.

Listen, I've never been a fan of those "we could build X number of schools with all the money we spend on Y" arguments. But it's undeniable: While we're pouring blood and treasure into policing a civil war, this country's critical infrastructure -- New Orleans, Minneapolis, New York, and who knows what next -- is crumbling around us. New York City can't even keep its transit information website up and running during a thunderstorm. Six years on, think we're ready for the next 9/11? It's outrageous.

Some good news: We can probably trim the budget for homeland security a bit. The terrorists know now that to paralyze the world's financial center, all they have to do is fly a twin-seater over Manhattan and seed the clouds.

Link: http://cunningrealist.blogspot.com/